OPPENHEIMER CHAMPION INCOME FUND/NY
PRE 14A, 2000-06-19
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                  OPPENHEIMER CHAMPION INCOME FUND

             6803 South Tucson Way, Englewood, CO  80112

            Notice Of Meeting Of Shareholders To Be Held

                           August 24, 2000

To The Shareholders of Oppenheimer Champion Income Fund:

Notice is hereby given that a Meeting of the  Shareholders  (the  "Meeting")  of
Oppenheimer Champion Income Fund (the "Fund"), will be held at 6803 South Tucson
Way,  Englewood,  Colorado,  80112,  at 10:00 A.M.,  Central time, on August 24,
2000.

During  the  Meeting,  shareholders  of the  Fund  will  vote  on the  following
proposals and sub-proposals:

1.    To elect a Board of Trustees;

2.      To ratify the  selection  of  Deloitte  & Touche LLP as the  independent
        auditor for the Fund for the current fiscal year;

3.      To  approve   the   elimination   of  certain   fundamental   investment
        restrictions of the Fund;

      4.To approve changes to four (4) fundamental  investment  restrictions of
the Fund;

5.    To authorize  the  Trustees to adopt an amended and restated  Declaration
        of Trust;

6.      To approve the Fund's Class C 12b-1  Distribution and Service Plan (only
        Class C shareholders may vote on this proposal); and

7.      To transact such other business as may properly come before the meeting,
        or any adjournments thereof.

Shareholders  of record at the close of business on June 14, 2000,  are entitled
to vote at the  meeting.  The  Proposals  are more fully  discussed in the Proxy
Statement.  Please read it carefully before telling us, through your proxy or in
person, how you wish your shares to be voted. The Board of Trustees of the Trust
recommends  a vote to elect each of the nominees as Trustee and in favor of each
Proposal. WE URGE YOU TO MARK, SIGN, DATE AND MAIL THE ENCLOSED PROXY PROMPTLY.

By Order of the Board of Trustees,


Andrew J. Donohue, Secretary
June __, 2000


<PAGE>



 PLEASE RETURN YOUR PROXY CARD PROMPTLY. YOUR VOTE IS IMPORTANT NO MATTER HOW
                              MANY SHARES YOU OWN.



190



<PAGE>


                                TABLE OF CONTENTS

Proxy Statement                                               Page

Questions and Answers

Proposal 1:     To Elect a Board of Trustees

Proposal 2:     To ratify the selection of Deloitte & Touche LLP as
the independent auditor for the Fund for the current fiscal year

Proposal 3 and 4:  Approval of Changes to Certain  Fundamental  Policies of the
           Fund
Introduction to Proposals 3 and 4

Proposal 3:             To  approve  the  elimination  of  certain  fundamental
           investment
restrictions of the Fund

Proposal 4:     To approve changes to four (4) fundamental investment
restrictions of the Fund

Proposal 5:     To authorize the Trustees to adopt an amended and restated
Declaration of Trust

Proposal 6: To approve the Fund's  Class C 12b-1  Distribution  and Service Plan
and Agreement (only Class C shareholders may vote on this proposal)

EXHIBITS

      A:   Amended Class C 12b-1 Distribution and Service Plan and Agreement

      B:   Amended and Restated Declaration of Trust


<PAGE>


                        OPPENHEIMER CHAMPION INCOME FUND
                                 PROXY STATEMENT

QUESTIONS AND ANSWERS

Q.    Who is Asking for My Vote?

A.         Trustees of Oppenheimer  Champion Income Fund (the "Fund") have asked
           that  you  vote  on  several   matters  at  the  Special  Meeting  of
           Shareholders to be held on August 24, 2000.

Q.    Who is Eligible to Vote?

A.         Shareholders  of record at the close of business on June 14, 2000 are
           entitled   to  vote  at  the  Meeting  or  any   adjourned   meeting.
           Shareholders  are entitled to cast one vote for each matter presented
           at the Meeting. The Notice of Meeting, proxy card and proxy statement
           were mailed to shareholders of record on or about June __, 2000.

Q.    On What Matters Am I Being Asked to Vote?

A.    You are being asked to vote on the following proposals:

1.    To elect a Board of Trustees;

2.           To ratify the selection of Deloitte & Touche LLP as the independent
             auditor for the Fund;

3. To eliminate certain fundamental investment restrictions of the Fund;

4. To amend certain fundamental investment restrictions of the Fund;

5.           To  authorize  the  Trustees  to  adopt  an  amended  and  restated
             Declaration of Trust;

6.           To approve the Fund's Class C 12b-1  Distribution  and Service Plan
             and  Agreement  (only  Class  C  shareholders   may  vote  on  this
             proposal); and

Q.    How do the Trustees Recommend that I Vote?

A.    The Trustees recommend that you vote:

1.    FOR election of all nominees as Trustees;

2.           FOR  ratification  of the selection of Deloitte & Touche LLP as the
             independent auditor for the Fund;


3.           FOR the  elimination of each of the Fund's  fundamental  investment
             restrictions proposed to be eliminated;

4.           FOR  amendment of the Fund's  fundamental  investment  restrictions
             proposed for amendment;

5.           FOR  authorization of the Trustees to adopt an amended and restated
             Declaration of Trust; and

6.           FOR approval of the Fund's Class C 12b-1  Distribution  and Service
             Plan by Class C shareholders.

      Q.   How Can I Vote?

A.    You can vote in two (2) different ways:

o     By mail, with the enclosed ballot
o     In person at the Meeting.

             Whichever method you choose,  please take the time to read the full
             text of the proxy statement before you vote.

Q.    How Will My Vote Be Recorded?

A.         Proxy cards that are properly signed,  dated and received at or prior
           to the Meeting will be voted as specified.  If you specify a vote for
           any of the proposals,  your proxy will be voted as indicated.  If you
           sign and date the proxy  card,  but do not  specify a vote for one or
           more of the  proposals,  your  shares  will be  voted in favor of the
           Trustees recommendations.

Q.    How Can I Revoke My Proxy?

A.         You  may  revoke  your  proxy  at any  time  before  it is  voted  by
           forwarding a written  revocation or a  later-dated  proxy card to the
           Fund that is received at or prior to the Meeting,  or  attending  the
           Meeting and voting in person.

Q.    How Can I Get More Information About the Fund?

A.         A copy of the Fund's  annual  report has  previously  been  mailed to
           Shareholders.  If you would like to have  copies of the  Fund's  most
           recent  annual  report  sent to you free of  charge,  please  call us
           toll-free at 1.800.525.7048 or write to the Fund at  OppenheimerFunds
           Services, P.O. Box 5270 Denver Colorado 80217-5270.

      Q.   Whom Do I Call If I Have Questions?

A.    Please call us at 1.800.525.7048


 THIS PROXY STATEMENT IS DESIGNED TO FURNISH SHAREHOLDERS WITH THE INFORMATION
  NECESSARY TO VOTE ON THE MATTERS COMING BEFORE THE MEETING. IF YOU HAVE ANY
                 QUESTIONS, PLEASE CALL US AT 1.800.525.7048.


<PAGE>


                  OPPENHEIMER CHAMPION INCOME FUND
                           PROXY STATEMENT

                       Meeting of Shareholders
                     To Be Held August 24, 2000

This statement is furnished to the  shareholders of Oppenheimer  Champion Income
Fund (the "Fund"),  in connection  with the  solicitation by the Fund's Board of
Trustees  of  proxies  to be used at a  special  meeting  of  shareholders  (the
"Meeting") to be held at 6803 South Tucson Way, Englewood,  Colorado,  80112, at
10:00 A.M., Central time, on August 24, 2000, or any adjournments thereof. It is
expected that the mailing of this Proxy  Statement will be made on or about June
__, 2000.

                              SUMMARY OF PROPOSALS

--------------------------------------------------------------------
     Proposal                                   Shareholder Voting
--------------------------------------------------------------------
--------------------------------------------------------------------
1.   To Elect a Board of Trustees               All
--------------------------------------------------------------------
--------------------------------------------------------------------
2.   To Ratify  the  Selection  of  Deloitte  & All  Touche  LLP as  Independent
     Auditors for the Fund for the current fiscal year
--------------------------------------------------------------------
--------------------------------------------------------------------
3.   To  approve  the  elimination  of  certain
     fundamental  investment  restrictions  for
     the Fund.
--------------------------------------------------------------------
--------------------------------------------------------------------
     a.  Purchasing  Securities  on  Margin  or All
     Engaging in Short Sales
--------------------------------------------------------------------
--------------------------------------------------------------------
     b.    Investing   in   Other    Investment All
     Companies
--------------------------------------------------------------------
--------------------------------------------------------------------
     c.  Purchase and Sale of Futures Contracts All
--------------------------------------------------------------------
--------------------------------------------------------------------
     d.  Types  of Put  and  Call  Options  the All
     Fund may Purchase and Sell
--------------------------------------------------------------------
--------------------------------------------------------------------
     e.  Writing Put  Options on Interest  Rate All
     Futures
--------------------------------------------------------------------
--------------------------------------------------------------------
     f.   Covered Call Writing                  All
--------------------------------------------------------------------
--------------------------------------------------------------------
     g.  Investing in Warrants or Rights        All
--------------------------------------------------------------------
--------------------------------------------------------------------
     h.  Purchasing Put or Call Options         All
--------------------------------------------------------------------
--------------------------------------------------------------------
     i.  Writing Put Options on Debt Securities All
--------------------------------------------------------------------
--------------------------------------------------------------------
     j.  Purchasing  Securities  of  Issuers in All
     which   Officers  or   Trustees   have  an
     Interest
--------------------------------------------------------------------
--------------------------------------------------------------------
     k.  Investing in Unseasoned Issuers        All
--------------------------------------------------------------------
--------------------------------------------------------------------
     l.   Investing   in  a  Company   for  the All
     Purpose of Acquiring Control
--------------------------------------------------------------------
--------------------------------------------------------------------
     m. Investing in  Mineral-Related  Programs All
     or Leases
--------------------------------------------------------------------
--------------------------------------------------------------------
4.   To  approve  changes  to  four  (4) of the All
     Fund's       fundamental        investment
     restrictions
--------------------------------------------------------------------
--------------------------------------------------------------------
5.   Authorize   the   Trustees   to  adopt  an All
     Amended and Restated Declaration of Trust
--------------------------------------------------------------------
--------------------------------------------------------------------
6.   Approve the "new" Class C 12b-1 Class C  Distribution  and Service Plan and
     Shareholders only Agreement
--------------------------------------------------------------------


<PAGE>

                  PROPOSAL 1:  ELECTION OF TRUSTEES

      At the  Meeting,  twelve  (12)  Trustees  are to be elected to hold office
until the next  meeting  of  shareholders  called for the  purpose  of  electing
Trustees and until their  successors are duly elected and shall have  qualified.
The persons named as  attorneys-in-fact  in the enclosed  proxy have advised the
Fund that unless a proxy  instructs  them to withhold  authority to vote for all
listed nominees or any individual nominee,  all validly executed proxies will be
voted by them for the  election of the  nominees  named below as Trustees of the
Fund. As a Massachusetts  business trust, the Fund does not contemplate  holding
annual  shareholder  meetings for the purpose of electing  Trustees.  Thus,  the
Trustees  will be  elected  for  indefinite  terms  until a special  shareholder
meeting  is called  for the  purpose  of voting  for  Trustees  and until  their
successors are properly elected and qualified.

      Each of the nominees (except for Messrs. Armstrong,  Cameron and Marshall)
currently serves as a Trustee of the Fund. All of the nominees have consented to
serve as Trustees if elected.

      Each nominee indicated below by an asterisk is an "interested  person" (as
that term is defined in the Investment Company Act of 1940,  referred to in this
Proxy  Statement as the "1940 Act") of the Funds due to the positions  indicated
with the Funds' investment  adviser,  OppenheimerFunds,  Inc. (the "Manager") or
its affiliates,  or other positions described. The beneficial ownership of Class
A shares listed below includes voting and investment  control,  unless otherwise
indicated  below.  All  of the  Trustees  own  shares  in  one  or  more  of the
Denver-based funds in the OppenheimerFunds complex, except William L. Armstrong.
If a nominee should be unable to accept election,  the Board of Trustees may, in
its discretion, select another person to fill the vacant position.

Name, Age, Address                    Fund Shares Beneficially Owned as of
And Five-Year Business Experience     June 14, 2000 and % of Class Owned

William L. Armstrong (63)                      0
11 Carriage Lane
Littleton, CO 80121

Chairman of the  following  private  mortgage  banking  companies:  Cherry Creek
Mortgage  Company (since 1991),  Centennial State Mortgage Company (since 1994),
The El Paso Mortgage Company (since 1993),  Transland Financial  Services,  Inc.
(since 1997), and Ambassador  Media  Corporation  (since 1984);  Chairman of the
following private companies: Frontier Real Estate, Inc. (residential real estate
brokerage)  (since 1994),  Frontier Title (title insurance  agency) (since 1995)
and Great Frontier Insurance  (insurance  agency) (since 1995);  Director of the
following public companies:  Storage Technology  Corporation (computer equipment
company) (since 1991), Helmerich & Payne, Inc. (oil and gas  drilling/production
company) (since 1992),  UNUMProvident (insurance company) (since 1991); formerly
Director of the following public companies:  International  Family Entertainment
(television  channel)  (1991 - 1997) and Natec  Resources,  Inc. (air  pollution
control  equipment and services  company) (1991 - 1995);  formerly U.S.  Senator
(January 1979 - January 1991).  Director/trustee  of 13 investment  companies in
the OppenheimerFunds complex.

Robert G. Avis (69)*                           0
10369 Clayton Road
St. Louis, MO 63131

Trustee since 1993.

Formerly  (until March 1999) Vice  Chairman  and  Director of A.G.  Edwards and
Vice  Chairman  of  A.G.   Edwards  &  Sons,   Inc.  (its   brokerage   company
subsidiary);  formerly  (until  March  1999)  Chairman  of A.G.  Edwards  Trust
Company and A.G.E.  Asset  Management  (investment  advisor);  formerly  (until
March  2000),  a  Director  of A.G.  Edwards  & Sons  and  A.G.  Edwards  Trust
Company;  until March of 2000; Chairman,  President and Chief Executive Officer
of A.G.  Edwards  Capital,  Inc.  (General Partner of private equity funds) and
remains  on  that  board  of  directors.   Director/Trustee  of  22  investment
companies of the OppenheimerFunds complex.

George C. Bowen (63)                           15,364.868
6803 South Tucson Way                          (.0002% of Class A shares)
Englewood, CO 80112

Trustee since 1998.

Formerly (until April 1999) Mr. Bowen held the following positions:  Senior Vice
President  (since  September  1987)  and  Treasurer  (since  March  1985) of the
Manager;  Vice President  (since June 1983) and Treasurer  (since March 1985) of
OppenheimerFunds  Distributor,  Inc.  ("Distributor");   Vice  President  (since
October 1989) and Treasurer  (since April 1986) of HarbourView  Asset Management
Corporation;  Senior Vice President (since February 1992), Treasurer (since July
1991)  Assistant  Secretary and a director  (since  December 1991) of Centennial
Asset Management Corporation;  President, Treasurer and a director of Centennial
Capital  Corporation  (since June 1989);  Vice  President and  Treasurer  (since
August 1978) and Secretary  (since April 1981) of  Shareholder  Services,  Inc.;
Vice President,  Treasurer and Secretary of Shareholder Financial Services, Inc.
(since  November 1989);  Assistant  Treasurer of Oppenheimer  Acquisition  Corp.
(since March 1998); Treasurer of Oppenheimer  Partnership Holdings,  Inc. (since
November  1989);   Vice  President  and  Treasurer  of  Oppenheimer  Real  Asset
Management, Inc. (since July 1996); Treasurer of OppenheimerFunds  International
Ltd. and Oppenheimer Millennium Funds plc (since October 1997). Director/trustee
of 17 investment companies in the OppenheimerFunds complex.

