OPPENHEIMER CONVERTIBLE SECURITIES FUND
485APOS, 2000-12-01
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                                                     Registration No. 33-3076
                                                              File No. 811-4576

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933                                                               [X]


Pre-Effective Amendment No. 22                                             [X]

Post-Effective Amendment No. _______                                     [   ]


                                     and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY

ACT OF 1940                                                              [   ]

Amendment No. 24                                                           [X]


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          BOND FUND SERIES - OPPENHEIMER CONVERTIBLE SECURITIES FUND
------------------------------------------------------------------------------
              (Exact Name of Registrant as Specified in Charter)

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                  350 Linden Oaks, Rochester, New York 14625
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             (Address of Principal Executive Offices) (Zip Code)

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                                  800-552-1149
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             (Registrant's Telephone Number, including Area Code)

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                             Andrew J. Donohue, Esq.
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                             OppenheimerFunds, Inc.
              Two World Trade Center, New York, New York 10048-0203
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                   (Name and Address of Agent for Service)

                    With a copy to: Ronald M. Feiman, Esq.
                             Mayer, Brown & Platt
                   1675 Broadway, New York, New York 10019

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


[ ] Immediately  upon filing  pursuant to paragraph  (b) [ ] On  _______________
pursuant to paragraph (b) [ ] 60 days after filing pursuant to paragraph  (a)(1)
[X] On February 2, 2001  pursuant to  paragraph  (a)(1) [ ] 75 days after filing
pursuant to paragraph (a)(2) [ ] On _______________ pursuant to paragraph (a)(2)
of Rule 485


If appropriate, check the following box:
[   ]                                 This      post-effective       amendment
designates  a  new  effective  date  for  a  previously  filed  post-effective
amendment.


<PAGE>


Oppenheimer
Convertible Securities Fund
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----------------------------------------

Prospectus dated February 2, 2001


                                               Oppenheimer           Convertible
                                         Securities  Fund is a mutual  fund that
                                         seeks a high  level of total  return as
                                         its  goal,  through  a  combination  of
                                         current      income     and     capital
                                         appreciation.  It invests  primarily in
                                         securities  that are  convertible  into
                                         common stock.

                                               This Prospectus contains
                                         important information about the Fund's
                                         objective, its investment policies,
                                         strategies and risks. It also contains
As with all mutual funds, the important  information about how to buy Securities
and Exchange  Commission  has and sell shares of the Fund and other not approved
or disapproved the Fund's account features.  Please read this securities nor has
it determined  that  Prospectus  carefully  before you invest this Prospectus is
accurate or and keep it for future  reference about  complete.  It is a criminal
offense to your account.
represent otherwise.


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                                                      (logo) OppenheimerFunds
The Right Way to Invest


<PAGE>


                                       75

Contents


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


            The Fund's Investment Objective and  Strategies

            Main Risks of Investing in the Fund

            The Fund's Past Performance

            Fees and Expenses of the Fund

            About the Fund's Investments

            How the Fund is Managed



                  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 M Shares
            Class N Shares


            Special Investor Services
            AccountLink
            PhoneLink
            OppenheimerFunds Internet Web Site
            Retirement Plans

            How to Sell Shares
            By Mail
            By Telephone

            How to Exchange Shares

            Shareholder Account Rules and Policies

            Dividends, Capital Gains and Taxes

            Financial Highlights




<PAGE>


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

The Fund's Investment Objective and Strategies

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WHAT IS THE FUND'S  INVESTMENT  OBJECTIVE?  The Fund seeks a high level of total
return on its  assets  through a  combination  of  current  income  and  capital
appreciation.
------------------------------------------------------------------------------

WHAT DOES THE FUND MAINLY  INVEST IN? The Fund invests at least 65% of its total
assets  in  convertible   securities  under  normal  market  conditions.   Those
convertible  securities  include  domestic  and (to a  limited  extent)  foreign
corporate bonds, notes,  warrants and preferred stocks that can be exchanged for
(converted  into) common stock of the issuer.  The Fund can invest without limit
in lower-grade,  high-yield convertible debt securities,  sometimes called "junk
bonds,"  and many of the  convertible  bonds the Fund buys are below  investment
grade.

      The  Fund  has no  limitations  on the  range  of  maturities  of the debt
securities  in which it can invest  and  therefore  may hold bonds with  short-,
medium-  or  long-term  maturities.   Although  the  Fund  currently  emphasizes
investments  in  smaller  cap  issuers,  it does not  limit its  investments  to
securities of issuers in a particular market  capitalization  range and can hold
securities of small-cap, medium-cap and large-cap issuers.

      While  the  Fund  can  also  invest  up to  35%  of its  total  assets  in
non-convertible  debt  securities  and common  stocks,  not more than 15% of its
total assets can be invested in common stocks that do not pay  dividends.  These
investments are more fully explained in "About the Fund's Investments," below.

HOW DOES  THE  PORTFOLIO  MANAGER  DECIDE  WHAT  SECURITIES  TO BUY OR SELL?  In
selecting  securities  for  the  Fund,  the  Fund's  portfolio  manager  uses  a
disciplined,   value-oriented   investment   approach  based  on  a  fundamental
"bottom-up"  analysis of the financial  condition of individual  issuers  rather
than overall  market or industry  conditions or trends.  The  portfolio  manager
currently  focuses on the factors below (which may vary in particular  cases and
may change over time):

o     The portfolio  manager  analyzes the balance sheet  strength of individual
      issuers,  including  current and  historic  financial  condition,  trading
      activity  in  their  securities,   present  and  anticipated  cash  flows,
      estimated  values in relation to historic  cost,  the issuer's  managerial
      expertise,   debt  maturity   schedules,   current  and  future  borrowing
      requirements and any change in its condition that might affect its ability
      to meet future obligations.
o     The portfolio  manager searches for convertible debt securities that might
      offer   participation  in  equity-like  returns  without  excessive  price
      volatility.
o     To avoid the volatility of owning stocks directly,  the portfolio  manager
      generally  sells stocks after they are obtained by  converting  securities
      the Fund held.
o     While the Fund is not required to sell  securities  to maintain 65% of its
      total  assets  in   convertible   securities,   if  its   investments   in
      non-convertible  securities, cash and common stock exceed 35% it will make
      new investments  only in convertible  securities until the 65% standard is
      met.

WHO IS THE FUND  DESIGNED  FOR?  The Fund is designed  primarily  for  investors
seeking  high total  return over the long term from a fund that invests for both
current  income  and  capital  appreciation  in  convertible  securities.  Those
investors  should be willing to assume the credit risks of a fund that typically
invests a significant  amount of its assets in lower-grade bonds and the changes
in share prices that can occur when interest rates change.  The Fund is intended
as a  long-term  investment,  not a  short-term  trading  vehicle,  and  may  be
appropriate as part of an investor's  retirement  plan portfolio.  However,  the
Fund is not a complete investment program.

Main Risks of Investing in the Fund


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



CREDIT RISK. Debt securities are subject to credit risk.  Credit risk relates to
the ability of the issuer of a security to make interest and principal  payments
on the  security as they become due. If the issuer  fails to pay  interest,  the
Fund's income might be reduced, and if the issuer fails to repay principal,  the
value  of  that  security  and of the  Fund's  shares  might  be  reduced.  Debt
securities and preferred stocks issued by domestic and foreign  corporations are
subject to risks of default.  A down grade in an issuer's credit rating or other
adverse news about an issuer can reduce the value of that issuer's securities.

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

 Special  Risks  of  Small-Cap  Issuers.  While  the  Fund  can buy  convertible
      securities of companies of small, medium or large market  capitalizations,
      investments in small-capitalization  companies may offer greater potential
      for high total return than securities of larger issuers,  and at times the
      Fund may have large  investments  in  convertible  securities of small-cap
      issuers.  These  securities  may have less of a trading  market and may be
      subject to greater risks of default than securities of larger issuers.

INTEREST RATE RISKS.  The values of debt  securities  are subject to change when
prevailing  interest  rates  change.  When  interest  rates fall,  the values of
already-issued  debt  securities  generally  rise. When interest rates rise, the
values of already-issued debt securities  generally fall, and they may sell at a
discount from their face amount.  The magnitude of these fluctuations will often
be greater for debt securities  having longer  maturities than for  shorter-term
debt  securities.  The Fund's share prices can go up or down when interest rates
change  because  of  the  effect  of the  changes  on the  value  of the  Fund's
investments  in debt  securities.  Also,  if  interest  rates  fall,  the Fund's
investments in new securities at lower yields will reduce the Fund's income.

STOCK MARKET RISKS.  Because most of the Fund's investments are convertible into
common stock, the prices of the Fund's investments in convertible securities are
sensitive to events that affect the values of the issuer's  common stock.  Those
can include broad stock market events as well as events affecting the particular
issuer,  such  as  poor  earnings  reports,  loss  of  major  customers,   major
litigation,  or regulatory  changes  affecting  the issuer or its industry.  The
income  offered by  fixed-income  securities  can help reduce the effect of that
volatility  on the Fund's  total  return to some  degree,  but the prices of the
Fund's convertible securities will be affected by those events.

THERE  ARE  SPECIAL  RISKS IN  USING  DERIVATIVE  INVESTMENTS.  The Fund can use
derivatives to seek increased  income or to try to hedge  investment  risks.  In
general  terms,  a derivative  investment is an investment  contract whose value
depends on (or is derived from) the value of an underlying asset,  interest rate
or index.  Options,  structured  notes,  and  equity-linked  debt securities are
examples of derivatives the Fund can use.

      If the issuer of the derivative  does not pay the amount due, the Fund can
lose money on the  investment.  Also, the  underlying  security or investment on
which the derivative is based, and the derivative itself,  might not perform the
way the Manager expected it to perform. If that happens,  the Fund's share price
could fall or the Fund could get less income than expected.  The Fund has limits
on the amount of particular types of derivatives it can hold and is not required
to use them to seek its objective.  Using derivatives can cause the Fund to lose
money on its investments and/or increase the volatility of its share prices.


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


      The values of debt securities, particularly lower-grade securities, can be
affected by a number of factors,  such as interest rate changes and other market
factors, and the prices of the Fund's shares can go up and down. The income from
the Fund's  investments may help cushion the Fund's total return from changes in
prices,  but debt  securities  are subject to credit  risks that can also affect
their   values  and  income   and  the  share   prices  of  the  Fund.   In  the
OppenheimerFunds  spectrum,  the Fund  generally  has more risks than bond funds
that focus primarily on U. S. government  securities and investment-grade  bonds
but may be less volatile than funds that focus solely on investments in stocks.


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


The Fund's Past Performance

The bar chart and table below show one measure of the risks of  investing in the
Fund, by showing changes in the Fund's performance (for its Class M shares) from
year to year for the past ten  calendar  years and by  showing  how the  average
annual total returns of the Fund's shares compare to those of broad-based market
indices. The Fund's past investment performance is not necessarily an indication
of how the Fund will perform in the future.

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

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


For  the  period from  1/1/01  through  12/31/00,  the  cumulative  return  (not
annualized) for Class M shares was ____ %. Sales charges are not included in the
calculations  of return in this bar chart,  and if those charges were  included,
the returns would be less than those shown.
During the period shown in the bar chart,  the highest  return (not  annualized)
for  a  calendar  quarter  was  _____%  (__Q'__)  and  the  lowest  return  (not
annualized) for a calendar quarter was _____% (__Q'__).




<PAGE>




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

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

Class M Shares                _____%          _____%             _____%

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

Goldman Sachs Conv. Bond 100  _____%          _____%             _____%1
Index

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

Lehman Bros. Aggregate Bond   _____%          _____%             _____%2
Index

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

Class A Shares (inception     _____%          _____%             N/A
5/1/95)

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

Class B Shares (inception     _____%          _____%             N/A
5/1/95)

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

Class C Shares (inception     _____%          _____%             N/A
3/11/96)

--------------------------------------------------------------------------------
1     From 12/31/89.
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2     From 12/31/89.

Class M shares  were first  publicly  offered  6/3/86 as Class A shares and were
re-designated as Class M shares on 3/11/96. The Fund's Class Y shares, which had
been offered since 5/1/95, were re-designated as Class A shares on 3/11/96.

The Fund's  average  annual total returns  include the current  maximum  initial
sales  charges  of 5.75%  for  Class A and  3.25%  for  Class M; the  contingent
deferred sales charge of 5% (1-year) and 2% (life-of-class) for Class B; and the
1% contingent deferred sales charge for the 1-year period for Class C.


The returns  measure the  performance of a hypothetical  account and assume that
all dividends and capital gains distributions have been reinvested in additional
shares.  The performance of the Fund's Class M Shares is compared to the Goldman
Sachs  Convertible Bond 100 Index, an unmanaged index of convertible  securities
and the  Lehman  Brothers  Aggregate  Bond  Index,  an  unmanaged  index of U.S.
corporate and government bonds. The index performance  reflects the reinvestment
of income but does not consider the effects of transaction  costs. The Fund also
compares  its  performance  to that of the S&P 500 index an  unmanaged  index of
common stock, and that comparison may be found in the Fund's annual report.  The
Fund's  investments may vary from the securities in the indices.  Class N shares
were not publicly offered during the period shown.



Fees and Expenses of the Fund


The Fund pays a variety of  expenses  directly  for  management  of its  assets,
administration,  distribution of its shares and other  services.  Those expenses
are  subtracted  from the Fund's assets to calculate the Fund's net asset values
per  share.   All   shareholders   therefore  pay  those  expenses   indirectly.
Shareholders  pay other  expenses  directly,  such as sales  charges and account
transaction  charges.  The following tables are meant to help you understand the
fees  and  expenses  you may pay if you buy and hold  shares  of the  Fund.  The
numbers  below are based on the Fund's  expenses  during  its fiscal  year ended
December  31, 2000  except  that the numbers for Class N shares,  which is a new
Class,  are based on the Fund's  anticipated  expenses for Class N shares during
the upcoming year.


Shareholder Fees (charges paid directly from your investment):

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

                       Class A     Class B  Class C    Class M    Class N
                       Shares      Shares   Shares     Shares     Shares

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

Maximum Sales Charge   5.75%       None    None        3.25%       None
(Load) on purchases
(as % of offering
price)

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

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

1. A contingent deferred sales charge may apply to redemptions of investments of
   $1 million or more ($500,000 for retirement plan accounts) of Class A shares.
   See "How to Buy Shares" for details.
2. Applies to redemptions in first year after purchase.  The contingent deferred
   sales charge declines to 1% in the sixth year and is eliminated after that.

3.    Applies to shares redeemed within twelve (12) months of purchase.
Applies to shares redeemed within eighteen  (18) months of purchase.


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

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

                       Class A      Class B       Class C      Class M  Class N
                       Shares       Shares        Shares       Shares   Shares

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

Management Fees        0.47%        0.47%         0.47%        0.47%       0.47%

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

Distribution and/or     0.25%       1.00%         1.00%        0.75%       0.25%
Service (12b-1) Fees

--------------------------------------------------------------------------------
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Other Expenses          0.23%        0.24%         0.23%        0.23%      0.23%

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

Total Annual Operating  0.95%        1.71%         1.70%        1.45%      0.95%
Expenses

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Expenses may vary in future years. "Other expenses" include transfer agent fees,
custodial  expenses,  and accounting  and legal expenses the Fund pays.  Class N
shares  were not  offered  for sale  during the Fund's  last  fiscal  year.  The
expenses  above for Class N shares are based on the  expected  expenses for that
class of shares for the current fiscal year.



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

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

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

Class A Shares           $666         $860        $1070        $1,674

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

Class B Shares           $674         $839        $1,128        $1,633

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

Class C Shares           $273         $536        $923        $2,009

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

Class M Shares           $148         $459        $792        $1,735

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

Class N Shares           $197         $303        $525        $1,166

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

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

Class A Shares           $666         $860        $1,070        $1,674

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

Class B Shares           $174         $539        $928        $1,633

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

Class C Shares           $173         $636        $928        $2,009

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

Class M Shares           $148         $459        $792        $1,735

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

Class N Shares           $97         $303        $525        $1,166

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


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

   since Class B shares automatically convert to Class A after 6 years.


About the Fund's Investments

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


      The Manager  tries to reduce  risks by  carefully  researching  securities
before they are purchased,  and in some cases by using hedging  techniques.  The
Fund  attempts  to reduce  its  exposure  to market  risks by  diversifying  its
investments,  that is, by not holding a  substantial  amount of stock of any one
company and by not  investing too great a percentage of the Fund's assets in any
one company.  Also, the Fund does not concentrate 25% or more of its investments
in any one industry.

      However, changes in the overall market prices of securities and the income
they pay can occur at any time.  The share  prices  and  yields of the Fund will
change  daily  based on  changes  in market  prices  of  securities  and  market
conditions, and in response to other economic events.


Convertible Securities. Convertible debt securities pay interest and convertible
      preferred  stocks  pay  dividends  until  they  mature  or are  converted,
      exchanged or redeemed.  Because of the conversion feature,  the price of a
      convertible  security will normally vary in some  proportion to changes in
      the  price  of  the  underlying  common  stock.  In  general,  convertible
      securities:

o     have higher yields than common stocks but lower yields than comparable
         non-convertible securities,
o     may be subject to less fluctuation in value than the underlying stock
         because of their income, and
o        provide  potential for capital  appreciation if the market price of the
         underlying common stock increases (and in those cases may be thought of
         as "equity substitutes").

What is a "Convertible" Security?
     A convertible security is one that can be converted into or exchanged for a
     set amunt of common stock of an issuer  within a particular  period of time
     at a specific price or according to a price formula.



      The Fund does not invest  only in  securities  of issuers in a  particular
      market  capitalization  range, and at times the Manager might increase the
      relative emphasis of securities of issuers in a particular  capitalization
      range if the Manager believes they offer greater  opportunities  for total
      return.

      Securities of smaller,  newer  companies  may offer greater  potential for
      higher returns, but they are also subject to greater risks of default than
      larger,  more established  issuers.  They may have unseasoned  management,
      they may lack  established  markets for their products or services and may
      be dependent on only a few customers or suppliers for a greater  amount of
      their business.  Also, they may not have the financial strength to sustain
      them  through  business  downturns  or adverse  market  conditions.  These
      securities  may have less of a trading  market than  securities  of larger
      issuers, and it might be harder for the Fund to dispose of its holdings at
      an acceptable  price when it wants to sell them.  As a result,  the Fund's
      investments  in securities of these issuers have greater  risks.  The Fund
      might not achieve its  expected  returns from them and its share price may
      fluctuate more to the extent that it holds these investments.

      In selecting  securities  for the Fund's  portfolio and  evaluating  their
      yield  potential  and credit  risk,  the  Manager  does not rely solely on
      ratings  by rating  organizations  but  evaluates  business  and  economic
      factors affecting an issuer as well. The debt securities the Fund buys may
      be rated by  nationally-recognized  rating  organizations  such as Moody's
      Investors Service,  Inc. or Standard & Poor's Rating Service,  or they may
      be unrated securities assigned an equivalent rating by the Manager. Credit
      ratings  evaluate the  expectation  of scheduled  payments of interest and
      principal, not market risks. Rating agencies might not always change their
      credit  ratings of an issuer in a timely manner to reflect the events that
      could  affect  an  issuer's   ability  to  make  timely  payments  on  its
      obligations.

      The Fund can invest in debt securities that are investment  grade or below
      investment  grade in credit  quality and at times will invest  substantial
      amounts of its assets in securities  below investment grade to seek higher
      income as part of its goal.  "Investment-grade" rated securities are those
      in the four highest rating  categories of national ratings  organizations.
      The  ratings  definitions  of  the  principal  ratings  organizations  are
      included in Appendix A to the Statement of Additional Information.

Convertible Preferred Stock. Unlike common stock,  preferred stock typically has
      a stated dividend rate. When prevailing  interest rates rise, the value of
      preferred  stock having a fixed  dividend rate tends to fall. The right to
      payment of dividends on preferred  stock  generally is  subordinate to the
      rights of the company's debt securities.  Preferred stock dividends may be
      cumulative  (they  remain  a  liability  of the  company  until  paid)  or
      non-cumulative.

      Some convertible preferred stock with a mandatory conversion feature has a
      set call  price to buy the  underlying  common  stock.  If the  underlying
      common  stock price is less than the call price,  the holder will pay more
      for the common stock than its market price.  The issuer might also be able
      to redeem the stock prior to the mandatory  conversion  date,  which could
      diminish the potential for capital appreciation on the investment.

"Mandatory-Conversion" Securities. These securities may combine features of both
      equity and debt  securities.  Normally  they have a  mandatory  conversion
      feature  and  an  adjustable  conversion  ratio.  One  type  of  mandatory
      conversion  security is the convertible  preferred stock discussed  above.
      Another is the "equity-linked" debt security, having a principal amount at
      maturity that depends on the performance of a specified  equity  security,
      such as the issuer's  common  stock.  Their values can also be affected by
      interest  rate  changes  and  credit  risks  of the  issuer.  They  may be
      structured in a way that limits their  potential for capital  appreciation
      and the entire value of the  security may be at risk of loss  depending on
      the performance of the underlying  equity  security.  Since the market for
      these  securities  is still  relatively  new, they may be less liquid than
      other convertible securities.

Lower-Grade  Securities.  Lower-grade  convertible  securities may offer greater
      opportunities for higher returns than higher-grade securities. Lower-grade
      securities  are those  rated below "Baa" by Moody's or lower than "BBB" by
      Standard & Poor's or similar ratings by other nationally-recognized rating
      organizations.  The Fund does not invest in securities  rated below "C" or
      which are in default.  While securities rated "Baa" by Moody's or "BBB" by
      S&P  are  considered   "investment  grade,"  they  have  some  speculative
      characteristics.

o     Special  Risks  of  Lower-Grade   Securities.   While   investment-grade
      securities   are  subject  to  risks  of  non-payment  of  interest  and
      principal, in general,  higher-yielding lower-grade bonds, whether rated
      or unrated,  have  greater  risks than  investment-grade  securities  as
      stated in "Main Risks of  Investing  in the Fund."  There may be less of
      a market  for  them  and  therefore  they  may be  harder  to sell at an
      acceptable  price.  These risks mean that the Fund might not achieve the
      expected  income from  lower-grade  securities,  and that the Fund's net
      asset  value per share  could be  affected by declines in value of these
      securities.

      The Fund also  invests  in  investment-grade  debt  securities.  It is not
      required to dispose of debt  securities  whose ratings fall after the Fund
      buys them.  However,  the portfolio manager will monitor those holdings of
      issuers whose credit  quality  falls to determine  whether the Fund should
      sell them.

Derivative  Investments.  In  addition  to  using  hedging  instruments  such as
      options, the Fund can use other derivative investments, such as structured
      notes and  "mandatory-conversion"  securities,  including  "equity-linked"
      debt securities, because they offer the potential for increased income and
      principal value.

      Markets  underlying  securities  and indices  may move in a direction  not
      anticipated by the Manager.  Interest rate and stock market changes in the
      U.S. and abroad may also influence the  performance of  derivatives.  As a
      result of these risks the Fund could realize less principal or income from
      the investment than expected.  Certain derivative  investments held by the
      Fund may be illiquid.

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

      The principal and/or interest payments depend on the performance of one or
      more other securities or indices. The values of these notes will therefore
      fall or rise in response  to the  changes in the values of the  underlying
      security  or index.  They are  subject to both  credit and  interest  rate
      risks.  Therefore,  the Fund could receive more or less than it originally
      invested  when the notes  mature.  It might receive less interest than the
      stated  coupon  payment  if the  underlying  investment  or index does not
      perform as  anticipated.  Their  values may be very  volatile and they may
      have a limited  trading  market,  making it difficult for the Fund to sell
      its investment at an acceptable price.

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


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


Foreign  Securities.  The Fund can invest up to 15% of its net assets in foreign
      securities.  The Fund can buy  securities  of companies in both  developed
      markets and emerging  markets.  The Fund's foreign debt investments can be
      denominated in U.S.  dollars or in foreign  currencies.  The Fund will buy
      foreign  currency only in connection with the purchase and sale of foreign
      securities and not for speculation.

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

      The value of foreign  investments  may be  affected  by  exchange  control
      regulations,  expropriation  or  nationalization  of a  company's  assets,
      foreign  taxes,   delays  in  settlement  of   transactions,   changes  in
      governmental  economic or monetary policy in the U.S. or abroad,  or other
      political and economic factors.

Zero-Coupon  Securities.  Some  of the  debt  securities  the  Fund  can buy are
      zero-coupon  bonds that pay no  interest  and are issued at a  substantial
      discount  from their face  value.  Zero-coupon  securities  are subject to
      greater   fluctuations   in  price  from   interest   rate   changes  than
      interest-bearing  securities.  The Fund  may  have to pay out the  imputed
      income  on  zero-coupon  securities  without  receiving  the  actual  cash
      currently.

Illiquid and Restricted Securities.  Investments may be illiquid because they do
      not have an active  trading  market,  making it difficult to value them or
      dispose of them promptly at an acceptable price. A restricted security has
      a contractual  restriction  on its resale or cannot be sold publicly until
      it is  registered  under  the  Securities  Act of 1933.  The Fund will not
      invest  more  than  15%  of its  net  assets  in  illiquid  or  restricted
      securities.  Certain restricted securities that are eligible for resale to
      qualified  institutional  purchasers may not be subject to that limit. The
      Manager  monitors  holdings of illiquid  securities on an ongoing basis to
      determine whether to sell any holdings to maintain adequate liquidity.

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

      The Fund could write covered call options on stocks,  purchase put options
      on stocks and enter  into  closing  transactions  on these  options  for a
      number of  purposes.  It might do so to try to manage its  exposure to the
      possibility that the prices of its portfolio securities may fall or to try
      to increase its income.

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

      If the  Manager  used a hedging  instrument  at the  wrong  time or judged
      market  conditions  incorrectly,  the  strategy  could  reduce  the Fund's
      return. The Fund could also experience losses if the prices of its options
      positions  were not correlated  with its other  investments or if it could
      not close out a position because of an illiquid market.

Temporary Defensive Investments.  For cash management purposes the Fund can hold
      cash equivalents such as commercial  paper,  repurchase  agreements,  U.S.
      Treasury bills and other short-term U.S. government  securities.  In times
      of unstable market or economic conditions,  the Fund can invest up to 100%
      of its assets in temporary defensive  investments.  These would ordinarily
      be short-term U.S. government securities,  commercial paper in the highest
      rating  category,  bank  obligations of domestic banks having assets of at
      least  $500  million  or  repurchase  agreements.  To the  extent the Fund
      invests  defensively  in  these  securities,  it  might  not  achieve  its
      investment objective.

How the Fund Is Managed

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


      The Manager has been an investment advisor since January 1960. The Manager
(including  subsidiaries)  managed  more  than  $____  billion  in  assets as of
_________,   including  other  Oppenheimer  funds  with  more  than  __  million
shareholder  accounts.  The Manager is located at Two World Trade  Center,  34th
Floor, New York, New York 10048-0203.


Portfolio  Manager.  The portfolio manager of the Fund is Edward Everett.  Mr.
      Everett  has been a  portfolio  manager of the Fund since July 12,  1993
      and  he  is  the  person  principally  responsible  for  the  day-to-day
      management of the Fund's  portfolio.  Mr. Everett is a Vice President of
      the  Manager.  Prior to joining  the Manager in January  1996,  he was a
      portfolio manager of Fielding  Management  Company,  Inc., an investment
      advisor.


Advisory Fees.  Under  the  investment  advisory  agreement,  the Fund  pays the
      Manager an  advisory  fee at an annual rate that  declines  on  additional
      assets as the Fund  grows:  0.625% of the first  $50  million  of  average
      annual net assets of the Fund, 0.50% of the next $250 million, and 0.4375%
      of average  annual net assets over $300 million.  The Fund's  advisory fee
      for its last  fiscal  year ended  December  31,  2000 was ____% of average
      annual net assets for each class of shares.



<PAGE>


ABOUT YOUR ACCOUNT

How to Buy Shares

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

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

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

   o  Paying by Federal Funds Wire. Shares purchased through the Distributor may
      be paid for by Federal  Funds  wire.  The  minimum  investment  is $2,500.
      Before  sending  a  wire,  call  the  Distributor's   Wire  Department  at
      1.800.525.7048  to  notify  the  Distributor  of the wire  and to  receive
      further instructions.

   o  Buying Shares Through OppenheimerFunds  AccountLink. With AccountLink, you
      pay for  shares by  electronic  funds  transfers  from your bank  account.
      Shares are  purchased  for your  account by a transfer  of money from your
      bank account  through the Automated  Clearing House (ACH) system.  You can
      provide  those  instructions  automatically,  under an Asset Builder Plan,
      described  below,  or by  telephone  instructions  using  OppenheimerFunds
      PhoneLink,  also described below. Please refer to "AccountLink," below for
      more details.

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


How Much  Must  You  Invest?  You can buy Fund  shares  with a  minimum  initial
investment of $1,000 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,  403(b)  plans,  Automatic  Exchange  Plans and
      military allotment plans, you can make initial and subsequent  investments
      for as little as $25.  You can make  additional  purchases of at least $25
      through AccountLink.

   o  Under retirement plans, such as IRAs, pension and profit-sharing plans and
      401(k)  plans,  you can start your account with as little as $250. If your
      IRA is started  under an Asset  Builder  Plan,  the $25  minimum  applies.
      Additional purchases may be for as little as $25.

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


At What Price Are Shares Sold? Shares are sold at their offering price, which is
the net asset value per share plus any initial  sales charge that  applies.  The
offering price that applies to a purchase order is based on the next calculation
of the net asset value per share that is made after the Distributor receives the
purchase order at its offices in Colorado,  or after any agent  appointed by the
Distributor receives the order and sends it to the Distributor.

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

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

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

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



<PAGE>



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

WHAT  CLASSES OF SHARES DOES THE FUND  OFFER?  The Fund  offers  investors  five
different  classes  of  shares.   The  different  classes  of  shares  represent
investments in the same portfolio of securities,  but the classes are subject to
different  expenses and will likely have  different  share prices.  When you buy
shares,  be sure to specify  the class of shares.  If you do not choose a class,
your investment will be made in Class A shares.

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

------------------------------------------------------------------------------
------------------------------------------------------------------------------
Class A Shares.  If you buy Class A shares,  you pay an initial sales charge (on
      investments up to $1 million for regular  accounts or $500,000 for certain
      retirement  plans). The amount of that sales charge will vary depending on
      the amount you invest.  The sales  charge rates are listed in "How Can You
      Buy Class A Shares?" below.
------------------------------------------------------------------------------
------------------------------------------------------------------------------

------------------------------------------------------------------------------
------------------------------------------------------------------------------
Class B Shares.  If you buy Class B shares,  you pay no sales charge at the time
      of purchase,  but you will pay an annual  asset-based sales charge. If you
      sell your shares within six years of buying them,  you will normally pay a
      contingent  deferred sales charge.  That contingent  deferred sales charge
      varies  depending  on how long you own your  shares,  as described in "How
      CanYou Buy Class B Shares?" below.
------------------------------------------------------------------------------
------------------------------------------------------------------------------

------------------------------------------------------------------------------
------------------------------------------------------------------------------
Class C Shares.  If you buy Class C shares,  you pay no sales charge at the time
      of purchase,  but you will pay an annual  asset-based sales charge. If you
      sell your shares within 12 months of buying them,  you will normally pay a
      contingent  deferred  sales charge of 1%, as described in "How Can You Buy
      Class C Shares?" below.
------------------------------------------------------------------------------

Class M Shares. If you buy Class M shares,  you pay an initial sales charge. The
      amount  of  that  sales   charge   depends  on  the  amount  you   invest.
      Additionally, there is an annual asset-based sales charge.
------------------------------------------------------------------------------

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

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

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

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


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

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


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

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

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

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


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

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

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


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

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


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



<PAGE>



  ---------------------------------------------------------------------------
  Amount of Purchase      Front-End Sales  Front-End Sales   Concession As
                                           Charge As a
                            Charge As a Percentage of
                          Percentage of    Net               Percentage of
                          Offering Price   Amount Invested   Offering Price
  ---------------------------------------------------------------------------
  ---------------------------------------------------------------------------
  Less than $25,000       5.75%            6.10%             4.75%
  ---------------------------------------------------------------------------
  ---------------------------------------------------------------------------
  $25,000 or more but     5.50%            5.82%             4.75%
  less than $50,000
  ---------------------------------------------------------------------------
  ---------------------------------------------------------------------------
  $50,000 or more but     4.75%            4.99%             4.00%
  less than $100,000
  ---------------------------------------------------------------------------
  ---------------------------------------------------------------------------
  $100,000 or more but    3.75%            3.90%             3.00%
  less than $250,000
  ---------------------------------------------------------------------------
  ---------------------------------------------------------------------------
  $250,000 or more but    2.50%            2.56%             2.00%
  less than $500,000
  ---------------------------------------------------------------------------
  ---------------------------------------------------------------------------
  $500,000 or more but    2.00%            2.04%             1.60%
  less than $1 million
  ---------------------------------------------------------------------------


Class A Contingent  Deferred  Sales Charge.  There is no initial sales charge on
      purchases  of Class A shares of any one or more of the  Oppenheimer  funds
      aggregating  $1 million or more or for  certain  purchases  by  particular
      types of  retirement  plans  described  in Appendix C to the  Statement of
      Additional Information. The Distributor pays dealers of record concessions
      in an amount  equal to 1.0% of  purchases of $1 million or more other than
      by retirement plans. For those retirement plan accounts, the concession is
      1.0% of the first $2.5 million,  plus 0.50% of the next $2.5 million, plus
      0.25% of  purchases  over $5 million,  based on the  cumulative  purchases
      during the prior 12 months  ending  with the current  purchase.  In either
      case,  the  concession  will  be paid  only on  purchases  that  were  not
      previously  subject to a front-end  sales  charge and dealer  concession.1
      That  concession  will not be paid on purchases of shares in amounts of $1
      million or more (including any right of accumulation) by a retirement plan
      that pays for the purchase with the redemption  proceeds of Class C shares
      of one or more Oppenheimer funds held by the plan for more than one year.

1No  concession  will be paid on  sales of  Class A  shares  purchased  with the
redemption  proceeds of shares of another  mutual fund offered as an  investment
option in a  retirement  plan in which  Oppenheimer  funds are also  offered  as
investment  options under a special  arrangement  with the  Distributor,  if the
purchase  occurs more than 30 days after the  Oppenheimer  funds are added as an
investment option under that plan.

      If you redeem any of those  shares  within an  18-month  "holding  period"
      measured  from  the  end  of the  calendar  month  of  their  purchase,  a
      contingent  deferred sales charge (called the "Class A contingent deferred
      sales  charge") may be deducted from the redemption  proceeds.  That sales
      charge will be equal to 1.0% of the lesser of (1) the  aggregate net asset
      value of the redeemed shares at the time of redemption  (excluding  shares
      purchased by reinvestment of dividends or capital gain  distributions)  or
      (2) the  original  net asset  value of the  redeemed  shares.  The Class A
      contingent  deferred sales charge will not exceed the aggregate  amount of
      the concessions  the  Distributor  paid to your dealer on all purchases of
      Class A shares of all Oppenheimer  funds you made that were subject to the
      Class A contingent deferred sales charge.


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

      Statement of Additional Information.


HOW CAN you BUY CLASS B SHARES?  Class B shares are sold at net asset  value per
share without an initial sales charge.  However,  if Class B shares are redeemed
within 6 years of the end of the calendar month of their purchase,  a contingent
deferred sales charge will be deducted from the redemption proceeds. The Class B
contingent  deferred sales charge is paid to compensate the  Distributor for its
expenses of providing  distribution-related  services to the Fund in  connection
with the sale of Class B shares.

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

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

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


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




<PAGE>


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

HOW CAN YOU BUY CLASS M SHARES? Class M shares are sold at their offering price,
which is normally net asset value plus an initial sales charge.2 In other cases,
reduced sales charges may be available under the Fund's "Right of  Accumulation"
or Letter of Intent,  as described  under Class A procedures  above.  Out of the
amount you  invest,  the Fund  receives  the net asset  value to invest for your
account.

2 Accounts  holding  Class M shares  established  prior to March 11,  1996,  can
purchase  additional Class M shares without sales charge,  at the offering price
equal to the net asset value per share.

      The sales charge varies depending on the amount you purchase. A portion of
the sales charge may be retained by the  Distributor or allocated to your dealer
as  concession.  The  Distributor  reserves  the  right to  reallow  the  entire
concession  to dealers.  The  Distributor  does not accept  purchases of Class M
shares in amounts of $1 million or more.  The  current  sales  charge  rates and
concession paid to dealers are as follows:

--------------------------------------------------------------------------------
Amount of Purchase   Front-End Sales     Front-End Sales     Concession As
                             Charge As a Charge As a
                     Percentage of       Percentage of Net   Percentage of
                     Offering Price      Amount Invested     Offering Price
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Less than $250,000   3.25%               3.36%               3.00%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
$250,000 or more
but less than        2.25%               2.30%               2.00%
$500,000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
$500,000 or more     1.25%               1.27%               1.00%
but less than $1
million
--------------------------------------------------------------------------------


WHO CAN BUY CLASS N SHARES?  Class N shares are offered only through  retirement
plans  that  purchase  $500,000  or  more  of  Class  N  shares  of one or  more
Oppenheimer  funds  or  that  have  assets  of  $500,000  or more or 100 or more
eligible  plan  participants.  Individual  investors  cannot  buy Class N shares
directly.  A contingent deferred sales charge of 1.00% will be imposed if: o the
retirement plan is terminated or Class N shares of all Oppenheimer
   funds are terminated as an investment  option of the plan and you redeem your
   shares within 18 months after the plan's first  purchase of Class N shares of
   any Oppenheimer fund, or,
o  with  respect to an  individual  retirement  plan,  if you redeem your shares
   within  18  months  of the  plan's  first  purchase  of Class N shares of any
   Oppenheimer fund.

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


Distribution and Service (12b-1) Plans.

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


Distribution and Service Plans for Class B, Class C, Class M and Class N Shares.
      The Fund has adopted  Distribution and Service Plans for Class B, Class C,
      Class M and Class N shares to pay the  Distributor  for its  services  and
      costs in distributing shares and servicing accounts.  Under the plans, the
      Fund pays the Distributor an annual  asset-based sales charge of 0.75% per
      year on Class B shares  and on Class C  shares  and an  asset-based  sales
      charge of 0.50% on Class M shares. The Distributor also receives a service
      fee of 0.25% per year under each plan.

      The asset-based sales charge and service fees increase Class B and Class C
      expenses by 1.00%, Class M expenses by 0.75% and Class N expenses by up to
      0.50% of the net assets per year of the  respective  class.  Because these
      fees are paid out of the Fund's  assets on an  on-going  basis,  over time
      these fees will increase the cost of your investment and may cost you more
      than other types of sales charges.

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


      The Distributor  currently pays sales concessions of 3.75% of the purchase
      price of Class B shares to dealers  from its own  resources at the time of
      sale.  Including  the advance of the service fee, the total amount paid by
      the  Distributor  to the  dealer at the time of sales of Class B shares is
      therefore 4.00% of the purchase price. The Distributor retains the Class B
      asset-based  sales  charge.  The  Distributor  also  retains  the  Class M
      asset-based sales charge,  but may use all or part of it to pay additional
      compensation to dealers that sell Class M shares.

      The Distributor  currently pays sales  concession of 0.75% of the purchase
      price of Class C shares to dealers  from its own  resources at the time of
      sale.  Including  the advance of the service fee, the total amount paid by
      the  Distributor  to the  dealer  at the time of sale of Class C shares is
      therefore  1.00%  of  the  purchase  price.   The  Distributor   pays  the
      asset-based sales charge as an ongoing concession to the dealer on Class C
      shares that have been outstanding for a year or more.


      The Distributor currently pays a sales concession of 0.75% of the purchase
      price of Class N shares to dealers  from its own  resources at the time of
      sale.  Including the service fee the total amount paid by the  Distributor
      to the dealer at the time of sale of Class N shares is therefore  1.00% of
      the purchase price. The Distributor  retains the asset-based  sales charge
      on Class N shares.


Special Investor Services

ACCOUNTLINK.  You can use our  AccountLink  feature to link your Fund  account
with an account at a U.S. bank or other financial  institution.  It must be an
Automated Clearing House (ACH) member. AccountLink lets you:
    o transmit funds  electronically to purchase shares by telephone  (through a
      service  representative  or by  PhoneLink)  or  automatically  under Asset
      Builder Plans, or
    o have the Transfer Agent send redemption proceeds or transmit dividends and
      distributions  directly to your bank  account.  Please  call the  Transfer
      Agent for more information.
      You may  purchase  shares by  telephone  only after your  account has been
established.  To purchase  shares in amounts up to $250,000  through a telephone
representative,  call the Distributor at  1.800.852.8457.  The purchase  payment
will be debited from your bank account.
      AccountLink  privileges  should be requested on your  Application  or your
dealer's settlement  instructions if you buy your shares through a dealer. After
your account is established,  you can request AccountLink  privileges by sending
signature-guaranteed  instructions to the Transfer Agent. AccountLink privileges
will apply to each  shareholder  listed in the  registration  on your account as
well as to your dealer  representative  of record  unless and until the Transfer
Agent receives written  instructions  terminating or changing those  privileges.
After you establish  AccountLink  for your  account,  any change of bank account
information  must be made by  signature-guaranteed  instructions to the Transfer
Agent signed by all shareholders who own the account.

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

Purchasing Shares.  You may purchase  shares in amounts up to $100,000 by phone,
      by  calling   1.800.533.3310.   You  must  have  established   AccountLink
      privileges  to link  your  bank  account  with the  Fund to pay for  these
      purchases.

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

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


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

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

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



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


RETIREMENT  PLANS.  You may buy  shares  of the Fund for  your  retirement  plan
account.  If you  participate  in a plan  sponsored by your  employer,  the plan
trustee  or  administrator  must buy the  shares  for  your  plan  account.  The
Distributor also offers a number of different  retirement plans that individuals
and employers can use:

Individual Retirement  Accounts  (IRAs).  These include regular IRAs, Roth IRAs,
      SIMPLE IRAs, rollover IRAs and Education IRAs.

SEP-IRAs. These are  Simplified  Employee  Pension Plan IRAs for small  business
      owners or self-employed individuals.

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

401(k) Plans.  These are special retirement plans for businesses.

Pension and  Profit-Sharing  Plans.  These plans are designed for businesses and
      self-employed individuals.

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

How to Sell Shares

You can sell  (redeem)  some or all of your shares on any regular  business day.
Your shares will be sold at the next net asset value calculated after your order
is received in proper form (which means that it must comply with the  procedures
described  below) and is accepted by the Transfer Agent.  The Fund lets you sell
your shares by writing a letter or by  telephone.  You can also set up Automatic
Withdrawal  Plans to redeem  shares on a regular  basis.  If you have  questions
about any of these  procedures,  and especially if you are redeeming shares in a
special  situation,  such as due to the death of the owner or from a  retirement
plan  account,  please call the Transfer  Agent first,  at  1.800.525.7048,  for
assistance.

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

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

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

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

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

Sending Redemption Proceeds by Wire. While the Fund normally sends your money by
      check, you can arrange to have the proceeds of the shares you sell sent by
      Federal  Funds  wire  to a  bank  account  you  designate.  It  must  be a
      commercial bank that is a member of the Federal  Reserve wire system.  The
      minimum redemption you can have sent by wire is $2,500. There is a $10 fee
      for each wire.  To find out how to set up this  feature on your account or
      to arrange a wire, call the Transfer Agent at 1.800.852.8457.

HOW DO you SELL SHARES BY MAIL? Write a letter of instructions that includes:

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



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


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

   o  To redeem shares through a service representative, call 1.800.852.8457

   o  To redeem shares automatically on PhoneLink, call 1.800.533.3310

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


Are There Limits on Amounts Redeemed by Telephone?


o  Telephone  Redemptions  Paid by Check.  Up to  $100,000  may be  redeemed  by
   telephone  in any 7-day  period.  The check  must be payable to all owners of
   record  of the  shares  and  must  be  sent  to the  address  on the  account
   statement.  This  service is not  available  within 30 days of  changing  the
   address on an account.


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


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

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



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


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

   o  the amount of your account value represented by an increase in net
      asset value over the initial purchase price,
   o  shares purchased by the reinvestment of dividends or capital gains
      distributions, or
   o  shares  redeemed in the special  circumstances  described in Appendix C to
      the Statement of Additional Information.

      To determine  whether a  contingent  deferred  sales  charge  applies to a
redemption, the Fund redeems shares in the following order:

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

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


How to Exchange Shares

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

   o  Shares of the fund  selected  for exchange  must be available  for sale in
      your state of residence.
   o The  prospectuses  of both funds must offer the exchange  privilege.  o You
   must hold the shares you buy when you establish your account for at
      least 7 days  before you can  exchange  them.  After the account is open 7
      days, you can exchange shares every regular business day.
   o  You must meet the minimum purchase  requirements for the fund whose shares
      you purchase by exchange.
   o Before exchanging into a fund, you must obtain and read its prospectus.

      Shares of a particular  class of the Fund may be exchanged only for shares
of the same class in the other Oppenheimer funds. For example,  you can exchange
Class A or Class M shares of this Fund only for Class A shares of another  fund,
and you cannot exchange shares of other  Oppenheimer funds for Class M shares of
this Fund  (except for shares of money market  funds  acquired by exchange  from
Class M shares of this  Fund).  In some cases,  sales  charges may be imposed on
exchange transactions.  For tax purposes,  exchanges of shares involve a sale of
the shares of the fund you own and a purchase  of the shares of the other  fund,
which may result in a capital  gain or loss.  Please  refer to "How to  Exchange
Shares" in the Statement of Additional Information for more details.

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


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

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

Telephone Exchange  Requests.  Telephone exchange requests may be made either by
      calling a service representative at 1.800.852.8457,  or by using PhoneLink
      for automated exchanges by calling 1.800.533.3310. Telephone exchanges may
      be made only between  accounts that are  registered  with the same name(s)
      and  address.  Shares  held under  certificates  may not be  exchanged  by
      telephone.

ARE THERE  LIMITATIONS ON EXCHANGES?  There are certain exchange  policies you
should be aware of:

   o  Shares are normally  redeemed from one fund and  purchased  from the other
      fund in the exchange transaction on the same regular business day on which
      the  Transfer  Agent  receives an exchange  request  that  conforms to the
      policies described above. It must be received by the close of The New York
      Stock Exchange that day, which is normally 4:00 P.M. but may be earlier on
      some days.  However,  either fund may delay the  purchase of shares of the
      fund you are exchanging into up to seven days if it determines it would be
      disadvantaged by a same-day exchange. For example, the receipt of multiple
      exchange  requests  from a "market  timer" might  require the Fund to sell
      securities at a disadvantageous time or price.
   o  Because excessive trading can hurt fund performance and harm shareholders,
      the Fund  reserves  the  right to  refuse  any  exchange  request  that it
      believes will  disadvantage  it, or to refuse multiple  exchange  requests
      submitted by a shareholder or dealer.
   o  The Fund may amend,  suspend or terminate  the  exchange  privilege at any
      time. The Fund will provide you notice whenever it is required to do so by
      applicable  law,  but it may  impose  changes  at any time  for  emergency
      purposes.
   o  If the Transfer Agent cannot  exchange all the shares you request  because
      of a restriction  cited above,  only the shares eligible for exchange will
      be exchanged.

Shareholder Account Rules and Policies

More  information  about the Fund's policies and procedures for buying,  selling
and exchanging shares is contained in the Statement of Additional Information.

The   offering  of  shares  may be  suspended  during  any  period  in which the
      determination  of net asset value is  suspended,  and the  offering may be
      suspended by the Board of Trustees at any time the Board believes it is in
      the Fund's best interest to do so.

Telephone transaction privileges for purchases,  redemptions or exchanges may be
      modified,  suspended or  terminated by the Fund at any time. If an account
      has more than one owner,  the Fund and the Transfer  Agent may rely on the
      instructions of any one owner.
      Telephone  privileges  apply to each owner of the  account  and the dealer
      representative  of  record  for the  account  unless  the  Transfer  Agent
      receives cancellation instructions from an owner of the account.

The   Transfer Agent will record any telephone  calls to verify data  concerning
      transactions  and has adopted other  procedures to confirm that  telephone
      instructions   are   genuine,   by   requiring   callers  to  provide  tax
      identification  numbers and other  account  data or by using PINs,  and by
      confirming such  transactions in writing.  The Transfer Agent and the Fund
      will not be  liable  for  losses  or  expenses  arising  out of  telephone
      instructions reasonably believed to be genuine.

Redemption or transfer  requests  will not be honored  until the Transfer  Agent
      receives all required  documents  in proper form.  From time to time,  the
      Transfer Agent in its discretion may waive certain of the requirements for
      redemptions stated in this Prospectus.

Dealers that can perform account transactions for their clients by participating
      in NETWORKING  through the National  Securities  Clearing  Corporation are
      responsible  for  obtaining  their  clients'  permission  to perform those
      transactions, and are responsible to their clients who are shareholders of
      the Fund if the dealer performs any transaction erroneously or improperly.

The   redemption price for shares will vary from day to day because the value of
      the securities in the Fund's portfolio  fluctuates.  The redemption price,
      which is the net asset  value per  share,  will  normally  differ for each
      class of shares.  The redemption  value of your shares may be more or less
      than their original cost.

Payment for redeemed shares ordinarily is made in cash. It is forwarded by check
      or  through  AccountLink  or by  Federal  Funds  Wire (as  elected  by the
      shareholder)   within  seven  days  after  the  Transfer   Agent  receives
      redemption   instructions   in  proper  form.   However,   under   unusual
      circumstances  determined  by  the  Securities  and  Exchange  Commission,
      payment may be delayed or suspended.  For accounts  registered in the name
      of a  broker-dealer,  payment  will  normally be  forwarded  within  three
      business days after redemption.

The   Transfer  Agent may delay  forwarding a check or  processing a payment via
      AccountLink  for recently  purchased  shares,  but only until the purchase
      payment  has  cleared.  That delay may be as much as 10 days from the date
      the shares  were  purchased.  That  delay may be  avoided if you  purchase
      shares by Federal Funds wire or certified check, or arrange with your bank
      to provide  telephone or written assurance to the Transfer Agent that your
      purchase payment has cleared.

Involuntary redemptions of small accounts may be made by the Fund if the account
      value has  fallen  below  $200 for  reasons  other  than the fact that the
      market value of shares has dropped. In some cases involuntary  redemptions
      may be made to repay the Distributor  for losses from the  cancellation of
      share purchase orders.

Sharesmay be "redeemed in kind" under unusual  circumstances  (such as a lack of
      liquidity in the Fund's  portfolio to meet  redemptions).  This means that
      the  redemption  proceeds  will be paid with  liquid  securities  from the
      Fund's portfolio.

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


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

If you want to  receive  multiple  copies of these  materials,  you may call the
Transfer  Agent at  1.800.525.7048.  You may also notify the  Transfer  Agent in
writing.  Individual  copies of  prospectuses  and  reports  will be sent to you
within  30  days  after  the  Transfer  Agent  receives  your  request  to  stop
householding.




Dividends, Capital Gains and Taxes


Dividends.  The Fund intends to declare  dividends  separately for each class of
shares from net investment  income on each regular business day and to pay those
dividends to shareholders  quarterly in March, June, September and December on a
date selected by the Board of Trustees.  Daily dividends will not be declared or
paid on  newly-purchased  shares until  Federal  Funds are available to the Fund
from the purchase payment for the shares. Dividends and other distributions paid
on Class A shares will  generally be higher than dividends for Class B, Class C,
Class M or Class N shares, which normally have higher expenses than Class A. The
Fund cannot guarantee that it will pay any dividends or other distributions.


Capital  Gains.  The Fund may  realize  capital  gains on the sale of  portfolio
securities.  If it does, it may make  distributions out of any net short-term or
long-term capital gains in December of each year. The Fund may make supplemental
distributions  of dividends  and capital  gains  following the end of its fiscal
year.  There  can be no  assurance  that the Fund  will  pay any  capital  gains
distributions in a particular year.


WHAT  CHOICES  DO YOU  HAVE FOR  RECEIVING  DISTRIBUTIONS?  When  you open  your
account,  specify on your application how you want to receive your dividends and
distributions. You have four options:


Reinvest  All  Distributions  in the  Fund.  You can  elect  to  reinvest  all
      dividends and capital gains  distributions  in additional  shares of the
      Fund.

Reinvest  Dividends  or  Capital   Gains.   You  can  elect  to  reinvest   some
      distributions  (dividends,  short-term  capital gains or long-term capital
      gains  distributions)  in the Fund  while  receiving  the  other  types of
      distributions  by check or having them sent to your bank  account  through
      AccountLink.

Receive All  Distributions  in Cash.  You can  elect to  receive a check for all
      dividends and capital gains  distributions  or have them sent to your bank
      through AccountLink.

Reinvest  Your  Distributions  in  Another  OppenheimerFunds  Account.  You  can
      reinvest  all  distributions  in the  same  class  of  shares  of  another
      OppenheimerFunds account you have established.

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

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

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

Remember,  There May be Taxes on  Transactions.  Because the Fund's share prices
      fluctuate,  you may have a capital  gain or loss when you sell or exchange
      your shares.  A capital gain or loss is the  difference  between the price
      you paid for the shares and the price you received when you sold them. Any
      capital gain is subject to capital gains tax.

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

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



<PAGE>



Financial Highlights


The Financial  Highlights  Table is presented to help you  understand the Fund's
financial  performance for the past 5 fiscal years. Certain information reflects
financial  results  for a single  Fund  share.  The total  returns  in the table
represent the rate that an investor would have earned (or lost) on an investment
in the Fund (assuming  reinvestment  of all dividends and  distributions).  This
information has been audited by KPMG, the Fund's independent accountants,  whose
report, along with the Fund's financial statements, is included in the Statement
of Additional Information, which is available on request.


<PAGE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>


                                            Six Months                                             Year
                                                 Ended                                            Ended
                                         June 30, 2000                                          Dec. 31,
 Class A                                   (Unaudited)     1999      1998      1997   1996(1)    1995(2)
========================================================================================================
<S>                                            <C>       <C>       <C>       <C>       <C>       <C>
 Per Share Operating Data

 Net asset value, beginning of period          $16.36    $14.84    $15.32    $14.27    $13.96    $13.11
-------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                            .37       .70       .70       .71(3)    .73(3)    .54(3)
 Net realized and unrealized gain (loss)          .22      2.66      (.08)     1.93(3)    .65(3)   1.48(3)
                                               --------------------------------------------------------
 Total income from investment operations          .59      3.36       .62      2.64      1.38      2.02
-------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income            (.37)     (.70)     (.70)     (.72)     (.72)     (.68)
 Distributions from net realized gain              --     (1.14)     (.40)     (.87)     (.35)     (.49)
                                               --------------------------------------------------------

 Total dividends and/or distributions
 to shareholders                                 (.37)    (1.84)    (1.10)    (1.59)    (1.07)    (1.17)
-------------------------------------------------------------------------------------------------------
 Net asset value, end of period                $16.58    $16.36    $14.84    $15.32    $14.27    $13.96
                                               ========================================================


=======================================================================================================
 Total Return, at Net Asset Value(4)             3.57%    23.37%     4.08%   18.77%     10.13%    15.54%

=======================================================================================================
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)    $230,765  $220,671  $221,693 $192,212    $93,578    $2,502
-------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)           $225,987  $207,008  $220,423 $145,929    $41,617    $1,799
-------------------------------------------------------------------------------------------------------
 Ratios to average net assets:(5)
 Net investment income                           4.42%     4.55%     4.55%    4.58%      5.11%     5.63%
 Expenses                                        0.92%     0.95%     0.93%(6) 0.95%(6)   0.98%(6)  1.05%(6)
 Expenses, net of interest(7)                     N/A       N/A      0.93%(6) 0.95%(6)   0.97%(6)  1.01%(6)
-------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                           76%       95%       90%      79%        53%       58%

</TABLE>


1. On January 4, 1996, OppenheimerFunds, Inc. became the investment advisor to
the Fund.
2. For the period from May 1, 1995 (inception of offering) to December 31, 1995.
3. Per share information has been determined based on average shares outstanding
for the period.
4. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
5. Annualized for periods of less than one full year.
6. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
7. During the periods shown above, the Fund's interest expense was substantially
offset by the incremental interest income generated on bonds purchased with
borrowed funds.

 | OPPENHEIMER CONVERTIBLE SECURITIES FUND

<PAGE>

FINANCIAL HIGHLIGHTS  Continued

<TABLE>
<CAPTION>


                                            Six Months                                             Year
                                                 Ended                                            Ended
                                         June 30, 2000                                          Dec. 31,
 Class B                                   (Unaudited)     1999      1998      1997   1996(1)    1995(2)
========================================================================================================
<S>                                            <C>       <C>       <C>       <C>       <C>       <C>
 Per Share Operating Data

 Net asset value, beginning of period          $16.38    $14.87    $15.35    $14.29    $13.98    $13.11
-------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                            .31       .59       .58       .59(3)    .62(3)    .45(3)
 Net realized and unrealized gain (loss)          .21      2.65      (.08)     1.94(3)    .65(3)   1.51(3)
                                               --------------------------------------------------------
 Total income from investment operations          .52      3.24       .50      2.53      1.27      1.96
-------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income            (.30)     (.59)     (.58)     (.60)     (.61)     (.60)
 Distributions from net realized gain              --     (1.14)     (.40)     (.87)     (.35)     (.49)
                                               --------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                 (.30)    (1.73)     (.98)    (1.47)     (.96)    (1.09)
-------------------------------------------------------------------------------------------------------
 Net asset value, end of period                $16.60    $16.38    $14.87    $15.35    $14.29    $13.98
                                               ========================================================


=======================================================================================================
 Total Return, at Net Asset Value(4)             3.18%    22.35%     3.30%    17.93%     9.28%    15.09%

=======================================================================================================
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)    $427,899  $431,370  $445,544  $383,755  $211,176   $34,465
-------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)           $427,577  $414,611  $441,677  $296,426  $113,784   $15,184
-------------------------------------------------------------------------------------------------------
 Ratios to average net assets:(5)
 Net investment income                           3.66%     3.79%     3.79%     3.80%     4.31%     4.82%
 Expenses                                        1.68%     1.71%     1.69%(6)  1.72%(6)  1.75%(6)  1.69%(6)
 Expenses, net of interest(7)                     N/A       N/A      1.69%(6)  1.72%(6)  1.75%(6)  1.64%(6)
-------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                           76%       95%       90%       79%       53%       58%
</TABLE>



1. On January 4, 1996, OppenheimerFunds, Inc. became the investment advisor to
the Fund.
2. For the period from May 1, 1995 (inception of offering) to December 31, 1995.
3. Per share information has been determined based on average shares outstanding
for the period.
4. Assumes a $1,000 hypothetical  initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
5. Annualized for periods of less than one full year.
6. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
7. During the periods shown above, the Fund's interest expense was substantially
offset by the incremental interest income generated on bonds purchased with
borrowed funds.


 | OPPENHEIMER CONVERTIBLE SECURITIES FUND

<PAGE>

<TABLE>
<CAPTION>


                                            Six Months                                      Year
                                                 Ended                                     Ended
                                         June 30, 2000                                  Dec. 31,
 Class C                                   (Unaudited)     1999      1998      1997    1996(1,2)
================================================================================================
<S>                                            <C>       <C>       <C>       <C>       <C>

 Per Share Operating Data

 Net asset value, beginning of period          $16.35    $14.84    $15.32    $14.27    $14.03
------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                            .30       .59       .58       .59(3)    .50(3)
 Net realized and unrealized gain (loss)          .22      2.65      (.08)     1.93(3)    .59(3)
                                               -------------------------------------------------
 Total income from investment operations          .52      3.24       .50      2.52      1.09
------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income            (.30)     (.59)     (.58)     (.60)     (.50)
 Distributions from net realized gain              --     (1.14)     (.40)     (.87)     (.35)
                                               -------------------------------------------------

 Total dividends and/or distributions
 to shareholders                                 (.30)    (1.73)     (.98)    (1.47)     (.85)
------------------------------------------------------------------------------------------------
 Net asset value, end of period                $16.57    $16.35    $14.84    $15.32    $14.27
                                               =================================================

================================================================================================
 Total Return, at Net Asset Value(4)             3.18%    22.41%     3.32%    17.88%     7.74%

================================================================================================
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)     $98,483   $94,352  $108,339   $85,397   $38,312
------------------------------------------------------------------------------------------------
 Average net assets (in thousands)            $95,803   $94,329  $105,974   $62,343   $18,550
------------------------------------------------------------------------------------------------
 Ratios to average net assets:(5)
 Net investment income                           3.66%     3.80%     3.81%     3.82%     4.32%
 Expenses                                        1.68%     1.70%     1.68%(6)  1.70%(6)  1.68%(6)
 Expenses, net of interest(7)                     N/A       N/A      1.68%(6)  1.70%(6)  1.67%(6)
----------------------------------------------------------------------------------------------
 Portfolio turnover rate                           76%       95%       90%       79%       53%
</TABLE>


1. On January 4, 1996, OppenheimerFunds, Inc. became the investment advisor to
the Fund.
2. For the period from March 11, 1996 (inception of offering) to December 31,
1996.
3. Per share information has been determined based on average shares outstanding
for the period.
4. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
5. Annualized for periods of less than one full year.
6. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
7. During the periods shown above, the Fund's interest expense was substantially
offset by the incremental interest income generated on bonds purchased with
borrowed funds.


 | OPPENHEIMER CONVERTIBLE SECURITIES FUND
<PAGE>

FINANCIAL HIGHLIGHTS  Continued


<TABLE>
<CAPTION>


                                            Six Months                                             Year
                                                 Ended                                            Ended
                                         June 30, 2000                                          Dec. 31,
 Class M                                   (Unaudited)     1999      1998      1997   1996(1)       1995
========================================================================================================
<S>                                            <C>       <C>       <C>       <C>       <C>       <C>
 Per Share Operating Data

 Net asset value, beginning of period          $16.35    $14.84    $15.32    $14.27    $13.96    $12.20
-------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                            .36       .63       .62       .62(2)    .65(2)    .70(2)
 Net realized and unrealized gain (loss)          .19      2.65      (.08)     1.94(2)    .66(2)   2.42(2)
                                               --------------------------------------------------------
 Total income from investment operations          .55      3.28       .54      2.56      1.31      3.12
-------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income            (.33)     (.63)     (.62)     (.64)     (.65)     (.87)
 Distributions from net realized gain              --     (1.14)     (.40)     (.87)     (.35)     (.49)
                                               --------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                 (.33)    (1.77)    (1.02)    (1.51)    (1.00)    (1.36)
-------------------------------------------------------------------------------------------------------
 Net asset value, end of period                $16.57    $16.35    $14.84    $15.32    $14.27    $13.96
                                               ========================================================

=======================================================================================================
 Total Return, at Net Asset Value(3)             3.31%    22.74%     3.58%    18.19%     9.58%    26.00%

=======================================================================================================
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)    $216,316  $234,023  $263,716  $297,292  $274,043  $239,341
-------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)           $224,797  $235,419  $288,953  $285,621  $264,936  $181,719
-------------------------------------------------------------------------------------------------------
 Ratios to average net assets:(4)
 Net investment income                           3.91%    4.06%      4.02%     4.05%     4.59%     5.12%
 Expenses                                        1.43%    1.45%      1.43%(5)  1.46%(5)  1.58%(5)  1.58%(5)
 Expenses, net of interest(6)                     N/A      N/A       1.43%(5)  1.46%(5)  1.55%(5)  1.56%(5)
-------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                           76%      95%        90%       79%       53%       58%
</TABLE>



1. On January 4, 1996, OppenheimerFunds, Inc. became the investment advisor to
the Fund.
2. Per share information has been determined based on average shares outstanding
for the period.
3. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
4. Annualized for periods of less than one full year.
5. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
6.  During the periods shown above, the Fund's interest expense was
substantially offset by the incremental interest income generated on bonds
purchased with borrowed funds.


 | OPPENHEIMER CONVERTIBLE SECURITIES FUND

<PAGE>


INFORMATION AND SERVICES

For More Information on Oppenheimer Convertible Securities Fund

The following additional  information about the Fund is available without charge
upon request:

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

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

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

----------------------------------------------------------------------------
By Telephone:                 Call OppenheimerFunds Services toll-free:
                                 1.800.525.7048
----------------------------------------------------------------------------
----------------------------------------------------------------------------
By Mail:                      Write to:
                              OppenheimerFunds Services
                              P.O. Box 5270
                              Denver, Colorado 80217-5270
----------------------------------------------------------------------------
----------------------------------------------------------------------------
On the Internet:              You can send us a request by e-mail or
                              read or down-load documents on the
                              OppenheimerFunds website:
                              http://www.oppenheimerfunds.com
----------------------------------------------------------------------------

You can also obtain copies of the Statement of Additional  Information and other
Fund  documents  and reports by visiting  the SEC's Public  Information  Room in
Washington,  D.C.  (Phone  1.202.942.8090)  or the EDGAR  database  on the SEC's
Internet web site at http://www.sec.gov. Copies may be obtained after payment of
a  duplicating   fee  by  electronic   request  at  the  SEC's  e-mail  address:
[email protected],  or by  writing  to  the  SEC's  Public  Reference  Section,
Washington, D.C. 20549-0102.

No one has been authorized to provide any information  about the Fund or to make
any  representations  about  the  Fund  other  than  what is  contained  in this
Prospectus.  This  Prospectus is not an offer to sell shares of the Fund,  nor a
solicitation  of an offer to buy shares of the Fund,  to any person in any state
or other jurisdiction where it is unlawful to make such an offer.