Edward L. Cameron                              (61) 0
Spring Valley Road
Morristown, NJ 07960

Formerly  (from  1974-1999)  a  partner  with   PricewaterhouseCoopers  LLC  (an
accounting firm) and Chairman, Price Waterhouse LLP Global Investment management
Industry  Services  Group (from  1994-1998).  Director/trustee  of 7  investment
companies in the OppenheimerFunds complex.

Jon S. Fossel (58)                             0
810 Jack Creek Road
Ennis, MT  59729

Trustee since 1990.

Formerly (until October 1996) Chairman and a director of the Manager,  President
and a director of Oppenheimer  Acquisition  Corp.,  the Manager's parent holding
company,  and Shareholder  Services,  Inc. and Shareholder  Financial  Services,
Inc.,  transfer  agent  subsidiaries  of  the  Manager.  Director/trustee  of 20
investment companies in the OppenheimerFunds complex.

Sam Freedman (59)                                   0
4975 Lakeshore Drive
Littleton, CO 80123

Trustee since 1996.

Formerly  (until  October  1994)  Chairman  and  Chief   Executive   Officer  of
OppenheimerFunds  Services,  Chairman, Chief Executive Officer and a director of
Shareholder  Services,  Inc., Chairman,  Chief Executive Officer and director of
Shareholder Financial Services, Inc., Vice President and director of Oppenheimer
Acquisition Corp.; a director of OppenheimerFunds,  Inc.  Director/trustee of 22
investment companies in the OppenheimerFunds complex.

Raymond J. Kalinowski (70)                     0
44 Portland Drive
St. Louis, MO 63131

Trustee since 1988.

Formerly  a director  of Wave  Technologies  International,  Inc.  (a  computer
products training company),  self-employed  consultant (securities matters) and
director/trustee of 22 investment companies in the OppenheimerFunds complex.

C. Howard Kast (78)                                 0
2552 East Alameda, #30
Denver, CO 80209

Trustee since 1987.

Formerly Managing Partner of Deloitte,  Haskins & Sells (an accounting firm) and
director/trustee of 22 investment companies in the OppenheimerFunds complex.

Robert M. Kirchner (78)                        0
7500 E. Arapohoe Road
Suite 250
Englewood, CO 80112

Trustee since 1987.

President of The Kirchner Company (management  consultants) and director/trustee
of 22 investment companies in the OppenheimerFunds complex.

Bridget A. Macaskill* (51)                     0
Two World Trade Center
New York, NY 10048

Trustee since 1995.

President (since June 1991),  Chief Executive Officer (since September 1995) and
a Director (since  December 1994) of the Manager;  President and director (since
June 1991) of HarbourView Asset Management  Corporation,  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; a director of Oppenheimer Real Asset
Management,  Inc.  (since July 1996);  President and a director  (since  October
1997) of  OppenheimerFunds  International  Ltd.,  an  offshore  fund  management
subsidiary of the Manager and of Oppenheimer Millennium Funds plc; a director of
Prudential Corporation plc (a U.K. financial service company), a director (since
April 2000) of  OppenheimerFunds  Legacy  Program,  a charitable  trust  program
established  by the Manager.  President  and  Director/trustee  of 19 investment
companies in the OppenheimerFunds complex.



-------------------
* Trustee who is an Interested Person of the Fund.


William F. Marshall, Jr. (58)                       0
87 Ely Road
Longmeadow, MA 01106

Formerly  Chairman  (1999)  SIS &  Family  Bank,  F.S.B.  (formerly  SIS  Bank);
President, Chief Executive Officer and Director (1993-1999), SIS Bankcorp., Inc.
and SIS Bank (formerly,  Springfield  Institution  for Savings);  Executive Vice
President (1999),  Peoples Heritage  Financial Group,  Inc.;  Chairman and Chief
Executive Officer  (1990-1993),  Bank of Ireland First Holdings,  Inc. and First
New Hampshire  Banks;  Trustee  (since  1996),  MassMutual  Institutional  Funds
(open-end investment company);  Trustee (since 1996), MML Series Investment Fund
(open-end investment company).

 James C. Swain* (66)                          0
 6803 South Tuscon Way
 Englewood, CO 80112

 Trustee since 1987.

 Vice Chairman of the Manager (since September 1988);  formerly  President and a
director of Centennial  Asset  Management  Corporation,  an  investment  adviser
subsidiary  of the Manager and  Chairman of the Board of  Shareholder  Services,
Inc.  Director/trustee  and Chairman of the Board of 22 investment  companies in
the OppenheimerFunds complex.

      Under the  Investment  Company Act of 1940 (the "1940 Act"),  the Board of
Trustees  may fill  vacancies  on the Board of Trustees or appoint new  Trustees
only if, immediately  thereafter,  at least two-thirds of the Trustees will have
been elected by shareholders. Currently, four of the Fund's eleven Trustees have
not been  elected  by  shareholders.  In  addition,  the Board of  Trustees  has
nominated Mr.  Armstrong,  Mr.  Cameron and Mr.  Marshall to become  independent
Trustees  of the  Fund.  In light  of the fact  that  only  seven of the  Fund's
Trustees  have been  elected  by  shareholders,  it  follows  that a meeting  of
shareholders needs to be held to elect Trustees.

      Under  the  1940  Act,  the Fund is also  required  to call a  meeting  of
shareholders  promptly to elect  Trustees if at any time less than a majority of
the Trustees  have been elected by  shareholders.  By holding a meeting to elect
Trustees at this time,  the Fund may be able to delay the time at which  another
shareholder meeting is required for the election of Trustees,  which will result
in a savings of the costs associated with holding a meeting.

      The primary  responsibility  for the management of the Fund rests with the
Board of Trustees.  The Trustees meet  regularly to review the activities of the
Fund and of the Manager, which is responsible for its day-to-day operations. Six
regular meetings of the Trustees were held during the

-------------------
* Trustee who is an Interested Person of the Fund.

fiscal year ended September 30, 1999. Each of the incumbent Trustees was present
for at least 75% of the  meetings  held of the Board  and of all  committees  on
which that Trustee  served.  The  Trustees  have  appointed an Audit  Committee,
comprised of Messrs. Kast (Chairman),  Kalinowski and Kirchner,  none of whom is
an "interested  person," as defined in the 1940 Act, of the Manager or the Fund.
The Committee met six times during the fiscal year ended September 30, 1999. The
Board  of  Trustees  does  not  have  a  standing,  nominating  or  compensation
committee.   The  Audit  Committee  furnishes  the  Board  with  recommendations
regarding the selection of the independent  auditor.  The other functions of the
Committee include (i) reviewing the methods, scope and results of audits and the
fees  charged;  (ii)  reviewing the adequacy of the Fund's  internal  accounting
procedures and controls;  (iii)  establishing  a separate line of  communication
between  the Fund's  independent  auditors  and its  independent  Trustees,  and
selecting and nominating the independent Trustees.

      The  Trustees  who  are  not  affiliated   with  the  investment   adviser
("Nonaffiliated Trustees") are paid a fixed fee from the Fund for serving on the
Board.  Each of the current  Trustees  also serves as trustees or  directors  of
other  Denver-based  investment  companies  in  the  OppenheimerFunds   complex.
Nonaffiliated  Trustees are paid a retainer plus a fixed fee for attending  each
meeting and are  reimbursed for expenses  incurred in connection  with attending
such meetings. Each Fund in the OppenheimerFunds complex for which they serve as
a director or trustee pays a share of these expenses.

      The officers of the Fund are  affiliated  with the  Manager.  They and the
Trustees of the Fund who are affiliated with the Manager (Ms.  Macaskill and Mr.
Swain)  receive no salary or fee from the Fund.  The  remaining  Trustees of the
Fund received the compensation  shown below from the Fund during the fiscal year
ended  September 30, 1999, and from all of the  Denver-based  Oppenheimer  funds
(including  the Fund) for which they  served as  Trustee,  Director  or Managing
General  Partner during the calendar year ended December 31, 1999.  Compensation
is paid for services in the positions below their names:

---------------------------------------------------------------------
Trustee's Name and      Aggregate   Number of Boards   Total
Other Positions         CompensationWithin             Compensation
                        from Fund 1 Denver-Board       From all
                                    Oppenheimer Funds  Denver-Based
                                    Complex on Which   Oppenheimer
                                    Trustee Serves     Funds 2
---------------------------------------------------------------------
---------------------------------------------------------------------
Robert G. Avis          $1,477      22                 $67,998
---------------------------------------------------------------------
---------------------------------------------------------------------
William A. Baker        $1,510      22                 $69,998
---------------------------------------------------------------------
---------------------------------------------------------------------
George C. Bowen         $258        17                 $23,879
---------------------------------------------------------------------
---------------------------------------------------------------------
Jon. S. Fossel          $1,499      20                 $66,586
Review Committee
Member 3
---------------------------------------------------------------------
---------------------------------------------------------------------
Sam Freedman            $1,608      22                 $73,998
Review Committee Member
---------------------------------------------------------------------
---------------------------------------------------------------------
Raymond J. Kalinowski   $1,591      22                 $73,248
Audit Committee Member
---------------------------------------------------------------------
---------------------------------------------------------------------
C. Howard Kast          $1,698      22                 $78,873
Chairman, Audit and
Review Committees
---------------------------------------------------------------------
---------------------------------------------------------------------
Robert M. Kirchner      $1,494      22                 $69,248
Audit Committee Member3
---------------------------------------------------------------------
---------------------------------------------------------------------
Ned M. Steel            $1,477      22                 $67,998
---------------------------------------------------------------------
1 For the Fund's fiscal year ended 9/30/99. 2. For the 1999 calendar year.
3. Committee position held during a portion of the period shown.
4. Messrs. Baker and Steel are not standing for  re-election as Trustees of
   the Fund.

      The Board of Trustees  has also adopted a Deferred  Compensation  Plan for
Nonaffiliated Trustees that enables Trustees to elect to defer receipt of all or
a portion of the annual fees they are entitled to receive  from the Fund.  As of
December 31, 1999,  none of the Trustees  elected to do so. 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  amount  of
compensation to any Trustee.

      Each  officer of the Fund is elected  by the  Trustees  to serve an annual
term.  Information  is given  below  about the  executive  officers  who are not
Trustees of the Fund,  including their business  experience during the past five
years.  Messrs.  Donohue,  Wixted,  Bishop,  Zack and Farrar  serve in a similar
capacity with several other funds in the OppenheimerFunds complex.

Name, Age, Address and Five-Year Business Experience

David P. Negri,  Vice  President and Portfolio  Manager since  December,  1997;
Age: 46
Two World Trade Center, New York, NY 10048

Senior  Vice  President  of the Manager  (since June 1989);  an officer of other
Oppenheimer funds.

Thomas P. Reedy,  Vice  President and Portfolio  Manager since  October,  1998;
Age: 38
Two World Trade Center, New York, NY 10048

Vice President of the Manager (since June 1993); an officer of other Oppenheimer
funds; formerly a Securities Analyst for the Manager.

Andrew J. Donohue, Secretary since 1996; Age: 49
Two World Trade Center, New York, NY 10048

Executive Vice President  (since January 1993),  General  Counsel (since October
1991) and a Director  (since  September  1995) of the  Manager;  Executive  Vice
President  and General  Counsel  (since  September  1993) and a director  (since
January 1992) of the Distributor;  Executive Vice President, General Counsel and
a director of HarbourView Asset Management  Corporation,  Shareholder  Services,
Inc.,   Shareholder   Financial  Services,   Inc.  and  (since  September  1995)
Oppenheimer  Partnership Holdings,  Inc.; President and a director of Centennial
Asset Management Corporation (since September 1995); President,  General Counsel
and a director of Oppenheimer  Real Asset  Management,  Inc.  (since July 1996);
General Counsel (since May 1996) and Secretary (since April 1997) of Oppenheimer
Acquisition   Corp.;   Vice   President  and  a  director  of   OppenheimerFunds
International Ltd. and Oppenheimer  Millennium Funds plc (since October 1997); a
director (since April 2000) of  OppenheimerFunds  Legacy  Program,  a charitable
trust program sponsored by the Manager; an officer of other Oppenheimer funds.

Brian W. Wixted, Treasurer since April, 1999; Age: 40
6803 South Tucson Way, Englewood, Colorado 80112

Senior Vice President and Treasurer (since April 1999) of the Manager; Treasurer
(since March 1999) of  HarbourView  Asset  Management  Corporation,  Shareholder
Services, Inc., Shareholder Financial Services, Inc. and Oppenheimer Partnership
Holdings,   Inc.  (since  April  1999);   Assistant   Treasurer  of  Oppenheimer
Acquisition  Corp. (since April 1999);  Assistant  Secretary of Centennial Asset
Management   Corporation  (since  April  1999);  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);  and Vice
President and Accounting Manager,  Merrill Lynch Asset Management (November 1987
- September 1991).

Robert G. Zack, Assistant Secretary since 1988; Age: 51
Two World Trade Center, New York, NY 10048

Senior Vice  President  (since May 1985) and Associate  General  Counsel (since
May 1981) of the Manager,  Assistant  Secretary of Shareholder  Services,  Inc.
(since May 1985),  and  Shareholder  Financial  Services,  Inc. (since November
1989);   Assistant  Secretary  of   OppenheimerFunds   International  Ltd.  and
Oppenheimer  Millennium  Funds plc (since  October  1997);  an officer of other
Oppenheimer funds.

Robert J. Bishop, Assistant Treasurer since April 1994; Age: 41
6803 South Tucson Way, Englewood, CO 80112

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

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

All officers serve at the pleasure of the Board.

As of June 14, 2000,  the Trustees  and officers as a group  beneficially  owned
15,391.687  shares, or less than 1% of the outstanding Class A, Class B or Class
C shares of the Fund.

THE BOARD OF TRUSTEES  RECOMMENDS  A VOTE FOR THE  ELECTION  OF EACH  NOMINEE AS
TRUSTEE.

PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS

      The Board of  Trustees of the Fund,  including a majority of the  Trustees
who are not "interested persons" (as defined in the 1940 Act) of the Fund or the
Manager, selected Deloitte & Touche LLP ("Deloitte") as auditors of the Fund for
the fiscal year beginning October 1, 1999.  Deloitte also serves as auditors for
the  Manager and certain  other funds for which the Manager  acts as  investment
adviser.  At the Meeting,  a resolution will be presented for the  shareholders'
vote to ratify  the  selection  of  Deloitte  as  auditors.  Representatives  of
Deloitte  are not  expected  to be  present  at the  Meeting  but will  have the
opportunity  to make a statement  if they desire to do so and will be  available
should  any  matter  arise  requiring  their  presence.  THE  BOARD OF  TRUSTEES
RECOMMENDS APPROVAL OF THE SELECTION OF DELOITTE AS AUDITORS OF THE FUND.