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



SEC File No. 811-4576
PR0345.001.0401Printed on recycled paper.



<PAGE>


Appendix to Prospectus of
Oppenheimer Convertible Securities Fund


      Graphic  material  included in the Prospectus of  Oppenheimer  Convertible
Securities  Fund (the "Fund") under the heading:  "Annual  Total Returns  (Class
M)(as of 12/31 each year)":

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

--------------------------------------------------------------------------------
Year Ended:                              Annual Total Return
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
12/31//91                                28.50%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
12/31/92                                 31.19%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
12/31/93                                 21.24%
-------------------------------------------------------------------------------
--------------------------------------------------------------------------------
12/31/94                                  -1.19%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
12/31/95                                 26.00%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
12/31/96                                   9.58%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
12/31/97                                 18.19%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
12/31/98                                   3.58%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
12/31/99                                 22.74%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

12/31/00

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



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


<PAGE>


                   Oppenheimer Convertible Securities Fund
------------------------------------------------------------------------------

350 Linden Oaks, Rochester, New York 14625

1.800.525.7048

          Statement of Additional Information dated February 2, 2001

This  Statement of Additional  Information  is not a  Prospectus.  This document
contains  additional  information about the Fund and supplements  information in
the  Prospectus  dated  February 2, 2001.  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 or by downloading
it from the OppenheimerFunds Internet web site at www.oppenheimerfunds.com.


Contents
Page

                                 About the Fund
Additional Information About the Fund's Investment Policies and Risks........
     The Fund's Investment Policies..........................................
     Other Investment Techniques and Strategies..............................
     Investment Restrictions..................................................
How the Fund is Managed.......................................................
     Organization and History.................................................
     Trustees and Officers....................................................
     The Manager .............................................................
Brokerage Policies of the Fund................................................
Distribution and Service Plans................................................
Performance of the Fund.......................................................
                               About Your Account
How to Buy Shares.............................................................
How to Sell Shares............................................................
How to Exchange Shares........................................................
Dividends, Capital Gains and Taxes............................................
Additional Information About the Fund.........................................

                      Financial Information About the Fund
Report of Independent Accountants.............................................
Financial Statements .........................................................

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


<PAGE>


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

    Additional Information About the Fund's Investment Policies and Risks

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

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

      |X|  Convertible  Securities.   Convertible  securities  are  fixed-income
securities  that may be exchanged for or converted  into the  underlying  common
stock of the  issuer at the option of the holder  during a  specified  period of
time.  Convertible  securities may take the form of convertible preferred stock,
convertible bonds or notes, or other fixed-income securities with stock purchase
warrants.  They may have a  combination  of the  features  of  several  of these
securities.

      Because of the  conversion  feature,  the price of a convertible  security
normally  will vary in  proportion  to  changes  in the price of the  underlying
common  stock.  Convertible  securities  in  general  are  subject to less price
volatility  than the common  stocks into which they are  convertible  because of
their  comparatively  higher  yields.  The  investment  characteristics  of each
convertible  security vary, and that variety enables the Fund to use convertible
securities in different  ways to pursue its  investment  objective of high total
return.  For  example,  the Fund can invest in: o  convertible  securities  that
provide a relatively high level of income,
      with less appreciation potential,
o     convertible  securities  that have  high  appreciation  potential  and a
      relatively low level of income, and
o     convertible  securities that provide some combination of both income and
      appreciation potential.

      Convertible  bonds  and  convertible  preferred  stocks  are  fixed-income
securities that retain the investment characteristics of fixed-income securities
until they have been  converted.  The holder is  entitled  to receive  the fixed
income of a bond or the  dividend  preference  of a  preferred  stock  until the
holder elects to exercise the conversion privilege.  Convertible  securities are
senior  securities  and therefore have a claim against the assets of the issuing
corporation  that is  superior to the claims of holders of the  issuer's  common
stock upon liquidation of the corporation.  Convertible securities, however, are
generally  subordinated  to  similar  non-convertible  securities  of  the  same
company.  The interest income and dividends from convertible bonds and preferred
stocks provide income potential and yields that are generally higher than common
stocks, but which are generally lower than non-convertible securities of similar
credit quality.



<PAGE>


      As with all fixed-income securities, convertible securities are subject to
changes  in value  from  changes  in the  level of  prevailing  interest  rates.
However, the conversion feature of convertible securities,  giving the owner the
right to exchange  them for the issuer's  common  stock,  in general  causes the
market  value of  convertible  securities  to  increase  when  the  value of the
underlying common stock increases, and to fall when the stock price falls. Since
securities prices fluctuate,  however, there can be no assurance that the market
value of convertible securities will increase.  Convertible securities generally
do not have the same potential for capital appreciation as the underlying stock.
When the  value of the  underlying  common  stock is  falling,  the value of the
convertible  security  may not  experience  the same  decline as the  underlying
common  stock.  It tends to decline to a level (often called  investment  value)
approximating the  yield-to-maturity  basis of  non-convertible  debt of similar
credit quality.

      Many  convertible  securities  sell at a  premium  over  their  conversion
values.  Conversion value is the number of shares of common stock to be received
upon  conversion  multiplied  by the  current  market  price of the stock.  That
premium  represents the price  investors are willing to pay for the privilege of
purchasing a fixed-income security having capital appreciation potential because
of the  conversion  privilege.  If the Fund  buys a  convertible  security  at a
premium,  there  can be no  assurance  that the  underlying  common  stock  will
appreciate  enough  for the  Fund to  recover  the  premium  on the  convertible
security.

      While some  convertible  securities are a form of debt  security,  in many
cases their  conversion  feature  (allowing  conversion into equity  securities)
causes them to be regarded by the  Manager  more as "equity  equivalents."  As a
result,  the rating  assigned to the security  has less impact on the  Manager's
investment  decision  than in the  case  of  non-convertible  debt  fixed-income
securities.

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

      |X| Convertible Preferred Stock. Preferred stock, unlike common stock, has
a stated dividend rate payable from the corporation's earnings.  Preferred stock
dividends may be cumulative or non-cumulative,  participating,  or auction rate.
"Cumulative"  dividend  provisions  require  all or a  portion  of prior  unpaid
dividends to be paid before  dividends can be paid to the issuer's common stock.
"Participating"  preferred  stock may be  entitled to a dividend  exceeding  the
stated dividend in certain cases.

      If interest rates rise, the fixed dividend on preferred stocks may be less
attractive,  causing the price of preferred  stocks to decline.  Preferred stock
may have mandatory sinking fund provisions,  as well as provisions  allowing the
stock to be called or redeemed prior to its maturity,  which can have a negative
impact on the  stock's  price  when  interest  rates  decline.  Preferred  stock
generally  has  a  preference  over  common  stock  on  the  distribution  of  a
corporation's assets in the event of


<PAGE>


liquidation of the corporation. The rights of preferred stock on distribution of
a corporation's  assets in the event of a liquidation are generally  subordinate
to the rights associated with a corporation's debt securities.

      While preferred stock is an equity security,  some  convertible  preferred
stock has  characteristics  of both a debt  security  and a call  option.  These
securities can be considered  derivative securities because of their call option
component,  described  below.  Typically  these stocks are convertible to common
stock after a three-year  period (although they are callable by the issuer prior
to  conversion).  They pay a cumulative,  fixed  dividend that is senior to, and
expected to be in excess of, the dividends  paid on the common stock of the same
issuer.

o     Mandatory-Conversion  Securities.  The Fund can  also  invest  in a more
      recently-developed  variety of  convertible  securities  referred  to as
      "mandatory-conversion   securities."   These   securities   may  combine
      several  of the  features  of debt  securities  and  equity  securities,
      including   both   preferred   stock  and  common  stock.   Unlike  more
      traditional  convertible  securities,  however, many of these securities
      have  a  mandatory  conversion  feature  and  an  adjustable  conversion
      ratio. As a result,  many of these  securities  offer limited  potential
      for  capital  appreciation  and,  in  some  instances,  are  subject  to
      unlimited potential for loss of capital.

      These  securities  are designed and marketed by major  investment  banking
firms and trade in the marketplace  under various  acronyms that are proprietary
to the investment banking firm. The Fund may be exposed to counter-party risk to
the extent it invests in synthetic  mandatory  conversion  securities  which are
issued by  investment  banking  firms.  Those are unsecured  obligations  of the
issuing  firm.  Should the firm that issued the  security  experience  financial
difficulty,  its ability to perform according to the terms of the security might
become impaired.  The mandatory conversion  securities which may be purchased by
the Fund  include,  among others,  "equity-linked  debt  securities,"  discussed
below, and certain varieties of convertible preferred stock.

      At any time prior to the mandatory  conversion date, the issuer can redeem
the preferred  stock. At its mandatory  conversion  date, the preferred stock is
converted  into a share (or a fraction of a share) of the issuer's  common stock
at the call  price  that was  established  at the time the  preferred  stock was
issued.  Generally, the call price is 30% to 45% above the price of the issuer's
common  stock at the time the  preferred  stock is issued  and may be subject to
downward adjustment over time. If the share price of the related common stock on
the  mandatory  conversion  date is less than the call price,  the holder of the
preferred stock will nonetheless receive only one share of common stock for each
share of  preferred  stock  (plus cash in the amount of any  accrued  but unpaid
dividends).

      The issuer must issue to the holder of the  preferred  stock the number of
shares of common stock equal to the call price of the preferred  stock in effect
on the date of redemption  divided by the market value of the common stock. That
market value  typically is determined  one or two trading days prior to the date
notice  of  redemption  is given.  The  issuer  must also pay the  holder of the
preferred  stock cash in an amount equal to any accrued but unpaid  dividends on
the preferred stock.

      Convertible  preferred  stock is  subject to the same  market  risk as the
common  stock of the issuer.  However  that risk may be  mitigated by the higher
dividend paid on the preferred stock.  This  convertible  preferred stock offers
limited opportunity for appreciation,  however,  because of the call feature. If
the market  value of the issuer's  common  stock  increases to the call price or
above the call  price of the  preferred  stock,  the  issuer  can (and  would be
expected to) call the preferred  stock for  redemption  at the call price.  This
convertible  preferred  stock is also subject to credit risk of the issuer as to
its ability to pay the dividend. Generally,  convertible preferred stock is less
volatile  than the related  common  stock of the issuer,  in part because of the
fixed dividend.

o Equity-Linked Debt Securities. The Fund can purchase mandatory conversion debt
securities  whose principal amount at maturity depends upon the performance of a
specified equity security.  These  "equity-linked debt securities" are a form of
derivative  security  and  differ  from  ordinary  debt  securities  in that the
principal  amount  received at maturity is not fixed.  Instead,  their principal
value is based on the price of the linked  equity  security at the time the debt
security matures.  These debt securities  usually mature in three to four years,
and during the years to maturity pay interest at a fixed rate.

      Although these debt  securities are typically  adjusted for events such as
stock  splits,  stock  dividends and certain other events that affect the market
value of the linked equity  security,  the debt  securities  are not adjusted if
additional  equity  securities  are issued for cash. An  additional  issuance of
equity  securities  of the  type to which  the debt  security  is  linked  could
adversely affect the price of the debt security. In general, however, these debt
securities  are less  volatile  than the  equity  securities  to which  they are
linked.

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

      While the changes in value of the Fund's  portfolio  securities after they
are  purchased  will be reflected  in the net asset value of the Fund's  shares,
those  changes  normally  do not  affect  the  interest  income  paid  by  those
securities (unless the security's  interest is paid at a variable rate pegged to
particular  interest rate changes).  However,  those price  fluctuations will be
reflected in the  valuations  of the  securities,  and  therefore the Fund's net
asset values will be affected by those fluctuations.

      |X| Credit Risk.  Credit risk relates to the ability of the issuer to meet
interest  or  principal  payments  or both  as  they  become  due.  In  general,
lower-grade,  higher-yield  bonds are subject to credit risk to a greater extent
than lower-yield, higher-quality bonds.


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




<PAGE>


      In making  investments  in debt  securities,  the Manager may rely to some
extent on the ratings of ratings organizations or it may use its own research to
evaluate  a  security's  credit-worthiness.  If  securities  the  Fund  buys are
unrated,  they are  assigned a rating by the  Manager of  comparable  quality to
bonds having similar yield and risk characteristics  within a rating category of
a rating organization.

      The Fund does not have investment policies  establishing specific maturity
ranges for the Fund's  investments,  and they may be within any  maturity  range
(short,  medium or long)  depending on the  Manager's  evaluation  of investment
opportunities available within the debt securities markets. Generally,  however,
it is expected that the Fund's  average  portfolio  maturity will be of a longer
average  maturity.  The Fund may shift its  investment  focus to  securities  of
longer maturity as interest rates decline and to securities of shorter  maturity
as interest rates rise.

o     Special Risks of Lower-Grade Securities. The Fund can invest without limit
      in  lower-grade  debt  securities,  and the Fund will normally  invest its
      assets  primarily in these  securities to seek its objective.  Lower-grade
      securities tend to offer higher yields than  investment-grade  securities,
      but also are  subject  to  greater  risks of  default by the issuer in its
      obligations to pay interest  and/or repay principal on the maturity of the
      security.


      "Lower-grade"  debt securities are those rated below  "investment  grade,"
which  means they have a rating  lower than "Baa" by Moody's or lower than "BBB"
by  Standard  & Poor's  or Fitch,  Inc.,  or  similar  ratings  by other  rating
organizations.  If they are unrated,  and are determined by the Manager to be of
comparable  quality to debt securities  rated below investment  grade,  they are
considered part of the Fund's portfolio of lower-grade securities. The Fund will
not invest in securities rated below "C" or which are in default at the time the
Fund buys them.


      Some of the special credit risks of  lower-grade  securities are discussed
below.  There is a greater risk that the issuer may default on its obligation to
pay  interest  or to  repay  principal  than  in the  case  of  investment-grade
securities. The issuer's low creditworthiness may increase the potential for its
insolvency.  An overall  decline in values in the high-yield bond market is also
more likely during a period of a general economic downturn. An economic downturn
or an  increase  in  interest  rates  could  severely  disrupt  the  market  for
high-yield bonds, adversely affecting the values of outstanding bonds as well as
the  ability of  issuers  to pay  interest  or repay  principal.  In the case of
foreign  high-yield  bonds,  these risks are in addition to the special  risk of
foreign  investing  discussed  in  the  Prospectus  and  in  this  Statement  of
Additional Information.

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


      While  securities  rated "Baa" by Moody's or "BBB" by Standard & Poor's or
Fitch,  Inc.  are  investment  grade and are not  regarded as junk bonds,  those
securities   may  be  subject  to  special  risks  and  have  some   speculative
characteristics.  Definitions  of the debt  security  ratings  categories of the
principal rating  organizations  are included in Appendix A to this Statement of
Additional Information.




<PAGE>


Other Investment Techniques and Strategies.  In seeking its objective,  the Fund
may from time to time employ the types of investment  strategies and investments
described below. It is not required to use all of these strategies at all times,
and at times may not use some of them.

      |X| Portfolio Turnover.  The Fund may engage in short-term trading to some
degree  try to achieve  its  objective.  It does not expect to have a  portfolio
turnover rate in excess of 100% annually.  Portfolio  turnover affects brokerage
costs  the Fund  pays.  If the Fund  realizes  capital  gains  when it sells its
portfolio  investments,  it must generally pay those gains out to  shareholders,
increasing their taxable  distributions.  The Financial  Highlights table at the
end of this  Prospectus  shows the Fund's  portfolio  turnover  rates during the
Fund's five most recent fiscal years.

      |X| Foreign Securities. The Fund can invest up to 15% of its net assets in
foreign securities.  These primarily will be fixed-income debt securities issued
or guaranteed by foreign companies. "Foreign securities" include equity and debt
securities  of companies  organized  under the laws of countries  other than the
United  States.  They may be traded on foreign  securities  exchanges  or in the
foreign over-the-counter markets.

      The  percentage  of the Fund's  assets that will be  allocated  to foreign
securities  will vary over time depending on a number of factors.  Those factors
may  include  the  Manager's  analysis  of  relative  yields of foreign and U.S.
securities,  the  economies of foreign  countries,  the condition of a country's
financial markets, the interest rate climate of particular foreign countries and
the  relationship  of  particular  foreign  currencies to the U.S.  dollar.  The
Manager analyzes fundamental economic criteria (for example,  relative inflation
levels and  trends,  growth rate  forecasts,  balance of  payments  status,  and
economic policies) as well as technical and political data.

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

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

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

<PAGE>


            Risks of Foreign  Investing.  Investments  in  foreign  securities
may  offer  special  opportunities  for  investing  but also  present  special
additional risks and considerations not typically  associated with investments
in domestic securities. Some of these additional risks are:
o     reduction of income by foreign taxes;
o     fluctuation in value of foreign  investments  due to changes in currency
               rates or currency control  regulations  (for example,  currency
               blockage);
o     transaction charges for currency exchange;
o     lack of public information about foreign issuers;
o     lack of uniform  accounting,  auditing and financial reporting standards
               in  foreign   countries   comparable  to  those  applicable  to
               domestic issuers;
o     less volume on foreign exchanges than on U.S. exchanges;
o     greater  volatility  and less  liquidity on foreign  markets than in the
               U.S.;
o     less governmental  regulation of foreign issuers,  securities  exchanges
               and brokers than in the U.S.;
o     greater difficulties in commencing lawsuits;
o     higher brokerage commission rates than in the U.S.;
o     increased  risks of delays in  settlement of portfolio  transactions  or
               loss of certificates for portfolio securities;
o     possibilities   in  some   countries  of   expropriation,   confiscatory
               taxation,   political,   financial  or  social  instability  or
               adverse diplomatic developments; and
o     unfavorable   differences   between   the  U.S.   economy   and  foreign
               economies.
      In  the  past,  U.S.   government   policies  have  discouraged  certain
investments abroad by U.S. investors,  through taxation or other restrictions,
and it is possible that such restrictions could be re-imposed.

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

o Risks of  Conversion  to Euro.  On January 1, 1999,  eleven  countries  in the
European  Union  adopted the euro as their  official  currency.  However,  their
current  currencies (for example,  the franc,  the mark, and the lira) will also
continue in use until January 1, 2002. After that date, it is expected that only
the euro will be used in those  countries.  A common  currency  is  expected  to
confer some benefits in those markets,  by  consolidating  the  government  debt
market for those  countries and reducing some currency risks and costs.  But the
conversion to the new currency will affect the Fund  operationally  and also has
potential  risks,  some of which are  listed  below.  Among  other  things,  the
conversion could affect: o

<PAGE>


            issuers in  which  the  Fund  invests,  because  of  changes  in the
               competitive  environment from a consolidated  currency market and
               greater  operational  costs from  converting to the new currency.
               This might depress securities values.
o              vendors the Fund  depends on to carry out its  business,  such as
               its custodian  bank (which holds the foreign  securities the Fund
               buys),  the Manager  (which must price the Fund's  investments to
               deal  with the  conversion  to the  euro)  and  brokers,  foreign
               markets and  securities  depositories.  If they are not prepared,
               there could be delays in settlements and additional  costs to the
               Fund.
o              exchange  contracts and derivatives  that are outstanding  during
               the   transition   to  the  euro.   The  lack  of  currency  rate
               calculations  between  the  affected  currencies  and the need to
               update the Fund's contracts could pose extra costs to the Fund.

      The Manager has upgraded  (at its  expense)  its computer and  bookkeeping
systems to deal with the conversion.  The Fund's  custodian bank has advised the
Manager of its plans to deal with the  conversion,  including how it will update
its record keeping systems and handle the redenomination of outstanding  foreign
debt.  The  Fund's  portfolio  manager  will also  monitor  the  effects  of the
conversion  on the issuers in which the Fund  invests.  The  possible  effect of
these factors on the Fund's  investments  cannot be determined with certainty at
this time,  but they may reduce  the value of some of the  Fund's  holdings  and
increase its operational costs.

         |X| Warrants. As a fundamental policy, the Fund cannot invest more than
15% of the  value of its net  assets  in  warrants,  and not more than 5% of the
Fund's net assets may be  invested  in  warrants  that are not listed on The New
York Stock Exchange or The American Stock  Exchange.  That policy does not limit
the Fund's  acquisition of warrants that have been acquired in units or attached
to  other  securities.  This  fundamental  policy  is  currently  limited  by an
operational  policy  under  which the Fund will not  invest  more than 5% of the
value of the its net assets in warrants,  and not more than 2% of the Fund's net
assets  may be  invested  in  warrants  that are not  listed  on the New York or
American Stock Exchanges.  Warrants acquired by the Fund in units or attached to
securities are deemed to be without value for purposes of the limitation imposed
by the operational policy.

      A warrant  basically  is an option to purchase  common stock at a specific
price  valid for a specific  period of time.  Usually  the price is at a premium
above the market value of the applicable common stock at its issuance.  Warrants
may  have a life  ranging  from  less  than a year  to  twenty  years  or may be
perpetual.  However,  many warrants have  expiration  dates after which they are
worthless  unless the  warrants are  exercised  or sold before they  expire.  In
addition,  if the market  price of the common stock does not exceed the exercise
price of the warrant  during the life of the  warrant,  the warrant  will expire
worthless.  Warrants have no voting rights,  pay no dividends and have no rights
with respect to the assets of the corporation  issuing them. The market price of
a warrant may  increase or decrease  more than the market  price of the optioned
common stock.

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



<PAGE>


       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.  The resale  price  exceeds the  purchase  price by an amount that
reflects an agreed-upon  interest rate effective for the period during which the
repurchase  agreement is in effect.  Approved  vendors  include U.S.  commercial
banks,  U.S.  branches  of  foreign  banks  or  broker-dealers  that  have  been
designated  a primary  dealer in  government  securities,  which meet the credit
requirements set by the Fund's Board of Trustees from time to time.

      The majority of these  transactions run from day to day. Delivery pursuant
to  resale  typically  will  occur  within  one to five  days  of the  purchase.
Repurchase  agreements  having a maturity  beyond  seven days are subject to the
Fund's limits on holding illiquid investments.

      Repurchase agreements,  are collateralized by the underlying security. The
Fund's  repurchase  agreements  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  monitor the  vendor's  creditworthiness  to confirm  that the
vendor is  financially  sound and will  continuously  monitor  the  collateral's
value.  However,  if the vendor  fails to pay the resale  price on the  delivery
date, the Fund may incur costs in disposing of the collateral and may experience
losses if there is any delay in its ability to do so.

      |X| Illiquid and Restricted Securities.  Under policies established by the
Fund's Board of Trustees,  the Manager  determines  the liquidity of some of the
Fund's  securities.  The Manager  monitors  holdings of illiquid and  restricted
securities  on an ongoing  basis to  determine  whether to sell any  holdings to
maintain adequate liquidity.

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

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

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



<PAGE>


      |X| Borrowing for Leverage. The Fund has a fundamental policy that permits
it to borrow from banks on an unsecured  basis,  to invest the borrowed funds in
portfolio securities. This technique is known as "leverage." The Fund may borrow
only from banks. Under applicable law, borrowings can be made only to the extent
that the value of the Fund's assets, less its liabilities other than borrowings,
is equal to at least 300% of all borrowings  (including the proposed borrowing).
If the  value of the  Fund's  assets  fails to meet  this  300%  asset  coverage
requirement,  the Fund is required to reduce its bank debt within 3 days to meet
the  requirement.  To do so,  the  Fund  might  have  to sell a  portion  of its
investments at a disadvantageous time.

      The Fund will pay interest on these loans,  and that interest expense will
raise the  overall  expenses  of the Fund and  reduce  its  returns.  If it does
borrow,  its expenses will be greater than  comparable  funds that do not borrow
for  leverage.  The interest on a loan might be more (or less) than the yield on
the securities  purchased with the loan proceeds.  Additionally,  the Fund's net
asset  value  per share  might  fluctuate  more  than that of funds  that do not
borrow.

      |X| Loans of Portfolio  Securities.  To raise cash for liquidity or income
purposes,  the Fund can lend its portfolio  securities  to brokers,  dealers and
other types of financial  institutions approved by the Fund's Board of Trustees.
These  loans are  limited  to not more than 10% of the value of the  Fund's  net
assets under guidelines established by the Board of Trustees. The Fund currently
does not intend to lend its securities.

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

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

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

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

      |X|  Hedging.  The Fund can use  hedging to  attempt  to  protect  against
declines  in the  market  value of its  portfolio,  to permit the Fund to retain
unrealized gains in the value of portfolio securities that have appreciated,  or
to facilitate  selling  securities  for  investment  reasons.  To do so the Fund
could:
o     buy puts on securities, or
o     write  covered  calls on  securities.  Covered calls can also be written
         on debt securities to attempt to increase the Fund's income.

      The Fund is not  obligated to use hedging  instruments,  even though it is
permitted  to use them in the  Manager's  discretion,  as described  below.  The
particular  options the Fund can use are  described  below.  The Fund may employ
other hedging  instruments  and  strategies in the future,  if those  investment
methods are  consistent  with the Fund's  investment  objective and  fundamental
policies,  are permissible under applicable  regulations  governing the Fund and
are approved by the Fund's Board of Trustees.

      The Fund can buy and sell only  certain  kinds of put  options  (puts) and
call options  (calls).  The Fund limits its options trading  activity to writing
covered calls on stocks  (including the stock underlying a convertible  security
the Fund owns),  purchasing  put options on stocks,  and  entering  into closing
transactions. These strategies are described below.

o     Writing  Covered Call  Options.  The Fund can write (that is, sell) call
options  on  stocks.  The  Fund's  call  writing  is  subject  to a number  of
restrictions:
(1)   Calls the Fund sells must be listed on a national securities exchange.
(2)   Each call the Fund writes  must be  "covered"  while it is  outstanding.
               That  means  the Fund  must own the  stock on which  the call was
               written  or must own a  security  convertible  into the  stock on
               which the option is written.
(3)            As a fundamental  policy, the Fund cannot write a call that would
               cause the value of its securities underlying call options (valued
               at the lower of the option  price or market  value) to exceed 25%
               of its net assets.

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



<PAGE>


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

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

o  Purchasing  Puts.  The Fund may buy only  those  puts that  relate to stocks,
including stocks  underlying the convertible  securities that the Fund owns. The
Fund may not sell puts other than puts it has previously purchased, to close out
a position.

      When the Fund  purchases a put,  it pays a premium.  The Fund then 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 a stock enables the Fund to protect  itself during the put period against
a decline in the value of the underlying investment below the exercise price. If
the market price of the underlying  investment is equal to or above the exercise
price and as a result the put is not  exercised  or resold,  the put will become
worthless at its  expiration  date.  In that case the Fund will lose its premium
payment and the right to sell the underlying investment. A put may be sold prior
to expiration (whether or not at a profit).

o Risks of Hedging with Options. The use of hedging instruments requires special
skills and knowledge of investment  techniques  that are different  than what is
required  for  normal  portfolio  management.  If the  Manager  uses  a  hedging
instrument at the wrong time or judges market  conditions  incorrectly,  hedging
strategies may reduce the Fund's returns.

      The Fund's option activities could affect its portfolio  turnover rate and
brokerage commissions. The exercise of calls written by the Fund might cause the
Fund to sell related  portfolio  securities,  thus increasing its turnover rate.
The Fund could pay a brokerage commission each time it buys a call or put, sells
a call,  or buys or  sells  an  underlying  investment  in  connection  with the
exercise of a call or put. Such commissions  might be higher on a relative basis
than  the  commissions   for  direct   purchases  or  sales  of  the  underlying
investments. Premiums paid for options are small in relation to the market value
of the underlying  investments.  Consequently,  put and call options offer large
amounts of leverage.  The leverage offered by trading in options could result in
the Fund's net asset value being more  sensitive  to changes in the value of the
underlying investment.


<PAGE>


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

      An  option  position  may be  closed  out only on a market  that  provides
secondary  trading for options of the same series.  There is no assurance that a
liquid secondary market will exist for a particular option.

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

Investment Restrictions

      |X|  What Are  "Fundamental  Policies?"  Fundamental  policies  are  those
policies that the Fund has adopted to govern its investments that can be changed
only by the vote of a "majority" of the Fund's  outstanding  voting  securities.
Under the Investment  Company Act, such a "majority" vote is defined as the vote
of the holders of the lesser of:
o        67% or  more  of the  shares  present  or  represented  by  proxy  at a
         shareholder meeting, if the holders of more than 50% of the outstanding
         shares are present or represented by proxy, or
o     more than 50% of the outstanding shares.

      The Fund's investment  objective is not a fundamental policy, but will not
be changed without  approval by the Fund's Board of Trustees and prior notice to
shareholders.  Other  policies  described in the Prospectus or this Statement of
Additional  Information are  "fundamental"  only if they are identified as such.
The  Fund's  Board of  Trustees  can  change  non-fundamental  policies  without
shareholder approval.  However,  significant changes to investment policies will
be described in  supplements  or updates to the  Prospectus or this Statement of
Additional Information,  as appropriate.  The Fund's most significant investment
policies are described in the Prospectus.

o Does the Fund Have Additional  Fundamental Policies?  The following investment
restrictions are fundamental policies of the Fund:

o The Fund may not invest more than 25% of the value of the Fund's  total assets
in the  securities  of any one  issuer  or any  group  of  issuers  in the  same
industry.  However,  this  restriction  does not prevent the Fund from investing
more than 25% of its total assets in securities of the United States government,
or its agencies or instrumentalities.

o With respect to 50% of its total assets,  the Fund must limit its  investments
to cash,  cash items,  U.S.  government  securities and securities of issuers in
which its  investments are limited to not more than 5% of the value of its total
assets in the  securities  of any one  issuer and not more than 10% of its total
assets in the outstanding voting securities of any one issuer.

o The Fund may not purchase securities on margin.  However,  the Fund can obtain
unsecured loans to purchase  securities.  The aggregate of all unsecured  loans,
however,  may not exceed  50% of the Fund's  total  assets.  It can also  borrow
amounts  equivalent  to up to  5%  of  the  Fund's  net  assets  for  temporary,
extraordinary or emergency purposes.


o The Fund may not make short sales on securities or maintain a short  position.
An exception  the Fund can do so if at all times when a short  position is open,
the Fund owns an equal  amount  of the  securities  sold  short or the Fund owns
securities that are convertible  into or exchangeable for securities of the same
issue as, and equal in amount to, the securities sold short,  without payment of
further consideration.  Not more than 10% of the Fund's total assets may be held
as collateral for these short sales at any one time.

o The Fund may not  purchase or sell put and call  options nor write put or call
options,  except as set forth in the  Prospectus or this Statement of Additional
Information.

o The Fund may not invest in  warrants  in amounts in excess of 15% of the value
of its net assets.  The valuation of warrants for the purpose of that limitation
shall be determined at the lower of cost or market value.  Warrants  acquired by
the Fund as part of a unit or attached to  securities at the time of purchase do
not count against that percentage limitation. Not more than 5% of the Fund's net
assets may be  invested  in  warrants  that are not listed on The New York Stock
Exchange or The American Stock Exchange.

o The Fund may not make loans.  However,  this policy does not prohibit the Fund
from (1) making loans of its portfolio  securities,  (2) purchasing notes, bonds
or other  evidences of  indebtedness,  (3) making  deposits with banks and other
financial institutions, or (4) entering into repurchase agreements.

o The Fund may not purchase or sell real estate or real estate  mortgage  loans.
However,  the Fund may invest not more than 5% of its total assets in marketable
securities of real estate investment trusts.

o The Fund may not deal in commodities or commodities contracts.

o The Fund may not  purchase  or retain  securities  of any issuer if any of its
officers and  trustees,  or any of the officers and  directors of the Manager or
the Distributor own individually  beneficially more than 0.5% of the outstanding
securities of that issuer,  or if all of those persons together own more than 5%
of that issuer's securities.

o

<PAGE>


      The Fund may not invest  more than 5% of the value of its total  assets in
securities  of any company  (including  its  predecessors)  that has not been in
business for at least three consecutive years.

o  The Fund may not issue any securities that are senior to shares of the Fund.

o The Fund may not underwrite securities of other issuers.

o The Fund may not acquire securities of any other investment  company,  if as a
result of that acquisition,  the Fund would own in the aggregate:  (1) more than
3% of the  voting  stock of that  investment  company;  (2)  securities  of that
investment company having an aggregate value in excess of 5% of the value of the
total assets of the Fund; or (3)  securities of that  investment  company and of
any other  investment  companies (but  excluding  treasury stock of those funds)
having an  aggregate  value in  excess  of 10% of the total  assets of the Fund.
However,  none of these limitations applies to a security received as a dividend
or as a result of an offer of exchange, a merger or plan of reorganization.

o With respect to 75% of its total assets, the Fund cannot buy securities issued
or guaranteed by any one issuer if more than 5% of the Fund's total assets would
be invested in securities of that issuer or if the Fund would then own more than
10% of that issuer's voting securities.  That restriction does not apply to cash
or cash items or securities  issued or guaranteed by the U.S.  government or its
agencies or instrumentalities.