PROPOSALS 3 and 4: APPROVAL OF CHANGES TO CERTAIN  FUNDAMENTAL  POLICIES OF THE
FUND

Introduction to Proposals 3 and 4

      The Fund is subject to certain  investment  restrictions  which govern the
Fund's   investment   activities.   Under  the  1940  Act,  certain   investment
restrictions are required to be "fundamental," which means that they can only be
changed by a shareholder  vote. An investment  company may designate  additional
restrictions   as   fundamental,   and  it  may  also  adopt   "non-fundamental"
restrictions, which may be changed by the Trustees without shareholder approval.
The Fund has adopted certain  fundamental  investment  restrictions that are set
forth in its  Statement  of  Additional  Information,  which  cannot be  changed
without the  requisite  shareholder  approval  described  below  under  "Further
Information  about Voting at the  Meeting."  Restrictions  that the Fund has not
specifically   designated   as   being   fundamental   are   considered   to  be
"non-fundamental"  and  may be  changed  by  the  Trustees  without  shareholder
approval.

      After the Fund was  established  in 1987,  certain  legal  and  regulatory
requirements  applicable to registered investment companies (also referred to as
"funds") changed.  For example,  certain  restrictions imposed by state laws and
regulations were preempted by the National Securities Markets Improvement Act of
1996 ("NSMIA") and therefore are no longer  applicable to funds.  As a result of
NSMIA,  the  Fund  currently  is  subject  to  several  fundamental   investment
restrictions  that are either more  restrictive than required under current law,
or which are no longer required at all. A number of the fundamental restrictions
that the Fund has  adopted  in the past also  reflect  regulatory,  business  or
industry conditions,  practices or requirements which at one time, for a variety
of reasons, led to the imposition of limitations on the management of the Fund's
investments.  With the passage of time,  the  development  of new  practices and
changes in regulatory standards,  several of these fundamental  restrictions are
considered by Fund  management to be  unnecessary  or  unwarranted.  In addition
other fundamental  restrictions  reflect federal  regulatory  requirements which
remain  in  effect,  but  which are not  required  to be  stated as  fundamental
restrictions.  Accordingly,  the Trustees recommend that the Fund's shareholders
approve  the  amendment  or   elimination  of  certain  of  the  Fund's  current
fundamental  investment  restrictions.  The purpose of each  sub-proposal  is to
provide the Fund with the  maximum  flexibility  permitted  by law to pursue its
investment  objectives and policies and to standardize the Fund's policy in this
area to one which is expected to become standard for all Oppenheimer  funds. The
proposed   standardized   restrictions   satisfy  current   federal   regulatory
requirements and are written to provide  flexibility to respond to future legal,
regulatory, market or technical changes.

      By  both  standardizing  and  reducing  the  total  number  of  investment
restrictions  that can be  changed  only by a  shareholder  vote,  the  Trustees
believe that it will assist the Fund and the Manager in  maintaining  compliance
with the various  investment  restrictions  to which the  Oppenheimer  funds are
subject,  and  that the Fund  will be able to  minimize  the  costs  and  delays
associated  with  holding  future  shareholder  meetings  to revise  fundamental
investment restrictions that have become outdated or inappropriate. The Trustees
also believe that the investment  adviser's  ability to manage the Fund's assets
in a changing  investment  environment  will be  enhanced,  and that  investment
management opportunities will be increased by these changes.

      The proposed  standardized  changes will not affect the Fund's  investment
objective.  Although the proposed changes in fundamental investment restrictions
will  provide  the Fund  greater  flexibility  to respond  to future  investment
opportunities,  the Board does not anticipate that the changes,  individually or
in the  aggregate,  will result in a material  change in the level of investment
risk  associated with investment in the Fund. The Board does not anticipate that
the  proposed  changes  will  materially  affect the manner in which the Fund is
managed.  If the Board determines in the future to change  materially the manner
in which the Fund is managed, the prospectus will be amended.

      The recommended changes are specified below. Shareholders are requested to
vote on each  Sub-Proposal  in  Proposal 3 and each  Sub-Proposal  in Proposal 4
separately.  If approved,  the effective date of these  Proposals may be delayed
until the Fund's updated  Prospectus and/or Statement of Additional  Information
can reflect the changes.

PROPOSAL  3: TO  APPROVE  THE  ELIMINATION  OF CERTAIN  FUNDAMENTAL  INVESTMENT
RESTRICTIONS OF THE FUND

A.  Purchasing Securities on Margin or Engaging in Short Sales.

      The Fund  currently  is subject to a  fundamental  investment  restriction
concerning  its  ability  to  purchase  securities  on margin or engage in short
sales. The existing  restriction is not required to be a fundamental  investment
restriction  under the 1940 Act. It is proposed  that this  current  fundamental
restriction  prohibiting  purchases of securities on margin or engaging in short
sales be eliminated. The current fundamental investment restriction is set forth
below.

                                     Current

          The Fund  cannot buy  securities  on margin or engage in short  sales.
          However,  the Fund can make margin deposits in connection with its use
          of hedging instruments.

      Margin  purchases  involve the purchase of securities  with money borrowed
from a broker.  "Margin" is the cash or eligible  securities  that the  borrower
places  with a broker  as  collateral  against  the  loan.  The  Fund's  current
fundamental  investment  restriction  prohibits it from purchasing securities on
margin,  except to obtain such  short-term  credits as may be necessary  for the
clearance  of  transactions.  Policies  of the SEC  allow  mutual  funds to make
initial and variation  margin  payments in connection with the purchase and sale
of futures contracts and options on futures  contracts.  In the futures markets,
"margin"  payments  are  akin to a  "performance  bond,"  rather  than a loan to
purchase  securities  as is the case in the  securities  markets.  As a  result,
futures  margins  typically  range  from  2-5% of the  value  of the  underlying
contract and are marked-to-market on a daily basis.

      In  a  short  sale,  an  investor   sells  a  borrowed   security  with  a
corresponding  obligation to the lender to return the identical security.  In an
investment technique known as a short sale  "against-the-box," an investor sells
short while owning the same  securities in the same amount,  or having the right
to obtain  equivalent  securities.  The investor  could have the right to obtain
equivalent securities,  for example, through ownership of options or convertible
securities.

      Elimination  of this  fundamental  investment  restriction  is unlikely to
affect the management of the Fund. The 1940 Act prohibitions on margin and short
sales will continue to apply to the Fund. Accordingly,  the Fund will be able to
sell securities  short to the extent  permitted by the 1940 Act, and any rule or
exemptive order granted by the SEC.  Elimination of this  restriction  would not
affect the Fund's ability to purchase securities on margin.

B.  Investing in Other Investment Companies.

      The Fund is  currently  subject to a  fundamental  investment  restriction
concerning  investment  in  securities  of  other  investment  companies.  It is
proposed that the current  fundamental  restriction be  eliminated.  The current
fundamental investment restriction is set forth below.

                                     Current

          The Fund  cannot  invest  in other  investment  companies,  except  in
          connection with a merger, consolidation, reorganization or acquisition
          of assets.


      The existing  restriction is not required to be fundamental under the 1940
Act and the  Board  recommends  that  shareholders  eliminate  this  fundamental
investment restriction. The purpose of this proposal is to provide the Fund with
the maximum flexibility permitted by law to pursue its investment objectives.

      The  ability  of the Fund to  invest  in  other  investment  companies  is
restricted by Section  12(d)(1) of the 1940 Act.  Section 12 was amended in 1996
by NSMIA to permit  mutual  funds to enter  into fund of funds or  master/feeder
arrangements  with other  mutual  funds in a fund  complex,  and granted the SEC
broad powers to provide exemptive relief for these purposes. The Fund is a party
to an exemptive  order from the SEC  permitting it to enter into a fund of funds
arrangement. Elimination of this fundamental investment restriction is necessary
to permit the Fund to take  advantage of the  exemptive  relief.  While the Fund
does not yet  participate  in a fund of funds  arrangement,  it may do so in the
future.

C.  Purchase and Sale of Futures Contracts.

      The Fund is  currently  subject to a  fundamental  investment  restriction
concerning  the  types of  futures  contracts  it may  purchase  or sell.  It is
proposed that the current  fundamental  restriction  be eliminated  and replaced
with a  non-fundamental  policy which would permit the Fund to engage in futures
transactions  relating  to  debt  securities,  broad-based  securities  indexes,
foreign currencies and commodities.  The current fundamental  restriction is set
forth below.

                                     Current

               The Fund can buy and sell futures  contracts  only if they relate
               to debt securities.

      A futures  contract  that relates to debt  securities is referred to as an
interest rate future.  An interest  rate future  obligates the seller to deliver
(and the purchaser to take) cash or a specified  type of debt security to settle
the futures transaction. There are risks associated with the purchase of futures
contracts.  The ordinary  spreads between prices in the cash and futures markets
are subject to  distortions,  due to differences in the nature of those markets.
First, all participants in the futures markets are subject to margin deposit and
maintenance   requirements.   Rather  than  meeting  additional  margin  deposit
requirements,   investors  may  close  futures  contracts   through   offsetting
transactions  which could distort the normal  relationship  between the cash and
futures  markets.  Second,  the  liquidity  of the  futures  market  depends  on
participants entering into offsetting  transactions rather than making or taking
delivery. To the extent participants decide to make or take delivery,  liquidity
in the futures market could be reduced, thus producing a distortion.  Third, the
deposit  requirements  in the  futures  markets  are less  onerous  than  margin
requirements in the securities  markets because margin in the futures markets is
a performance  bond, while in the securities  markets,  margin represents a loan
for purchasing securities. Typically, futures margin constitutes between 2-5% of
the underlying value of the contract while securities margin is 50% of the value
of the  securities  for long  positions and 150% of the value of securities  for
short  positions.  Therefore,  increased  participation  by  speculators  in the
futures  market may cause  temporary  price  distortions.  Investing  in futures
contracts may cause the Fund's share price to become more volatile.

      The existing  restriction is not required to be fundamental under the 1940
Act and the  Board  recommends  that  shareholders  eliminate  this  fundamental
investment restriction. The purpose of this proposal is to provide the Fund with
the maximum flexibility permitted by law to pursue its investment objectives and
policies. If adopted, the primary effect of this proposal would be to remove the
restriction that the Fund may only buy and sell futures contracts if they relate
to debt securities.  Therefore,  as a non-fundamental  policy, the Fund would be
able to buy and sell futures  contracts that relate to broadly-based  securities
indices (stock index futures and bond index futures),  foreign  currencies,  and
commodities, in addition to futures contracts on debt securities.

D. Types of Put and Call Options the Fund May Purchase and Sell.

      The Fund  currently  is subject to a  fundamental  investment  restriction
concerning  the types of put and call options it may  purchase  and sell.  It is
proposed that the current  fundamental  restriction  be eliminated  and replaced
with a  non-fundamental  investment policy which would permit the Fund to employ
all  exchange-traded  and over-the counter ("OTC") put options ("puts") and call
options  ("calls").  The elimination of the current  limitation would expand the
permissible use of options to foreign  securities and/or  commodities  exchanges
and the OTC market. The current fundamental restriction is summarized below.

                                     Current

          The Fund can sell  calls  and buy puts and  calls on debt  securities,
          interest  rate  futures and foreign  currencies,  and can sell puts on
          debt securities and foreign currencies,  provided those securities are
          listed on a domestic  securities or commodities  exchange or quoted on
          NASDAQ.  In the case of puts and  calls on  currencies,  they  must be
          quoted by major recognized dealers.

      The existing  restriction is not required to be fundamental under the 1940
Act and the  Board  recommends  that  shareholders  eliminate  this  fundamental
investment restriction. The purpose of this proposal is to provide the Fund with
the maximum flexibility permitted by law to pursue its investment objectives. If
adopted,  the primary effect of this proposal would be to remove the restriction
that the Fund may only buy and sell options  listed on a domestic  securities or
commodities exchange or quoted on NASDAQ. If the current fundamental restriction
is eliminated,  the Fund through a non-fundamental  restriction would be able to
buy and sell any type of exchange traded and over-the-counter  options as may be
consistent with its investment objective and policies.

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

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

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

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

      There are risks  related to OTC options.  OTC options are not traded on an
exchange.  They are traded directly with dealers. To the extent an OTC option is
a  tailored   investment   for  the  Fund,   it  may  be  less  liquid  than  an
exchange-traded  option.  Further,  as with other  derivative  investments,  OTC
options are  subject to  counterparty  risk.  The Fund will have the credit risk
that the seller of an OTC option  will not  perform  its  obligations  under the
option agreement if the Fund exercises the option.

E.  Writing Put Options on Interest Rate Futures.

      The Fund is currently subject to a fundamental restriction with respect to
writing put options on interest rates futures contracts.  As discussed above, an
interest rate future is a futures contract  relating to debt  securities.  It is
proposed that the current fundamental restriction be eliminated so that the Fund
is permitted to engage in the writing  (selling) of put options on interest rate
futures contracts. The current fundamental restriction is set forth below.

                                     Current

             The Fund cannot write puts on interest rate futures.

      A put option on an interest  rate future gives the  purchaser the right to
sell, and the writer the obligation to buy, the underlying  futures  contract at
the exercise price during the option  period.  If the Fund writes a put, the put
must be covered by  segregated  liquid  assets.  The premium that the Fund would
receive  from  writing the put  represents  profit,  as long as the price of the
underlying  futures contract remains equal to or above the exercise price of the
put. The Fund would also assume the  obligation  during the option period to buy
the underlying  future from the buyer of the put at the exercise price,  even if
the value of the future falls below the exercise price.

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

      When writing a put option on a futures contract,  to secure its obligation
to pay for the underlying future, the Fund deposits in escrow liquid assets with
a value equal to or greater than the exercise  price of the  contract.  The Fund
therefore  forgoes the opportunity of investing the segregated assets or writing
calls against those assets.

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

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

      The existing  restriction of the Fund  prohibiting put writing on interest
rate futures  contracts is not required to be fundamental under the 1940 Act and
the Board recommends that  shareholders  eliminate this  fundamental  investment
restriction.  The  purpose  of this  proposal  is to  provide  the Fund with the
maximum  flexibility  permitted by law to pursue its investment  objectives.  If
adopted,  the primary effect of this proposal would be to remove the prohibition
restricting  the  Fund  from  writing  put  options  on  interest  rate  futures
contracts.  Therefore,  the Fund would be able to write  (sell)  put  options on
interest  rate futures  subject to the rules and  regulations  of the  Commodity
Exchange Act  ("CEA").  The  regulations  under the CEA require that in order to
remain exempt from  registration  as a commodity  pool  operator,  the Fund must
limit its aggregate  initial futures margin and related options  premiums to not
more than 5% of the  Fund's  net  assets  for  hedging  strategies  that are not
considered  bona fide hedging under the Rule. The percentage of Fund assets used
for futures  margin and related  options  premiums in connection  with bona fide
hedging  strategies is not limited.  The Trustees believe that any additional or
different  risk from the Fund  engaging in interest  rate futures put writing is
outweighed by the added  flexibility in putting on hedges for the benefit of the
Fund and shareholders.

F.  Covered Call Writing.

      The Fund is currently  subject to a fundamental  restriction that requires
all  call  writing  (selling)  by  the  Fund  to  be  covered.  This  investment
restriction is not required to be  fundamental,  and  therefore,  it is proposed
that the restriction be eliminated.  However, the Trustees intend to retain this
restriction as a non-fundamental  restriction to be complied with by the Fund in
managing its assets. The current fundamental restriction is set forth below.

                                     Current

             If the Fund sells a call option, it must be covered.

      In a covered  call  options  transaction,  the Fund is required to own the
underlying security or assets subject to the call while the call is outstanding,
or,  for  certain  calls on  futures  contracts,  the call  must be  covered  by
segregating  liquid assets to enable the Fund to satisfy its  obligations if the
call is exercised.  Consistent with current rules and regulations and the Fund's
own  operating  policies,  there is no limit on the amount of the  Fund's  total
assets subject to covered calls the Fund writes.

      When the Fund writes a call on a security or other asset, it receives cash
in the form of a premium.  Pursuant to the option contract, the Fund then agrees
to sell the underlying  security or asset to a purchaser of a corresponding call
on the same security or asset 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.  Therefore,  the Fund  undertakes the risk of
loss that the price of the  underlying  security or asset may decline during the
call period.  This risk is somewhat offset 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.

      A similar process occurs for calls written on indices, except for the fact
that settlement occurs in cash rather than physical delivery.  Therefore, if the
buyer of the call exercises it, the Fund will pay an amount of cash equal to the
difference  between  the  closing  price  of the call  and the  exercise  price,
multiplied by a specific  multiple that  determines  the total value of the call
for each point of difference.

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

      The existing  restriction  of the Fund  prohibiting  the writing of a call
option unless covered is not required to be  fundamental  under the 1940 Act and
the Board recommends that  shareholders  eliminate this  fundamental  investment
restriction.  The  purpose  of this  proposal  is to  provide  the Fund with the
maximum  flexibility  permitted by law to pursue its investment  objectives.  If
adopted, the Fund would continue to limit the writing of calls to those that are
established on a "covered"  basis.  Therefore,  the management of the Fund would
remain unchanged,  except that the non-fundamental investment policy on limiting
call writing to "covered" call writing,  may be changed by the Board at any time
without  shareholder  approval.  The  adoption of this  proposal  would  provide
greater flexibility for the Fund in the event of uncertain market  environments.
The Trustees further believe that the elimination of this fundamental investment
restriction will not produce additional or different risks for the Fund.

G.     Investing in Warrants or Rights.

      The Fund is  currently  subject to a  fundamental  investment  restriction
concerning its investment in warrants or rights. It is proposed that the current
fundamental  restriction be eliminated.  However,  the Trustees intend to retain
this  restriction  as a  non-fundamental  restriction to be complied with by the
Fund in managing its assets. The current fundamental policy is set forth below:

                                     Current

      The Fund  cannot  invest  more than 5% of its total  assets in warrants or
      rights.

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

      The existing  restriction is not required to be fundamental under the 1940
Act and the  Board  recommends  that  shareholders  eliminate  this  fundamental
investment restriction. The purpose of this proposal is to provide the Fund with
the maximum flexibility permitted by law to pursue its investment objectives. If
adopted,  the Fund would continue to limit its investments in warrants or rights
to 5% of total  assets.  Therefore,  the  management  of the Fund  would  remain
unchanged  except that the  non-fundamental  policy on investing in warrants and
rights may be changed by the Board at any time without shareholder approval. The
adoption of this proposal would provide greater  flexibility for the Fund in the
event  of  uncertain  market   environments.   The  Trustees  believe  that  the
elimination  of  this  fundamental   investment  restriction  will  not  produce
additional or different risks for the Fund.

H.     Purchasing Put or Call Options.

      The Fund is  currently  subject to a  fundamental  investment  restriction
concerning its purchase of put or call options.  It is proposed that the current
fundamental  policy be eliminated.  However,  the Trustees intend to retain this
restriction as a non-fundamental  restriction to be complied with by the Manager
in managing the Fund's assets. The current fundamental  restriction is set forth
below.

                                     Current

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

      The existing  restriction is not required to be fundamental under the 1940
Act and the  Board  recommends  that  shareholders  eliminate  this  fundamental
investment restriction. The purpose of this proposal is to provide the Fund with
the maximum flexibility permitted by law to pursue its investment objectives. If
adopted,  the Fund will  continue to limit its purchases of put or call options.
Therefore,  the  management of the Fund would remain  unchanged  except that the
non-fundamental  policy  limiting  the  purchase  of put or call  options may be
changed by the Board at any time without shareholder  approval.  The adoption of
this proposal  would provide  greater  flexibility  for the Fund in the event of
uncertain market environments. The Trustees believe that the elimination of this
fundamental  investment  restriction  will not produce  additional  or different
risks for the Fund.  Sub-proposal D above  describes the risks  associated  with
purchasing put and call options.

I.    Writing Put Options on Debt Securities.

      The Fund is  currently  subject to a  fundamental  investment  restriction
concerning  its  writing  of  put  options.  It is  proposed  that  the  current
fundamental  restriction be eliminated.  However,  the Trustees intend to retain
this  restriction  as a  non-fundamental  restriction to be complied with by the
Manager in managing the Fund's assets.  The current  fundamental  restriction is
set forth below.

                                     Current

      A put  written on debt  securities  must be covered by  segregated  liquid
      assets and the Fund  cannot  write puts if, as a result,  more than 50% of
      the Fund's net assets would be required to be segregated to cover such put
      options.

      The existing  restriction is not required to be fundamental under the 1940
Act and the  Board  recommends  that  shareholders  eliminate  this  fundamental
investment restriction. The purpose of this proposal is to provide the Fund with
the maximum flexibility permitted by law to pursue its investment objectives. If
adopted,  the Fund will continue to cover the put options on debt  securities it
purchases by  segregating  liquid  assets and will not write put options if more
than 50% of the Fund's net assets  would be required to be  segregated  to cover
such puts.  Therefore,  the management of the Fund would remain unchanged except
that the non-fundamental policy regarding writing put options on debt securities
may be  changed  by the  Board at any time  without  shareholder  approval.  The
adoption of this proposal would provide greater  flexibility for the Fund in the
event  of  uncertain  market   environments.   The  Trustees  believe  that  the
elimination  of  this  fundamental   investment  restriction  will  not  produce
additional or different  risks for the Fund.  Sub-proposal F above describes the
risks associated with writing put options and the segregation of liquid assets.

J.  Purchasing  Securities  of Issuers in which  Officers or  Trustees  Have An
Interest.

      The Fund is  currently  subject to a  fundamental  investment  restriction
concerning  purchasing the securities of an issuer if the officers and directors
of the Fund or the Manager  individually  own 1/2 of 1% of such  securities  and
together own more than 5% of such  securities.  It is proposed  that the current
fundamental  restriction  be  eliminated.  The  current  fundamental  investment
restriction is set forth below.

                                     Current

          The Fund cannot invest in or hold securities of any issuer if officers
          and Trustees of the Fund or the Manager individually own more than 1/2
          of 1% of the  securities  of that issuer and together own more than 5%
          of the securities of that issuer.

      This  restriction  was  originally  adopted to address state or "Blue Sky"
requirements in connection with the  registration of shares of the Fund for sale
in a  particular  state  or  states.  The  Board  recommends  that  shareholders
eliminate this fundamental investment restriction. Under NSMIA, this restriction
no longer  applies  to the  Fund.  In  addition,  the  Board  believes  that its
elimination could increase the Fund's  flexibility when choosing  investments in
the future.

K.  Investing in Unseasoned Issuers.

      The Fund is  currently  subject to a  fundamental  investment  restriction
concerning  its  investment in securities of issuers that have been in operation
less than three years  ("unseasoned  issuers").  It is proposed that the current
fundamental  restriction be eliminated.  The current fundamental  restriction is
set forth below.

                                     Current

          The Fund cannot invest more than 5% of its net assets in securities of
          issuers  (including  their  predecessors)  that have been in operation
          less than three years.

      This  restriction  was  originally  adopted to address state or "Blue Sky"
requirements in connection with the  registration of shares of the Fund for sale
in a  particular  state  or  states.  The  Board  recommends  that  shareholders
eliminate this fundamental investment restriction. Under NSMIA, this restriction
no longer  applies  to the  Fund.  In  addition,  the  Board  believes  that its
elimination could increase the Fund's  flexibility when choosing  investments in
the future.

L.  Investing in a Company for the Purpose of Acquiring Control

      The Fund  currently  is subject to a  fundamental  investment  restriction
concerning  its  investment in portfolio  companies for the purpose of acquiring
control. It is proposed that the current fundamental  investment  restriction be
eliminated.  Although the Fund has no intention of investing  for the purpose of
acquiring control of a company, it believes that this restriction is unnecessary
and  may,  in  fact,  reduce  possible  investment  opportunities.  The  current
fundamental investment restriction is set forth below.

                                     Current

          The Fund  cannot  invest in any  company  for the  primary  purpose of
          acquiring management or control of it.

      Elimination  of  the  above  fundamental  investment  restriction  is  not
expected to have a  significant  impact on the Fund's  investment  practices  or
management because the Fund currently has no intention of investing in companies
for the purpose of obtaining or exercising  management or control.  A Fund might
be considered to be investing for control if it purchases a large  percentage of
the securities of a single issuer.  This restriction was intended to ensure that
a mutual fund would not be engaged in the business of managing another company.

      This  restriction  was  originally  adopted to address state or "Blue Sky"
requirements in connection with the  registration of shares of the Fund for sale
in a  particular  state  or  states.  The  Board  recommends  that  shareholders
eliminate this fundamental investment restriction. Under NSMIA, this restriction
no longer  applies  to the  Fund.  In  addition,  the  Board  believes  that its
elimination could increase the Fund's  flexibility when choosing  investments in
the future.

M.  Investing in Mineral-Related Programs or Leases

      The Fund  currently  is subject to a  fundamental  investment  restriction
concerning its investment in mineral-related  programs or leases. It is proposed
that the current fundamental restriction be eliminated.  The current fundamental
restriction is set forth below.

                                     Current

           The Fund cannot invest in mineral-related programs or leases.

      This  restriction  was  originally  adopted to address state or "Blue Sky"
requirements in connection with the  registration of shares of the Fund for sale
in a  particular  state  or  states.  The  Board  recommends  that  shareholders
eliminate this fundamental investment restriction. Under NSMIA, this restriction
no longer  applies  to the  Fund.  In  addition,  the  Board  believes  that its
elimination could increase the Fund's  flexibility when choosing  investments in
the future.

THE  BOARD  OF  TRUSTEES   UNANIMOUSLY   RECOMMENDS   THAT  YOU  APPROVE   EACH
SUB-PROPOSAL DESCRIBED ABOVE

PROPOSAL 4: TO APPROVE CHANGES TO CERTAIN FUNDAMENTAL  INVESTMENT  RESTRICTIONS
OF THE FUND

      Proposal  number 4 is composed of four  separate  proposed  changes to the
Fund's current  investment  policies.  The Board believes that under appropriate
circumstances,  the Fund should be  permitted to lend money to, and borrow money
from, other Oppenheimer mutual funds and pledge its assets as collateral for the
loan as explained in the following  proposals.  All four of these proposals must
be approved together if the inter-fund lending arrangements  described below are
to be  implemented,  and  shareholders  are  requested  to  vote to  approve  or
disapprove all three together.

A.  Borrowing.

      The 1940 Act imposes certain  restrictions on the borrowing  activities of
registered  investment  companies.  The  restrictions on borrowing are generally
designed to protect  shareholders  and their  investment by restricting a fund's
ability to subject its assets to claims of  creditors  who might have a claim to
the fund's assets that would take priority  over the claims of  shareholders.  A
fund's borrowing restriction must be a fundamental investment restriction.

      Under the 1940 Act, a fund may borrow  from banks up to  one-third  of its
total assets (including the amount borrowed).  In addition, a fund may borrow up
to 5% of its total assets for temporary purposes from any person.  Section 18 of
the 1940 Act  deems a loan  temporary  if it is  repaid  within  60 days and not
extended or renewed.  Funds typically  borrow money to meet redemptions in order
to avoid forced, unplanned sales of portfolio securities.  This technique allows
a fund greater  flexibility to buy and sell portfolio  securities for investment
or tax considerations, rather than for cash flow considerations.

      The Fund  currently  is subject to a  fundamental  investment  restriction
concerning  borrowing which is more  restrictive  than required by the 1940 Act.
The Board proposes that the Fund's restriction on borrowing be amended to permit
the Fund to borrow  from banks  and/or  affiliated  investment  companies  up to
one-third of its total assets (including the amount borrowed).  As amended,  the
Fund's   restriction  on  borrowing  would  remain  a  fundamental   restriction
changeable only by the vote of a majority of the outstanding  voting  securities
of the Fund as defined in the 1940 Act.

      The current and proposed fundamental investment restrictions are set forth
below.

Current                                   Proposed

The Fund cannot borrow money in excess of The Fund cannot borrow money in excess
of 10% of the value of its total  assets.  The Fund  33-1/3% of the value of its
total  assets.  may only borrow as a  temporary  measure for The Fund may borrow
only from banks  and/or  emergency  purposes.  The Fund  cannot  buy  affiliated
investment  companies and only as a any additional  investments  when borrowings
temporary  measure  for  extraordinary  or exceed 5% of the value of its assets.
emergency purposes.

The Fund cannot make any investment at a time during which its borrowings exceed
5% of the value of its total assets.  With respect to this  fundamental  policy,
the Fund can borrow only if it maintains a 300% ratio of assets to borrowings at
all times in the manner set forth in the Investment Company Act of 1940.

      The  current  restriction  on  borrowing  is silent  with  respect  to the
permissible entities that the Fund may borrow from. The Board proposes that this
restriction be amended to permit the Fund to borrow money from banks and/or from
affiliated  investment  companies as a temporary  measure for  extraordinary  or
emergency  purposes  provided such borrowings do not exceed 33-1/3% of its total
assets.

      Permitting  the Fund to borrow money from  affiliated  funds (for example,
those  funds  in  the  OppenheimerFunds  complex)  would  afford  the  Fund  the
flexibility to use the most cost-effective  alternative to satisfy its borrowing
requirements.  The  Trustees  believe  that the Fund may be able to obtain lower
interest rates on its  borrowings  from  affiliated  funds than it would through
traditional bank channels.

      Current  law  prohibits  the Fund from  borrowing  from other funds of the
OppenheimerFunds  complex.  Before an inter-fund  borrowing  arrangement  can be
established,  the Fund must  obtain  approval  from the SEC.  Implementation  of
inter-fund borrowing would be accomplished consistent with applicable regulatory
requirements,  including the  provisions of any order the SEC might issue to the
Fund and other Oppenheimer funds. The Fund has not yet decided to apply for such
an order and there is no  guarantee  any such order  would be  granted,  even if
applied for. Until the SEC has approved an inter-fund borrowing application, the
Fund will not engage in borrowing from affiliated investment companies.

      The Fund will not borrow  from  affiliated  funds  unless the terms of the
borrowing  arrangement  are at least as  favorable  as the terms the Fund  could
otherwise  negotiate  with a third  party.  To assure  that the Fund will not be
disadvantaged  by borrowing from an affiliated Fund,  certain  safeguards may be
implemented. An example of the types of safeguards which the SEC may require may
include  some or all of the  following:  the fund  will not  borrow  money  from
affiliated  funds unless the interest rate is more favorable than available bank
loan rates;  the Fund's  borrowing from affiliated funds must be consistent with
its  investment  objective  and  investment  policies;  the loan  rates  will be
determined by a  pre-established  formula based on quotations  from  independent
banks; if the Fund has outstanding  borrowings from all sources greater than 10%
of its total  assets,  then the Fund must  secure  each  additional  outstanding
interfund loan by the pledge of segregated collateral (see paragraph C "Pledging
of Assets," below);  the Fund cannot borrow from an affiliated fund in excess of
125% of its total  redemptions for the preceding seven days; each interfund loan
may be repaid on any day by the Fund;  and the Trustees  will be provided with a
report of all interfund  loans and the Trustees will monitor all such borrowings
to ensure that the Fund's participation is appropriate.

      In determining  to recommend the proposed  amendment to  shareholders  for
approval, the Board considered the possible risks to the Fund from participation
in the inter-fund  lending program.  There is a risk that a borrowing fund could
have a loan called on one day's notice. In that circumstance, the borrowing fund
might have to borrow from a bank at a higher interest cost if money to lend were
not available  from another  Oppenheimer  fund.  The Board  considered  that the
benefits to the Fund of participating in the program outweigh the possible risks
to the Fund from such participation.