Does the Fund Have Any  Restrictions  That Are Not  Fundamental?  The Fund has a
number of other investment restrictions that are not fundamental policies, which
means  that they can be  changed by the Board of  Trustees  without  shareholder
approval. While these investment policies do not require shareholder approval to
be changed,  as a matter of operating policy,  the Fund has agreed not to change
these  policies  without  prior  notice  to its  shareholders.  These  operating
policies provide that the Fund may not do any of the following:

o The Fund may not invest in any issuer for the purpose of exercising control or
management of that issuer, unless approved by the Fund's Board of Trustees.

o The Fund may not invest any part of its total assets in interests in oil, gas,
or other mineral exploration or development programs,  although it may invest in
securities of companies  which invest in or sponsor such programs.  The Fund may
not invest in oil, gas or other mineral leases.

o The  Fund may not  invest  more  than 5% of the  value  of its net  assets  in
warrants, valued at the lower of cost or market value. The Fund can buy warrants
that are not  listed  on The New  York  Stock  Exchange  or The  American  Stock
Exchange, but they count toward the 5% limit on warrants described above and may
not exceed 2% of the value of the Fund's net  assets.  Warrants  acquired by the
Fund in units or attached to securities are not covered by this restriction.



<PAGE>


      Unless the Prospectus or Statement of Additional Information states that a
percentage  restriction applies on an ongoing basis, it applies only at the time
the Fund makes an investment.  In that case 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.

      In carrying out its policy with respect to  concentration  of investments,
the Fund applies that policy to prohibit the Fund from making an  investment  in
the  securities  of any one issuer or group of issuers in the same  industry  if
that investment  would cause 25% or more of the value of the Fund's total assets
to be invested in that industry.  In applying its policy not to concentrate  its
investments,  the Fund has adopted  the  industry  classifications  set forth in
Appendix  B  to  this  Statement  of  Additional  Information.  This  is  not  a
fundamental policy.

      In carrying out its policy  prohibiting the issuance of senior securities,
the Fund interprets that policy not to prohibit  certain  investment  activities
for which assets of the Fund are  designated  as segregated to cover the related
obligations.  Examples of those activities  include borrowing money,  repurchase
agreements, and contracts to buy or sell derivatives.


                             How the Fund is Managed


Organization  and  History.  The  Fund  is a  series  of  Bond  Fund  Series,  a
Massachusetts  business  trust  organized  in 1986 as an  open-end,  diversified
management  investment  company with an unlimited number of authorized shares of
beneficial  interest  (that trust is referred to in this  section as the "Fund's
parent  Trust"  or the  "Trust").  The  Trust  was  originally  named  Rochester
Convertible Fund and was renamed Rochester Fund Series, which was its name until
it was renamed Bond Fund Series in 1997.  The Fund is currently  the only series
of the Trust and is a  diversified  fund. It was called The Bond Fund for Growth
until 1997. In 1997 it was re-named Oppenheimer Bond Fund for Growth. The Fund's
name was changed to Oppenheimer Convertible Securities Fund in 1998.

      The Fund and its parent Trust are  governed by a Board of Trustees,  which
is responsible for protecting the interests of shareholders under  Massachusetts
law. The Trustees meet  periodically  throughout  the year to oversee the Fund's
(and the Trust's) activities,  review its performance, and review the actions of
the Manager.


      |X|  Classes  of Shares.  The Board of  Trustees  has the  power,  without
shareholder  approval,  to divide  unissued  shares of the Fund into two or more
classes.  The Board has done so,  and the Fund  currently  has five  classes  of
shares,  Class A, Class B, Class C, Class M and Class N. All  classes  invest in
the same investment  portfolio.  Shares are freely transferable.  Each share has
one vote at shareholder  meetings,  with fractional shares voting proportionally
on  matters  submitted  to the  vote of  shareholders.  Each  share  of the Fund
represents an interest in the Fund proportionally  equal to the interest of each
other share of the same class.  Shares do not have  cumulative  voting rights on
preemptive or subscription rights.  Shares may be voted in person or by proxy at
shareholder  meetings.  Each  class  of  shares:  o has  its own  dividends  and
distributions,  o pays certain expenses which may be different for the different
classes, o may have a different net asset value, o


<PAGE>


      may have  separate  voting  rights on matters in which the  interests of
         one class are different from the interests of another class, and
o     votes as a class on matters that affect that class alone.

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

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

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

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

Trustees and Officers. The Trustees and officers and their principal occupations
and business  affiliations during the past five years are listed below. Trustees
denoted with an asterisk (*) below are deemed to be "interested  persons" of the
Fund under the  Investment  Company Act.  Mr.  Cannon is a Trustee of the Trust,
Rochester  Portfolio  Series and  Rochester  Fund  Municipals.  All of the other
Trustees are trustees or directors of the following Oppenheimer funds:


<PAGE>




Oppenheimer                                 Quest For Value  Funds,  a Rochester
                                            Portfolio   Series,  a  series  fund
                                            having one series:
series   fund   having  the   following     Limited-Term  New  York  Municipal
series:                                         Fund
   Oppenheimer                              Quest  Small  Cap  Fund,  Bond  Fund
                                            Series,  a series  fund  having  one
                                            series:
   Oppenheimer   Quest  Balanced  Value     Oppenheimer            Convertible
   Fund and                                     Securities Fund
   Oppenheimer  Quest Opportunity Value Rochester Fund Municipals
   Fund
Oppenheimer  Quest  Global  Value Fund, Oppenheimer MidCap Fund
Inc.
Oppenheimer  Quest  Capital Value Fund,
Inc.
Oppenheimer Quest Value Fund, Inc.


    Ms. Macaskill and Messrs.  Bishop, Wixted,  Donohue,  Farrar and Zack, who
are  officers  of the Fund,  respectively  hold the same  offices of the other
Oppenheimer  funds  listed  above.  As of  _________,  the  Trustees  and  the
officers of the Fund as a group owned less than 1% of the  outstanding  shares
of the Fund.  The foregoing  statement  does not reflect shares held of record
by an employee  benefit plan for  employees  of the Manager  other than shares
beneficially  owned under that plan by the officers of the Fund listed  below.
Ms. Macaskill and Mr. Donohue are trustees of that plan.

Bridget A. Macaskill*,  Chairman of the Board of Trustees and President,  Age:
52.

Two World Trade Center, New York, New York 10048-0203

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

John Cannon, Trustee, Age: 71.
620 Sentry  Parkway West Suite 220, Blue Bell,  Pennsylvania  19422  Independent
Consultant;  Chief Investment Officer, CDC Associates,  a registered  investment
advisor; Director,  Neuberger & Berman Income Managers Trust, Neuberger & Berman
Income Funds and Neuberger Berman Trust, (1995 - present); formerly Chairman and
Treasurer, CDC Associates, (1993 - February 1996).

Paul Y. Clinton, Trustee, Age: 70.
39 Blossom Avenue, Osterville, Massachusetts 02655

Principal of Clinton  Management  Associates,  a financial  and venture  capital
consulting firm;  Trustee of Capital Cash Management  Trust, a money-market fund
and  Narragansett  Tax-Free Fund, a tax-exempt  bond fund;  Director of OCC Cash
Reserves, Inc. and Trustee of OCC Accumulation Trust, both of which are open-end
investment companies.  Formerly: Director, External Affairs, Kravco Corporation,
a national real estate owner and property management  corporation;  President of
Essex Management Corporation, a management consulting company; a general partner
of Capital  Growth Fund, a venture  capital  partnership;  a general  partner of
Essex Limited Partnership, an investment partnership; President of Geneve Corp.,
a venture  capital fund;  Chairman of Woodland  Capital  Corp., a small business
investment company; and Vice President of W.R. Grace & Co.


Thomas W. Courtney, Trustee, Age: 67.
833 Wyndemere Way, Naples, Florida 34105

Principal of Courtney  Associates,  Inc. (venture capital firm);  former General
Partner of Trivest Venture Fund (private venture capital fund); former President
of  Investment  Counseling  Federated  Investors,  Inc.;  Trustee of Cash Assets
Trust, a money market fund; Director of OCC Cash Reserves,  Inc., and Trustee of
OCC  Accumulation  Trust;  former  President  of  Boston  Company  Institutional
Investors;  Trustee of  Hawaiian  Tax-Free  Trust and Tax Free Trust of Arizona,
tax-exempt bond funds; Director of several privately owned corporations;  former
Director of Financial Analysts Federation.


Robert G. Galli, Trustee, Age: 67.
19750 Beach Road, Jupiter, Florida 33469
A Trustee or Director of other Oppenheimer funds. Formerly he held the following
positions:  Vice  Chairman  (October 1995 - December  1997) and  Executive  Vice
President  (December  1977 -  October  1995)  of  the  Manager;  Executive  Vice
President  and a  director  (April  1986 - October  1995) of  HarbourView  Asset
Management Corporation.

Lacy B. Herrmann, Trustee, Age: 71.

380 Madison Avenue, Suite 2300, New York, New York 10017

Chairman  and Chief  Executive  Officer of Aquila  Management  Corporation,  the
sponsoring  organization and manager,  administrator  and/or  sub-advisor to the
following open-end investment  companies,  and Chairman of the Board of Trustees
and President of each:  Churchill Cash Reserves Trust,  Aquila - Cascadia Equity
Fund,  Pacific Capital Cash Assets Trust,  Pacific Capital U.S.  Treasuries Cash
Assets Trust,  Pacific  Capital  Tax-Free  Cash Assets  Trust,  Prime Cash Fund,
Narragansett  Insured  Tax-Free Income Fund,  Tax-Free Fund For Utah,  Churchill
Tax-Free Fund of Kentucky,  Tax-Free Fund of Colorado, Tax-Free Trust of Oregon,
Tax-Free Trust of Arizona,  Hawaiian  Tax-Free Trust,  and Aquila Rocky Mountain
Equity Fund;  Vice President,  Director,  Secretary,  and formerly  Treasurer of
Aquila  Distributors,  Inc.,  distributor  of the  above  funds;  President  and
Chairman of the Board of Trustees of Capital Cash Management Trust ("CCMT"), and
an Officer and  Trustee/Director of its predecessors;  President and Director of
STCM Management Company, Inc., sponsor and advisor to CCMT; Chairman,  President
and a  Director  of  InCap  Management  Corporation,  formerly  sub-advisor  and
administrator of Prime Cash Fund and Short Term Asset Reserves;  Director of OCC
Cash Reserves,  Inc., and Trustee of OCC Accumulation  Trust,  both of which are
open-end investment companies; Trustee Emeritus of Brown University.

George Loft, Trustee, Age: 86.
51 Herrick Road, Sharon, Connecticut 06069
Private Investor; formerly Director of OCC Cash Reserves, Inc., and Trustee
of OCC Accumulation Trust.

Ted Everett,  Vice  President  and Portfolio  Manager,  Age: 34. Two World Trade
Center,  New York,  New York  10048-0203  Vice  President of the Manager  (since
January 2000);  formerly Assistant Vice President of the Manager (January 1996 -
January 2000);  Portfolio  Manager at Fielding  Management  Company (July 1993 -
January 1996).

Andrew J. Donohue, Secretary, Age: 50.
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
OppenheimerFunds  Distributor,  Inc., the Fund's Transfer Agent;  Executive Vice
President,  General Counsel and a director (since September 1995) of HarbourView
Asset Management Corporation,  Shareholder Services, Inc., Shareholder Financial
Services,  Inc.  and  Oppenheimer  Partnership  Holdings,  Inc.,  of OFI Private
Investments,  Inc.  (since March 2000),  and of PIMCO Trust  Company  (since May
2000);  President  and a director of  Centennial  Asset  Management  Corporation
(since  September 1995) and of Oppenheimer  Real Asset  Management,  Inc. (since
July  1996);   Vice  President  and  a  director   (since   September  1997)  of
OppenheimerFunds  International  Ltd. and  Oppenheimer  Millennium  Funds plc; a
director (since April 2000) of OppenheimerFunds Legacy Program;  General Counsel
(since May 1996) and  Secretary  (since April 1997) of  Oppenheimer  Acquisition
Corp.; an officer of other Oppenheimer funds.

Brian W. Wixted, Treasurer, Age: 41.
6803 South Tucson Way, Englewood, Colorado 80112
Senior Vice President and Treasurer (since March 1999) of the Manager; Treasurer
(since March 1999) of  HarbourView  Asset  Management  Corporation,  Shareholder
Services,  Inc.,  Oppenheimer  Real Asset  Management  Corporation,  Shareholder
Financial  Services,  Inc. and Oppenheimer  Partnership  Holdings,  Inc., of OFI
Private   Investments,   Inc.   (since  March  2000)  and  of   OppenheimerFunds
International  Ltd.  and  Oppenheimer  Millennium  Funds plc  (since  May 2000);
Treasurer and Chief  Financial  Officer (since May 2000) of PIMCO Trust Company;
Assistant  Treasurer (since March 1999) of Oppenheimer  Acquisition Corp. and of
Centennial Asset Management Corporation;  an officer of other Oppenheimer funds;
formerly Principal and Chief Operating  Officer,  Bankers Trust Company - Mutual
Fund  Services  Division  (March 1995 - March 1999);  Vice  President  and Chief
Financial Officer of CS First Boston Investment Management Corp. (September 1991
- March 1995).

Robert G. Zack, Assistant Secretary, Age: 52.
Two World Trade Center, New York, New York 10048-0203
Senior Vice President  (since May 1985) and Associate  General  Counsel (since
May 1981) of the Manager;  Assistant Secretary of Shareholder  Services,  Inc.
(since May 1985),  Shareholder Financial Services, Inc. (since November 1989);
OppenheimerFunds  International  Ltd.  and  Oppenheimer  Millennium  Funds plc
(since October 1997); an officer of other Oppenheimer funds.

Robert J. Bishop, Assistant Treasurer, Age: 42.
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 of
the Manager.

Adele A. Campbell, Assistant Treasurer, Age: 37.
350 Linden Oaks, Rochester, New York 14625
Assistant Vice President of OppenheimerFunds,  Inc.  (1996-Present);  Formerly
Assistant Vice President of Rochester Fund Services, Inc. (1994 - 1996).

Scott T. Farrar, Assistant Treasurer, Age: 35.
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 of
the Manager.

    |X| Remuneration of Trustees.  The officers of the Fund and one Trustee, Ms.
Macaskill, are affiliated with the Manager and receive no salary or fee from the
Fund.  The  remaining  Trustees  received  the  compensation  shown  below.  The
compensation  from the Fund was paid during its fiscal year ended  December  31,
2000.  The  table  below  also  shows  the  total  compensation  from all of the
Oppenheimer  funds listed above,  including the compensation from the Fund. That
amount represents  compensation received as a director,  trustee, or member of a
committee of the Board during the calendar year 2000.




<PAGE>


-------------------------------------------------------------------------------
                                                          Total Compensation
                                                          From all Oppenheimer
                                        Retirement        Quest/Rochester
                      Aggregate         Benefits Accrued  Funds
                      Compensation      as Part of Fund   (10 Funds)1
Trustee's Name        From the Fund 1   Expenses
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

John Cannon                $6,347           $1,184            $28,439

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

Paul Y. Clinton            $16,188           $11,024            $140,190

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

Thomas W. Courtney         $13,529          $8,366            $140,190

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

Robert G. Galli            $5,163           $0            $176,215

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

Lacy B. Herrmann           $17,902           $12,739            $139,290

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

George Loft                $17,175           $12,012            $140,190

-------------------------------------------------------------------------------
1. Aggregate compensation includes fees, deferred compensation,  if any, and any
   retirement plan benefits accrued for a Trustee or Director.
2.    For Mr.  Cannon,  the total  compensation  is from two funds,  Rochester
   Funds Municipals and Limited Tern New York Municipal Fund.

3. Total compensation for the 2000 calendar year includes  compensation from two
   fund complexes for which the sub-advisor acts as the investment advisor.
4. Total compensation for the 2000 calendar year includes  compensation received
   for serving as a Trustee or Director of 24 other Oppenheimer funds.



<PAGE>


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

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

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


      |X| Major Shareholders. As of _____________,  the only person who owned of
record or were known by the Fund to own  beneficially 5% or more of any class of
the Fund's outstanding shares was:

Merrill  Lynch Pierce  Fenner & Smith Inc.  4800 Deer Lake Drive East,  Floor 3,
Jacksonville,   Florida  32246,  which  owned  _______________  Class  B  shares
(approximately   _________%   of  the   Class  B   shares   then   outstanding),
__________________  Class C shares  (approximately  ________%  of Class C shares
then outstanding),  _____________ Class M shares  (approximately  ______% of the
Class M shares then-outstanding), for the benefit of its customers.


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

      The  portfolio  manager  of the Fund is  principally  responsible  for the
day-to-day management of the Fund's investment  portfolio.  Other members of the
Manager's  fixed-income  portfolio  department,  provide  the  Fund's  portfolio
manager with research and support in managing the Fund's portfolio.

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

      |X| The Investment  Advisory  Agreement.  The Manager provides  investment
advisory  and  management  services  to the Fund  under an  investment  advisory
agreement  between the Manager and the Fund. The Manager selects  securities for
the  Fund's  portfolio  and  handles  its day-to day  business.  That  agreement
requires the Manager,  at its expense,  to provide the Fund with adequate office
space,  facilities  and  equipment.  It also requires the Manager to provide and
supervise the activities of all  administrative  and clerical personnel required
to   provide   effective   corporate   administration   for  the   Fund.   Those
responsibilities include the compilation and maintenance of records with respect
to the Fund's operations,  the preparation and filing of specified reports,  and
the  composition of proxy materials and  registration  statements for continuous
public sale of shares of the Fund.

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

      The investment advisory agreement contains an indemnity of the Manager. In
the  absence  of  willful  misfeasance,  bad  faith,  gross  negligence  in  the
performance of its duties, or reckless  disregard for its obligations and duties
under the investment advisory agreement,  the Manager is not liable for any loss
sustained by reason of any  investment of the Fund assets made with due care and
in good faith.  The agreement  permits the Manager to act as investment  advisor
for any other person,  firm or corporation and to use the name  "Oppenheimer" in
connection  with other  investment  companies for which it may act as investment
advisor or general distributor. If the Manager shall no longer act as investment
advisor to the Fund,  the Manager may  withdraw the Fund's right to use the name
"Oppenheimer" as part of its name.

o Accounting and Record-Keeping  Services.  The Manager provides  accounting and
record-keeping services to the Fund pursuant to an Accounting and Administration
Agreement approved by the Board of Trustees.  Under that agreement,  the Manager
maintains  the  general  ledger  accounts  and  records  relating  to the Fund's
business and calculates the daily net asset values of the Fund's shares. The fee
is  $12,000  for the first $30  million  of the Fund's net assets and $9,000 for
each additional $30 million of net assets.


<PAGE>



-------------------------------------------------------------------------------
  Fiscal Year Ended      Management Fee Paid to     Accounting and
                                                    Administrative Services
                      ----------------------------- Fee Paid to
        12/31            OppenheimerFunds, Inc.     OppenheimerFunds, Inc.
-------------------------------------------------------------------------------
        1997                   $3,705,530                    $239,689
-------------------------------------------------------------------------------
        1998                   $4,873,274                    $312,803
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
        1999                   $4,436,407                    $272,339
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

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

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

                         Brokerage Policies of the Fund

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

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

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

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


<PAGE>


execution  can be  obtained  by doing  so. In an  option  transaction,  the Fund
ordinarily  uses the same broker for the  purchase or sale of the option and any
transaction in the securities to which the option relates.

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

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

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

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

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


<PAGE>



--------------------------------------------------------------------------------
 Fiscal Year Ended 12/31:     Total Brokerage Commissions Paid by the Fund1
--------------------------------------------------------------------------------
           1997                                  $374,622
--------------------------------------------------------------------------------
           1998                                  $314,366
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
           1999                                 $388,6852
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

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

2. In the fiscal year ended  12/31/99,  the amount of  transactions  directed to
   brokers  for  research  services  was  $35,552,468  and  the  amount  of  the
   concessions paid to broker-dealers for those services was $33,594.



                         Distribution and Service Plans

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


    The  compensation  paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares during the Fund's three most recent fiscal
years is shown in the table  below.  Class N shares  were not  publicly  offered
during the Fund's fiscal  year's  depicted and therefore are not included in any
of  the  charts   located  in  this  section  of  the  Statement  of  Additional
Information.




<PAGE>




-------------------------------------------------------------------------------
Fiscal    Aggregate    Class A       Commissions    Commissions  Commissions
          Front-End    Front-End
          Sales        Sales         on Class A     on Class B   on Class C
Year      Charges on   Charges       Shares         Shares       Shares
Ended     Class A      Retained by   Advanced by    Advanced by  Advanced by
12/31:    Shares       Distributor2  Distributor1   Distributor1 Distributor1
-------------------------------------------------------------------------------
  1997     $1,867,289    $564,844       $61,148      $5,894,745    $434,925
-------------------------------------------------------------------------------
  1998     $1,551,248    $405,691       $117,278     $4,756,069    $420,210
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
  1999      $353,830     $104,804       $36,458       $960,277      $86,566
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

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

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

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


-------------------------------------
Fiscal    Aggregate    Class M
          Front-End    Front-End
          Sales        Sales
Year      Charges on   Charges
Ended     Class M      Retained by
12/31:    Shares       Distributor1
-------------------------------------
  1997      $760,191      $96,399
-------------------------------------
  1998      $538,755      $52,560
-------------------------------------
-------------------------------------
  1999      $85,944       $10,458
-------------------------------------
-------------------------------------
-------------------------------------
1. Includes  amounts  retained by a broker-dealer  that is an affiliate of the
parent of the Distributor.


--------------------------------------------------------------------------------
Fiscal    Class A          Class B          Class C           Class M
          Contingent       Contingent
          Deferred Sales   Deferred Sales   Contingent        Contingent
Year      Charges          Charges          Deferred Sales    Deferred Sales
Ended     Retained by      Retained by      Charges Retained  Charge Retained
12/31     Distributor      Distributor      by Distributor    by Distributor
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

  1999        $4,533          $1,693,693          $24,673            None

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


Distribution  and Service Plans. The Fund has adopted a Service Plan for Class A
shares  and  Distribution  and  Service  Plans for Class B, Class C, Class M and
Class N shares under Rule 12b-1 of the Investment Company Act. Under those plans
the Fund pays the  Distributor  for all or a portion  of its costs  incurred  in
connection  with  the  distribution  and/or  servicing  of  the  shares  of  the
particular class.

            Each  plan has been  approved  by a vote of the  Board of  Trustees,
including a majority of the Independent  Trustees3,  cast in person at a meeting
called  for the  purpose of voting on that plan.  The  shareholder  vote for the
Distribution  and Service Plans for Class B, Class C and Class N shares was cast
by the Manager as the sole initial holder of Class B, Class C and Class N shares
of the Fund.

3. In  accordance  with  Rule  12b-1 of the  Investment  Company  Act,  the term
"Independent  Trustees" in this  Statement of Additional  Information  refers to
those  Trustees  who are not  "interested  persons"  of the Fund (or its  parent
corporation)  and who do not have any direct or indirect  financial  interest in
the  operation  of the  distribution  plan or any  agreement  under the plan.




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

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

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

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

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

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

      |X| Class A Service  Plan  Fees.  Under  the  Class A  service  plan,  the
Distributor  currently  uses the fees it receives  from the Fund to pay brokers,
dealers and other financial  institutions (they are referred to as "recipients")
for personal  services and account  maintenance  services they provide for their
customers who hold Class A shares. The services include, among others, answering
customer  inquiries about the Fund,  assisting in  establishing  and maintaining
accounts in the Fund, making the Fund's investment plans available and providing
other  services  at the  request  of the Fund or the  Distributor.  The  Class A
service plan permits  reimbursements to the Distributor at a rate of up to 0.25%
of average annual net assets of Class A shares. While the plan permits the Board
to authorize  payments to the Distributor to reimburse itself for services under
the plan, the Board has not yet done so. The Distributor  makes payments to plan
recipients quarterly at an annual rate not to exceed 0.25% of the average annual
net assets  consisting of Class A shares held in the accounts of the  recipients
or their customers.


      For the fiscal year ended  December  31, 2000  payments  under the Class A
Plan totaled $_________, all of which was paid by the Distributor to recipients.
That included $______ paid to an affiliate of the Distributor's  parent company.
Any unreimbursed  expenses the Distributor incurs with respect to Class A shares
in any fiscal year cannot be recovered in subsequent  years. The Distributor may
not use  payments  received  under the  Class A Plan to pay any of its  interest
expenses, carrying charges, or other financial costs, or allocation of overhead.

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


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


    The Distributor  retains the asset-based sales charge on Class B and Class M
shares.  It may pay dealers who sell Class M shares a portion of the asset-based
sales  charge it receives on Class M shares,  as  additional  compensation.  The
Distributor  retains the  asset-based  sales charge on Class C shares during the
first year the shares are outstanding.  It pays the asset-based  sales charge as
an ongoing  concession to the recipient on Class C shares outstanding for a year
or  more.  If a  dealer  has a  special  agreement  with  the  Distributor,  the
Distributor  will pay the Class B and/or Class C service fee and the asset-based
sales charge to the dealer quarterly in lieu of paying the sales concessions and
service  fee in advance at the time of  purchase.  The  Distributor  retains the
asset based sales charge on Class N shares.

      The asset-based sales charges on Class B, Class C and Class N shares allow
investors  to buy  shares  without a  front-end  sales  charge  (and the Class M
asset-based  sales charge allows investors to buy shares at a reduced  front-end
sales charge) while  allowing the  Distributor  to compensate  dealers that sell
those shares. The Fund pays the asset-based sales charges to the Distributor for
its  services  rendered  in  distributing  Class B, Class C, Class M and Class N
shares.  The  payments  are  made to the  Distributor  in  recognition  that the
Distributor:
o     pays sales concessions to authorized  brokers and dealers at the time of
         sale and pays service fees as described above,
o        may  finance  payment of sales  concessions  and/or the  advance of the
         service fee payment to recipients  under the plans, or may provide such
         financing from its own resources or from the resources of an affiliate,

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


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



<PAGE>



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

    Distribution Fees Paid to the Distributor for the Year Ended 12/31/99*

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

Class B Plan    $4,146,098   $3,386,142 1       $9,555,997           2.22%

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

Class C Plan    $943,574    $298,813 2        $1,101,182          1.17%

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

Class M Plan    $1,766,073    $653,494 3        NONE            N/A

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

1.    Includes  $17,395  paid  to an  affiliate  of  the  Distributor's  parent
    company.
2.    Includes  $13,440  paid  to an  affiliate  of  the  Distributor's  parent
    company.
3.    Includes  $14,122  paid  to an  affiliate  of  the  Distributor's  parent
    company.
* The Fund did not offer Class N Shares  during its fiscal  year ended  December
31, 2000.


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


                             Performance of the Fund


Explanation  of  Performance  Terminology.  The Fund uses a variety  of terms to
illustrate its investment performance. Those terms include "standardized yield,"
"dividend  yield,"  "average  annual total return,"  "cumulative  total return,"
"average  annual total return at net asset value" and "total return at net asset
value." An  explanation  of how yields and total  returns are  calculated is set
forth below. The charts below show the Fund's  performance as of its most recent
fiscal  year end for its  classes  of  shares  that  are  currently  offered  to
investors.  You can obtain current performance information by calling the Fund's
Transfer Agent at  1.800.525.7048 or by visiting the  OppenheimerFunds  Internet
web site at http://www.oppenheimerfunds.com.


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

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

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

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

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

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

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

                                    (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 assumptions).
      c =  the  average  daily  number  of shares  of that  class  outstanding
           during the 30-day period that were entitled to receive dividends.
      d =  the maximum  offering price per share of that class on the last day
           of the period, adjusted for undistributed net investment income.

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

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

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


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


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

            The Fund's Yields for the 30-Day Periods Ended 12/31/00*

  -----------------------------------------------------------------------------
  -----------------------------------------------------------------------------
  Class of          Standardized Yield                 Dividend Yield
  Shares
  -----------------------------------------------------------------------------
  -----------------------------------------------------------------------------
                 Without           After          Without           After
                  Sales            Sales           Sales            Sales
                  Charge          Charge           Charge          Charge
  -----------------------------------------------------------------------------
  -----------------------------------------------------------------------------

  Class A         _____%          ______%          _____%          _____%

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

  Class B         _____%            N/A            _____%            N/A

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

  Class C         _____%            N/A            _____%            N/A

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

  Class M         _____%          _____%           _____%          _____%

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

* Class N shares were not offered for sale during the Fund's  fiscal year ending
12/31/99.


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


      In calculating total returns for Class A shares, the current maximum sales
charge of 5.75%,  and for Class M, the current  maximum  initial sales charge of
3.25% (as a  percentage  of the  offering  price) is  deducted  from the initial
investment ("P") (unless the return is shown without sales charge,  as described
below). For Class B shares,  payment of the applicable contingent deferred sales
charge is applied,  depending on the period for which the return is shown:  5.0%
in the first year,  4.0% in the second year, 3.0% in the third and fourth years,
2.0% in the fifth year, 1.0% in the sixth year and none thereafter.  For Class C
shares, the 1% contingent  deferred sales charge is deducted for returns for the
1-year period.  For Class N shares,  the 1% contingent  deferred sales charge is
deducted for returns for the 1-year and life-of-class periods, as applicable.

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



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


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

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



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


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

            The Fund's Total Returns for the Periods Ended 12/31/00*

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

Class A    _____%1  _____%1   _____%   _____%  _____%1 _____%1    N/A      N/A

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

Class B    _____%2   ____%2   _____%   _____%  _____%2 _____%2    N/A      N/A

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

Class C    _____%3  ______%3  _____%   _____%  _____3   ____3     N/A      N/A

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

Class M4   _____%   ______%   _____%   _____%  _____%   _____%   _____%  _____%

--------------------------------------------------------------------------------
1.    Life-of-class performance is shown from inception of Class A: 5/1/95.
2.    Life-of-class performance is shown from inception of Class B: 5/1/95.
3.    Life-of-class performance is shown from inception of Class C: 3/11/96.
4.    Inception of Class M: 6/3/86.

* Class N shares were not offered for sale during the Fund's  fiscal year ending
12/31/00.


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

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

      |X|  Morningstar  Ratings  and  Rankings.  From  time to time the Fund may
publish the ranking  and/or  star  rating of the  performance  of its classes of
shares by  Morningstar,  Inc., an independent  mutual fund  monitoring  service.
Morningstar  rates  and  ranks  mutual  funds  in broad  investment  categories;
domestic  stock  funds,  international  stock  funds,  taxable  bond  funds  and
municipal bond funds. The Fund is included in the taxable bond fund category.

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

      The Fund may also compare its total return  ranking to that of other funds
in its Morningstar category, in addition to its star ratings. Those total return
rankings  are  percentages  from one percent to one hundred  percent and are not
risk-adjusted. For example, if a fund is in the 94th percentile, that means that
94% of the funds in the same category performed better than it did.

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

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

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



<PAGE>



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


                                How to Buy Shares

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

AccountLink.  When shares are purchased through AccountLink,  each purchase must
be at least $25.  Shares  will be  purchased  on the  regular  business  day the
Distributor  is  instructed  to initiate the  Automated  Clearing  House ("ACH")
transfer to buy the shares.  Dividends will begin to accrue on shares  purchased
with the proceeds of ACH transfers on the business day the Fund receives Federal
Funds for the purchase  through the ACH system  before the close of The New York
Stock Exchange. The Exchange normally closes at 4:00 P.M., but may close earlier
on certain days. If Federal Funds are received on a business day after the close
of the Exchange, the shares will be purchased and dividends will begin to accrue
on the next regular  business  day. The proceeds of ACH  transfers  are normally
received by the Fund 3 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 and Class M shares under Right of  Accumulation
and Letters of Intent because of the economies of sales efforts and reduction in
expenses realized by the Distributor,  dealers and brokers making such sales. No
sales charge is imposed in certain other  circumstances  described in Appendix C
to this Statement of Additional Information because the Distributor or dealer or
broker incurs little or no selling expenses.

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

      A fiduciary can count all shares  purchased  for a trust,  estate or other
fiduciary  account  (including  one or more  employee  benefit plans of the same
employer) that has multiple  accounts.  The  Distributor  will add the value, at
current offering price, of the shares you previously purchased and currently own
to the value of  current  purchases  to  determine  the sales  charge  rate that
applies. The reduced sales charge will apply only to current purchases. You must
request it when you buy shares.
      |X| The Oppenheimer  Funds.  The Oppenheimer  funds are those mutual funds
for which the  Distributor  acts as the distributor or the  sub-distributor  and
currently include the following:


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

Limited-Term New York Municipal Fund
Rochester Fund Municipals

and the following money market funds:


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


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

      |X| Letters of Intent.  Under a Letter of Intent,  if you purchase Class A
shares  or Class M shares  of the Fund and  Class A and  Class B shares of other
Oppenheimer funds during a 13-month period, you can reduce the sales charge rate
that applies to your purchases of Class A or Class M shares. The total amount of
your  intended  purchases of Class A, Class M and Class B shares will  determine
the reduced sales charge rate for the Class A or Class M shares purchased during
that period. You can include purchases made up to 90 days before the date of the
Letter.
      A  Letter  of  Intent  is  an  investor's  statement  in  writing  to  the
Distributor  of the  intention to purchase  Class A or Class M shares or Class A
and  Class B  shares  of the  Fund  (and  Class A or  Class B  shares  of  other
Oppenheimer funds) during a 13-month period (the "Letter of Intent period").  At
the investor's  request,  this may include purchases made up to 90 days prior to
the date of the Letter.  The Letter states the investor's  intention to make the
aggregate  amount of purchases  of shares  which,  when added to the  investor's
holdings of shares of those funds,  will equal or exceed the amount specified in
the Letter.  Purchases made by  reinvestment  of dividends or  distributions  of
capital gains and purchases  made at net asset value without sales charge do not
count toward satisfying the amount of the Letter.

      A Letter  enables  an  investor  to count the Class A, Class M and Class B
shares  purchased  under the Letter to obtain the reduced  sales  charge rate on
purchases of Class A or Class M 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 or Class M shares under the Letter will be made
at the  offering  price  (including  the sales  charge) that applies to a single
lump-sum  purchase of shares in the amount  intended to be  purchased  under the
Letter.

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


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

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

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

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

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

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

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

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



<PAGE>


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

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

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

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

Retirement  Plans.  Certain types of  Retirement  Plans are entitled to purchase
shares of the Fund without  sales charge or at reduced  sales charge  rates,  as
described in Appendix C to this  Statement of  Additional  Information.  Certain
special sales charge arrangements described in that Appendix apply to retirement
plans whose records are maintained on a daily  valuation  basis by Merrill Lynch
Pierce Fenner & Smith, Inc. or an independent  record keeper that has a contract
or special  arrangement  with  Merrill  Lynch.  If on the date the plan  sponsor
signed the Merrill Lynch record keeping service agreement the plan has less than
$3 million in assets (other than assets invested in money market funds) invested
in applicable  investments,  then the retirement  plan may purchase only Class B
shares of the  Oppenheimer  funds.  Any  retirement  plans in that category that
currently  invest in Class B shares of the Fund will have  their  Class B shares
converted to Class A shares of the Fund when the Plan's  applicable  investments
reach $5 million.


Cancellation of Purchase Orders.  Cancellation of purchase orders for the Fund's
shares (for  example,  when a purchase  check is  returned  to the Fund  unpaid)
causes a loss to be incurred  when the net asset  value of the Fund's  shares on
the  cancellation  date is less than on the purchase date. That loss is equal to
the amount of the  decline in the net asset  value per share  multiplied  by the
number of shares in the purchase  order.  The investor is  responsible  for that
loss. If the investor fails to compensate the Fund for the loss, the Distributor
will do so. The Fund may reimburse the  Distributor for that amount by redeeming
shares from any account  registered in that investor's  name, or the Fund or the
Distributor may seek other redress.  Classes of Shares.  Each class of shares of
the Fund  represents  an interest in the same  portfolio of  investments  of the
Fund. However, each class has different shareholder privileges and features. The
net income  attributable  to Class B, Class C, Class M or Class N shares and the
dividends payable on those shares will be reduced by incremental  expenses borne
solely by that class.  Those expenses  include the asset-based  sales charges to
which Class B, Class C, Class M and Class N are subject.

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


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

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

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

      The  methodology  for  calculating  the net  asset  value,  dividends  and
distributions  of the Fund's  share  classes  recognizes  two types of expenses.
General expenses that do not pertain specifically to any one class are allocated
pro rata to the shares of all classes. The allocation is based on the percentage
of the Fund's total assets that is represented by the assets of each class,  and
then  equally to each  outstanding  share  within a given  class.  Such  general
expenses include  management fees, legal,  bookkeeping and audit fees,  printing
and mailing costs of shareholder reports, Prospectuses, Statements of Additional
Information and other materials for current  shareholders,  fees to unaffiliated
Trustees,  custodian  bank  expenses,  share issuance  costs,  organization  and
start-up costs,  interest,  taxes and brokerage  commissions,  and non-recurring
expenses, such as litigation costs.
      Other expenses that are directly  attributable  to a particular  class are
allocated equally to each outstanding share within that class.  Examples of such
expenses  include  distribution  and service  plan  (12b-1)  fees,  transfer and
shareholder  servicing agent fees and expenses and shareholder  meeting expenses
(to the extent that such expenses pertain only to a specific class).

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

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

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

      |X|   Securities   Valuation.   The  Fund's   Board  of   Trustees   has
established  procedures  for  the  valuation  of  the  Fund's  securities.  In
general those procedures are as follows:

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

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

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


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


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

                               How to Sell Shares

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

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


      The  reinvestment  may be made without sales charge only in Class A shares
of the Fund or any of the other  Oppenheimer funds into which shares of the Fund
are  exchangeable as described in "How to Exchange  Shares" below.  Reinvestment
will be at the net asset value next computed  after the Transfer  Agent receives
the  reinvestment  order.  The shareholder  must ask the Transfer Agent for that
privilege at the time of reinvestment.  This privilege does not apply to Class C
or  Class N  shares.  The  Fund  may  amend,  suspend  or  cease  offering  this
reinvestment  privilege at any time as to shares redeemed after the date of such
amendment, suspension or cessation.


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



<PAGE>


Payments "In Kind".  The Prospectus  states that payment for shares tendered for
redemption is  ordinarily  made in cash.  However,  the Board of Trustees of the
Fund may determine  that it would be  detrimental  to the best  interests of the
remaining  shareholders of the Fund to make payment of a redemption order wholly
or partly in cash.  In that case,  the Fund may pay the  redemption  proceeds in
whole or in part by a  distribution  "in  kind" of  liquid  securities  from the
portfolio of the Fund, in lieu of cash.

      The Fund has elected to be  governed  by Rule 18f-1  under the  Investment
Company Act.  Under that rule,  the Fund is obligated to redeem shares solely in
cash up to the lesser of $250,000 or 1% of the net assets of the Fund during any
90-day  period for any one  shareholder.  If shares are  redeemed  in kind,  the
redeeming  shareholder  might  incur  brokerage  or other  costs in selling  the
securities for cash. The Fund will value  securities  used to pay redemptions in
kind  using the same  method  the Fund uses to value  its  portfolio  securities
described  above  under  "Determination  of Net Asset  Values Per  Share."  That
valuation will be made as of the time the redemption price is determined.

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

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


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


Sending  Redemption  Proceeds 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.

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

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

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

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

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

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


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

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


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


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


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

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

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

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

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

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

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

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

How to Exchange Shares


      As stated in the Prospectus,  shares of a particular  class of Oppenheimer
funds having more than one class of shares may be  exchanged  only for shares of
the same class of other Oppenheimer funds. Shares of Oppenheimer funds that have
a single class without a class  designation are deemed "Class A" shares for this
purpose.  You can obtain a current list showing  which funds offer which classes
by calling the Distributor at 1.800.525.7048.


o     All of the  Oppenheimer  funds  currently  offer  Class  A, B and C shares
      except Oppenheimer Money Market Fund, Inc., Centennial Money Market Trust,
      Centennial Tax Exempt Trust,  Centennial Government Trust,  Centennial New
      York Tax  Exempt  Trust,  Centennial  California  Tax  Exempt  Trust,  and
      Centennial America Fund, L.P., which only offer Class A shares.
o     Oppenheimer  Main Street  California  Municipal Fund currently offers only
      Class A and Class B shares.
o     Class B and Class C shares of  Oppenheimer  Cash  Reserves  are  generally
      available  only by  exchange  from  the  same  class  of  shares  of other
      Oppenheimer funds or through OppenheimerFunds-sponsored 401(k) plans.
o     Only certain  Oppenheimer  funds currently  offer Class Y shares.  Class Y
      shares of  Oppenheimer  Real Asset Fund may not be exchanged for shares of
      any other fund.
o     Class M shares of Oppenheimer Convertible Securities Fund may be exchanged
      only  for  Class A  shares  of other  Oppenheimer  funds.  They may not be
      acquired by exchange of shares of any class of any other Oppenheimer funds
      except Class A shares of Oppenheimer Money Market Fund or Oppenheimer Cash
      Reserves acquired by exchange of Class M shares.
o     Class A  shares  of  Senior  Floating  Rate  Fund are not  available  by
      exchange of shares of  Oppenheimer  Money  Market Fund or Class A shares
      of  Oppenheimer  Cash  Reserves.  If  any  Class  A  shares  of  another
      Oppenheimer  fund  that  are  exchanged  for  Class A shares  of  Senior
      Floating Rate Fund are subject to the Class A contingent  deferred sales
      change  of the  other  Oppenheimer  fund at the  time of  exchange,  the
      holding  period for that Class A contingent  deferred  sales charge will
      carry over to the Class A shares of  Oppenheimer  Senior  Floating  Rate
      Fund  acquired  in the  exchange.  The  Class A  shares  of  Oppenheimer
      Senior  Floating  Rate Fund acquired in that exchange will be subject to
      the Class A Early Withdrawal Charge of Oppenheimer  Senior Floating Rate
      Fund if they  are  repurchased  before  the  expiration  of the  holding
      period.
o     Class X shares of Limited  Term New York  Municipal  Fund can be exchanged
      only for Class B shares of other Oppenheimer funds and no exchanges may be
      made to Class X shares.
o     Shares of Oppenheimer  Capital  Preservation Fund may not be exchanged for
      shares of Oppenheimer  Money Market Fund, Inc.,  Oppenheimer Cash Reserves
      or Oppenheimer  Limited-Term Government Fund. Only participants in certain
      retirement plans may purchase shares of Oppenheimer  Capital  Preservation
      Fund, and only those participants may exchange shares of other Oppenheimer
      funds for shares of Oppenheimer Capital Preservation Fund.


      Class A shares of  Oppenheimer  funds may be  exchanged at net asset value
for shares of any money  market fund offered by the  Distributor.  Shares of any
money market fund  purchased  without a sales charge may be exchanged for shares
of  Oppenheimer  funds  offered  with a sales  charge upon  payment of the sales
charge. They may also be used to purchase shares of Oppenheimer funds subject to
an early withdrawal charge or contingent deferred sales charge.


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

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

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


      |X| How Exchanges Affect Contingent  Deferred Sales Charges. No contingent
deferred  sales charge is imposed on exchanges of shares of any class  purchased
subject to a contingent  deferred  sales  charge.  However,  when Class A shares
acquired  by  exchange of Class A shares of other  Oppenheimer  funds  purchased
subject to a Class A contingent  deferred  sales  charge are redeemed  within 18
months of the end of the calendar month of the initial purchase of the exchanged
Class A shares,  the Class A contingent  deferred sales charge is imposed on the
redeemed  shares.  The Class B  contingent  deferred  sales charge is imposed on
Class B shares  acquired by exchange if they are redeemed  within 6 years of the
initial  purchase  of the  exchanged  Class B  shares.  The  Class C  contingent
deferred sales charge is imposed on Class C shares  acquired by exchange if they
are redeemed  within 12 months of the initial  purchase of the exchanged Class C
shares.  With  respect to Class N shares,  if you redeem your  shares  within 18
months of the retirement plan's first purchase or the retirement plan eliminates
the Fund as a plan  investment  option within 18 months of selecting the Fund, a
1% contingent deferred sales charge will be imposed on the plan.

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


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

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

      |X| Processing  Exchange Requests.  Shares to be exchanged are redeemed on
the regular  business day the  Transfer  Agent  receives an exchange  request in
proper form (the "Redemption Date"). Normally, shares of the Fund to be acquired
are  purchased on the  Redemption  Date,  but such  purchases  may be delayed by
either  fund up to  five  business  days  if it  determines  that  it  would  be
disadvantaged  by an immediate  transfer of the  redemption  proceeds.  The Fund
reserves the right, in its discretion,  to refuse any exchange  request that may
disadvantage it. For example,  if the receipt of multiple exchange requests from
a dealer might require the disposition of portfolio securities at a time or at a
price  that  might be  disadvantageous  to the  Fund,  the Fund may  refuse  the
request.  When you exchange  some or all of your shares from on fund to another,
any  special  account  features  such as an  Asset  Builder  Plan  or  Automatic
Withdrawal  Plan,  will be switched to the new fund account  unless you tell the
Transfer Agent not to do so. However,  special  redemption and exchange features
such as  Automatic  Exchange  Plans and  Automatic  Withdrawal  Plans  cannot be
switched to an account in the Oppenheimer Senior Floating Rate Fund.

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

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


                       Dividends, Capital Gains and Taxes

Dividends and Distributions.  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 will not be declared or paid
on newly purchased  shares 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.  Shares
purchased through dealers or brokers normally are paid for by the third business
day following the placement of the purchase order.

      Shares  redeemed  through the regular  redemption  procedure  will be paid
dividends  through  and  including  the day on which the  redemption  request is
received by the  Transfer  Agent in proper form.  Dividends  will be declared on
shares  repurchased  by a dealer or broker for three business days following the
trade  date (that is, up 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.


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


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


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

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

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

      The Fund intends to qualify as a "regulated  investment company" under the
Internal  Revenue Code  (although  it reserves  the right not to qualify).  That
qualification enables the Fund to "pass through" its income and realized capital
gains to  shareholders  without having to pay tax on them.  This avoids a double
tax on that income and capital gains, since shareholders  normally will be taxed
on the dividends and capital gains they receive from the Fund (unless the Fund's
shares are held in a retirement  account or the shareholder is otherwise  exempt
from tax). If the Fund qualifies as a "regulated  investment  company" under the
Internal Revenue Code, it will not be liable for federal income taxes on amounts
paid by it as dividends  and  distributions.  The Fund  qualified as a regulated
investment company in its last fiscal year. The Internal Revenue Code contains a
number of complex tests relating to qualification  which the Fund might not meet
in any particular year. If it did not so qualify,  the Fund would be treated for
tax  purposes  as an  ordinary  corporation  and  receive no tax  deduction  for
payments made to shareholders.

      If prior  distributions  made by the Fund  must be  re-characterized  as a
non-taxable  return of capital at the end of the fiscal  year as a result of the
effect of the Fund's  investment  policies,  they will be  identified as such in
notices sent to shareholders.

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



<PAGE>



                      Additional Information About the Fund

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

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

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

Independent  Accountants.  KPMG LLP are the independent auditors of the Fund for
the year ended December 31, 2000. They audit the Fund's financial statements and
perform  other  related  audit  services.  They also act as auditors for certain
other funds advised by the Manager and its affiliates.

Independent Auditors        KPMG LLP


STATEMENT OF INVESTMENTS June 30, 2000 / Unaudited

<TABLE>
<CAPTION>

                                                                         Principal   Market Value
                                                                            Amount     See Note 1
=================================================================================================
<S>                                                                      <C>         <C>
 Convertible Corporate Bonds and Notes--57.2%
-------------------------------------------------------------------------------------------------
 Capital Goods--4.8%
-------------------------------------------------------------------------------------------------
 Aerospace/Defense--0.4%
 Orbital Sciences Corp., 5% Cv. Unsec. Sub. Nts., 10/1/02              $ 6,000,000    $ 4,057,500
-------------------------------------------------------------------------------------------------
 Electrical Equipment--0.8%
 Commscope, Inc., 4% Cv. Nts., 12/15/06(1)                               7,000,000      7,656,250
-------------------------------------------------------------------------------------------------
 Industrial Services--2.3%
 Cendant Corp., 3% Cv. Sub. Nts., 2/15/02                                5,000,000      4,550,000
-------------------------------------------------------------------------------------------------
 Danka Business Systems plc, 6.75% Cv. Sub. Nts., 4/1/02                 4,000,000      2,740,000
-------------------------------------------------------------------------------------------------
 EMCOR Group, Inc., 5.75% Cv. Sub. Nts., 4/1/05                          3,000,000      2,925,000
-------------------------------------------------------------------------------------------------
 Getty Images, Inc., 5% Cv. Sub. Nts., 3/15/07(1)                        5,000,000      4,137,500
-------------------------------------------------------------------------------------------------
 Mail-Well, Inc., 5% Cv. Nts., 11/1/02                                   5,000,000      4,150,000
-------------------------------------------------------------------------------------------------
 Mansur Industries, Inc., 8.25% Cv. Sub. Nts., 2/18/03(2)                4,701,972      4,090,716
                                                                                     ------------
                                                                                       22,593,216


-------------------------------------------------------------------------------------------------
 Manufacturing--1.3%
 Hexcel Corp., 7% Cv. Unsec. Sub. Nts., 8/1/03                           3,000,000      2,595,000
-------------------------------------------------------------------------------------------------
 Mark IV Industries, Inc., 4.75% Cv. Sub. Nts., 11/1/04                  7,000,000      6,501,250
-------------------------------------------------------------------------------------------------
 Robbins & Myers, Inc., 6.50% Cv. Unsec. Nts., 9/1/03                    3,500,000      3,390,625
                                                                                     ------------
                                                                                       12,486,875


-------------------------------------------------------------------------------------------------
 Communication Services--10.2%
-------------------------------------------------------------------------------------------------
 Telecommunications: Long Distance--4.1%
 Exodus Communications, Inc., 4.75% Cv. Nts., 7/15/08(1)                 4,000,000      5,855,000
-------------------------------------------------------------------------------------------------
 Global Telesystems, Inc., 5.75% Cv. Nts., 7/1/10                        6,000,000      3,480,000
-------------------------------------------------------------------------------------------------
 Level 3 Communications, Inc., 6% Cv. Unsec. Sub. Nts., 3/15/10         15,000,000     13,631,250
-------------------------------------------------------------------------------------------------
 NTL, Inc., 5.75% Cv. Nts., 12/15/09(1)                                 10,000,000      7,987,500
-------------------------------------------------------------------------------------------------
 Telefonos de Mexico SA, 4.25% Cv. Sr. Nts., 6/15/04                     4,000,000      5,380,000
-------------------------------------------------------------------------------------------------
 World Access, Inc., 4.50% Cv. Unsec. Sub. Nts., 10/1/02                 5,000,000      3,662,500
                                                                                     ------------
                                                                                       39,996,250


-------------------------------------------------------------------------------------------------
 Telecommunications: Wireless--6.1%
 American Tower Corp., 5% Cv. Nts., 2/15/10(1)                           7,000,000      7,113,750
-------------------------------------------------------------------------------------------------
 AT&T Corp./Liberty Media Group, 3.75% Cv. Nts., 5/15/30(1)             25,000,000      27,156,25
-------------------------------------------------------------------------------------------------
 Gilat Satellite Networks Ltd., 4.25% Cv. Sub. Nts., 3/15/05(1)          7,000,000      4,821,250
-------------------------------------------------------------------------------------------------
 Nextel Communications, Inc., 5.25% Cv. Sr. Nts., 1/15/10(1)            20,000,000      20,475,00
                                                                                     ------------
                                                                                       59,566,250


-------------------------------------------------------------------------------------------------
 Consumer Cyclicals--4.0%
-------------------------------------------------------------------------------------------------

 Autos & Housing--1.1%
 Magna International, Inc., 5% Cv. Sub. Debs., 10/15/02                  6,500,000      6,581,250
-------------------------------------------------------------------------------------------------
 MascoTech, Inc., 4.50% Cv. Sub. Debs., 12/15/03                         5,000,000      3,750,000
                                                                                     ------------
                                                                                       10,331,250


9 | OPPENHEIMER CONVERTIBLE SECURITIES FUND

<PAGE>

STATEMENT OF INVESTMENTS Unaudited / Continued

                                                                         Principal   Market Value
                                                                            Amount     See Note 1
-------------------------------------------------------------------------------------------------
 Media--2.2%
 Interpublic Group of Cos., Inc., 1.87% Cv. Unsec. Nts., 6/1/06        $ 8,000,000    $ 7,760,000
-------------------------------------------------------------------------------------------------
 Omnicom Group, Inc., 2.25% Cv. Unsec. Nts., 1/6/13                      3,500,000      6,479,375
-------------------------------------------------------------------------------------------------
 Young & Rubicam, Inc., 3% Cv. Nts., 1/15/05(1)                          7,000,000      7,131,250
                                                                                     ------------
                                                                                       21,370,625


-------------------------------------------------------------------------------------------------
 Retail: Specialty--0.7%
 Amazon.com, Inc.:
 4.75% Cv. Sub. Debs., 2/1/09                                            3,000,000      1,901,250
 4.75% Cv. Sub. Debs., 2/1/09(1)                                         5,000,000      3,168,750
-------------------------------------------------------------------------------------------------
 Central Garden & Pet Co., 6% Cv. Nts., 11/15/03                         3,000,000      2,036,250
                                                                                     ------------
                                                                                        7,106,250


-------------------------------------------------------------------------------------------------
 Consumer Staples--3.1%
-------------------------------------------------------------------------------------------------
 Broadcasting--2.7%
 Clear Channel Communications, Inc.:
 1.50% Cv. Nts., 12/1/02                                                 6,000,000      5,880,000
 2.625% Cv. Sr. Nts., 4/1/03                                             7,000,000      9,073,750
-------------------------------------------------------------------------------------------------
 Echostar Communications Corp., 4.875% Cv. Nts., 1/1/07(1)              12,000,000     11,430,000
                                                                                     ------------
                                                                                       26,383,750


-------------------------------------------------------------------------------------------------
 Food & Drug Retailers--0.4%
 Costco Cos., Inc., Zero Coupon Cv. Sub. Nts., 1.93%, 8/19/17(3)         4,000,000      3,295,000


-------------------------------------------------------------------------------------------------
 Energy--3.3%
-------------------------------------------------------------------------------------------------
 Energy Services--2.0%
 Diamond Offshore Drilling, Inc., 3.75% Cv. Unsec. Sub. Nts., 2/15/07    4,000,000      4,170,000
-------------------------------------------------------------------------------------------------
 Nabors Industries, Inc., Zero Coupon Cv. Sr. Debs.,
 2.50%, 6/20/20(1,3)                                                     8,500,000      5,195,625
-------------------------------------------------------------------------------------------------
 Pride International, Inc., Zero Coupon Cv. Sub. Debs., 6.16%,
 6.16%, 4/24/18(3)                                                      15,000,000      6,168,750
-------------------------------------------------------------------------------------------------
 Transocean Sedco Forex, Inc., Zero Coupon Cv. Sr. Unsec. Debs.,
 2.75%, 5/24/20(3)                                                      7,000,000      4,200,000
                                                                                     ------------
                                                                                       19,734,375


-------------------------------------------------------------------------------------------------
 Oil: Domestic--1.3%
 Devon Energy Corp., 4.95% Cv. Sr. Unsec. Debs., 8/15/08
 (cv. into common stock of Chevron Corp.)                                8,000,000      7,670,000
-------------------------------------------------------------------------------------------------
 Kerr-McGee Corp., 5.25% Cv. Unsec. Sub. Nts., 2/15/10                   4,000,000      4,625,000
                                                                                     ------------
                                                                                       12,295,000


10 | OPPENHEIMER CONVERTIBLE SECURITIES FUND
<PAGE>


                                                                         Principal   Market Value
                                                                            Amount     See Note 1
-------------------------------------------------------------------------------------------------
 Financial--2.0%
-------------------------------------------------------------------------------------------------
 Diversified Financial--2.0%
 Ameritrade Holding Corp.:
 5.75% Cv. Nts., 8/1/04(1)                                             $ 2,000,000    $ 1,215,000
 5.75% Cv. Nts., 8/1/04                                                  4,000,000      2,430,000
-------------------------------------------------------------------------------------------------
 Bell Atlantic Financial Services Corp.:
 4.25% Sr. Exchangeable Nts., 9/15/05 (exchangeable for shares
 of Cable & Wireless Communications, Inc. or cash)(1)                    3,000,000      3,907,500
 5.75% Cv. Sr. Unsec. Nts., 4/1/03 (cv. into common stock of
 Telecom Corp. of New Zealand)(1)                                        5,000,000      4,887,500
-------------------------------------------------------------------------------------------------
 Phoenix Investment Partners Corp., 6% Cv. Unsec. Sub. Debs., 11/1/15    5,817,500      7,562,750
                                                                                     ------------
                                                                                       20,002,750


-------------------------------------------------------------------------------------------------
 Healthcare--8.5%
-------------------------------------------------------------------------------------------------
 Healthcare/Drugs--8.5%
 Affymetrix, Inc., 4.75% Cv. Sub. Nts., 2/15/07(1)                      10,000,000      7,825,000
-------------------------------------------------------------------------------------------------
 Alkermes, Inc., 3.75% Cv. Sub. Nts., 2/15/07                            5,000,000      4,200,000
-------------------------------------------------------------------------------------------------
 ALZA Corp., Zero Coupon Cv. Nts., 5.37%, 7/14/14(3)                    10,000,000      7,875,000
-------------------------------------------------------------------------------------------------
 Athena Neurosciences, Inc., 4.75% Gtd. Cv. Nts., 11/15/04               8,000,000     11,260,000
-------------------------------------------------------------------------------------------------
 Centocor, Inc., 4.75% Cv. Unsec. Sub. Debs., 2/15/05 (cv. into
 common stock of Johnson & Johnson)                                     10,000,000     13,537,500
-------------------------------------------------------------------------------------------------
 Human Genome Sciences, Inc., 3.75% Cv. Unsec. Sub., Nts., 3/15/07(1)    7,000,000      5,818,750
-------------------------------------------------------------------------------------------------
 Millennium Pharmaceuticals, Inc., 5.50% Cv. Sub. Nts., 1/15/07(1)       3,000,000      4,473,750
-------------------------------------------------------------------------------------------------
 Roche Holdings, Inc., Zero Coupon Cv. Liquid Yield Option Nts.:
 2.23%, 1/19/15 (cv. into common stock of Genentech, Inc.)(1,3)         15,000,000     13,875,000
 4.78%, 4/20/10(1,3)                                                    15,000,000      7,893,750
-------------------------------------------------------------------------------------------------
 Sepracor, Inc., 5% Cv. Sub. Nts., 2/15/07(1)                            4,000,000      5,875,000
                                                                                     ------------
                                                                                       82,633,750


-------------------------------------------------------------------------------------------------
 Technology--20.4%
-------------------------------------------------------------------------------------------------
 Communications Equipment--1.2%
 DSC Communications Corp., 7% Cv. Unsec. Sub. Nts., 8/1/04               6,000,000      6,862,500
-------------------------------------------------------------------------------------------------
 Efficient Networks, Inc., 5% Cv. Unsec. Sub. Nts., 3/15/05(1)           6,000,000      4,500,000
                                                                                     ------------
                                                                                       11,362,500


-------------------------------------------------------------------------------------------------
 Computer Hardware--3.8%
 Adaptec, Inc., 4.75% Cv. Sub. Nts., 2/1/04                              8,000,000      6,750,000
-------------------------------------------------------------------------------------------------
 Hewlett-Packard Co., Zero Coupon Cv. Sr. Liquid Yield
 Option Nts., 2.42%, 10/14/17(3)                                        20,000,000     19,000,000
-------------------------------------------------------------------------------------------------
 Juniper Networks, Inc., 4.75% Cv. Unsec. Sub. Nts., 3/15/07            10,000,000     11,100,000
                                                                                     ------------
                                                                                       36,850,000


-------------------------------------------------------------------------------------------------
 Computer Services--1.5%
 Checkfree Holdings Corp., 6.50% Cv. Nts., 12/1/06(1)                    5,000,000      4,825,000
-------------------------------------------------------------------------------------------------
 Internet Capital Group, Inc., 5.50% Cv. Nts., 12/21/04                  8,000,000      5,280,000
-------------------------------------------------------------------------------------------------
 Safeguard Scientifics, Inc., 5% Cv. Unsec. Sub. Nts., 6/15/06           3,000,000      4,601,250
                                                                                     ------------
                                                                                       14,706,250


11 | OPPENHEIMER CONVERTIBLE SECURITIES FUND
<PAGE>

STATEMENT OF INVESTMENTS Unaudited / Continued

                                                                         Principal   Market Value
                                                                            Amount     See Note 1
-------------------------------------------------------------------------------------------------
 Computer Software--5.3%
 Aspen Technology, Inc., 5.25% Cv. Unsec. Nts., 6/15/05                $ 4,500,000   $  4,393,125
-------------------------------------------------------------------------------------------------
 BEA Systems, Inc., 4% Cv. Nts., 12/15/06(1)                             4,000,000      6,280,000
-------------------------------------------------------------------------------------------------
 Excite@Home, 4.75% Cv. Sr. Nts., 12/15/06(1)                            8,500,000      6,013,750
-------------------------------------------------------------------------------------------------
 I2 Technologies, Inc., 5.25% Cv. Sub. Nts., 12/15/06                    2,000,000      3,085,000
-------------------------------------------------------------------------------------------------
 Mercury Interactive Corp., 4.75% Cv. Nts., 7/1/07(1)                    3,000,000      3,234,375
-------------------------------------------------------------------------------------------------
 Network Associates, Inc., Zero Coupon Cv. Unsec. Sub. Debs.,
 6.37%, 2/13/18(3)                                                      20,000,000      7,125,000
-------------------------------------------------------------------------------------------------
 Rational Software Corp., 5% Cv. Sub. Nts., 2/1/07(1)                    6,000,000      8,782,500
-------------------------------------------------------------------------------------------------
 Redback Networks, Inc., 5% Cv. Bonds, 4/1/07(1)                         6,000,000      6,810,000
-------------------------------------------------------------------------------------------------
 Tecnomatix Technologies Ltd., 5.25% Cv. Sub. Nts., 8/15/04              5,000,000      3,281,250
-------------------------------------------------------------------------------------------------
 Veritas Software Corp., 1.856% Cv. Unsec. Nts., 8/13/06                 1,000,000      3,155,000
                                                                                     ------------
                                                                                       52,160,000


-------------------------------------------------------------------------------------------------
 Electronics--8.6%
-------------------------------------------------------------------------------------------------
 Amkor Technologies, Inc., 5% Cv. Nts., 3/15/07(1)                       5,000,000      4,556,250
-------------------------------------------------------------------------------------------------
 ASM Lithography Holding NV, 4.25% Cv. Nts., 11/30/04(1)                 5,000,000      6,687,500
-------------------------------------------------------------------------------------------------
 Cirrus Logic, Inc., 6% Cv. Unsec. Sub. Nts., 12/15/03                   5,000,000      4,437,500
-------------------------------------------------------------------------------------------------
 Conexant Systems, Inc., 4% Cv. Sub. Nts., 2/1/07(1)                    10,000,000      7,875,000
-------------------------------------------------------------------------------------------------
 Cypress Semiconductor Corp., 3.75% Cv. Bonds, 7/1/05                    6,000,000      5,872,500
-------------------------------------------------------------------------------------------------
 Lam Research Corp., 5% Cv. Sub. Nts., 9/1/02                            3,000,000      4,076,250
-------------------------------------------------------------------------------------------------
 LSI Logic Corp., 4% Cv. Unsec. Sub. Nts., 2/15/05                       6,000,000      6,337,500
-------------------------------------------------------------------------------------------------
 Sanmina Corp., 4.25% Cv. Unsec. Nts., 5/1/04                            2,000,000      4,037,500
-------------------------------------------------------------------------------------------------
 SCI Systems, Inc., 3% Cv. Sub. Nts., 3/15/07                            5,000,000      4,900,000
-------------------------------------------------------------------------------------------------
 Semtech Corp., 4.50% Cv. Sub. Nts., 2/1/07(1)                           5,000,000      5,462,500
-------------------------------------------------------------------------------------------------
 Solectron Corp., Zero Coupon Cv. Liquid Yield Option Nts.,
 2.81%, 5/8/20(3)                                                       16,000,000     10,160,000
-------------------------------------------------------------------------------------------------
 Thermo Instrument Systems, Inc., 4% Cv. Gtd. Nts.,
 Series RG, 1/15/05                                                     11,999,999     10,365,000
-------------------------------------------------------------------------------------------------
 Vitesse Semiconductor Corp., 4% Cv. Sub. Nts., 3/15/05(1)               9,000,000      8,347,500
                                                                                     ------------
                                                                                       83,115,000


-------------------------------------------------------------------------------------------------
 Utilities--0.9%
-------------------------------------------------------------------------------------------------
 Electric Utilities--0.9%
 AES Corp. (The), 4.50% Cv. Jr. Sub. Nts., 8/15/05                       5,000,000      8,756,250
                                                                                     ------------
 Total Convertible Corporate Bonds and Notes (Cost $534,937,963)                      556,459,091