      Shareholders  are  being  asked to  approve  an  amendment  to the  Fund's
fundamental policy on borrowing and are also being asked to approve an amendment
to the Fund's fundamental restriction on lending (paragraph B "Lending," below).
If this proposal 4 is adopted,  the Fund,  subject to its investment  objectives
and policies,  will be able to participate in the inter-fund  lending program as
both a lender and a borrower.

B.  Lending.

      Under  the  1940  Act,  a fund's  restriction  regarding  lending  must be
fundamental.  Under its current  restriction,  the Fund  enters into  repurchase
agreements,  which  may be  considered  a loan,  and is  permitted  to lend  its
portfolio securities.

      It is proposed  that the  current  fundamental  restriction  be amended to
permit  the Fund to lend its  assets to  affiliated  investment  companies  (for
example,  other funds in the OppenheimerFunds  complex).  In addition,  the Fund
also proposes to clearly state that  investments  in debt  instruments  or other
similar  evidences of indebtedness  are not prohibited by the Fund's  investment
restriction on making loans.  Before an inter-fund  lending  arrangement  can be
established,  the Fund must  obtain  approval  from the SEC.  Implementation  of
inter-fund lending would be accomplished  consistent with applicable  regulatory
requirements,  including the  provisions of any order the SEC might issue to the
Fund and other Oppenheimer funds. The Fund has not yet decided to apply for such
an order and there is no  guarantee  any such order  would be  granted,  even if
applied for. Until the SEC has approved an inter-fund lending  application,  the
Fund  will not  engage in  lending  with  affiliated  investment  companies.  As
amended,  the  restriction  on lending for the Fund would  remain a  fundamental
restriction  changeable only by the vote of a majority of the outstanding voting
securities  as defined in the 1940 Act of the Fund.  The  current  and  proposed
fundamental investment restrictions are set forth below.

Current                             Proposed

The Fund cannot make loans.  The Fund cannot make loans except (a)  However,  it
can purchase  portfolio  through lending of securities,  (b) through  securities
subject to repurchase the purchase of debt  instruments  or similar  agreements.
The Fund may also  evidences of  indebtedness,  (c) through  lend its  portfolio
securities.  an interfund lending program with other affiliated funds,  provided
that no such loan may be made if, as a result, the aggregate of such loans would
exceed 33 1/3% of the value of its total  assets  (taken at market  value at the
time of such loans), and (d) through repurchase agreements.

      The reason for  lending  money to an  affiliated  fund is that the lending
fund may be able to obtain a higher rate of return  than it could from  interest
rates on alternative short-term investments. To assure that the Fund will not be
disadvantaged by making loans to affiliated  funds,  certain  safeguards will be
implemented. An example of the types of safeguards which the SEC may require may
include some or all of the following: the Fund will not lend money to affiliated
funds unless the interest rate on such loan is determined to be reasonable under
the  circumstances;  the Fund may not make interfund  loans in excess of 7.5% of
its net assets; an interfund loan to any one affiliated fund shall not exceed 5%
of the Fund's net assets; an interfund loan may not be outstanding for more than
seven days; each interfund loan may be called on one business day's notice;  and
the  Manager  will  provide  the  Trustees   reports  on  all  inter-fund  loans
demonstrating that the Fund's  participation is appropriate and that the loan is
consistent with its investment objectives and policies.

      When the Fund lends assets to another affiliated fund, the lending fund is
subject to credit risks if the borrowing fund fails to repay the loan.
The Trustees believe that the risk is minimal.

C.  Pledging of Assets.

      The Fund is  currently  subject to a  fundamental  investment  restriction
concerning  the  pledging  of Fund  assets.  It is  proposed  that this  current
fundamental  investment  restriction  be  eliminated.  The  current  fundamental
investment restriction is set forth below.

                                     Current

          The Fund  cannot  mortgage,  hypothecate  or pledge any of its assets.
          However,  the Fund can use escrow  arrangements in connection with its
          use of hedging instruments permitted by its fundamental policies.

      The existing  restriction is not required to be fundamental under the 1940
Act, and therefore, the Board believes that the Fund should be provided with the
maximum flexibility  permitted by law to pursue its investment  objectives.  The
1940 Act  prohibitions  on  borrowing  by the Fund  would  continue  to apply as
discussed above in Paragraph A "Borrowing".  Therefore, the Fund will be able to
pledge its assets for borrowing  money and for other purposes in compliance with
the 1940 Act and any rule or  exemptive  order  granted by the SEC. The Trustees
recommend  that this  restriction  be eliminated so that the Fund may enter into
collateral   arrangements   entered  into  in  connection   with  its  borrowing
requirements and consistent with paragraph A "Borrowing."

D.    Diversification

      The Fund is  currently  subject to a  fundamental  investment  restriction
concerning the  diversification of Fund assets. It is proposed that this current
restriction be amended to exclude securities of other investment  companies from
the restriction. As amended, the restriction would remain fundamental changeable
only by the vote of a majority of the outstanding  voting securities of the Fund
as defined in the 1940 Act.  The current  and  proposed  fundamental  investment
restrictions are set forth below.

Current                             Proposed

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

      The percentage limits in the current and proposed  fundamental  investment
restrictions  are  imposed  by the 1940 Act.  It is  proposed  that the  current
restriction  be  amended  to permit  the Fund to lend its  assets to  affiliated
investment companies (for example, other funds in the OppenheimerFunds complex),
as discussed previously in paragraph B of Proposal 4 "Lending" and to permit the
Fund to enter  into a fund of  funds  arrangement  as  previously  discussed  in
paragraph B of Proposal 3 "Investing in Other  Investment  Companies." THE BOARD
OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU APPROVE EACH SUB-PROPOSAL

PROPOSAL 5:  TO AUTHORIZE THE TRUSTEES TO ADOPT AN AMENDED AND
RESTATED DECLARATION OF TRUST

The Board of Trustees has approved and recommends  that the  shareholders of the
trust  authorize them to adopt and execute the Amended and Restated  Declaration
of Trust for the Trust in the form attached to this Proxy Statement as Exhibit 1
(New  Declaration  of Trust).  The  attached New  Declaration  of Trust has been
marked to show changes from the Trust's  existing  Declaration of Trust (Current
Declaration  of Trust).  The New  Declaration  of Trust is a more modern form of
trust instrument for a Massachusetts  business trust, and going forward, will be
used  as  the  standard  Declaration  of  Trust  for  all  new  OppenheimerFunds
Massachusetts business trusts.

Adoption of the New  Declaration  of Trust will not result in any changes in the
Fund's  Trustees or  officers  or in the  investment  policies  and  shareholder
services described in the Fund's current prospectus.

Generally, a majority of the Trustees may amend the Current Declaration of Trust
when authorized by a "majority of the outstanding voting securities" (as defined
in the 1940 Act) of the trust. On April 25, 2000, the Trustees approved the form
of the New  Declaration  of  Trust  and  authorized  the  submission  of the New
Declaration of Trust to the Trust's shareholders for their authorization at this
Meeting.

The New Declaration of Trust amends the Current Declaration of Trust in a number
of  significant  ways.  The  following  discussion  summarizes  some of the more
significant  amendments to the Current  Declaration of Trust effected by the New
Declaration of Trust.

In addition to the changes  described  below,  there are other  substantive  and
stylistic  differences  between  the New  Declaration  of Trust and the  Current
Declaration  of Trust.  The  following  summary is  qualified in its entirety by
reference to the New Declaration of Trust itself, which is attached as Exhibit 1
to this Proxy Statement.

Significant Changes Effected by the New Declaration of Trust.

Reorganization  of the  Trust or Its  Series  or  Classes.  Unlike  the  Current
Declaration  of  Trust,  the New  Declaration  of Trust  generally  permits  the
Trustees,  subject to applicable  Federal and state law, to reorganize the Trust
or any of its series or classes into a newly formed entity  without  shareholder
approval.  The Current  Declaration  of Trust requires  shareholder  approval in
order to reorganize the Trust or any of its series.  Currently,  the Fund is the
sole series of the Trust.

Under  certain  circumstances,  it may not be in the  shareholders'  interest to
require a  shareholder  meeting  to permit the Trust or a series of the Trust to
reorganize into a newly formed entity. For example,  in order to reduce the cost
and  scope  of  state  regulatory  constraints  or to take  advantage  of a more
favorable tax  treatment  offered by another  state,  the Trustees may determine
that it would be in the  shareholders'  interests to  reorganize  the Trust or a
series of the Trust to domicile it in another state or to change its legal form.
Under the Current  Declaration of Trust,  the Trustees cannot  effectuate such a
potentially  beneficial  reorganization  without first  conducting a shareholder
meeting and  incurring  the  attendant  costs and delays.  In contrast,  the New
Declaration of Trust gives the Trustees the  flexibility to reorganize the Trust
or any  of  its  series  into  a  newly  formed  entity  and  achieve  potential
shareholder  benefits without incurring the delay and potential costs of a proxy
solicitation.  Such  flexibility  should help to assure that the Trust  operates
under the most appropriate form of organization.

Before  allowing  a  trust  or  a  series   reorganization  to  proceed  without
shareholder  approval,  the Trustees  have a fiduciary  responsibility  to first
determine that the proposed  transaction is in the shareholders'  interest.  Any
exercise of the Trustees' increased authority under the New Declaration of Trust
is also subject to any applicable requirements of the 1940 Act and Massachusetts
law. Of course,  in all cases,  the New  Declaration of Trust would require that
shareholders receive written notification of any transaction.

The New Declaration of Trust does not give the Trustees the authority to merge a
series with  another  operating  mutual fund or sell all of a series'  assets to
another operating mutual fund without first seeking shareholder approval.  Under
the New Declaration of Trust,  shareholder  approval is still required for these
transactions.

Termination of the Trust or its Series or Classes. Under the Current Declaration
of Trust,  the Amended and Restated  Declaration of Trust generally  permits the
Trustees, subject to applicable Federal and state law, to terminate the Trust or
any of its series or classes of shares without shareholder approval.

Under  certain  circumstances,  it may not be in the  shareholders'  interest to
require a shareholder meeting to permit the Trustees to terminate the Trust or a
series or class of shares. For example, a series may have insufficient assets to
invest  effectively or a series or a class of shares may have  excessively  high
expense levels due to operational needs. Under such circumstances, absent viable
alternatives, the Trustees may determine that terminating the series or class of
shares  is in the  shareholders'  interest  and the only  appropriate  course of
action. The process of obtaining shareholder approval of the series' or classes'
termination  may,  however,  make it more  difficult  to complete the series' or
classes'  liquidation and termination  and, in general,  will increase the costs
associated with the termination.  In such a case, it may be in the shareholders'
interest to permit the series' or classes'  termination  without  incurring  the
costs and delays of a shareholder meeting.

As discussed above,  before allowing the Trust or a series or class to terminate
without shareholder  approval,  the Trustees have a fiduciary  responsibility to
first determine that the proposed transaction is in the shareholders'  interest.
Any exercise of the Trustees'  increased  authority under the New Declaration of
Trust  is also  subject  to any  applicable  requirements  of the  1940  Act and
Massachusetts  law, and  shareholders'  receipt of written  notification  of the
transaction.

Future  Amendments of the  Declaration  of Trust.  The New  Declaration of Trust
permits the Trustees, with certain exceptions, to amend the Declaration of Trust
without shareholder approval.  Under the New Declaration of Trust,  shareholders
generally have the right to vote on any amendment affecting their right to vote,
on any amendment affecting the New Declaration of Trust's amendment  provisions,
on any amendment affecting the shareholders'  rights to indemnification,  and on
any amendment  affecting the shareholders'  rights to vote on the merger or sale
of the trusts,  series,  or classes'  assets to an operating  mutual  fund.  The
Current  Declaration of Trust, on the other hand,  generally gives  shareholders
the  exclusive  power to amend the  Declaration  of Trust with  certain  limited
exceptions.   By  allowing   amendment  of  the  Declaration  of  Trust  without
shareholder  approval,  the New  Declaration  of Trust  gives the  Trustees  the
necessary  authority  to react  quickly to future  contingencies.  As  mentioned
above, such increased authority remains subordinate to the Trustees'  continuing
fiduciary obligations to act with due care and in the shareholders' interest.

    Other Changes Effected by the Amended and Restated Declaration of Trust

      In addition to the significant  changes  described  above, the Amended and
Restated  Declaration  of Trust  modifies the current  Declaration of Trust in a
number of important ways, including, but not limited to, the following:

a.           The Amended and Restated  Declaration  of Trust  clarifies  that no
             shareholders  of any  series  or  class  shall  have a claim on the
             assets of another series or class.

b.           As a general matter, the Amended and Restated  Declaration of Trust
             modifies   the  current   Declaration   of  Trust  to   incorporate
             appropriate references to classes of shares.

c.           The Amended and Restated  Declaration of Trust modifies the current
             Declaration  of  Trust by  changing  the par  value of the  Trust's
             shares from no par value to $.001 par value.

d.           The Amended and Restated  Declaration of Trust modifies the current
             Declaration  of Trust by giving the  Trustees the power to effect a
             reverse stock split, and to make distributions in-kind.

e.           The  Amended  and  Restated  Declaration  of Trust  modifies  the
             current Declaration  of  Trust  so that  all Shares of all Series
             vote together  on issues to be voted on unless (i) separate Series
             or Class  voting  is  otherwise  required  by  the  1940  Act or
             the instrument  establishing such Shares, in which case the
             provisions of the 1940 Act or such instrument, as applicable, will
             control, or (ii)  unless the issue to be voted on affects  only
             particular Series or  Classes,  in which  case  only  Series  or
             Classes so affected will be entitled to vote.

f.           The  Amended  and  Restated  Declaration  of Trust  clarifies  that
             proxies may be voted  pursuant to any  computerized,  telephonic or
             mechanical data gathering  device,  that  Shareholders  receive one
             vote  per  Share  and  a  proportional  fractional  vote  for  each
             fractional share, and that, at a meeting,  Shareholders may vote on
             issues with respect to which a quorum is present,  while adjourning
             with respect to issues for which a quorum is not present.

g.           The Amended and Restated  Declaration of Trust clarifies various
             existing trustee   powers.   For   example,   the  Amended   and
             Restated Declaration  of Trust  clarifies that the Trustees may
             appoint and terminate   agents  and consultants  and  hire  and
             terminate employees; in addition to banks and trust companies,
             the Trustees may  employ as fund  custodian  companies  that are
             members  of a national  securities  exchange or other entities
             permitted  under the 1940 Act;  to retain  one or more  transfer
             agents and employ sub-agents;  delegate  authority to investment
             advisers and other agents   or   independent   contractors; pledge,
             mortgage  or hypothecate  the assets of the  Trust;  and  operate
             and carry on the business of an  investment  company.  The Amended
             and Restated Declaration  of Trust  clarifies  or adds to the list
             of  trustee  powers.  For  example, the  Trustees  may sue or be
             sued in the name of the Trust;  make loans of cash  and/or
             securities; enter into joint  ventures,  general or limited
             partnerships  and other combinations or associations;  endorse or
             guarantee  the payment of  any  notes  or  other   obligations of
             any  person  or  make contracts  of  guarantee  or   suretyship
             or  otherwise   assume liability for payment; purchase insurance
             and/or  bonding; pay pensions and adopt  retirement, incentive and
             benefit plans; and adopt 12b-1 plans.

h.           The Amended and Restated Declaration of Trust clarifies that the
             Trust may  redeem shares of a class or series held by a shareholder
             for any reason, including but not limited to reimbursing the Trust
             or the distributor for the shareholder's failure to make timely
             and  good payment; failure to supply a tax identification number;
             and failure to maintain a minimum account balance as established
             by the Trustees from time to time.

i.           The Amended and  Restated  Declaration  of Trust  clarifies  that a
             trust is created and not a  partnership,  joint stock  association,
             corporation, bailment, or any other form of legal relationship, and
             expressly disclaims  shareholder and trustee liability for the acts
             and obligations of the trust.

j.           The Amended and Restated  Declaration  of Trust  clarifies that the
             Trustees  shall not be  responsible  or liable  for any  neglect or
             wrongdoing of any officer,  agent, employee,  consultant,  adviser,
             administrator,  distributor or principal underwriter,  custodian or
             transfer agent of the trust nor shall a trustee be responsible  for
             the act or omission of any other trustee.