                                                                            Shares
=================================================================================================
 Preferred Stocks--26.7%
-------------------------------------------------------------------------------------------------
 Basic Materials--0.5%
-------------------------------------------------------------------------------------------------
 Paper--0.5%
 International Paper Capital Trust, 5.25% Cum. Cv., Non-Vtg.
 (cv. into common stock of International Paper Co.)                        140,000      5,267,500


12 | OPPENHEIMER CONVERTIBLE SECURITIES FUND

<PAGE>


                                                                                     Market Value
                                                                            Shares     See Note 1
-------------------------------------------------------------------------------------------------
 Capital Goods--2.4%
-------------------------------------------------------------------------------------------------
 Aerospace/Defense--0.4%
 Coltec Capital Trust, 5.25% Cv.                                           100,000    $ 4,012,500
-------------------------------------------------------------------------------------------------
 Industrial Services--0.4%
 Sensormatic Electronics Corp.:
 6.50% Cv.(1)                                                              150,000      3,562,500
 6.50% Cv., Non-Vtg.                                                        25,000        593,750
                                                                                     ------------
                                                                                        4,156,250

-------------------------------------------------------------------------------------------------
 Manufacturing--1.6%
 Ingersoll-Rand Co., 6.75% Cv., Non-Vtg.                                   250,000      5,093,750
-------------------------------------------------------------------------------------------------
 Sealed Air Corp., $2.00 Cv., Series A                                     200,000     10,125,000
                                                                                     ------------
                                                                                       15,218,750


-------------------------------------------------------------------------------------------------
 Communication Services--5.2%
-------------------------------------------------------------------------------------------------
 Telecommunications: Long Distance--1.9%
 Global Crossing Ltd., 6.75% Cv.                                            35,000      7,717,500
-------------------------------------------------------------------------------------------------
 Intermedia Communications, Inc., 7% Cv.                                   155,000      3,448,750
-------------------------------------------------------------------------------------------------
 Qwest Trends Trust, 5.75% Cv.(1)                                           90,000      7,323,750
                                                                                     ------------
                                                                                       18,490,000


-------------------------------------------------------------------------------------------------
 Telecommunications: Wireless--1.0%
-------------------------------------------------------------------------------------------------
 MediaOne Group, Inc.:
 6.25% Cv. Premium Income Exchangeable Securities
 (exchangeable for Vodafone Airtouch plc)                                   30,000      2,698,125
 7% Cv. Premium Income Exchangeable Securities
 (exchangeable for Vodafone Airtouch plc)                                  170,000      6,885,000
                                                                                     ------------
                                                                                        9,583,125


-------------------------------------------------------------------------------------------------
 Telephone Utilities--2.3%
 Alliant Energy Resources, Inc., 7.25% Cv.(1)                              100,000      6,975,000
-------------------------------------------------------------------------------------------------
 BroadWing, Inc., 6.75% Cv., Series B                                      130,000      6,110,000
-------------------------------------------------------------------------------------------------
 DECS Trust IV, 6.25% Cv. (exchangeable for common stock of
 Metromedia Fiber Network, Inc., Cl. A)                                     80,000      5,490,000
-------------------------------------------------------------------------------------------------
 Winstar Communications, Inc., 7% Cv. Cum., Series D, Non-Vtg.              70,000      3,955,000
                                                                                     ------------
                                                                                       22,530,000


-------------------------------------------------------------------------------------------------
 Consumer Cyclicals--3.1%
-------------------------------------------------------------------------------------------------
 Consumer Services--1.3%
 Cox Communications, Inc., 7% Cv. Preferred Redeemable Increased
 Dividend Equity Securities, Non-Vtg.                                      160,000      9,830,000
-------------------------------------------------------------------------------------------------
 XM Satellite Radio Holdings, Inc., 8.25% Cum. Cv., Series B                50,000      2,756,250
                                                                                     ------------
                                                                                       12,586,250


-------------------------------------------------------------------------------------------------
 Media--1.8%
 Tribune Co., 2% Unsec. Exchangeable Nts., 5/15/29 (exchangeable
 for shares of America Online, Inc.)                                       150,000     17,662,500


13 | OPPENHEIMER CONVERTIBLE SECURITIES FUND

<PAGE>

STATEMENT OF INVESTMENTS Unaudited / Continued

                                                                                     Market Value
                                                                            Shares     See Note 1
-------------------------------------------------------------------------------------------------
 Consumer Staples--3.8%
-------------------------------------------------------------------------------------------------
 Entertainment--0.9%
 Seagram Co. Ltd. (The), 7.50% Automatic Common Exchangeable
 Securities                                                                160,000    $ 8,600,000
-------------------------------------------------------------------------------------------------
 Food--0.6%
 Suiza Capital Trust II/Suiza Foods Corp., 5.50% Cv. Cum., Non-Vtg.        150,000      5,700,000
-------------------------------------------------------------------------------------------------
 Food & Drug Retailers--1.2%
 CVS Corp. Automatic Common Exchange Security Trust,
 6% Cv. Trust Automatic Common Exchange Securities                          70,000      4,956,875
-------------------------------------------------------------------------------------------------
 IFT Financial Group, Inc., 6.50% Cum. Cv.                                 160,000      7,140,000
                                                                                     ------------
                                                                                       12,096,875


-------------------------------------------------------------------------------------------------
 Household Goods--1.1%
 Estee Lauder Automatic Common Exchange Security Trust II,
 $6.25 Cv. Trust Automatic Common Exchange Securities, Non-Vtg.
 (exchangeable for common stock of Estee Lauder Cos., Cl. A)                60,000      5,407,500
-------------------------------------------------------------------------------------------------
 Newell Financial Trust I, 5.25% Cv. Quarterly Income Preferred
 Securities, Non-Vtg.                                                      150,000      5,643,750
                                                                                     ------------
                                                                                       11,051,250


-------------------------------------------------------------------------------------------------
 Energy--1.5%
-------------------------------------------------------------------------------------------------
 Energy Services--0.5%
 Weatherford International, Inc., 5% Cv.                                   100,000      4,537,500
-------------------------------------------------------------------------------------------------
 Oil: Domestic--1.0%
 Apache Corp., 6.50% Cv. Automatic Common Exchange Securities              100,000      5,175,000
-------------------------------------------------------------------------------------------------
 Kerr-McGee Corp., 5.50% Cv. Unsec. Debt Exchangeable for Common
 Stock, 8/2/04                                                             100,000      4,975,000
                                                                                     ------------
                                                                                       10,150,000


-------------------------------------------------------------------------------------------------
 Financial--6.5%
-------------------------------------------------------------------------------------------------
 Banks--0.9%
 National Australia Bank Ltd., ExCaps (each ExCap consists of $25 principal
 amount of 7.875% Perpetual Capital Security and a purchase contract
 entitling the holder to exchange ExCaps for ordinary shares)(4)           297,900      8,434,294
-------------------------------------------------------------------------------------------------
 Diversified Financial--1.1%
 Lehman Brothers Holdings, Inc., 5% Cum. Cv., Series B                     150,000      5,306,250
-------------------------------------------------------------------------------------------------
 Wendy's Financing I, $2.50 Term Convertible Securities, Series A,
 9/15/26 (cv. into common stock of Wendy's International, Inc.)            100,000      4,500,000
                                                                                     ------------
                                                                                        9,806,250


-------------------------------------------------------------------------------------------------
 Insurance--1.8%
 ACE Ltd., 8.25% Cv. Preferred Redeemable Increased Dividend Equity
 Securities, Non-Vtg.                                                      110,000      6,881,875
-------------------------------------------------------------------------------------------------
 MetLife Capital Trust I, 8% Cv.(5)                                        150,000     10,378,125
                                                                                     ------------
                                                                                       17,260,000


-------------------------------------------------------------------------------------------------
 Real Estate Investment Trusts--2.2%
 Equity Residential Properties Trust, 7.25% Cv., Series G                  325,000      7,312,500


14 | OPPENHEIMER CONVERTIBLE SECURITIES FUND
<PAGE>

                                                                                     Market Value
                                                                            Shares     See Note 1
-------------------------------------------------------------------------------------------------
 Real Estate Investment Trusts  Continued
 General Growth Properties, Inc., 7.25% Cv. Preferred Income Equity
 Redeemable Stock                                                          300,000    $ 6,525,000
-------------------------------------------------------------------------------------------------
 Vornado Realty Trust, 6.50% Cv., Series A                                 150,000      7,771,875
                                                                                     ------------
                                                                                       21,609,375


-------------------------------------------------------------------------------------------------
 Savings & Loans--0.5%
 Sovereign Capital Trust II, 7.50% Cv. Preferred Income Equity Redeemable
 Stock, Units (each unit consists of one preferred plus one warrant to
 purchase 5.3355 shares of Sovereign Bancorp common stock)(4)              100,000      4,900,000
-------------------------------------------------------------------------------------------------
 Healthcare--1.5%
-------------------------------------------------------------------------------------------------
 Healthcare/Drugs--1.5%
 Biovail Corp., 6.75% Cv.                                                  100,000      5,412,500
-------------------------------------------------------------------------------------------------
 Monsanto Co., 6.50% Cv. Adjustable Conversion-rate Equity Security        200,000      9,050,000
                                                                                     ------------
                                                                                       14,462,500


-------------------------------------------------------------------------------------------------
 Transportation--0.8%
-------------------------------------------------------------------------------------------------
 Railroads & Truckers--0.8%
 Union Pacific Capital Trust, 6.25% Cum. Term Income Deferrable Equity
 Securities, Non-Vtg.                                                      200,000      7,725,000
-------------------------------------------------------------------------------------------------
 Utilities--1.4%
-------------------------------------------------------------------------------------------------
 Electric Utilities--0.4%
 Calpine Capital Trust II, 5.50% Cv.(1)                                     60,000      4,297,500
-------------------------------------------------------------------------------------------------
 Gas Utilities--1.0%
-------------------------------------------------------------------------------------------------
 El Paso Energy Corp. Capital Trust I, 4.75% Cv.                           150,000      9,656,250
                                                                                     ------------
 Total Preferred Stocks (Cost $246,664,392)                                           259,793,669


=================================================================================================
 Common Stocks--1.7%
 American Home Products Corp.                                               40,080      2,354,700
-------------------------------------------------------------------------------------------------
 Citigroup, Inc.                                                           100,000      6,025,000
-------------------------------------------------------------------------------------------------
 Danskin, Inc.(5,6)                                                      2,990,710      1,241,144
-------------------------------------------------------------------------------------------------
 Danskin, Inc. Restricted Common Shares(2,5,6)                           2,015,119        519,901
-------------------------------------------------------------------------------------------------
 Hudson Hotels Corp.(2,5,6)                                              1,666,667      1,406,250
-------------------------------------------------------------------------------------------------
 Intermedia Communications, Inc.(5)                                          2,033         60,482
-------------------------------------------------------------------------------------------------
 Learn2.com, Inc.(2,5)                                                      35,704         70,292
-------------------------------------------------------------------------------------------------
 News Corp. Ltd. (The), Sponsored ADR, Preference                          110,000      5,225,000
-------------------------------------------------------------------------------------------------
 Sensormatic Electronics Corp.(5)                                            4,348         68,753
                                                                                     ------------
 Total Common Stocks (Cost $14,297,878)                                                16,971,522


                                                                           Units
=================================================================================================
 Rights, Warrants and Certificates--0.0%
 Cash Invested in a Portion of Danskin, Inc.'s $3 Million Promissory
 Nts., to be used to purchase 53,3090 restricted common shares in rights
 offering(2,6)                                                              53,309         15,993
-------------------------------------------------------------------------------------------------
 Danskin, Inc. Wts., Exp. 10/8/04(2,6)                                     367,801         14,712
-------------------------------------------------------------------------------------------------
 Submicron Systems Corp. Wts., Exp. 1/15/01(2)                              27,000             --
                                                                                     ------------
 Total Rights, Warrants and Certificates (Cost $15,993)                                    30,705


15 | OPPENHEIMER CONVERTIBLE SECURITIES FUND

<PAGE>

STATEMENT OF INVESTMENTS Unaudited / Continued


                                                                         Principal   Market Value
                                                                            Amount     See Note 1
=================================================================================================
 Structured Instruments--4.3%
-------------------------------------------------------------------------------------------------
 Bank of America NA, Lucent Market Indexed Deposits, 6%, 2/9/02       $ 10,000,000  $  10,411,670
-------------------------------------------------------------------------------------------------
 Deutsche Bank AG/AT&T Corp. Linked Nts., 3.10%, 11/5/02(2)              8,000,000      9,180,000
-------------------------------------------------------------------------------------------------
 J.P. Morgan & Co., Inc. Mandatory Exchangeable Debt Securities,
 5%, 7/21/00 (exchangeable into Ethan Allen common stock)               14,060,000      5,140,336
-------------------------------------------------------------------------------------------------
 Lehman Brothers Holdings, Inc., 0.25% Ten Uncommon Values Index
 Linked Nts., 7/8/03                                                     8,000,000      8,060,000
 -------------------------------------------------------------------------------------------------
 NationsBank NA/The Boeing Co. BA Enhanced Yield Equity-
 Linked Certificates of Deposits, 5%, 7/15/00                           10,000,000      8,716,930
                                                                                     ------------
 Total Structured Instruments (Cost $43,000,053)                                       41,508,936


=================================================================================================
 Repurchase Agreements--10.5%
 Repurchase agreement with Deutsche Bank Securities Inc., 6.55%,
 dated 6/30/00, to be repurchased at $102,283,799 on 7/3/00,
 collateralized by U.S. Treasury Bonds, 6%-8.50%, 2/15/20-2/15/26,
 with a value of $104,518,966 (Cost $102,228,000)                      102,228,000    102,228,000
-------------------------------------------------------------------------------------------------
 Total Investments, at Value (Cost $941,144,279)                             100.4%   976,991,923
-------------------------------------------------------------------------------------------------
 Liabilities in Excess of Other Liabilities                                   (0.4)    (3,529,291)
                                                                       --------------------------
 Net Assets                                                                  100.0%  $973,462,632
                                                                       ==========================
</TABLE>

Footnotes to Statement of Investments

1. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $263,432,500 or 27.06% of the Fund's net
assets as of June 30, 2000.
2. Identifies issues considered to be illiquid or restricted--See Note 6 of
Notes to Financial Statements.
3. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
4. Units may be comprised of several components, such as debt and equity and/or
warrants to purchase equity at some point in the future. For units which
represent debt securities, principal amount disclosed represents total
underlying principal.
5. Non-income-producing security.
6. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer, and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the period ended June 30, 2000. The
aggregate fair value of securities of affiliated companies held by the Fund as
of June 30, 2000 amounts to $3,198,000. Transactions during the period in which
the issuer was an affiliate are as follows:


<TABLE>
<CAPTION>


                                              Shares        Gross          Gross           Shares
                                   December 31, 1999    Additions     Reductions    June 30, 2000
-------------------------------------------------------------------------------------------------
<S>                                        <C>          <C>              <C>            <C>

 Danskin, Inc.                             3,408,210           --        417,500        2,990,710
-------------------------------------------------------------------------------------------------
 Danskin, Inc., Restricted
 Common Shares                               289,251    1,725,868             --        2,015,119
-------------------------------------------------------------------------------------------------
 Danskin, Inc., $88.2722 Cv., Series D
 (cv. into 1,471,203 restricted
 common shares)                                   88           --             88               --
-------------------------------------------------------------------------------------------------
 Danskin, Inc. Wts., Exp. 10/8/04            367,801           --             --          367,801
-------------------------------------------------------------------------------------------------
 Portion of Danskin, Inc. Promissory Nt.,
 to be used to purchase 53,309 shares of
 restricted common stock in rights offering       --           --             --               --
 ------------------------------------------------------------------------------------------------
 Hudson Hotels Corp.                              --    1,666,667             --        1,666,667
</TABLE>

See accompanying Notes to Financial Statements.


16 | OPPENHEIMER CONVERTIBLE SECURITIES FUND

<PAGE>

STATEMENT OF ASSETS AND LIABILITIES  Unaudited

<TABLE>
<CAPTION>

June 30, 2000
=================================================================================================
<S>                                                                                 <C>
 Assets

 Investments, at value (including repurchase agreements of $102,228,000)--
 see accompanying statement:
 Unaffiliated companies (cost $934,981,391)                                         $ 973,793,923
 Affiliated companies (cost $6,162,888)                                                 3,198,000
-------------------------------------------------------------------------------------------------
 Cash                                                                                   1,965,959
-------------------------------------------------------------------------------------------------
 Receivables and other assets:
 Interest and dividends                                                                 7,772,185
 Investments sold                                                                       5,006,855
 Shares of beneficial interest sold                                                     2,558,779
 Other                                                                                     56,799
                                                                                     ------------
 Total assets                                                                         994,352,500

=================================================================================================
 Liabilities

 Payables and other liabilities:
 Investments purchased                                                                 14,880,674
 Dividends                                                                              2,941,628
 Shares of beneficial interest redeemed                                                 1,726,005
 Distribution and service plan fees                                                       672,713
 Transfer and shareholder servicing agent fees                                            144,344
 Trustees' compensation                                                                    86,263
 Other                                                                                    438,237
                                                                                     ------------
 Total liabilities                                                                     20,889,864


=================================================================================================
 Net Assets                                                                          $973,462,636
                                                                                     ============

=================================================================================================
 Composition of Net Assets
 Paid-in capital                                                                    $ 840,983,676
-------------------------------------------------------------------------------------------------
 Undistributed net investment income                                                    1,715,740
-------------------------------------------------------------------------------------------------
 Accumulated net realized gain on investment transactions                              94,915,576
-------------------------------------------------------------------------------------------------
 Net unrealized appreciation on investments                                            35,847,644
                                                                                     ------------
 Net Assets                                                                          $973,462,636
                                                                                     ============
</TABLE>

17 | OPPENHEIMER CONVERTIBLE SECURITIES FUND
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES  Unaudited / Continued

<TABLE>
=================================================================================================
<S>                                                                                        <C>
 Net Asset Value Per Share
 Class A Shares:
 Net asset value and redemption price per share (based on net assets of
 $230,764,682 and 13,921,714 shares of beneficial interest outstanding)                    $16.58
 Maximum offering price per share (net asset value plus sales charge of 5.75% of
 offering price)                                                                           $17.59
-------------------------------------------------------------------------------------------------
 Class B Shares:
 Net asset value, redemption price (excludes applicable contingent deferred

 sales charge) and offering price per share (based on net assets of $427,898,862
 and 25,776,187 shares of beneficial interest outstanding)                                 $16.60
-------------------------------------------------------------------------------------------------
 Class C Shares:
 Net asset value, redemption price (excludes applicable contingent deferred
 sales charge) and offering price per share (based on net assets of $98,482,993
 and 5,944,589 shares of beneficial interest outstanding)                                  $16.57
-------------------------------------------------------------------------------------------------
 Class M Shares:
 Net asset value, redemption price and offering price per share (based
 on net assets of $216,316,099 and 13,057,038 shares of beneficial
 interest outstanding)                                                                     $16.57
 Maximum offering price per share (net asset value plus
 sales charge of 3.25% of offering price)                                                  $17.13
</TABLE>



See accompanying Notes to Financial Statements.


18 | OPPENHEIMER CONVERTIBLE SECURITIES FUND

<PAGE>

STATEMENT OF OPERATIONS  Unaudited

<TABLE>
<CAPTION>

For the Six Months Ended June 30, 2000
==================================================================================
<S>                                                                   <C>
 Investment Income
 Interest                                                             $ 18,376,927
----------------------------------------------------------------------------------
 Dividends (net of foreign withholding taxes of $13,781)                 7,561,159
                                                                      ------------
 Total income                                                           25,938,086


==================================================================================
 Expenses

 Management fees                                                         2,243,841
----------------------------------------------------------------------------------
 Distribution and service plan fees:
 Class A                                                                   280,884
 Class B                                                                 2,126,393
 Class C                                                                   476,305
 Class M                                                                   838,781
----------------------------------------------------------------------------------
 Transfer and shareholder servicing agent fees:
 Class A                                                                   133,328
 Class B                                                                   280,871
 Class C                                                                    60,912
 Class M                                                                   138,123
----------------------------------------------------------------------------------
 Accounting service fee                                                    146,836
----------------------------------------------------------------------------------
 Custodian fees and expenses                                                32,781
----------------------------------------------------------------------------------
 Trustees' compensation                                                     20,071
----------------------------------------------------------------------------------
 Other                                                                     277,252
                                                                      ------------
 Total expenses                                                          7,056,378
 Less expenses paid indirectly                                             (26,297)
                                                                      ------------
 Net expenses                                                            7,030,081


==================================================================================
 Net Investment Income                                                  18,908,005

==================================================================================
 Realized and Unrealized Gain (Loss)

 Net realized gain on:
 Investments:
 Unaffiliated companies (including premiums on options exercised)       96,414,397
 Affiliated companies                                                     (326,440)
 Closing and expiration of option contracts written                        401,387
                                                                      ------------
 Net realized gain                                                      96,489,344


----------------------------------------------------------------------------------
 Net change in unrealized depreciation on investments                  (83,905,896)
                                                                      ------------
 Net realized and unrealized gain                                       12,583,448


==================================================================================
 Net Increase in Net Assets Resulting from Operations                 $ 31,491,453
                                                                      ============

</TABLE>




See accompanying Notes to Financial Statements.


19 | OPPENHEIMER CONVERTIBLE SECURITIES FUND
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS


<TABLE>
<CAPTION>

                                                         Six Months           Year
                                                              Ended          Ended
                                                      June 30, 2000   December 31,
                                                        (Unaudited)           1999
==================================================================================
<S>                                                   <C>             <C>
 Operations

 Net investment income                                $  18,908,005 $   38,292,215
----------------------------------------------------------------------------------
 Net realized gain                                       96,489,344     70,071,773
----------------------------------------------------------------------------------
 Net change in unrealized appreciation (depreciation)   (83,905,896)    86,533,925
                                                       ---------------------------
 Net increase in net assets resulting from operations    31,491,453    194,897,913

==================================================================================
 Dividends and/or Distributions to Shareholders

 Dividends from net investment income:
 Class A                                                 (5,031,675)    (9,741,207)
 Class B                                                 (7,700,359)   (15,529,379)
 Class C                                                 (1,728,466)    (3,532,239)
 Class M                                                 (4,334,157)    (9,489,390)
-----------------------------------------------------------------------------------
 Distributions from net realized gain:
 Class A                                                         --    (14,347,902)
 Class B                                                         --    (28,098,374)
 Class C                                                         --     (6,147,578)
 Class M                                                         --    (15,305,909)

==================================================================================
 Beneficial Interest Transactions

 Net increase (decrease) in net assets resulting from
 beneficial interest transactions:
 Class A                                                  7,393,864    (21,379,419)
 Class B                                                 (9,106,206)   (54,697,711)
 Class C                                                  2,825,552    (23,083,766)
 Class M                                                (20,763,803)   (52,420,296)

==================================================================================
 Net Assets

 Total decrease                                          (6,953,797)   (58,875,257)
----------------------------------------------------------------------------------
 Beginning of period                                    980,416,433  1,039,291,690
                                                       ---------------------------
 End of period (including undistributed net investment
 income of $1,715,740 and $1,602,392, respectively)    $973,462,636  $ 980,416,433
                                                       ===========================
</TABLE>




See accompanying Notes to Financial Statements.


20 | OPPENHEIMER CONVERTIBLE SECURITIES FUND

<PAGE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>


                                            Six Months                                             Year
                                                 Ended                                            Ended
                                         June 30, 2000                                          Dec. 31,
 Class A                                   (Unaudited)     1999      1998      1997   1996(1)    1995(2)
========================================================================================================
<S>                                            <C>       <C>       <C>       <C>       <C>       <C>
 Per Share Operating Data

 Net asset value, beginning of period          $16.36    $14.84    $15.32    $14.27    $13.96    $13.11
-------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                            .37       .70       .70       .71(3)    .73(3)    .54(3)
 Net realized and unrealized gain (loss)          .22      2.66      (.08)     1.93(3)    .65(3)   1.48(3)
                                               --------------------------------------------------------
 Total income from investment operations          .59      3.36       .62      2.64      1.38      2.02
-------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income            (.37)     (.70)     (.70)     (.72)     (.72)     (.68)
 Distributions from net realized gain              --     (1.14)     (.40)     (.87)     (.35)     (.49)
                                               --------------------------------------------------------

 Total dividends and/or distributions
 to shareholders                                 (.37)    (1.84)    (1.10)    (1.59)    (1.07)    (1.17)
-------------------------------------------------------------------------------------------------------
 Net asset value, end of period                $16.58    $16.36    $14.84    $15.32    $14.27    $13.96
                                               ========================================================


=======================================================================================================
 Total Return, at Net Asset Value(4)             3.57%    23.37%     4.08%   18.77%     10.13%    15.54%

=======================================================================================================
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)    $230,765  $220,671  $221,693 $192,212    $93,578    $2,502
-------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)           $225,987  $207,008  $220,423 $145,929    $41,617    $1,799
-------------------------------------------------------------------------------------------------------
 Ratios to average net assets:(5)
 Net investment income                           4.42%     4.55%     4.55%    4.58%      5.11%     5.63%
 Expenses                                        0.92%     0.95%     0.93%(6) 0.95%(6)   0.98%(6)  1.05%(6)
 Expenses, net of interest(7)                     N/A       N/A      0.93%(6) 0.95%(6)   0.97%(6)  1.01%(6)
-------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                           76%       95%       90%      79%        53%       58%

</TABLE>


1. On January 4, 1996, OppenheimerFunds, Inc. became the investment advisor to
the Fund.
2. For the period from May 1, 1995 (inception of offering) to December 31, 1995.
3. Per share information has been determined based on average shares outstanding
for the period.
4. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
5. Annualized for periods of less than one full year.
6. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
7. During the periods shown above, the Fund's interest expense was substantially
offset by the incremental interest income generated on bonds purchased with
borrowed funds.

See accompanying Notes to Financial Statements.

21 | OPPENHEIMER CONVERTIBLE SECURITIES FUND

<PAGE>

FINANCIAL HIGHLIGHTS  Continued

<TABLE>
<CAPTION>


                                            Six Months                                             Year
                                                 Ended                                            Ended
                                         June 30, 2000                                          Dec. 31,
 Class B                                   (Unaudited)     1999      1998      1997   1996(1)    1995(2)
========================================================================================================
<S>                                            <C>       <C>       <C>       <C>       <C>       <C>
 Per Share Operating Data

 Net asset value, beginning of period          $16.38    $14.87    $15.35    $14.29    $13.98    $13.11
-------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                            .31       .59       .58       .59(3)    .62(3)    .45(3)
 Net realized and unrealized gain (loss)          .21      2.65      (.08)     1.94(3)    .65(3)   1.51(3)
                                               --------------------------------------------------------
 Total income from investment operations          .52      3.24       .50      2.53      1.27      1.96
-------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income            (.30)     (.59)     (.58)     (.60)     (.61)     (.60)
 Distributions from net realized gain              --     (1.14)     (.40)     (.87)     (.35)     (.49)
                                               --------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                 (.30)    (1.73)     (.98)    (1.47)     (.96)    (1.09)
-------------------------------------------------------------------------------------------------------
 Net asset value, end of period                $16.60    $16.38    $14.87    $15.35    $14.29    $13.98
                                               ========================================================


=======================================================================================================
 Total Return, at Net Asset Value(4)             3.18%    22.35%     3.30%    17.93%     9.28%    15.09%

=======================================================================================================
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)    $427,899  $431,370  $445,544  $383,755  $211,176   $34,465
-------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)           $427,577  $414,611  $441,677  $296,426  $113,784   $15,184
-------------------------------------------------------------------------------------------------------
 Ratios to average net assets:(5)
 Net investment income                           3.66%     3.79%     3.79%     3.80%     4.31%     4.82%
 Expenses                                        1.68%     1.71%     1.69%(6)  1.72%(6)  1.75%(6)  1.69%(6)
 Expenses, net of interest(7)                     N/A       N/A      1.69%(6)  1.72%(6)  1.75%(6)  1.64%(6)
-------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                           76%       95%       90%       79%       53%       58%
</TABLE>



1. On January 4, 1996, OppenheimerFunds, Inc. became the investment advisor to
the Fund.
2. For the period from May 1, 1995 (inception of offering) to December 31, 1995.
3. Per share information has been determined based on average shares outstanding
for the period.
4. Assumes a $1,000 hypothetical  initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
5. Annualized for periods of less than one full year.
6. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
7. During the periods shown above, the Fund's interest expense was substantially
offset by the incremental interest income generated on bonds purchased with
borrowed funds.


See accompanying Notes to Financial Statements.

22 | OPPENHEIMER CONVERTIBLE SECURITIES FUND

<PAGE>

<TABLE>
<CAPTION>


                                            Six Months                                      Year
                                                 Ended                                     Ended
                                         June 30, 2000                                  Dec. 31,
 Class C                                   (Unaudited)     1999      1998      1997    1996(1,2)
================================================================================================
<S>                                            <C>       <C>       <C>       <C>       <C>

 Per Share Operating Data

 Net asset value, beginning of period          $16.35    $14.84    $15.32    $14.27    $14.03
------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                            .30       .59       .58       .59(3)    .50(3)
 Net realized and unrealized gain (loss)          .22      2.65      (.08)     1.93(3)    .59(3)
                                               -------------------------------------------------
 Total income from investment operations          .52      3.24       .50      2.52      1.09
------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income            (.30)     (.59)     (.58)     (.60)     (.50)
 Distributions from net realized gain              --     (1.14)     (.40)     (.87)     (.35)
                                               -------------------------------------------------

 Total dividends and/or distributions
 to shareholders                                 (.30)    (1.73)     (.98)    (1.47)     (.85)
------------------------------------------------------------------------------------------------
 Net asset value, end of period                $16.57    $16.35    $14.84    $15.32    $14.27
                                               =================================================

================================================================================================
 Total Return, at Net Asset Value(4)             3.18%    22.41%     3.32%    17.88%     7.74%

================================================================================================
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)     $98,483   $94,352  $108,339   $85,397   $38,312
------------------------------------------------------------------------------------------------
 Average net assets (in thousands)            $95,803   $94,329  $105,974   $62,343   $18,550
------------------------------------------------------------------------------------------------
 Ratios to average net assets:(5)
 Net investment income                           3.66%     3.80%     3.81%     3.82%     4.32%
 Expenses                                        1.68%     1.70%     1.68%(6)  1.70%(6)  1.68%(6)
 Expenses, net of interest(7)                     N/A       N/A      1.68%(6)  1.70%(6)  1.67%(6)
----------------------------------------------------------------------------------------------
 Portfolio turnover rate                           76%       95%       90%       79%       53%
</TABLE>


1. On January 4, 1996, OppenheimerFunds, Inc. became the investment advisor to
the Fund.
2. For the period from March 11, 1996 (inception of offering) to December 31,
1996.
3. Per share information has been determined based on average shares outstanding
for the period.
4. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
5. Annualized for periods of less than one full year.
6. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
7. During the periods shown above, the Fund's interest expense was substantially
offset by the incremental interest income generated on bonds purchased with
borrowed funds.


See accompanying Notes to Financial Statements.


23 | OPPENHEIMER CONVERTIBLE SECURITIES FUND
<PAGE>

FINANCIAL HIGHLIGHTS  Continued


<TABLE>
<CAPTION>


                                            Six Months                                             Year
                                                 Ended                                            Ended
                                         June 30, 2000                                          Dec. 31,
 Class M                                   (Unaudited)     1999      1998      1997   1996(1)       1995
========================================================================================================
<S>                                            <C>       <C>       <C>       <C>       <C>       <C>
 Per Share Operating Data

 Net asset value, beginning of period          $16.35    $14.84    $15.32    $14.27    $13.96    $12.20
-------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                            .36       .63       .62       .62(2)    .65(2)    .70(2)
 Net realized and unrealized gain (loss)          .19      2.65      (.08)     1.94(2)    .66(2)   2.42(2)
                                               --------------------------------------------------------
 Total income from investment operations          .55      3.28       .54      2.56      1.31      3.12
-------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income            (.33)     (.63)     (.62)     (.64)     (.65)     (.87)
 Distributions from net realized gain              --     (1.14)     (.40)     (.87)     (.35)     (.49)
                                               --------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                 (.33)    (1.77)    (1.02)    (1.51)    (1.00)    (1.36)
-------------------------------------------------------------------------------------------------------
 Net asset value, end of period                $16.57    $16.35    $14.84    $15.32    $14.27    $13.96
                                               ========================================================

=======================================================================================================
 Total Return, at Net Asset Value(3)             3.31%    22.74%     3.58%    18.19%     9.58%    26.00%

=======================================================================================================
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)    $216,316  $234,023  $263,716  $297,292  $274,043  $239,341
-------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)           $224,797  $235,419  $288,953  $285,621  $264,936  $181,719
-------------------------------------------------------------------------------------------------------
 Ratios to average net assets:(4)
 Net investment income                           3.91%    4.06%      4.02%     4.05%     4.59%     5.12%
 Expenses                                        1.43%    1.45%      1.43%(5)  1.46%(5)  1.58%(5)  1.58%(5)
 Expenses, net of interest(6)                     N/A      N/A       1.43%(5)  1.46%(5)  1.55%(5)  1.56%(5)
-------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                           76%      95%        90%       79%       53%       58%
</TABLE>



1. On January 4, 1996, OppenheimerFunds, Inc. became the investment advisor to
the Fund.
2. Per share information has been determined based on average shares outstanding
for the period.
3. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
4. Annualized for periods of less than one full year.
5. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
6.  During the periods shown above, the Fund's interest expense was
substantially offset by the incremental interest income generated on bonds
purchased with borrowed funds.