PROPOSAL  6:  APPROVAL  OF THE FUND'S  CLASS C 12b-1  DISTRIBUTION  AND SERVICE
PLAN AND AGREEMENT

Class C shares  were  first  offered  to the  public on  December  1,  1993.  In
connection  with the  initial  public  offering  of these  shares,  the Fund had
previously   adopted  a  Distribution   and  Service  Plan  and  Agreement  (the
"Distribution  and Service  Plan") for Class C shares which  permits the Fund to
pay on an annual basis up to 0.25% of its average annual net assets as a service
fee and up to 0.75% of its  average  annual net assets as an  asset-based  sales
charge.  The  Manager,  as the sole  initial  shareholder  of the Fund's Class C
shares, approved the Distribution and Service Plan for the Class C shares of the
Fund dated December 1, 1993.

At a meeting of the Board of  Trustees  held  February  29,  2000,  the  Manager
proposed the  adoption of a new  Distribution  and Service  Plan (the  "Proposed
Plan") which is a "compensation type plan" instead of the current "reimbursement
type plan." The Fund's Board of Trustees, including a majority of the

Independent  Trustees,*  approved the new Distribution and Service Plan, subject
to  shareholder  approval,  and  determined  to recommend the  Distribution  and
Service  Plan and  Agreement  for  approval by the  shareholders.  A copy of the
Proposed  Distribution  and Service  Plan is attached as Exhibit A to this proxy
statement.

Description of the Distribution and Service Plans.  Under both the Proposed Plan
and the  current  Distribution  and Service  Plan and  Agreement  (the  "Current
Plan"),  the Fund makes  payments  to the  Distributor  in  connection  with the
distribution  of Class C Shares and the  personal  service  and  maintenance  of
accounts that hold Class C shares.  The Fund pays the Distributor an asset-based
sales charge of 0.75% per annum of Class C shares, and also pays the Distributor
a service  fee of 0.25% per  annum,  each of which is  computed  on the  average
annual net assets of Class C shares of the Fund.

Service Fee. Under the Proposed Plan and the Current Plan, the Distributor  pays
certain brokers,  dealers,  banks or other persons or entities  ("Recipients") a
service fee of 0.25% for providing personal services to Class C shareholders and
for  maintenance  of  shareholder  accounts by those  Recipients.  The  services
rendered by Recipients in connection with personal  services and the maintenance
of Class C  shareholder  accounts  may  include but shall not be limited to, the
following: answering routine inquiries from the Recipient's customers concerning
the  Fund,  assisting  in the  establishment  and  maintenance  of  accounts  or
sub-accounts in the Fund and processing  share redemption  transactions,  making
the  Fund's  investment  plans  and  dividend  payment  options  available,  and
providing such other  information  and services in connection with the rendering
of personal  services and/or the maintenance of accounts,  as the Distributor or
the Fund may reasonably request.

Service fee payments under the Proposed and Current Plans by the  Distributor to
Recipients  are  made (i) in  advance  for the  first  year  Class C shares  are
outstanding,  following  the purchase of shares,  in an amount equal to 0.25% of
the net asset value of the shares  purchased by the  Recipient or its  customers
and (ii) thereafter,  on a quarterly basis, computed as of the close of business
each day at an  annual  rate of 0.25% of the net  asset  value of Class C shares
held in accounts of the Recipient or its customers.  In the event Class C shares
are  redeemed  less than one year  after the date such  shares  were  sold,  the
Recipient is obligated to repay to the  Distributor on demand a pro rata portion
of such advance service fee payments, based on the ratio of the remaining period
to one year.

The main difference between the proposed and current Plan for the payment of the
service fee is that under the current Plan, the Fund  reimburses the Distributor
for service fee payments made to  Recipients.  Under the Proposed Plan, the Fund
will pay the Distributor a service fee at a flat rate of 0.25% per annum without
regard to the  Distributor's  expenses.  At the  present  time,  all service fee
payments are, in effect,  passed through the  Distributor and paid to Recipients
for the  Recipient's  services in servicing  accounts  and personal  services to
account holders.  It is not anticipated  that this arrangement will change,  and
the amount of service fee payments by the Fund is not expected to increase.


-------------------
* Trustees who are not "interested  persons" (as defined in the 1940 Act) of the
Fund or the Manager and who have no direct or indirect financial interest in the
operation of the Fund's 12b-1 plans or in any related agreements.


Asset-Based Sales Charge. The Current Plan, a reimbursement type plan,  provides
that the Fund will pay the  Distributor on a monthly basis an asset-based  sales
charge  at an  annual  rate of  0.75% of the net  asset  value of Class C Shares
outstanding to reimburse the Distributor for its expenses in rendering  services
in  connection  with the  distribution  of the Fund's Class C shares.  Under the
Current Plan, the distribution  assistance and  administrative  support services
rendered by the  Distributor in connection  with the sales of Class C shares may
include:  (i) paying  sales  commissions  to any broker,  dealer,  bank or other
institution  that sells the Fund's Class C shares;  (ii) paying  compensation to
and expenses of personnel of the Distributor who support distribution of Class C
shares by Recipients;  (iii) paying or reimbursing  the Distributor for interest
and other borrowing costs incurred on any unreimbursed  expenses carried forward
to subsequent fiscal quarters;  (iv) other direct distribution costs of the type
approved  by  the  Board,  including  without  limitation  the  costs  of  sales
literature,  advertising and prospectuses (other than those furnished to current
shareholders) and state "blue sky" registration  expenses;  and (v) any services
rendered by the Distributor that a Recipient may render as described above.

The Proposed Plan, a compensation type plan, provides that the Fund will pay the
Distributor on a monthly basis an asset-based  sales charge at an annual rate of
0.75% of the net asset value of Class C Shares  outstanding  to  compensate  the
Distributor  for  providing  distribution  assistance  in  connection  with  the
distribution  of the  Fund's  Class C  Shares.  Under  the  Proposed  Plan,  the
distribution  assistance and  administrative  support  services  rendered by the
Distributor in connection  with the  distribution of Class C Shares may include:
(i) paying  sales  commissions  to any broker,  dealer,  bank or other person or
entity  that  sells  and  services  the  Fund's  Class  C  Shares,  (ii)  paying
compensation  to and  expenses  of  personnel  of the  Distributor  who  support
distribution  of Class C Shares by  Recipients,  (iii)  obtaining  financing  or
providing  such  financing  from its own  resources,  or from an affiliate,  for
interest and other borrowing costs of the Distributor's  unreimbursed  expenses,
incurred  in  rendering  distribution  assistance  for Class C Shares,  and (iv)
paying certain other distribution expenses.

Other distribution  assistance  rendered by the Distributor and Recipients under
either  Plan  may  include,   but  shall  not  be  limited  to,  the  following:
distributing  sales  literature and  prospectuses  other than those furnished to
current Class C shareholders,  providing  compensation to and paying expenses of
personnel of the Recipient who support the distribution of Class C shares by the
Recipient,  and providing such other information and services in connection with
the distribution of Class C shares as the Distributor or the Fund may reasonably
request.

The Proposed Plan provides that payments may be made in connection  with Class C
Shares  acquired  (i) by  purchase,  (ii) in  exchange  for  shares  of  another
investment   company  for  which  the  Distributor   serves  as  distributor  or
sub-distributor, or (iii) pursuant to a plan of reorganization to which the Fund
is a party.

Under both Plans, the Distributor pays sales  commissions from its own resources
to Recipients at the time of sale currently equal to 0.75% of the purchase price
of Fund shares sold by such  Recipient,  and advances the first year service fee
of 0.25%.  The  Distributor  retains the service fee and the  asset-based  sales
charge  during  the first  year  shares  are  outstanding  to  recoup  the sales
commissions  it pays,  the  advances of service fee  payments it makes,  and its
financing costs. The Distributor plans to pay the asset-based sales charge as an
ongoing  commission to  Recipients on Class C shares that have been  outstanding
for a year or more.  Asset-based sales charge payments are designed to permit an
investor to purchase  shares of the Fund without  paying a front-end  sales load
and at the  same  time  permit  the  Distributor  to  compensate  Recipients  in
connection with the sale of Class C shares of the Fund.

The Proposed and Current Plans contain a provision which provides that the Board
may allow the Fund to continue  payments to the  Distributor  for Class C shares
sold prior to termination of the Distribution and Service Plan. Pursuant to this
provision,  payment of the service fee and the asset-based sales charge could be
continued by the Board after termination.

Like the service fee, the main difference  between the proposed and current Plan
regarding  payment of the  asset-based  sales  charge is that under the  current
Plan, the Fund reimburses the  Distributor  for its services  rendered and under
the Proposed Plan, the Fund will pay the Distributor at a flat rate of 0.75% per
annum without regard to the  Distributor's  expenses.  As discussed below, it is
possible  that the Fund will,  over time,  pay more under the Proposed Plan than
under the Current Plan.

Additional Information. Both Plans have the effect of increasing annual expenses
of Class C Shares of the Fund by up to 1.00% of the class's  average  annual net
assets from what those expenses would  otherwise be. Payments by the Fund to the
Distributor  under the Current Plan for the fiscal year ended September 30, 1999
were $2,461,363  (1.00% of the Fund's average net assets  represented by Class C
Shares  during  that  period),  of which  the  Distributor  paid  $18,231  to an
affiliate of the Distributor and retained  $2,306,578 as reimbursement for Class
C sales  commissions and service fee advances,  as well as financing  costs; the
balance was paid to Recipients not affiliated with the Distributor.

If the Class C  shareholders  approve this  Proposal,  the Proposed  Plan shall,
unless terminated as described below, become effective upon shareholder approval
and continue in effect until December 31, 2000 and from year to year  thereafter
only so long as such continuance is specifically approved, at least annually, by
the Fund's  Board of  Trustees  and its  Independent  Trustees by a vote cast in
person at a meeting called for the purpose of voting on such continuance. Either
Plan may be  terminated  at any time by a vote of a majority of the  Independent
Trustees or by a vote of the holders of a majority  (as defined in the 1940 Act)
of the  Fund's  outstanding  Class C  shares.  Each Plan may not be  amended  to
increase  materially the amount of payments to be made without approval by Class
C  shareholders.  All material  amendments must be approved by a majority of the
non-interested Trustees.

Each of the  Proposed  Plan and the Current  Plan  provides  that while it is in
effect,  the selection and  nomination of those Trustees of the Fund who are not
"interested  persons" of the Fund or the Manager is committed to the  discretion
of the Independent Trustees.  This does not prevent the involvement of others in
such  selection and  nomination if the final  decision on any such  selection or
nomination is approved by a majority of the Independent Trustees.

Under  either  Plan,  the Board of Trustees  may  determine  that no payment for
service fees or  asset-based  sales charge will be made to any  Recipient in any
quarter  if the  aggregate  net  asset  value  of all  Fund  shares  held by the
Recipient for itself and its customers does not exceed a minimum amount, if any,
that may be fixed from time to time by a majority of the  Independent  Trustees.
Under both Plans,  the Board of Trustees has set the fee at the maximum rate and
set no minimum amount. Each Plan permits the Distributor and the Manager to make
additional   distribution  payments  to  Recipients  from  their  own  resources
(including profits from management fees) at no cost to the Fund. The Distributor
and the Manager may, in their sole  discretion,  increase or decrease the amount
of  distribution  assistance  payments  they make to  Recipients  from their own
assets.

Rule  12b-1 of the 1940 Act  permits  the Fund to adopt  the Plans and each Plan
conforms  with the rules of the  National  Association  of  Securities  Dealers.
Analysis of the Proposed Plan by the Board of Trustees.  In considering  whether
to recommend the Proposed Plan for approval,  the Board  requested and evaluated
information  it deemed  necessary to make an informed  determination.  The Board
found that there is a reasonable  likelihood that the Proposed Plan benefits the
Fund and its Class C shareholders by providing financial incentives to financial
intermediaries  to attract new Class C shareholders to the Fund and by assisting
the  efforts  of the Fund and the  Distributor  to service  and retain  existing
shareholders  and attract new investors.  The Proposed Plan enables the Fund and
the  Distributor  to offer  investors in the Fund  alternative  ways to purchase
shares.  This arrangement  allows the Fund to be competitive with similar funds,
including  funds that impose sales  charges,  provide  financial  incentives  to
institutions  that  direct  investors  to such funds,  and  provide  shareholder
servicing and administrative services.

The Distributor  identified two main  difficulties  with the Current Plan. These
involve accurately following certain distribution  expenses when exchanges among
the   funds   occur,   and  the   Distributor's   inability   to   recover   its
distribution-related  expenses  incurred  when funds  enter into  reorganization
agreements.

The  Fund  and the  other  mutual  funds in the  OppenheimerFunds  complex  have
arrangements  so that a  shareholder  of one fund may exchange his or her shares
for the shares of one or more other Oppenheimer funds. Frequently, a shareholder
will enter into a number of exchanges.

The Distributor  advised the Board that the  Distributor  could not at this time
design and implement an expedient and cost-effective accounting system to follow
expenses   of  the   sales   commission,   service   fee   payment   and   other
distribution-related  expenses among the funds as exchanges  occur. As a result,
the Distributor may not receive full reimbursement for its  distribution-related
expenses  under the Current Plan.

It occasionally  happens that, for various reasons, it is desirable for one fund
to  reorganize   into  another  fund  when  it  is   anticipated   that  such  a
reorganization will benefit the funds involved.  When reorganizations occur, the
Distributor  currently  must write off and thus is unable to recover  previously
spent, but unrecovered,  distribution expenses for the fund which will go out of
existence.

The  compensation  type Plan proposed for approval will  eliminate the foregoing
difficulties  and allow the  Distributor  to continue to provide  exchanges  and
reorganizations  without having to risk the loss of, in some cases,  substantial
amounts of money previously spent for distribution.  The Proposed Plan expressly
provides that the  distribution  and  administrative  support services under the
plan may be rendered  in  connection  with Class C shares  issued by the Fund in
exchanges  for other  Oppenheimer  funds and in a  reorganization  with  another
mutual fund.

The Distributor  advised the Board that under the Proposed Plan, it will be able
to track its expenses of  distribution  for the Oppenheimer  Funds complex,  and
that it will also be able  reasonably  to identify its  distribution  costs with
respect  to  the  Fund  and  each  other  Oppenheimer  fund  by  allocating  the
Distributor's  distribution expenses among the funds in the complex according to
sales.  While not a precise  method,  the Board  concluded  that this  method of
allocating  distribution expenses to the Fund is a reasonable manner by which to
identify the  Distributor's  expenses in  distributing  the Fund's  shares.  The
payments  under the proposed Plan will remain  subject to the limits  imposed on
asset-based sales charges by the NASD.

The Board  considered that a wide range of different  situations  might occur in
the future  regarding  the sale and  redemption  of Fund shares.  It is possible
under the current reimbursement Plan for the Fund's payments to be substantially
reduced or cease when limited to reimbursement to the Distributor for its costs.
The Board concluded that this type of situation is unlikely to occur.  The Board
also  recognized  that superior  investment  performance  could result in larger
amounts paid by the Fund under the Proposed Plan and the Distributor's  recovery
of more Plan  payments  from the Fund than the  Distributor  had expended on the
Fund. Other differing scenarios were also reviewed.

The level of  annual  payments  by the Fund  under  the  Proposed  Plan will not
increase over the amounts  currently paid by the Fund.  Under the Proposed Plan,
however,  over time,  the Fund's Plan  payments  may exceed the amount which the
Fund might pay under the Current Plan.  The length of time over which the Fund's
payments  will  continue   under  the  Proposed  Plan  is  not  limited  by  any
reimbursement  factor,  and the Fund's  payments may thus  continue for a longer
period of time than under the Current  Plan,  thus  potentially  increasing  the
amount of Plan  payments  which  reduce the  dividends  and total return on Fund
shares.

The Board concluded that it is extremely  difficult to predict purchases,  sales
and exchanges by shareholders,  and how future  individual,  market and economic
events may influence  individual  investor  decisions.  The Board thus concluded
that it is not reasonably  possible to determine with any degree of certainty at
this time whether the Fund will pay more under the  Proposed  Plan than it would
under  the  Current  Plan.  The  Distributor  provides  the Board  with  certain
quarterly  reports  as to the  amount  of  payments  made by the Fund  under the
Proposed Plan and the purpose for which payments were made. The Distributor will
provide  extensive annual reports to the Board which set forth the Distributor's
allocated expenses and recovery of money by the Distributor from the asset-based
sales charges and contingent  deferred sales charges,  and information on sales,
redemptions and exchanges of Fund shares and related data. The Board  determined
that under these quarterly and annual  reports,  the Board will be provided with
adequate information about the payments which the Fund makes to the Distributor,
about the payments which the  Distributor  makes and receives in connection with
the  distribution  of the  Fund's  shares,  and  about the  Distributor's  other
distribution  expenses.  The Board anticipates that with this  information,  the
Board will be able to review each year the benefits  which the Fund is receiving
from the Plan  payments it makes to  determine  if the Fund is  benefiting  at a
level commensurate with those payments.

Stimulation of  distribution of mutual fund shares and providing for shareholder
services  and  account  maintenance  services  by  payments  to a mutual  fund's
distributor and to brokers,  dealers, banks and other financial institutions has
become common in the mutual fund industry. Competition among brokers and dealers
for these  types of  payments  has  intensified.  The  Trustees  concluded  that
promotion,  sale and  servicing of mutual fund shares and  shareholders  through
various brokers, dealers, banks and other financial institutions is a successful
way of distributing shares of a mutual fund. The Trustees concluded that without
an  effective  means of selling  and  distributing  Fund  shares  and  servicing
shareholders and providing account maintenance,  shareholders may redeem shares,
or not buy more shares,  and if assets  decline,  expenses may increase on a per
share basis.  By providing an alternative  means of acquiring  Fund shares,  the
Distribution  and Service Plan proposed for shareholder  approval is designed to
stimulate sales by and services from many types of financial institutions.

The Trustees  recognize  that the Manager  will  benefit from the Proposed  Plan
through  larger  investment  advisory  fees  resulting  from an increase in Fund
assets,  since its  investment  advisory fees are based upon a percentage of net
assets  of  the  Fund.  The  Board  was  also  advised  by  the  Manager  that a
compensation plan could possibly decrease the time necessary for the Distributor
to recover,  and could  possibly  increase the likelihood  that the  Distributor
might actually recover, the costs of distributing Class C shares. If either were
to occur,  the  profits  of the  Manager,  which is the  parent  company  of the
Distributor,  would be increased.  The Board,  including each of the Independent
Trustees,  determined  that the  Proposed  Plan is in the best  interests of the
Fund,  and that its adoption has a reasonable  likelihood of benefiting the Fund
and its Class C  shareholders.  In its annual review of the Proposed  Plan,  the
Board will  consider  the  continued  appropriateness  of the  Distribution  and
Service Plan, including the level of payments provided for therein.

THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS YOU APPROVE THIS PROPOSAL

                     INFORMATION ABOUT THE FUND

      The SEC requires that the following  information be provided to the Fund's
shareholders.

Fund  Information.  As of June 14,  2000,  the Fund had  125,944,290.319  shares
outstanding,  consisting of 59,490,709.754  Class A, 46,913,319.547  Class B and
19,540,261.018  Class C shares.  Each share has voting  rights as stated in this
Proxy  Statement  and is entitled  to one vote for each share (and a  fractional
vote for a fractional share).

Beneficial  Owners.  Occasionally,  the  number  of  shares  of the Fund held in
"street name"  accounts of various  securities  dealers for the benefit of their
clients may exceed 5% of the total shares outstanding. As of June 14, 2000, MLPF
& S for the sole benefit of its customers, 4800 Deer Lake Drive, Jacksonville FL
32246,  held  2,755,032.113 or 5.87% of the outstanding  total Class B shares of
the Fund and  3,910,457.854  or 20.01% of the outstanding  Class C shares of the
Fund.

The Manager, the Distributor and the Transfer Agent. Subject to the authority of
the Board of Trustees,  the Manager is responsible for the day-to-day management
of the Fund's business,  pursuant to its investment  advisory agreement with the
Fund.  OppenheimerFunds  Distributor,  Inc., a  wholly-owned  subsidiary  of the
Manager,  is the general  distributor (the  "Distributor") of the Fund's shares.
OppenheimerFunds  Services,  a division  of the  Manager,  located at 6803 South
Tucson  Way,  Englewood,  CO  80112,  serves  as the  transfer  and  shareholder
servicing agent (the "Transfer  Agent") for the Funds on an "at cost" basis, for
which it was paid  $1,978,856 by the Fund during the fiscal year ended September
30, 1999.

The Manager (including subsidiaries and affiliates) currently manages investment
companies,  including  other  Oppenheimer  funds,  with assets of more than $125
billion as of March 31, 2000, and with more than 5 million shareholder accounts.
The  Manager is a  wholly-owned  subsidiary  of  Oppenheimer  Acquisition  Corp.
("OAC"),  a holding company  controlled by  Massachusetts  Mutual Life Insurance
Company ("MassMutual").  The Manager, the Distributor and OAC are located at Two
World Trade  Center,  New York,  New York 10048.  MassMutual  is located at 1295
State  Street,  Springfield,  Massachusetts  01111.  OAC acquired the Manager on
October 22, 1990.  As indicated  below,  the common stock of OAC is owned by (i)
certain  officers  and/or  directors of the Manager,  (ii)  MassMutual and (iii)
another investor. No institution or person holds 5% or more of OAC's outstanding
common stock except  MassMutual.  MassMutual  has engaged in the life  insurance
business since 1851.

The common stock of OAC is divided into three classes. Effective as of August 1,
1997,  OAC  declared a ten for one stock  split.  At  December  31,  1999,  on a
post-split  basis,  MassMutual held (i) all of the 21,600,000  shares of Class A
voting  stock,  (ii)  10,565,715  shares  of Class B  voting  stock,  and  (iii)
18,377,759 shares of Class C non-voting  stock.  This  collectively  represented
91.9% of the outstanding common stock and 90.4% of the voting power of OAC as of
that date.  Certain  officers and/or directors of the Manager held (i) 3,035,120
shares of the Class B voting stock,  representing 5.5% of the outstanding common
stock and 8.5% of the voting  power,  and (ii)  options  acquired  without  cash
payment which, when they become exercisable, allow the holders to purchase up to
1,508,523  shares of Class C non-voting  stock.  That group includes persons who
serve as officers of the Fund and Bridget A. Macaskill,  who serves as a Trustee
of the Fund.

Holders of OAC Class B and Class C common  stock may put (sell) their shares and
vested options to OAC or MassMutual at a formula price (based on earnings of the
Manager).  MassMutual may exercise call  (purchase)  options on all  outstanding
shares of both such  classes  of common  stock and  vested  options  at the same
formula  price.  From the period October 1, 1998 to September 31, 1999, the only
transactions on a post-split  basis by persons who serve as Trustees of the Fund
were by Mr. Swain who exercised 80,000 options to Mass Mutual for a cash payment
of $2,621,900,  Ms. Macaskill who exercised 434,873 options to Mass Mutual for a
cash payment of $14,770,051  and Mr. Bowen who sold 11,420 shares of Class B OAC
common stock to Mass Mutual and  exercised  65,880  options to Mass Mutual for a
cash payment of $2,335,929.

The names and principal  occupations  of the  executive  officers and directors
of  the  Manager  are  as  follows:  Bridget  A.  Macaskill,  President,  Chief
Executive  Officer  and a  director;  James C.  Swain,  Vice  Chairman;  Jeremy
Griffiths,  Executive Vice President and Chief  Financial  Officer;  O. Leonard
Darling,  Executive  Vice  President and Chief  Investment  Officer;  Andrew J.
Donohue,  Executive  Vice  President,  General  Counsel and a director;  George
Batejan,   Executive  Vice  President  and  Chief  Information  Officer,  Craig
Dinsell,  Loretta  McCarthy,  James Ruff and  Andrew  Ruotolo,  Executive  Vice
Presidents;  Brian W. Wixted,  Senior Vice  President  and  Treasurer;  Charles
Albers,  Peter M. Antos,  Victor Babin, Bruce Bartlett,  Richard Bayha,  Robert
A. Densen,  Ronald H. Fielding,  Robert B. Grill,  Robert Guy Thomas W. Keffer,
Avram  Kornberg,  John S.  Kowalik,  Andrew J.  Mika,  David  Negri,  Robert E.
Patterson,  Russell  Read,  Richard  Rubinstein,  Christian  D.  Smith,  Arthur
Steinmetz,  John Stoma,  Jerry A. Webman,  William L. Wilby, Donna Winn, Robert
G. Zack, and Arthur J. Zimmer,  Senior Vice Presidents;  and Barbara  Hennigar,
Chairman  of  OppenheimerFunds  Services,  a  division  of the  Manager.  These
officers  are  located  at one of the four  offices of the  Manager:  Two World
Trade Center,  New York, NY 10048-0203;  6803 South Tucson Way,  Englewood,  CO
80112; 350 Linden Oaks,  Rochester,  NY 14625-2807 and One Financial Plaza, 755
Main Street, Hartford, CT 06103.

Custodian.  The Bank of New York, Mutual Funds Division,  90 Washington  Street,
New York, NY 10286, acts as custodian of the Fund's securities and other assets.

Reports  to  Shareholders  and  Financial  Statements.   The  Annual  Report  to
Shareholders  of the Fund,  including  financial  statements of the Fund for the
fiscal  year  ended  September  30,  1999,  has  previously  been  sent  to  all
shareholders. Upon request, shareholders may obtain without charge a copy of the
Annual  Report by writing the Fund at the  address  above or calling the Fund at
1.800.525.7048.

FURTHER INFORMATION ABOUT VOTING AND THE MEETING

Solicitation of Proxies.  The cost of soliciting  these proxies will be borne by
the Fund.  In addition to  solicitations  by mail,  proxies may be  solicited by
officers or employees of the Fund's  transfer  agent or by officers or employees
of the Fund's  investment  adviser,  personally  or by telephone  or  telegraph;
without  extra   compensation.   Proxies  may  also  be  solicited  by  a  proxy
solicitation firm hired at the Fund's expense for such purpose.  Brokers,  banks
and other  fiduciaries may be required to forward  soliciting  material to their
principals  and to obtain  authorization  for the  execution  of proxies.  It is
anticipated that the cost of engaging a proxy solicitation firm would not exceed
$3,500 plus the  additional  costs which  would be incurred in  connection  with
contacting  those  shareholders who have not voted. For those services they will
be reimbursed by the Fund for their out-of-pocket expenses.

Voting By  Broker-Dealers.  Shares  owned of record  by  broker-dealers  for the
benefit  of  their  customers  ("street  account  shares")  will be voted by the
broker-dealer  based  on  instructions  received  from  its  customers.   If  no
instructions  are received,  the  broker-dealer  may (if permitted by applicable
stock  exchange  rules) as record  holder vote such  shares for the  election of
Trustees and on the Proposals in the same proportion as that broker-dealer votes
street account shares for which voting  instructions were received in time to be
voted.  A "broker  non-vote"  is deemed to exist  when a proxy  received  from a
broker indicates that the broker does not have  discretionary  authority to vote
the shares on that matter.

Quorum.  A majority of the shares  outstanding and entitled to vote,  present in
person or represented by proxy, constitutes a quorum at the Meeting. Shares over
which  broker-dealers  have  discretionary  voting power,  shares that represent
broker  non-votes and shares whose proxies reflect an abstention on any item are
all counted as shares  present and entitled to vote for purposes of  determining
whether the required quorum of shares exists.

Required  Vote.  Approval of  Proposals  1 and 2 require a majority  vote of the
outstanding  shares  present at the  meeting.  Approval of Proposals 3 through 5
requires the affirmative vote of a majority of the outstanding voting securities
of the Fund voting in the  aggregate  and not by class.  Proposal 6 requires the
affirmative vote of a majority of the outstanding  Class C shares. As defined in
the 1940 Act, the vote of a majority of the outstanding shares means the vote of
(1) 67% or more of the Fund's  outstanding  shares present at a meeting,  if the
holders of more than 50% of the  outstanding  shares of the Fund are  present or
represented  by proxy;  or (2) more than 50% of the Fund's  outstanding  shares,
whichever is less.

If a  shareholder  executes  and returns a proxy but fails to  indicate  how the
votes  should be cast,  the proxy will be voted in favor of the election of each
of the nominees  named in this Proxy  Statement for Trustee and in favor of each
Proposal.

You may revoke your previously  granted proxy at any time before it is exercised
(1) by delivering a written  notice to the Fund  expressly  revoking your proxy,
(2) by  signing  and  forwarding  to the  Fund a  later-dated  proxy,  or (3) by
attending the Meeting and casting your votes in person.

Shareholder Proposals.  The Fund is not required to hold shareholder meetings on
a regular basis.  Special  meetings of  shareholders  may be called from time to
time by either  the Fund or the  shareholders  (for  certain  matters  and under
special conditions described in the Statement of Additional Information).  Under
the proxy rules of the Securities and Exchange Commission, shareholder proposals
which meet certain  conditions may be included in a Fund's proxy statement for a
particular  meeting.   Those  rules  require  that  for  future  meetings,   the
shareholder  must be a record or beneficial owner of Fund shares either (i) with
a value of at least $2,000 or (ii) in an amount  representing at least 1% of the
Fund's securities to be voted, at the time the proposal is submitted and for one
year prior  thereto,  and must  continue to own such shares  through the date on
which the meeting is held. Another  requirement relates to the timely receipt by
the Fund of any such  proposal.  Under those  rules,  a proposal  submitted  for
inclusion in the Fund's proxy material for the next meeting after the meeting to
which this proxy  statement  relates  must be received by the Fund a  reasonable
time before the solicitation is made. The fact that the Fund receives a proposal
from a qualified shareholder in a timely manner does not ensure its inclusion in
the proxy material, since there are other requirements under the proxy rules for
such inclusion.

                                  OTHER MATTERS

      The Board does not intend to bring any matters  before the  Meeting  other
than  Proposals  1 through 6 and the Board and the  Manager are not aware of any
other  matters to be brought  before the  Meeting by others.  Since  matters not
known at the time of the solicitation may come before the Meeting,  the proxy as
solicited  confers  discretionary  authority  with  respect  to such  matters as
properly come before the Meeting,  including  any  adjournment  or  adjournments
thereof,  and it is the intention of the persons named as  attorneys-in-fact  in
the proxy to vote the proxy in accordance with their judgment on such matters.