See accompanying Notes to Financial Statements.


24 | OPPENHEIMER CONVERTIBLE SECURITIES FUND
<PAGE>

NOTES TO FINANCIAL STATEMENTS  Unaudited


================================================================================
1. Significant Accounting Policies
Oppenheimer Convertible Securities Fund (the Fund), a portfolio of the Bond Fund
Series, is registered under the Investment Company Act of 1940, as amended,
as an open-end management investment company. The Fund's investment
objective is to seek a high level of total return on its assets through a
combination of current income and capital appreciation. The Fund's investment
advisor is OppenheimerFunds, Inc. (the Manager).
    The Fund offers Class A, Class B, Class C and Class M shares. Class A shares
are sold at their offering price, which is normally net asset value plus a
front-end sales charge. Class B and Class C shares are sold without a front-end
sales charge but may be subject to a contingent deferred sales charge (CDSC).
Class M shares are sold with a reduced front-end sales charge. All classes of
shares have identical rights to earnings, assets and voting privileges, except
that each class has its own expenses directly attributable to that class and
exclusive voting rights with respect to matters affecting that class. Classes
A, B, C and M have separate distribution and/or service plans. Class B shares
will automatically convert to Class A shares six years after the date of
purchase. The following is a summary of significant accounting policies
consistently followed by the Fund.
--------------------------------------------------------------------------------
Securities Valuation. Securities listed or traded on National Stock Exchanges
or other domestic or foreign exchanges are valued based on the last sale price
of the security traded on that exchange prior to the time when the Fund's
assets are valued. In the absence of a sale, the security is valued at the last
sale price on the prior trading day, if it is within the spread of the closing
bid and asked prices, and if not, at the closing bid price. Securities
(including restricted securities) for which quotations are not readily
available are valued primarily using dealer-supplied valuations, a portfolio
pricing service authorized by the Board of Trustees, or at their fair value.
Fair value is determined in good faith under consistently applied procedures
under the supervision of the Board of Trustees. Short-term "money market type"
debt securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
--------------------------------------------------------------------------------
Foreign Currency Translation. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
    The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains
and losses in the Fund's Statement of Operations.


25 | OPPENHEIMER CONVERTIBLE SECURITIES FUND
<PAGE>


NOTES TO FINANCIAL STATEMENTS  Unaudited / Continued

================================================================================
1. Significant Accounting Policies Continued
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is
required to be at least 102% of the resale price at the time of purchase. If
the seller of the agreement defaults and the value of the collateral declines,
or if the seller enters an insolvency proceeding, realization of the value of
the collateral by the Fund may be delayed or limited.
--------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily
to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
--------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required. During 1995, the Fund
acquired all of the assets and liabilities of another investment company which
did not distribute its net investment income or realized gains and was taxed as
a C corporation. Accordingly, an accrued tax liability was assumed by the Fund
on the date of the acquisition. As of December 31, 1999, the remaining accrued
tax liability for net unrealized gains on investments at the time of the
acquisition was $531,724.
--------------------------------------------------------------------------------
Trustees' Compensation. The Fund has adopted an unfunded retirement plan for
the Fund's independent Board of Trustees. Benefits are based on years of
service and fees paid to each trustee during the years of service. During the
six months ended June 30, 2000, a provision of $2,785 was made for the Fund's
projected benefit obligations, resulting in an accumulated liability of $79,593
as of June 30, 2000.
    The Board of Trustees has adopted a deferred compensation plan for
independent trustees that enables trustees to elect to defer receipt of all or
a portion of annual compensation they are entitled to receive from the Fund.
Under the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the Board of Trustees in shares of one
or more Oppenheimer funds selected by the trustee. The amount paid to the Board
of Trustees under the plan will be determined based upon the performance of the
selected funds. Deferral of trustees' fees under the plan will not affect the
net assets of the Fund, and will not materially affect the Fund's assets,
liabilities or net investment income per share.
--------------------------------------------------------------------------------
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.


26 | OPPENHEIMER CONVERTIBLE SECURITIES FUND

<PAGE>


--------------------------------------------------------------------------------
Classification of Dividends and Distributions to Shareholders. Net investment
income (loss) and net realized gain (loss) may differ for financial statement
and tax purposes. The character of dividends and distributions made during the
fiscal year from net investment income or net realized gains may differ from
its ultimate characterization for federal income tax purposes. Also, due to
timing of dividends and distributions, the fiscal year in which amounts are
distributed may differ from the fiscal year in which the income or realized
gain was recorded by the Fund.
--------------------------------------------------------------------------------
Expense Offset Arrangements. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
--------------------------------------------------------------------------------
Other. Investment transactions are accounted for as of trade date and dividend
income is recorded on the ex-dividend date. Certain dividends from foreign
securities will be recorded as soon as the Fund is informed of the dividend if
such information is obtained subsequent to the ex-dividend date. Realized gains
and losses on investments and unrealized appreciation and depreciation are
determined on an identified cost basis, which is the same basis used for
federal income tax purposes.
    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.


27 | OPPENHEIMER CONVERTIBLE SECURITIES FUND
<PAGE>

NOTES TO FINANCIAL STATEMENTS  Unaudited / Continued


================================================================================
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:


<TABLE>
<CAPTION>

                             Six Months Ended June 30, 2000   Year Ended December 31, 1999
                                     Shares          Amount         Shares          Amount
------------------------------------------------------------------------------------------
<S>                             <C>           <C>               <C>          <C>
 Class A
 Sold                             2,515,699   $  42,002,318      1,839,242   $ 28,451,586
 Dividends and/or
 distributions reinvested           243,065       4,092,180      1,245,687     19,795,587
 Redeemed                        (2,327,126)    (38,700,634)    (4,530,563)   (69,626,592)
                                ---------------------------------------------------------
 Net increase (decrease)            431,638   $   7,393,864     (1,445,634)  $(21,379,419)
                                =========================================================

------------------------------------------------------------------------------------------
 Class B
 Sold                             1,827,494   $  30,326,878      2,027,260   $ 31,242,213
 Dividends and/or
 distributions reinvested           334,924       5,656,630      2,239,180     35,741,741
 Redeemed                        (2,715,702)    (45,089,714)    (7,908,649)  (121,681,665)
                                ---------------------------------------------------------
 Net decrease                      (553,284)  $  (9,106,206)    (3,642,209)  $(54,697,711)
                                =========================================================

------------------------------------------------------------------------------------------
 Class C
 Sold                               805,644   $  13,290,653        666,790   $ 10,271,657
 Dividends and/or
 distributions reinvested            73,825       1,244,491        499,994      7,958,464
 Redeemed                          (706,020)    (11,709,592)    (2,698,276)   (41,313,887)
                                ---------------------------------------------------------
 Net increase (decrease)            173,449   $   2,825,552     (1,531,492)  $(23,083,766)
                                =========================================================

------------------------------------------------------------------------------------------
 Class M
 Sold                               195,809   $   3,235,784        253,587   $  3,881,769
 Dividends and/or
 distributions reinvested           186,080       3,136,609      1,228,639     19,534,574
 Redeemed                        (1,638,231)    (27,136,196)    (4,938,225)   (75,836,639)
                                ---------------------------------------------------------
 Net decrease                    (1,256,342)   $(20,763,803)    (3,455,999)  $(52,420,296)
                                =========================================================
</TABLE>


================================================================================
3. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the six months ended June 30, 2000, were
$670,472,565 and $706,255,263, respectively.

--------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Manager were in accordance with
the investment advisory agreement with the Fund which provides for a fee of
0.625% on the first $50 million of average net assets of the Fund, 0.50% of the
next $250 million and 0.4375% of average annual net assets over $300 million.
The Fund's management fee for six months ended June 30, 2000 was an annualized
rate of 0.46%, before any waiver by the Manager if applicable.


28 | OPPENHEIMER CONVERTIBLE SECURITIES FUND
<PAGE>

--------------------------------------------------------------------------------
Accounting Fees. Accounting fees paid to the Manager were in accordance with
the accounting services agreement with the Fund which provides for an annual
fee of $12,000 for the first $30 million of net assets and $9,000 for each
additional $30 million of net assets.

--------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the
Manager, acts as the transfer and shareholder servicing agent for the Fund and
for other Oppenheimer funds. The Fund pays an annual maintenance fee for each
Fund shareholder account and reimburses OFS for its out-of-pocket expenses.
During the six months ended ended June 30, 2000, the Fund paid OFS $644,324.

--------------------------------------------------------------------------------
Distribution and Service Plan Fees. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.

The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the
period indicated.

<TABLE>
<CAPTION>


                    Aggregate        Class A  Commissions     Commissions     Commissions      Aggregate         Class M
                    Front-End      Front-End   on Class A      on Class B      on Class C      Front-End       Front-End
Six             Sales Charges  Sales Charges       Shares          Shares          Shares  Sales Charges   Sales Charges
Months             on Class A    Retained by  Advanced by     Advanced by     Advanced by     on Class M     Retained by
Ended                  Shares    Distributor  Distributor(1)  Distributor(1)  Distributor(1)      Shares     Distributor
------------------------------------------------------------------------------------------------------------------------
<S>                  <C>             <C>          <C>            <C>            <C>              <C>             <C>
June 30, 2000        $306,222        $88,180      $34,460        $831,219       $101,949         $57,950         $8,672
</TABLE>


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


<TABLE>
<CAPTION>

                                  Class A                  Class B                  Class C                  Class M
 Six                  Contingent Deferred      Contingent Deferred      Contingent Deferred      Contingent Deferred
 Months                     Sales Charges            Sales Charges            Sales Charges            Sales Charges
 Ended            Retained by Distributor  Retained by Distributor  Retained by Distributor  Retained by Distributor
--------------------------------------------------------------------------------------------------------------------
<S>                               <C>                    <C>                        <C>                         <C>
June 30, 2000                     $4,099                 $653,677                   $5,647                      $--
</TABLE>



The Fund has adopted a Service Plan for Class A shares and Distribution and
Service Plans for Class B and Class C shares under Rule 12b-1 of the Investment
Company Act. Under those plans the Fund pays the Distributor for all or a
portion of its costs incurred in connection with the distribution and/or
servicing of the shares of the particular class.

--------------------------------------------------------------------------------
Class A Service Plan Fees. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements
to the Distributor at a rate of up to 0.25% of average annual net assets of
Class A shares purchased. The Distributor makes payments to plan recipients
quarterly at an annual rate not to exceed 0.25% of the average annual net
assets consisting of Class A shares of the Fund. For the six months ended June
30, 2000, payments under the Class A plan totaled $280,884, all of which were
paid by the Distributor to recipients, and included $25,165 paid to an
affiliate of the Manager. Any unreimbursed expenses the Distributor incurs with
respect to Class A shares in any fiscal year cannot be recovered in subsequent
years.


29 | OPPENHEIMER CONVERTIBLE SECURITIES FUND
<PAGE>

NOTES TO FINANCIAL STATEMENTS  Unaudited / Continued

================================================================================
4. Fees and Other Transactions with Affiliates  Continued
Class B, Class C and Class M Distribution and Service Plan Fees. Under each
plan, service fees and distribution fees are computed on the average of the net
asset value of shares in the respective class, determined as of the close of
each regular business day during the period. The Class B, Class C and Class M
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 under the plan during the period for which the fee is paid.
    The Distributor retains the asset-based sales charge on Class B and Class M
shares. The Distributor retains the asset-based sales charge on Class C shares
during the first year the shares are outstanding. The asset-based sales charges
on Class B and Class C shares allow investors to buy shares without a front-end
sales charge while allowing the Distributor to compensate dealers that sell
those shares.
    The Distributor's actual expenses in selling Class B, Class C and Class M
shares may be more than the payments it receives from the contingent deferred
sales charges collected on redeemed shares and asset-based sales charges from
the Fund under the plans. If any plan is terminated by the Fund, the Board of
Trustees may allow the Fund to continue payments of the asset-based sales
charge to the Distributor for distributing shares before the plan was
terminated. The plans allow for the carry-forward of distribution expenses, to
be recovered from asset-based sales charges in subsequent fiscal periods.

Distribution fees paid to the Distributor for the six months ended June 30,
2000, were as follows:


<TABLE>
<CAPTION>
                                                       Distributor's   Distributor's
                                                           Aggregate    Unreimbursed
                                                        Unreimbursed   Expenses as %
                    Total Payments   Amount Retained        Expenses   of Net Assets
                        Under Plan    by Distributor      Under Plan        of Class
------------------------------------------------------------------------------------
<S>                     <C>               <C>             <C>                  <C>
 Class B Plan           $2,126,393        $1,778,809      $8,503,564           1.99%
 Class C Plan              476,305            35,027       1,344,553           1.37
 Class M Plan              838,781           286,581              --             --
</TABLE>

30 | OPPENHEIMER CONVERTIBLE SECURITIES FUND
<PAGE>

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

Written option activity for the six months ended June 30, 2000 was as follows:

<TABLE>
<CAPTION>


                                                                      Call Options
                                                         -------------------------
                                                          Number of      Amount of
                                                            Options       Premiums
-----------------------------------------------------------------------------------
<S>                                                          <C>         <C>
 Options outstanding as of
 December 31, 1999                                            1,900      $ 871,787
 Options written                                              1,400        470,400
 Options closed or expired                                   (1,900)      (871,787)
 Options exercised                                           (1,400)      (470,400)
                                                         -------------------------
 Options outstanding as of
 June 30, 2000                                                   --      $     --
                                                         =========================
</TABLE>

31 | OPPENHEIMER CONVERTIBLE SECURITIES FUND
<PAGE>

NOTES TO FINANCIAL STATEMENTS  Unaudited / Continued

================================================================================
6. Illiquid or Restricted Securities
As of June 30, 2000, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933,
may have contractual restrictions on resale, and are valued under methods
approved by the Board of Trustees as reflecting fair value. A security may also
be considered illiquid if it lacks a readily available market or if its
valuation has not changed for a certain period of time. The Fund intends to
invest no more than 15% of its net assets (determined at the time of purchase
and reviewed periodically) in illiquid or restricted securities. Certain
restricted securities, eligible for resale to qualified institutional
investors, are not subject to that limitation. The aggregate value of illiquid
or restricted securities subject to this limitation as of June 30, 2000 was
$15,297,864, which represents 1.57% of the Fund's net assets, of which
$11,207,148 is considered restricted. Information concerning restricted
securities is as follows:

<TABLE>
<CAPTION>

                                                                                       Valuation
                                                                                  Per Unit as of
 Security                                   Acquisition Date   Cost Per Unit       June 30, 2000
------------------------------------------------------------------------------------------------
<S>                                                <C>               <C>                  <C>
 Bonds
 Deutsche Bank AG/AT&T Linked Nts.,                10/29/97          100.00%              114.75%
 3.10%, 11/5/02

 Stocks and Warrants
 Danskin, Inc.:
 Portion of Promissary Note to be used to
 purchase 53,309 shares of restricted common
 stock in rights offering                           8/14/95           $0.30                $0.30
 Restricted Common Shares                           8/14/95            0.30                 0.26
 Wts., Exp. 10/8/04                                 8/14/95              --                 0.04
------------------------------------------------------------------------------------------------
 Hudson Hotels Corp.                                4/14/00            1.19                 0.84
------------------------------------------------------------------------------------------------
 Learn2.com, Inc.                                    5/5/98              --                 1.97
------------------------------------------------------------------------------------------------
 Submicron Systems Corp. Wts.,
 Exp. 1/15/01                                      12/11/98              --                 0.01
</TABLE>



================================================================================
7. Bank Borrowings
The Fund may borrow up to a certain percentage of its total assets from a bank
to purchase portfolio securities, or for temporary and emergency purposes. The
Fund has entered into an agreement which enables it to participate with certain
other Oppenheimer funds in an unsecured line of credit with a bank, which
permits borrowings up to $100 million, collectively. Interest is charged to
each fund, based on its borrowings, at a rate equal to the Federal Funds Rate
plus 0.625%. The Fund also pays a commitment fee equal to its pro rata share of
the average unutilized amount of the credit facility at a rate of 0.09% per
annum.
    The Fund had no borrowings outstanding for the six months ended
June 30, 2000.


32 | OPPENHEIMER CONVERTIBLE SECURITIES FUND
<PAGE>

OPPENHEIMER CONVERTIBLE SECURITIES FUND

<TABLE>
<CAPTION>

A Series of Bond Fund Series
==========================================================================================
<S>                          <C>
Officers and Trustees        Bridget A. Macaskill, Trustee, President and
                               Chairman of the Board
                             John Cannon, Trustee
                             Paul Y. Clinton, Trustee
                             Thomas W. Courtney, Trustee
                             Robert G. Galli, Trustee
                             Lacy B. Herrmann, Trustee
                             George Loft, Trustee
                             Edward Everett, Vice President
                             Michael S. Rosen, Vice President
                             Andrew J. Donohue, Secretary
                             Brian W. Wixted, Treasurer
                             Robert J. Bishop, Assistant Treasurer
                             Adele A. Campbell, Assistant Treasurer
                             Scott T. Farrar, Assistant Treasurer
                             Robert G. Zack, Assistant Secretary

==========================================================================================
 Investment Advisor          OppenheimerFunds, Inc.


==========================================================================================
 Distributor                 OppenheimerFunds Distributor, Inc.


==========================================================================================
 Transfer and Shareholder    OppenheimerFunds Services
 Servicing Agent


==========================================================================================
 Custodian of                The Bank of New York
 Portfolio Securities


==========================================================================================
</TABLE>



<PAGE>


                                       A-7
                                   Appendix A

                               RATINGS DEFINITIONS

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

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

Long-Term (Taxable) Bond Ratings


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

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

A: Bonds rated "A" possess many  favorable  investment  attributes and are to be
considered  as  upper-medium  grade  obligations.  Factors  giving  security  to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment some time in the future.

Baa: Bonds rated "Baa" are considered  medium-grade  obligations;  that is, they
are neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective  elements may be
lacking or may be  characteristically  unreliable over any great length of time.
Such bonds lack  outstanding  investment  characteristics  and have  speculative
characteristics as well.

Ba:  Bonds  rated "Ba" are judged to have  speculative  elements.  Their  future
cannot  be  considered  well-assured.  Often  the  protection  of  interest  and
principal  payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future.  Uncertainty of position  characterizes
bonds in this class.

B: Bonds rated "B" generally lack  characteristics of the desirable  investment.
Assurance of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small.

Caa: Bonds rated "Caa" are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or
interest.

Ca: Bonds rated "Ca" represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.

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

Con. (...):  Bonds for which the security  depends on the completion of some act
or the  fulfillment of some condition are rated  conditionally.  These bonds are
secured by (a) earnings of projects under construction, (b) earnings of projects
unseasoned in operating  experience,  (c) rentals that begin when facilities are
completed,  or (d) payments to which some other limiting condition attaches. The
parenthetical   rating  denotes  probable  credit  stature  upon  completion  of
construction or elimination of the basis of the condition.

Moody's  applies  numerical  modifiers  1,  2,  and  3 in  each  generic  rating
classification  from "Aa" through  "Caa." The modifier  "1"  indicates  that the
obligation ranks in the higher end of its generic rating category;  the modifier
"2" indicates a mid-range  ranking;  and the modifier "3" indicates a ranking in
the lower end of that generic rating category. Advanced refunded issues that are
secured by certain assets are identified with a # symbol.


Short-Term Ratings - Taxable Debt


These ratings  apply to the ability of issuers to honor senior debt  obligations
having an original maturity not exceeding one year:


Prime-1: Issuer has a superior ability for repayment of senior short-term
debt obligations.


Prime-2:  Issuer has a strong  ability for repayment of senior  short-term  debt
obligations.  Earnings  trends and coverage  ratios,  while  sound,  may be more
subject to variation. Capitalization characteristics,  while appropriate, may be
more affected by external conditions. Ample alternate liquidity is maintained.


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

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


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

                            Long-Term Credit Ratings

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

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


A: Bonds rated "A" are  somewhat  more  susceptible  to the  adverse  effects of
changes  in   circumstances   and  economic   conditions  than   obligations  in
higher-rated  categories.  However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.

BBB: Bonds rated "BBB" exhibit adequate protection parameters.  However, adverse
economic  conditions  or  changing  circumstances  are more  likely to lead to a
weakened  capacity  of the  obligor  to meet  its  financial  commitment  on the
obligation.

BB, B, CCC, CC, and C

Bonds rated "BB",  "B", "CCC",  "CC" and "C" are regarded as having  significant
speculative characteristics. "BB" indicates the least degree of speculation, and
"C" the  highest.  While such  obligations  will  likely  have some  quality and
protective  characteristics,  these may be outweighed by large  uncertainties or
major exposures to adverse conditions.
BB: Bonds rated "BB" are less  vulnerable to nonpayment  than other  speculative
issues.  However,  these face major ongoing uncertainties or exposure to adverse
business,  financial,  or economic  conditions which could lead to the obligor's
inadequate capacity to meet its financial commitment on the obligation.

B: Bonds rated "B" are more  vulnerable to  nonpayment  than  obligations  rated
"BB",  but  the  obligor  currently  has the  capacity  to  meet  its  financial
commitment  on  the  obligation.   Adverse  business,   financial,  or  economic
conditions will likely impair the obligor's  capacity or willingness to meet its
financial commitment on the obligation.

CCC: Bonds rated "CCC" are currently vulnerable to nonpayment, and are dependent
upon favorable business,  financial,  and economic conditions for the obligor to
meet its  financial  commitment  on the  obligation.  In the  event  of  adverse
business,  financial or economic  conditions,  the obligor is not likely to have
the capacity to meet its financial commitment on the obligation.

CC:  Bonds rated "CC" are currently highly vulnerable to nonpayment.

C: A  subordinated  debt or preferred  stock  obligation  rated "C" is currently
highly vulnerable to nonpayment. The "C" rating may be used to cover a situation
where a bankruptcy petition has been filed or similar action has been taken, but
payments on this obligation are being continued.  A "C" also will be assigned to
a preferred  stock issue in arrears on dividends or sinking fund  payments,  but
that is currently paying.

D: Bonds rated "D" are in default. Payments on the obligation are not being made
on the date due even if the  applicable  grace  period has not  expired,  unless
Standard and Poor's  believes  that such payments will be made during such grace
period.  The "D"  rating  will  also be used  upon the  filing  of a  bankruptcy
petition  or the taking of a similar  action if payments  on an  obligation  are
jeopardized.

The ratings  from "AA" to "CCC" may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within the major rating categories. The
"r" symbol is attached to the ratings of instruments with significant  noncredit
risks.


Short-Term Issue Credit Ratings


A-1: Obligation is rated in the highest category. The obligor's capacity to meet
its financial  commitment on the obligation is strong.  Within this category,  a
plus (+) sign designation indicates the obligor's capacity to meet its financial
obligation is extremely strong.


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


A-3:  Obligation  exhibits  adequate  protection  parameters.  However,  adverse
economic  conditions  or  changing  circumstances  are more  likely to lead to a
weakened  capacity  of the  obligor  to meet  its  financial  commitment  on the
obligation.

B: Obligation is regarded as having significant speculative characteristics. The
obligor  currently  has the  capacity to meet its  financial  commitment  on the
obligation.  However,  it faces major ongoing  uncertainties which could lead to
the  obligor's  inadequate  capacity  to meet its  financial  commitment  on the
obligation.

C: Obligation is currently vulnerable to nonpayment and is dependent upon
favorable business, financial, and economic conditions for the obligor to
meet its financial commitment on the obligation.

D:  Obligation is in payment  default.  Payments on the obligation have not been
made on the due date even if the applicable grace period has not expired, unless
Standard and Poor's  believes  that such payments will be made during such grace
period.  The "D"  rating  will  also be used  upon the  filing  of a  bankruptcy
petition  or the taking of a similar  action if payments  on an  obligation  are
jeopardized.


Fitch, Inc.

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


International Long-Term Credit Ratings


Investment Grade:

AAA: Highest Credit Quality. "AAA" ratings denote the lowest expectation of
credit risk. They are assigned only in the case of exceptionally strong
capacity for timely payment of financial commitments. This capacity is highly
unlikely to be adversely affected by foreseeable events.

AA: Very High Credit Quality. "AA" ratings denote a very low expectation of
credit risk. They indicate a very strong capacity for timely payment of
financial commitments. This capacity is not significantly vulnerable to
foreseeable events.

A: High Credit Quality. "A" ratings denote a low expectation of credit risk.
The capacity for timely payment of financial commitments is considered
strong. This capacity may, nevertheless, be more vulnerable to changes in
circumstances or in economic conditions than is the case for higher ratings.


BBB: Good Credit Quality. "BBB" ratings indicate that there is currently a
low expectation of credit risk. The capacity for timely payment of financial
commitments is considered adequate, but adverse changes in circumstances and
in economic conditions are more likely to impair this capacity. This is the
lowest investment-grade category.


Speculative Grade:


BB: Speculative. "BB" ratings indicate that there is a possibility of credit
risk developing, particularly as the result of adverse economic change over
time. However, business or financial alternatives may be available to allow
financial commitments to be met. Securities rated in this category are not
investment grade.


B: Highly Speculative. "B" ratings indicate that significant credit risk is
present, but a limited margin of safety remains. Financial commitments are
currently being met. However, capacity for continued payment is contingent
upon a sustained, favorable business and economic environment.

CCC, CC C: High Default Risk.  Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon sustained, favorable
business or economic developments. A "CC" rating indicates that default of
some kind appears probable. "C" ratings signal imminent default.


DDD, DD, and D: Default.  The ratings of  obligations in this category are based
on their prospects for achieving partial or full recovery in a reorganization or
liquidation  of  the  obligor.   While  expected   recovery  values  are  highly
speculative  and cannot be estimated with any precision,  the following serve as
general  guidelines.  "DDD" obligations have the highest potential for recovery,
around  90%-100% of  outstanding  amounts and accrued  interest.  "DD" indicates
potential  recoveries  in the  range of  50%-90%,  and "D" the  lowest  recovery
potential, i.e., below 50%.

Entities  rated  in  this  category  have  defaulted  on  some  or all of  their
obligations.  Entities  rated "DDD" have the highest  prospect for resumption of
performance  or  continued  operation  with or  without a formal  reorganization
process.  Entities  rated  "DD"  and  "D"  are  generally  undergoing  a  formal
reorganization or liquidation process;  those rated "DD" are likely to satisfy a
higher portion of their outstanding obligations, while entities rated "D" have a
poor prospect for repaying all obligations.
Plus (+) and  minus  (-)  signs  may be  appended  to a rating  symbol to denote
relative status within the major rating categories. Plus and minus signs are not
added to the "AAA"  category or to  categories  below  "CCC," nor to  short-term
ratings other than "F1" (see below).


International Short-Term Credit Ratings


F1:  Highest credit quality. Strongest capacity for timely payment of
financial commitments. May have an added "+" to denote any exceptionally
strong credit feature.

F2:   Good credit quality. A satisfactory capacity for timely payment of
financial commitments, but the margin of safety is not as great as in the
case of higher ratings.

F3:   Fair credit quality. Capacity for timely payment of financial
commitments is adequate. However, near-term adverse changes could result in a
reduction to non-investment grade.

B:    Speculative. Minimal capacity for timely payment of financial
commitments, plus vulnerability to near-term adverse changes in financial and
economic conditions.

C:      High default risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon a sustained, favorable
business and economic environment.


D:     Default. Denotes actual or imminent payment default.

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


<PAGE>


                                       B-1
                                   Appendix B

------------------------------------------------------------------------------
                            Industry Classifications
------------------------------------------------------------------------------

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




<PAGE>


                                      C-58
                                   Appendix C

OppenheimerFunds Special Sales Charge Arrangements and Waivers

In certain cases,  the initial sales charge that applies to purchases of Class A
shares1 of the  Oppenheimer  funds or the contingent  deferred sales charge that
may apply to Class A, Class B or Class C shares may be waived.2  That is because
of the  economies of sales  efforts  realized by  OppenheimerFunds  Distributor,
Inc.,  (referred  to in this  document as the  "Distributor"),  or by dealers or
other  financial  institutions  that offer  those  shares to certain  classes of
investors.

Not all waivers apply to all funds. For example,  waivers relating to Retirement
Plans do not apply to Oppenheimer municipal funds, because shares of those funds
are not  available  for  purchase  by or on behalf of  retirement  plans.  Other
waivers apply only to shareholders of certain funds.

For the purposes of some of the waivers  described  below and in the  Prospectus
and Statement of Additional Information of the applicable Oppenheimer funds, the
term  "Retirement  Plan"  refers  to the  following  types of  plans:  (1) plans
qualified under Sections 401(a) or 401(k) of the Internal Revenue
           Code,
(2) non-qualified  deferred  compensation plans, (3) employee benefit plans3 (4)
Group  Retirement  Plans4 (5) 403(b)(7)  custodial  plan accounts (6) Individual
Retirement Accounts ("IRAs"), including traditional IRAs,
           Roth IRAs, SEP-IRAs, SARSEPs or SIMPLE plans

The  interpretation  of these  provisions as to the  applicability  of a special
arrangement  or waiver in a  particular  case is in the sole  discretion  of the
Distributor or the transfer agent (referred to in this document as the "Transfer
Agent")  of  the  particular   Oppenheimer   fund.  These  waivers  and  special
arrangements  may be amended or terminated at any time by a particular fund, the
Distributor, and/or OppenheimerFunds,  Inc. (referred to in this document as the
"Manager").
Waivers that apply at the time shares are redeemed must be requested by the
shareholder and/or dealer in the redemption request.
1.    Certain waivers also apply to Class M shares of Oppenheimer Convertible
   Securities Fund.
2. In the case of Oppenheimer Senior Floating Rate Fund, a  continuously-offered
   closed-end  fund,  references to contingent  deferred  sales charges mean the
   Fund's  Early  Withdrawal   Charges  and  references  to  "redemptions"  mean
   "repurchases" of shares.
3. An "employee  benefit plan" means any plan or arrangement,  whether or not it
   is "qualified" under the Internal Revenue Code, under which Class A shares of
   an  Oppenheimer  fund  or  funds  are  purchased  by  a  fiduciary  or  other
   administrator  for the account of participants  who are employees of a single
   employer or of affiliated employers.  These may include, for example, medical
   savings accounts, payroll deduction plans or similar plans. The fund accounts
   must be registered in the name of the fiduciary or  administrator  purchasing
   the shares for the benefit of participants in the plan.
4. The term  "Group  Retirement  Plan"  means  any  qualified  or  non-qualified
   retirement  plan  for  employees  of a  corporation  or sole  proprietorship,
   members and  employees of a partnership  or  association  or other  organized
   group of persons  (the  members of which may include  other  groups),  if the
   group has made special  arrangements  with the Distributor and all members of
   the group  participating  in (or who are eligible to participate in) the plan
   purchase  Class A shares  of an  Oppenheimer  fund or funds  through a single
   investment dealer,  broker or other financial  institution  designated by the
   group.  Such plans  include 457 plans,  SEP-IRAs,  SARSEPs,  SIMPLE plans and
   403(b) plans other than plans for public  school  employees.  The term "Group
   Retirement Plan" also includes  qualified  retirement plans and non-qualified
   deferred  compensation  plans  and IRAs  that  purchase  Class A shares of an
   Oppenheimer fund or funds through a single investment dealer, broker or other
   financial institution that has made special arrangements with the Distributor
   enabling  those  plans to  purchase  Class A shares  at net  asset  value but
   subject to the Class A contingent deferred sales charge.

5.


<PAGE>



I. Applicability of Class A Contingent Deferred Sales Charges in Certain Cases

Purchases of Class A Shares of Oppenheimer Funds That Are Not Subject to Initial
Sales Charge but May Be Subject to the Class A Contingent  Deferred Sales Charge
(unless a waiver applies).

      There is no initial  sales charge on purchases of Class A shares of any of
the Oppenheimer funds in the cases listed below. However, these purchases may be
subject to the Class A contingent  deferred  sales charge if redeemed  within 18
months of the end of the calendar month of their  purchase,  as described in the
Prospectus (unless a waiver described  elsewhere in this Appendix applies to the
redemption).  Additionally,  on shares  purchased  under these  waivers that are
subject to the Class A contingent  deferred sales charge,  the Distributor  will
pay the  applicable  commission  described  in the  Prospectus  under  "Class  A
Contingent Deferred Sales Charge."4 This waiver provision applies to:

4 However, that commission will not be paid on purchases of shares in amounts of
$1 million or more  (including any right of  accumulation)  by a Retirement Plan
that pays for the purchase with the redemption proceeds of Class C shares of one
or more Oppenheimer funds held by the Plan for more than one year.

|_| Purchases of Class A shares aggregating $1 million or more.

 |_| Purchases by
a Retirement Plan (other than an IRA or 403(b)(7)
         custodial plan) that:
(1)   buys shares costing $500,000 or more, or
(2)   has, at the time of purchase, 100 or more eligible employees or total
         plan assets of $500,000 or more, or
(3)      certifies  to the  Distributor  that it  projects  to have  annual plan
         purchases of $200,000 or more.
|_|      Purchases  by  an  OppenheimerFunds-sponsored   Rollover  IRA,  if  the
         purchases are made:
(1)      through a broker,  dealer,  bank or registered  investment advisor that
         has made special arrangements with the Distributor for those purchases,
         or
(2)      by a direct rollover of a distribution from a qualified Retirement Plan
         if the  administrator of that Plan has made special  arrangements  with
         the Distributor for those purchases.
|_|      Purchases  of Class A shares by  Retirement  Plans that have any of the
         following record-keeping arrangements:
(1)   The record keeping is performed by Merrill Lynch Pierce Fenner & Smith,
               Inc. ("Merrill Lynch") on a daily valuation basis for the
               Retirement Plan. On the date the plan sponsor signs the
               record-keeping service agreement with Merrill Lynch, the Plan
               must have $3 million or more of its assets invested in (a)
               mutual funds, other than those advised or managed by Merrill
               Lynch Asset Management, L.P. ("MLAM"), that are made available
               under a Service Agreement between Merrill Lynch and the mutual
               fund's principal underwriter or distributor, and  (b)  funds
               advised or managed by MLAM (the funds described in (a) and (b)
               are referred to as "Applicable Investments").
(2)   The record keeping for the Retirement Plan is performed on a daily
               valuation basis by a record keeper whose services are provided
               under a contract or arrangement between the Retirement Plan
               and Merrill Lynch. On the date the plan sponsor signs the
               record keeping service agreement with Merrill Lynch, the Plan
               must have $3 million or more of its assets (excluding assets
               invested in money market funds) invested in Applicable
               Investments.
(3)            The record  keeping  for a  Retirement  Plan is  handled  under a
               service  agreement  with  Merrill  Lynch and on the date the plan
               sponsor signs that  agreement,  the Plan has 500 or more eligible
               employees (as  determined  by the Merrill  Lynch plan  conversion
               manager).
|_|      Purchases   by  a   Retirement   Plan   whose   record   keeper  had  a
         cost-allocation  agreement  with the Transfer Agent on or before May 1,
         1999.


<PAGE>



II.  Waivers of Class A Sales Charges of Oppenheimer Funds

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

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

<PAGE>


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

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

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

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

The Class A contingent deferred sales charge is also waived if shares that would
otherwise be subject to the contingent deferred sales charge are redeemed in the
following cases:
|_|      To make Automatic Withdrawal Plan payments that are limited annually to
         no more than 12% of the account value adjusted annually.
|_|      Involuntary  redemptions  of shares by operation of law or  involuntary
         redemptions of small  accounts  (please refer to  "Shareholder  Account
         Rules and Policies," in the applicable fund Prospectus).
|_|      For distributions from Retirement Plans, deferred compensation plans or
         other employee benefit plans for any of the following purposes:
(1)           Following  the death or  disability  (as  defined in the  Internal
              Revenue  Code) of the  participant  or  beneficiary.  The death or
              disability  must  occur  after  the   participant's   account  was
              established.
(2)   To return excess contributions.
(3)   To return contributions made due to a mistake of fact.
(4)   Hardship withdrawals, as defined in the plan.5 Under a Qualified
              Domestic Relations Order, as defined in the Internal Revenue Code,
              or,  in the case of an IRA,  a  divorce  or  separation  agreement
              described in Section 71(b) of the Internal Revenue Code.

5 This provision does not apply to IRAs.

(5)   To meet the minimum distribution requirements of the Internal Revenue
              Code.
(6)         To make  "substantially  equal  periodic  payments"  as described in
            Section 72(t) of the Internal Revenue Code.
(7)   For loans to participants or beneficiaries.
(8)   Separation from service.6

6 This provision does not apply to 403(b)(7) custodial plans if the
participant is less than age 55, nor to IRAs.

         (10)Participant-directed  redemptions  to  purchase  shares of a mutual
             fund (other than a fund managed by the Manager or a  subsidiary  of
             the  Manager) if the plan has made  special  arrangements  with the
             Distributor.
         (11)     Plan termination or "in-service distributions," if the
             redemption proceeds are rolled over directly to an
             OppenheimerFunds-sponsored IRA.
|_|      For  distributions  from  Retirement  Plans having 500 or more eligible
         employees,  except  distributions  due  to  termination  of  all of the
         Oppenheimer funds as an investment option under the Plan.
|_|      For distributions  from 401(k) plans sponsored by  broker-dealers  that
         have entered into a special  agreement  with the  Distributor  allowing
         this waiver.

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

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

A.  Waivers for Redemptions in Certain Cases.

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

<PAGE>


      Distributions  from Retirement  Plans or other employee  benefit plans for
         any of the following purposes:
(1)             Following  the death or  disability  (as defined in the Internal
                Revenue Code) of the  participant or  beneficiary.  The death or
                disability  must  occur  after  the  participant's  account  was
                established in an Oppenheimer fund.
(2)   To return excess contributions made to a participant's account.
(3)   To return contributions made due to a mistake of fact.
(4)   To make hardship withdrawals, as defined in the plan.7

7 This provision does not apply to IRAs.

(5)   To make distributions required under a Qualified Domestic Relations
                Order  or,  in the  case  of an IRA,  a  divorce  or  separation
                agreement  described in Section  71(b) of the  Internal  Revenue
                Code.
(6)   To meet the minimum distribution requirements of the Internal Revenue
                Code.
(7)             To make "substantially  equal periodic payments" as described in
                Section 72(t) of the Internal Revenue Code.
(8)  For  loans  to  participants  or  beneficiaries.8
8 This provision does not apply to loans from 403(b)(7)  custodial plans.

(9) On account of the participant's separation from service.9
9 This provision does not apply to 403(b)(7)  custodial plans if the participant
is less than age 55, nor to IRAs.


(10) Participant-directed redemptions to
purchase shares of a mutual fund
             (other than a fund  managed by the Manager or a  subsidiary  of the
             Manager)  offered as an investment  option in a Retirement  Plan if
             the plan has made special arrangements with the Distributor.
(11)         Distributions made on account of a plan termination or "in-service"
             distributions,  if the redemption proceeds are rolled over directly
             to an OppenheimerFunds-sponsored IRA.
(12)         Distributions  from  Retirement  Plans having 500 or more  eligible
             employees,  but excluding  distributions made because of the Plan's
             elimination  as  investment  options  under  the Plan of all of the
             Oppenheimer funds that had been offered.
(13)         For distributions  from a participant's  account under an Automatic
             Withdrawal Plan after the  participant  reaches age 59 1/2, as long
             as the aggregate value of the distributions  does not exceed 10% of
             the account's value, adjusted annually.
(14)         Redemptions  of Class B shares under an Automatic  Withdrawal  Plan
             for an account other than a Retirement Plan, if the aggregate value
             of the redeemed shares does not exceed 10% of the account's  value,
             adjusted annually.
      |_|Redemptions  of Class B shares  or  Class C shares  under an  Automatic
         Withdrawal  Plan from an account  other than a  Retirement  Plan if the
         aggregate  value of the  redeemed  shares  does not  exceed  10% of the
         account's value annually.

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

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


<PAGE>



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

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



<PAGE>


  Oppenheimer Quest Value Fund, Inc.    Oppenheimer Quest Small Cap
                                        Value Fund
  Oppenheimer Quest Balanced Value Fund Oppenheimer Quest Global Value
                                        Fund
  Oppenheimer Quest Opportunity Value
  Fund

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

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

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

A.  Reductions or Waivers of Class A Sales Charges.

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

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

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



<PAGE>


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

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

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

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

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

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

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

      |X| Waivers for Redemptions of Shares  Purchased on or After March 6, 1995
but Prior to November 24, 1995. In the following cases, the contingent  deferred
sales  charge  will be waived  for  redemptions  of Class A,  Class B or Class C
shares of an Oppenheimer  fund. The shares must have been acquired by the merger
of a  Former  Quest  for  Value  Fund  into  the  fund  or by  exchange  from an
Oppenheimer  fund  that was a Former  Quest For Value  Fund or into  which  such
Former Quest for Value Fund merged.  Those shares must have been purchased on or
after March 6, 1995, but prior to November 24, 1995: |_|  redemptions  following
the death or disability of the shareholder(s) (as
            evidenced by a determination of total disability by the U.S.
            Social Security Administration);
|_|         withdrawals under an automatic withdrawal plan (but only for Class B
            or Class C shares) where the annual withdrawals do not exceed 10% of
            the initial value of the account value, adjusted annually; and
|_|         liquidation  of a  shareholder's  account if the aggregate net asset
            value of  shares  held in the  account  is less  than  the  required
            minimum account value.
      A shareholder's account will be credited with the amount of any contingent
deferred  sales charge paid on the redemption of any Class A, Class B or Class C
shares of the  Oppenheimer  fund  described  in this section if the proceeds are
invested  in the same Class of shares in that fund or another  Oppenheimer  fund
within 90 days after redemption.

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

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

  Connecticut Mutual Liquid Account         Connecticut Mutual Total Return
                                            Account
  Connecticut Mutual Government Securities  CMIA LifeSpan Capital Appreciation
Account                                     Account
  Connecticut Mutual Income Account         CMIA LifeSpan Balanced Account
  Connecticut Mutual Growth Account         CMIA Diversified Income Account

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

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

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

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

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

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

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

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

     VI.  Special Reduced Sales Charge for Former Shareholders of
      Advance America Funds, Inc.

Shareholders of Oppenheimer  Municipal Bond Fund,  Oppenheimer  U.S.  Government
Trust,  Oppenheimer Strategic Income Fund and Oppenheimer Equity Income Fund who
acquired   (and  still  hold)   shares  of  those  funds  as  a  result  of  the
reorganization  of series of Advance America Funds,  Inc. into those Oppenheimer
funds on October 18, 1991, and who held shares of Advance America Funds, Inc. on
March 30, 1990, may purchase Class A shares of those four Oppenheimer funds at a
maximum sales charge rate of 4.50%.

VII.  Sales Charge Waivers on Purchases of Class M Shares of
Oppenheimer Convertible Securities Fund

Oppenheimer  Convertible  Securities  Fund  (referred  to as the  "Fund" in this
section)  may sell Class M shares at net asset value  without any initial  sales
charge to the classes of investors  listed  below who,  prior to March 11, 1996,
owned shares of the Fund's  then-existing Class A and were permitted to purchase
those shares at net asset value without  sales  charge:  |_| the Manager and its
affiliates,  |_| present or former officers,  directors,  trustees and employees
(and
         their  "immediate  families"  as  defined in the  Fund's  Statement  of
         Additional  Information)  of the Fund, the Manager and its  affiliates,
         and  retirement  plans  established  by  them or the  prior  investment
         advisor of the Fund for their employees,
|_|      registered  management  investment  companies  or separate  accounts of
         insurance  companies  that  had an  agreement  with  the  Fund's  prior
         investment advisor or distributor for that purpose,
|_|      dealers or brokers that have a sales agreement with the Distributor, if
         they purchase shares for their own accounts or for retirement plans for
         their employees,
|_|      employees and registered representatives (and their spouses) of dealers
         or brokers described in the preceding section or financial institutions
         that have entered into sales arrangements with those dealers or brokers
         (and  whose  identity  is made  known to the  Distributor)  or with the
         Distributor,  but only if the purchaser certifies to the Distributor at
         the time of purchase that the purchaser meets these qualifications,
|_|      dealers,  brokers,  or registered  investment advisors that had entered
         into an agreement with the Distributor or the prior  distributor of the
         Fund  specifically  providing for the use of Class M shares of the Fund
         in specific investment products made available to their clients, and
|_|      dealers,  brokers or  registered  investment  advisors that had entered
         into an agreement  with the  Distributor  or prior  distributor  of the
         Fund's  shares  to  sell  shares  to  defined   contribution   employee
         retirement plans for which the dealer,  broker,  or investment  advisor
         provides administrative services.


<PAGE>



------------------------------------------------------------------------------
                   Oppenheimer Convertible Securities Fund
------------------------------------------------------------------------------

Internet Web Site:
      www.oppenheimerfunds.com

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 Agent
     OppenheimerFunds Services
     P.O. Box 5270
     Denver, Colorado 80217

     1.800.525.7048


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

Independent Accountants
     KPMG LLP
     707 Seventeenth Street
     Denver, Colorado 80202

Legal Counsel
     Mayer, Brown & Platt
     1675 Broadway

     New York, New York 10019-5820

1234
PX0345.0401



<PAGE>


                                BOND FUND SERIES
                   OPPENHEIMER CONVERTIBLE SECURITIES FUND

                                    FORM N1-A

                                     PART C

                                OTHER INFORMATION


Item 23. Exhibits


(a)   (i)   Amended and Restated  Agreement and  Declaration of Trust as filed
      with  the  Commonwealth  of  Massachusetts  on  2/8/95,  as  amended  on
      11/7/95:  Previously filed with  Registrant's  Post Effective  Amendment
      No. 15 filed 1/11/96, and incorporated herein by reference.

(ii)  Amendment  to the Amended and  Restated  Agreement  and  Declaration  of
            Trust  dated  2/7/96:  Previously  filed  with  Registrant's  Post
            Effective  Amendment No. 16 filed 3/5/96, and incorporated  herein
            by reference.


(iii) Amendment  to the Amended and  Restated  Agreement  and  Declaration  of
            Trust  dated  6/17/97:  Previously  filed with  Registrant's  Post
            Effective Amendment No. 23 filed 4/19/00,  and incorporated herein
            by reference.


(iv)  Amendment  to the Amended and  Restated  Agreement  and  Declaration  of
            Trust  dated  6/10/98:  Previously  filed with  Registrant's  Post
            Effective Amendment No. 22 filed 4/30/99,  and incorporated herein
            by reference.

(b)   (i)   By-Laws   dated   4/15/87:   Previously   filed  with   Registrant's
      Post-Effective   Amendment  filed  5/1/87,  and  incorporated   herein  by
      reference.
      (ii)  Amendment  No.1 to By-Laws dated  7/22/98:  Previously  filed with
      Registrant's  Post-Effective  Amendment No. 19, 3/1/99, and incorporated
      herein by reference.

      (c)   (i)   Specimen   Class  A   Share   Certificate   of   Oppenheimer
Convertible  Securities Fund, a portfolio of the Registrant:  Previously filed
with  Registrant's  Post  Effective  Amendment  No.  20  filed  4/28/99,   and
incorporated herein by reference.
            (ii)  Specimen   Class  B   Share   Certificate   of   Oppenheimer
Convertible  Securities Fund, a portfolio of the Registrant:  Previously filed
with  Registrant's  Post  Effective  Amendment  No.  20  filed  4/28/99,   and
incorporated herein by reference.
      Specimen  Class  C  Share   Certificate   of   Oppenheimer   Convertible
      Securities  Fund, a portfolio of the Registrant:  Previously  filed with
      Registrant's  Post  Effective  Amendment  No.  20  filed  4/28/99,   and
      incorporated herein by reference.

(iv)  Specimen  Class  N  Share   Certificate   of   Oppenheimer   Convertible
      Securities  Fund,  a  portfolio  of  the  Registrant:  To  be  filed  by
      Amendment.

            (iv)  Specimen   Class  M   Share   Certificate   of   Oppenheimer
Convertible  Securities Fund, a portfolio of the Registrant:  Previously filed
with  Registrant's  Post  Effective  Amendment  No.  20  filed  4/28/99,   and
incorporated herein by reference.

(d)   Investment  Advisory Agreement dated 1/4/96 with Oppenheimer  Management
Corporation:  Previously  filed with  Post-Effective  Amendment  No. 15 of the
Registrant, 1/11/96 and incorporated herein by reference.

      (e)   (i)   General   Distributor's    Agreement   dated   1/4/96   with
Oppenheimer  Funds  Distributor,   Inc:  Previously  filed  with  Registrant's
Post-Effective   Amendment  No.  15,  1/11/96,   and  incorporated  herein  by
reference.

      (ii)  Form of Dealer Agreement of  OppenheimerFunds  Distributor,  Inc.:
      Previously filed with Pre-Effective  Amendment No. 2 to the Registration
      Statement  of  Oppenheimer  Trinity  Value  Fund (Reg.  No.  333-79707),
      8/25/99, and incorporated herein by reference.

      (iii) Form of Agency Agreement of  OppenheimerFunds  Distributor,  Inc.:
      Previously filed with Pre-Effective  Amendment No. 2 to the Registration
      Statement  of  Oppenheimer  Trinity  Value  Fund (Reg.  No.  333-79707),
      8/25/99, and incorporated herein by reference.

      (iv)  Form of Broker Agreement of  OppenheimerFunds  Distributor,  Inc.:
Previously  filed  with  Pre-Effective  Amendment  No.  2 to the  Registration
Statement of  Oppenheimer  Trinity Value Fund (Reg. No.  333-79707),  8/25/99,
and incorporated herein by reference.

(f)   Form    of    Deferred     Compensation     Plan    for    Disinterested
Trustees/Directors:   Filed  with  Post-Effective  Amendment  No.  43  to  the
Registration  Statement  of  Oppenheimer  Quest  For  Value  Funds  (Reg.  No.
33-15489), 12/21/98, and incorporated herein by reference.


(i)   Custody  Agreement  dated 4/4/96  between the Registrant and the Bank of
      New York:  Previously filed with Registrant's  Post-Effective  Amendment
      No. 19, 3/1/99, and incorporated herein by reference.

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



(h)   Not applicable.

(i)   Opinion  and Consent of Counsel  dated  2/24/97:  Previously  filed with
the Registrant's Rule 24f-2 Notice, 2/27/97.


(j)   Independent Auditors Consent: To be filed by Post-Effective Amendment.


(k)   Not applicable.

(l)   Investment Letter from OppenheimerFunds,  Inc. dated 3/11/96 relating to
Class C shares  investment:  Previously filed with Registrant's Post Effective
Amendment No. 16, 3/5/96 and incorporated by reference.

(m)   (i)   Amended and Restated  Service Plan and Agreement with  Oppenheimer
      Funds  Distributor,  Inc.  dated  1/4/96 for Class A Shares:  Previously
      filed with  Post-Effective  Amendment No. 15 of the Registrant,  1/11/96
      and incorporated herein by reference.

      (ii)  Amended and Restated  Distribution  and Service Plan and Agreement
for  Class  B  shares  dated  2/3/98:   Previously  filed  with   Registrant's
Post-Effective   Amendment  No.  18,  4/28/98,   and  incorporated  herein  by
reference.

   Amended and Restated  Distribution and Service Plan and Agreement for Class
      C   shares   dated   2/3/98:    Previously   filed   with   Registrant's
      Post-Effective  Amendment No. 18, 4/28/98,  and  incorporated  herein by
      reference.


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


      (iv)  Amended and Restated  Distribution  and Service Plan and Agreement
for Class M shares  dated  1/4/96:  Previously  filed with  Registrant's  Post
Effective Amendment No. 16, 3/5/96, and incorporated herein by reference.


(n)   Oppenheimer Funds Multiple Class Plan under Rule 18f-3 updated through
      8/22/00:  Previously filed with 8/27/99,Post-Effective Amendment No.62,
      to the registration statement of Oppenheimer Money Market Fund, Inc.
      (Reg. No. 2-49887), (11/20/00), and incorporated herein by reference.


(o)   Powers of Attorney for all  Trustees/Directors  and  Officers  (with the
      exception  of Brian W.  Wixted):  Previously  filed with  Post-Effective
      Amendment  No.  15 of the  Registrant,  1/11/96,  for  Brian W.  Wixted,
      previously  filed with  Registrant's  Post-Effective  Amendment  No. 20,
      4/28/99, and incorporated herein by reference.


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


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

The Board of Trustees of the  Registrant  is identical to the Boards of Trustees
of  Rochester  Portfolio  Series -  Limited  Term New  York  Municipal  Fund and
Rochester Funds Municipals (collectively "The Rochester Funds").

Item 25.  Indemnification

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

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

Item 26.  Business and Other Connections of the Investment Advisor


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



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

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

Charles E. Albers,

Senior                              Vice President An officer  and/or  portfolio
                                    manager of certain  Oppenheimer funds (since
                                    April 1998); a Chartered Financial Analyst.


Edward Amberger,

Assistant Vice President            None.


Janette Aprilante
Assistant Vice President            None.

Victor Babin,
Senior Vice President               None.

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


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

                                     1998).

Connie Bechtolt,
Assistant Vice President            None.

Kathleen Beichert,
Vice President                      None.

Rajeev Bhaman,

Vice President                      None.

Mark Binning
Assistant Vice President            None.


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


John R. Blomfield,
Vice President                      None.


Chad Boll,
Assistant Vice President            None

Scott Brooks,
Vice President                      None.


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


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


Michael A. Carbuto,

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

John Cardillo,
Assistant Vice President            None.

Elisa Chrysanthis

Assistant Vice President            None.


H.C. Digby Clements,

Vice President: Rochester Division  None.

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


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

Robert A. Densen,
Senior Vice President               None.


Ruggero de'Rossi

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

Sheri Devereux,
Vice President                      None.


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


Craig P. Dinsell

Executive Vice President            None.


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


Drew Donohue
Assistant Vice President            Formerly,   a  trust   officer  for  Trust
Company.


Andrew J. Donohue,
Executive Vice President,

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

Bruce Dunbar,
Vice President                      None.


Daniel Engstrom,
Assistant Vice President            None.


Armond Erpf
Assistant Vice President            None.


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


Edward N. Everett,

Assistant Vice President            None.

George Fahey,
Vice President                      None.

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

Scott Farrar,

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

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


Ronald H. Fielding,
Senior Vice President; Chairman:

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


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


Crystal French
Vice President                      None.


Dan Gangemi,
Vice President                      None.

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

Charles Gilbert,
Assistant Vice President            None.

Alan Gilston,

Vice President                      None.


Jill Glazerman,
Vice President                      None.

Mikhail Goldverg
Assistant Vice President            None.

Jeremy Griffiths,
Executive Vice President,
Chief Financial Officer and

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


Robert Grill,

Senior Vice President               None.

Robert Guy
Senior Vice President               None.


Robert Haley

Assistant Vice President            None.


Thomas B. Hayes,
Vice President                      None.


Dorothy Hirshman,
Assistant Vice President            None

Merryl Hoffman,
Vice President and
Senior Counsel                      None

Merrell Hora,
Assistant Vice President            None.


Scott T. Huebl,
Vice President                      None.

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


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

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


Kathleen T. Ives,
Vice President                      None.

William Jaume,

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


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

Andrew Jordan,
Assistant Vice President            None.

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

Lewis Kamman

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

Jennifer Kane
Assistant Vice President            None.

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


Thomas W. Keffer,
Senior Vice President               None.

Erica Klein,
Assistant Vice President            None.

Walter Konops,
Assistant Vice President            None.

Avram Kornberg,

Senior Vice President               None.


Jimmy Kourkoulakos,
Assistant Vice President.           None.

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

Joseph Krist,
Assistant Vice President            None.


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


Michael Levine,
Vice President                      None.

Shanquan Li,
Vice President                      None.

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


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


David Mabry,
Vice President                      None.


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

Steve Macchia,
Vice President                      None.


Philip T. Masterson,

Vice President                      None.


Loretta McCarthy,
Executive Vice President            None.

Lisa Migan,
Assistant Vice President            None.

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


Joy Milan
Assistant Vice President            None.


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

Nikolaos Monoyios,

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

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

John Murphy,
President and Chief
Operating Officer                   President  of   MassMutual   Institutional
                                    Funds and the MML Series Funds


Kenneth Nadler,
Vice President                      None.

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

Barbara Niederbrach,
Assistant Vice President            None.

Robert A. Nowaczyk,
Vice President                      None.



<PAGE>


Ray Olson,
Assistant Vice President            None.

Gina M. Palmieri,

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


Frank Pavlak,

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


James Phillips
Assistant Vice President            None.


David Pellegrino
Vice President                      None.


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

Michael Quinn,

Assistant Vice President            None.


Julie Radtke,

Vice President                      None.


Russell Read,

Senior Vice President               Senior Vice  President  (since March 2000)
                                    of    HarbourView     Asset     Management
                                    Corporation;     Vice     President     of
                                    Oppenheimer  Real Asset  Management,  Inc.
                                    (since August 1996).


Thomas Reedy,

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


John Reinhardt,
Vice President: Rochester Division  None

Jeffrey Rosen,
Vice President                      None.

Marci Rossell,

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


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

Lawrence Rudnick,
Assistant Vice President            None.

James Ruff,

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


Andrew Ruotolo

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


Rohit Sah,
Assistant Vice President            None.

Valerie Sanders,
Vice President                      None.


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


Jeff Schneider,

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


Ellen Schoenfeld,

Vice President                      None.

Allan Sedmak

Assistant Vice President            None.

Jennifer Sexton,
Vice President                      None.

Martha Shapiro,
Assistant Vice President            None.

Connie Song,
Assistant Vice President            None.

Richard Soper,
Vice President                      None.


Keith Spencer,
Vice President                      None.


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

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

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

Jayne Stevlingson,
Vice President                      None.


Gregg Stitt,
Assistant Vice President            None.


John Stoma,
Senior Vice President               None.

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

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

Susan Switzer,
Assistant Vice President            None.

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


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


Angela Uttaro,
Assistant Vice President            None.

Mark Vandehey,
Vice President                      None.

Maureen VanNorstrand,
Assistant Vice President            None.

Annette Von Brandis,
Assistant Vice President            None.

Phillip Vottiero,

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


Teresa Ward,
Vice President                      None.

Jerry Webman,

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

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


Christine Wells,
Vice President                      None.

Joseph Welsh,
Assistant Vice President            None.

William L. Wilby,

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

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

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


Carol Wolf,

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

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


Caleb Wong,

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


Robert G. Zack,
Senior Vice President and
Assistant Secretary, Associate

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


Jill Zachman,
Assistant Vice President:
Rochester Division                  None.


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


Mark Zavanelli,
Assistant Vice President            None.

Arthur J. Zimmer,

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

Susan Zimmerman,
Vice President                      None.


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

            New York-based Oppenheimer Funds


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


Quest/Rochester Funds

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

Denver-based Oppenheimer Funds


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

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

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



Item 27. Principal Underwriter


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


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

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

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

William Beardsley (2)            Vice President             None

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

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

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

Susan Burton(2)                  Vice President             None

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

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


Jeff Damia(2)                    Vice President             None

Stephen Demetrovits(2)           Vice President             None


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


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


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

Andrew John Donohue(2)           Executive Vice             Secretary

                             President and Director


G. Patrick Dougherty (2)         Vice President             None


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


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

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


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


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


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


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

Ronald H. Fielding(3)            Vice President             None

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

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


Victoria Friece(1)               Assistant Vice President   None

Luiggino Galleto                 Vice President             None
10302 Riesling Court

Charlotte, NC 28277


Michelle Gans                    Vice President             None
18771 The Pines

Eden Prairie, MN 55347

L. Daniel Garrity                Vice President             None
27 Covington Road

Avondale Estates, GA 30002

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

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


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


Webb Heidinger                   Vice President             None
90 Gates Street

Portsmouth, NH 03801

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


Brian Husch(2)                   Vice President             None


Edward Hrybenko (2)              Vice President             None


Richard L. Hymes(2)              Assistant Vice President   None


Byron Ingram(1)                  Assistant Vice President   None

Kathleen T. Ives(1)              Vice President             None


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


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

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


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


Brian Kelly                      Vice President             None
60 Larkspur Road
Fairfield, CT  06430


Michael Keogh(2)                 Vice President             None

Lisa Klassen(1)                  Assistant Vice President   None


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

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

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


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


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

John Lynch (2)                   Vice President             None


Michael Magee(2)                 Vice President             None


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

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

LuAnn Mascia(2)                  Assistant Vice President   None

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

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

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

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

Laura Mulhall(2)                 Senior Vice President      None

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

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

Denise-Marie Nakamura            Vice President             None
4111 Colony Plaza

Newport Beach, CA 92660

John Nesnay                      Vice President             None
9511 S. Hackberry Street

Highlands Ranch, CO 80126


Kevin Neznek(2)                  Vice President             None


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


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


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

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


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


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


Bill Presutti(2)                 Vice President             None


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

Elaine Puleo(2)                  Senior Vice President      None

Minnie Ra                        Vice President             None

100 Dolores Street, #203
Carmel, CA 93923

Dustin Raring                    Vice President             None
184 South Ulster

Denver, CO 80220

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

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


Michelle Richter(2)              Assistant Vice President   None


Ruxandra Risko(2)                Vice President             None


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

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

Malibu, CA 90265

James Ruff(2)                    President & Director       None


William Rylander (2)             Vice President             None

Alfredo Scalzo                   Vice President             None
9616 Lale Chase Island Way
Tampa, FL  33626


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

Eric Sharp                       Vice President             None
862 McNeill Circle
Woodland, CA  95695


Michelle Simone - Ricter(2)      Assistant Vice President   None

Kristen Sims (2)                 Vice President             None

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

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


Peter Sullivan                   Vice President             None
21445 S. E 35th Street
Issaquah, WA  98029

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


Michael Sussman(2)               Vice President             None

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




<PAGE>


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

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


Martin Telles(2)                 Senior Vice President      None


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

Tanya Valency (2)                Assistant Vice President   None

Mark Vandehey(1)                 Vice President             None

Brian Villec (2)                 Vice President             None

Andrea Walsh(1)                  Vice President             None

Suzanne Walters(1)               Assistant Vice President   None

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

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

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


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




<PAGE>


Gregor Yuska(2)                  Vice President             None


(1)6803 South Tucson Way, Englewood, CO 80112
(2)Two World Trade Center, New York, NY 10048
(3)350 Linden Oaks, Rochester, NY 14623

(c)   Not applicable.



Item 28.  Location of Accounts and Records
The accounts,  books and other documents required to be maintained by Registrant
pursuant  to  Section  31(a) of the  Investment  Company  Act of 1940 and  rules
promulgated  thereunder are in the possession of  OppenheimerFunds,  Inc. at its
offices at 6803 South Tucson Way, Englewood, Colorado 80112.

Item 29.  Management Services

Not applicable

Item 30.  Undertakings

Not applicable.







<PAGE>


                                   SIGNATURES


Pursuant to the requirements of the Securities Act of 1933 and/or the Investment
Company Act of 1940, the Registrant certifies that it meets all the requirements
for effectiveness of this Registration  Statement  pursuant to Rule 485(b) under
the  Securities  Act of  1933  and  certifies  that  it  has  duly  caused  this
Registration Statement to be signed on its behalf by the undersigned,  thereunto
duly  authorized,  in the City of New York and State of New York on the 30th day
of November, 2000.


                                       Bond Fund Series
------------------------------------------------------------------------------

------------------------------------------------------------------------------
                                       By:  /s/ Bridget A. Macaskill,
                                          Bridget A. Macaskill,
                                          Chairman of the Board and President

Pursuant to the  requirements of the Securities Act of 1933,  this  Registration
Statement  has been signed below by the following  persons in the  capacities on
the dates indicated:

Signatures                          Title                      Date


/s/ Bridget A Macaskill*            Chairman of the Board,  November 30, 2000
-------------------------------------                       President (Principal
Bridget A. Macaskill                Executive Officer) and

                                     Trustee

/s/ John Cannon*

---------------------------------------                     Trustee
November 30, 2000
John Cannon

/s/ Paul Y. Clinton*                Trustee                 November 30, 2000

-------------------------------------
Paul Y. Clinton


/s/ Thomas W. Courtney*             Trustee                 November 30, 2000

-------------------------------------
Thomas W. Courtney

/s/ Robert G. Galli*

-------------------------------------                       Trustee
November 30, 2000
Robert G. Galli

/s/ Lacy B. Herrmann*               Trustee                 November 30, 2000

-------------------------------------
Lacy B. Herrmann


/s/ George Loft*                    Trustee                 November 30, 2000

-------------------------------------
George Loft

/s/ Brian W. Wixted*

------------------------------------- Treasurer, Chief
                                      Financial             November 30, 2000
Brian W. Wixted                     and Accounting Officer


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





<PAGE>



                                BOND FUND SERIES
                   OPPENHEIMER CONVERTIBLE SECURITIES FUND


                                  EXHIBIT INDEX





Exhibit No.             Description


23(m)(iv)               Distribution and Service Plan and Agreement

















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