      In the event  sufficient votes in favor of one or more Proposals set forth
in the Notice of Meeting of  Shareholders  are not  received  by the date of the
Meeting,  the  persons  named in the  enclosed  proxy  may  propose  one or more
adjournments  of the  Meeting.  If a quorum is present but  sufficient  votes in
favor of one or more of the Proposals have not been received,  the persons named
as proxies may propose one or more adjournments of the Meeting to permit further
solicitation of proxies with respect to any such proposal.
All such adjournments will require the affirmative vote
of a majority of the shares  present in person or by proxy at the session of the
Meeting to be adjourned.  A vote may be taken on one or more of the proposals in
this proxy statement prior to any such  adjournment if sufficient  votes for its
approval have been received and it is otherwise appropriate.

                               By Order of the Board of Trustees,



                               Andrew J. Donohue, Secretary
                                  June __, 2000



burns\proxies\190__2000rev


<PAGE>


                   AMENDED AND RESTATED DECLARATION OF TRUST

                                       OF

                        OPPENHEIMER CHAMPION INCOME FUND


      This  DECLARATION OF TRUST,  made as of the 2nd day of June,  1998, by and
among the individuals  executing this Declaration of Trust as the Trustees,  and
amended and restated this ___ day of ___________, 2000.

      WHEREAS, the Trustees wish to establish a trust fund under the laws of the
Commonwealth  of  Massachusetts,  for the investment and  reinvestment  of funds
contributed thereto;

      NOW,  THEREFORE,   the  Trustees  declare  that  all  money  and  property
contributed  to the trust fund  hereunder  shall be held and managed  under this
Declaration of Trust in trust as herein set forth below.

      ARTICLE FIRST - NAME

      This Trust shall be known as OPPENHEIMER CHAMPION INCOME FUND. The address
of  Oppenheimer  Champion  Income Fund is 6803 South Tucson Way,  Englewood,  CO
80112. The Registered  Agent for Service is Massachusetts  Mutual Life Insurance
Company, 1295 State Street, Springfield, Massachusetts 01111, Attention: Stephen
Kuhn, Esq.

      ARTICLE SECOND - DEFINITIONS

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

      1. All terms used in this  Declaration  of Trust  that are  defined in the
1940 Act (defined below) shall have the meanings given to them in the 1940 Act.

      2. "1940 Act" refers to the  Investment  Company Act of 1940 and the Rules
and Regulations of the Commission thereunder, all as amended from time to time.

      3.  "Board" or "Board of Trustees"  or the  "Trustees"  means the Board of
Trustees of the Trust.

      4. "By-Laws" means the By-Laws of the Trust as amended from time to time.

      5.  "Class"  means a class of a series of shares of the Trust  established
and designated under or in accordance with the provisions of Article FOURTH.

      6. "Commission" means the Securities and Exchange Commission.

7.         "Declaration   of  Trust"   shall  mean  this  Amended  and  Restated
           Declaration  of Trust as it may be amended or  restated  from time to
           time.

8. "Majority  Vote of  Shareholders"  shall mean,  with respect to any matter on
which the Shares of the Trust or of a Series or Class  thereof,  as the case may
be, may be voted, the "vote of a majority of the outstanding  voting securities"
(as  defined  in the 1940 Act or the rules  and  regulations  of the  Commission
thereunder) of the Trust or such Series or Class, as the case may be.

      9. "Net asset value" means,  with respect to any Share of any Series,  (i)
in the case of a Share of a Series whose  Shares are not divided  into  Classes,
the  quotient  obtained by  dividing  the value of the net assets of that Series
(being the value of the assets  belonging  to that Series  less the  liabilities
belonging  to that  Series)  by the  total  number  of  Shares  of  that  Series
outstanding,  and (ii) in the case of a Share of a Class of  Shares  of a Series
whose Shares are divided  into  Classes,  the quotient  obtained by dividing the
value of the net assets of that Series  allocable to such Class (being the value
of the  assets  belonging  to that  Series  allocable  to such  Class  less  the
liabilities belonging to such Class) by the total number of Shares of such Class
outstanding;  all  determined  in  accordance  with the methods and  procedures,
including without limitation those with respect to rounding,  established by the
Trustees from time to time.

      10.  "Series"  refers to series  of  shares of the Trust  established  and
designated under or in accordance with the provisions of Article FOURTH.

      11. "Shareholder" means a record owner of Shares of the Trust.

      12. "Shares" refers to the  transferable  units of interest into which the
beneficial  interest  in the  Trust or any  Series or Class of the Trust (as the
context may require)  shall be divided from time to time and includes  fractions
of Shares as well as whole Shares.

      13.  "Trust"  refers to the  Massachusetts  business trust created by this
Declaration of Trust, as amended or restated from time to time.

      14.  "Trustees"  refers to the  individual  trustees in their  capacity as
trustees  hereunder of the Trust and their  successor or successors for the time
being in office as such trustees.

      ARTICLE THIRD - PURPOSE OF TRUST

      The purpose or purposes  for which the Trust is formed and the business or
objects to be transacted, carried on and promoted by it are as follows:

      1. To hold,  invest or reinvest its funds, and in connection  therewith to
hold part or all of its funds in cash,  and to  purchase or  otherwise  acquire,
hold for investment or otherwise,  sell, lend, pledge,  mortgage,  write options
on,  lease,  sell short,  assign,  negotiate,  transfer,  exchange or  otherwise
dispose  of  or  turn  to  account  or  realize  upon,  securities  (which  term
"securities"  shall for the  purposes  of this  Declaration  of  Trust,  without
limitation of the generality thereof,  be deemed to include any stocks,  shares,
bonds,  financial futures contracts,  indexes,  debentures,  notes, mortgages or
other obligations, and any certificates, receipts, warrants or other instruments
representing  rights  to  receive,  purchase  or  subscribe  for  the  same,  or
evidencing  or  representing  any other rights or interests  therein,  or in any
property or assets)  created or issued by any issuer (which term "issuer"  shall
for the  purposes  of this  Declaration  of  Trust,  without  limitation  of the
generality  thereof,  be deemed to include  any  persons,  firms,  associations,
corporations,  syndicates, business trusts, partnerships,  investment companies,
combinations,  organizations,  governments,  or  subdivisions  thereof)  and  in
financial   instruments   (whether   they  are   considered   as  securities  or
commodities); and to exercise, as owner or holder of any securities or financial
instruments, all rights, powers and privileges in respect thereof; and to do any
and all  acts and  things  for the  preservation,  protection,  improvement  and
enhancement in value of any or all such securities or financial instruments.

      2. To borrow money and pledge assets in connection with any of the objects
or purposes of the Trust,  and to issue  notes or other  obligations  evidencing
such  borrowings,  to the extent  permitted  by the 1940 Act and by the  Trust's
fundamental investment policies under the 1940 Act.

      3. To issue and sell its Shares in such Series and Classes and amounts and
on such terms and  conditions,  for such purposes and for such amount or kind of
consideration   (including  without  limitation  thereto,   securities)  now  or
hereafter permitted by the laws of the Commonwealth of Massachusetts and by this
Declaration of Trust, as the Trustees may determine.

      4. To purchase or otherwise acquire,  hold, dispose of, resell,  transfer,
reissue,  redeem or cancel its Shares, or to classify or reclassify any unissued
Shares or any Shares  previously  issued and  reacquired  of any Series or Class
into one or more Series or Classes that may have been established and designated
from time to time,  all without the vote or consent of the  Shareholders  of the
Trust,  in any  manner  and to the extent  now or  hereafter  permitted  by this
Declaration of Trust.

      5. To conduct its  business in all its  branches at one or more offices in
New York,  Colorado and elsewhere in any part of the world,  without restriction
or limit as to extent.

      6. To  carry  out all or any of the  foregoing  objects  and  purposes  as
principal  or  agent,  and  alone or with  associates  or to the  extent  now or
hereafter  permitted  by the laws of  Massachusetts,  as a member  of, or as the
owner or holder of any securities or other  instruments of, or share of interest
in, any issuer, and in connection  therewith or make or enter into such deeds or
contracts  with any issuers and to do such acts and things and to exercise  such
powers, as a natural person could lawfully make, enter into, do or exercise.

      7. To do any and all such  further acts and things and to exercise any and
all such further powers as may be necessary,  incidental,  relative,  conducive,
appropriate or desirable for the  accomplishment,  carrying out or attainment of
all or any of the foregoing purposes or objects.

      The foregoing  objects and purposes shall,  except as otherwise  expressly
provided, be in no way limited or restricted by reference to, or inference from,
the terms of any other clause of this or any other  Article of this  Declaration
of Trust,  and shall each be regarded as independent  and construed as powers as
well as objects and purposes, and the enumeration of specific purposes,  objects
and powers shall not be construed to limit or restrict in any manner the meaning
of general terms or the general  powers of the Trust now or hereafter  conferred
by the laws of the Commonwealth of Massachusetts nor shall the expression of one
thing be deemed to  exclude  another,  though it be of a similar  or  dissimilar
nature, not expressed;  provided, however, that the Trust shall not carry on any
business, or exercise any powers, in any state,  territory,  district or country
except to the extent that the same may lawfully be carried on or exercised under
the laws thereof.

      ARTICLE FOURTH - SHARES

      1. The beneficial  interest in the Trust shall be divided into Shares, all
with $.001 par value per share,  but the Trustees  shall have the authority from
time to time,  without  obtaining  shareholder  approval,  to create one or more
Series  of  Shares  in  addition  to the  Series  specifically  established  and
designated  in part 3 of this  Article  FOURTH,  and to divide the shares of any
Series into two or more Classes  pursuant to part 2 of this Article FOURTH,  all
as they deem necessary or desirable,  to establish and designate such Series and
Classes, and to fix and determine the relative rights and preferences as between
the  different  Series of Shares or  Classes as to right of  redemption  and the
price,  terms and manner of redemption,  liabilities and expenses to be borne by
any Series or Class,  special  and  relative  rights as to  dividends  and other
distributions   and  on  liquidation,   sinking  or  purchase  fund  provisions,
conversion on liquidation,  conversion  rights,  and conditions  under which the
several  Series or Classes  shall  have  individual  voting  rights or no voting
rights.  Except as  established  by the Trustees  with respect to such Series or
Classes,  pursuant  to the  provisions  of this  Article  FOURTH,  and except as
otherwise  provided herein,  all Shares of the different Series and Classes of a
Series, if any, shall be identical.

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

           (b) The  establishment  and designation of any Series or any Class of
any Series in  addition to that  established  and  designated  in part 3 of this
Article FOURTH shall be effective upon either (i) the execution by a majority of
the Trustees of an instrument  setting forth such  establishment and designation
and the  relative  rights and  preferences  of such Series or such Class of such
Series,  whether directly in such instrument or by reference to, or approval of,
another  document that sets forth such relative  rights and  preferences  of the
Series  or  any  Class  of  any  Series  including,   without  limitation,   any
registration statement of the Trust, (ii) upon the execution of an instrument in
writing  by an officer of the Trust  pursuant  to the vote of a majority  of the
Trustees, or (iii) as otherwise provided in either such instrument.  At any time
that  there  are  no  Shares  outstanding  of any  particular  Series  or  Class
previously  established  and  designated,  the  Trustees  may  by an  instrument
executed by a majority of their number or by an officer of the Trust pursuant to
a vote of a  majority  of the  Trustees  abolish  that  Series  or Class and the
establishment  and  designation  thereof.  Each  instrument  referred to in this
paragraph shall be an amendment to this  Declaration of Trust,  and the Trustees
may make any such amendment without shareholder approval.

           (c) Any  Trustee,  officer  or  other  agent  of the  Trust,  and any
organization  in which any such person is interested may acquire,  own, hold and
dispose  of Shares of any Series or Class of any Series of the Trust to the same
extent as if such  person  were not a  Trustee,  officer  or other  agent of the
Trust;  and the Trust may issue and sell or cause to be issued  and sold and may
purchase Shares of any Series or Class of any Series from any such person or any
such organization subject only to the general limitations, restrictions or other
provisions  applicable to the sale or purchase of Shares of such Series or Class
generally.

      2. (a) Classes.  The Trustees shall have the exclusive authority from time
to time,  without obtaining  shareholder  approval,  to divide the Shares of any
Series into two or more  Classes as they deem  necessary  or  desirable,  and to
establish and  designate  such  Classes.  In such event,  each Class of a Series
shall  represent  interests in the designated  Series of the Trust and have such
voting,  dividend,  liquidation  and  other  rights  as may be  established  and
designated  by the  Trustees.  Expenses  and  liabilities  related  directly  or
indirectly  to the  Shares  of a Class of a Series  may be borne  solely by such
Class (as shall be determined by the Trustees)  and, as provided in this Article
FOURTH. The bearing of expenses and liabilities solely by a Class of Shares of a
Series  shall  be  appropriately  reflected  (in the  manner  determined  by the
Trustees) in the net asset value,  dividend and liquidation rights of the Shares
of such Class of a Series.  The  division of the Shares of a Series into Classes
and the terms and  conditions  pursuant  to which the Shares of the Classes of a
Series will be issued must be made in compliance  with the 1940 Act. No division
of Shares of a Series into  Classes  shall  result in the creation of a Class of
Shares having a preference as to dividends or  distributions  or a preference in
the event of any  liquidation,  termination  or winding up of the Trust,  to the
extent such a preference  is  prohibited by Section 18 of the 1940 Act as to the
Trust.  The  fact  that a Series  shall  have  initially  been  established  and
designated  without any specific  establishment or designation of Classes (i.e.,
that all  Shares of such  Series are  initially  of a single  Class),  or that a
Series shall have more than one  established  and  designated  Class,  shall not
limit the authority of the Trustees to establish and designate separate Classes,
or one or more  additional  Classes,  of said  Series  without  approval  of the
holders of the initial Class thereof,  or previously  established and designated
Class or Classes thereof.

           (b) Class  Differences.  The relative  rights and  preferences of the
Classes of any Series may differ in such  other  respects  as the  Trustees  may
determine  to be  appropriate  in their  sole  discretion,  provided  that  such
differences are set forth in the instrument  establishing  and designating  such
Classes and executed by a majority of the Trustees (or by an instrument executed
by an officer of the Trust pursuant to a vote of a majority of the Trustees).

      The relative  rights and  preferences of each Class of Shares shall be the
same in all  respects  except  that,  and unless and until the Board of Trustees
shall  determine  otherwise:  (i) when a vote of  Shareholders is required under
this  Declaration  of Trust or when a meeting of  Shareholders  is called by the
Board of Trustees,  the Shares of a Class shall vote exclusively on matters that
affect that Class only;  (ii) the  expenses and  liabilities  related to a Class
shall be borne solely by such Class (as  determined  and allocated to such Class
by the Trustees from time to time in a manner  consistent  with parts 2 and 3 of
this Article FOURTH); and (iii) pursuant to part 10 of Article NINTH, the Shares
of each Class shall have such other rights and preferences as are set forth from
time to time in the then  effective  prospectus  and/or  statement of additional
information relating to the Shares. Dividends and distributions on each Class of
Shares may differ from the dividends and  distributions on any other such Class,
and the net asset  value of each Class of Shares  may differ  from the net asset
value of any other such Class.

      3. Without limiting the authority of the Trustees set forth in parts 1 and
2 of this  Article  FOURTH to  establish  and  designate  any further  Series or
Classes of Series, the Trustees hereby establish one Series of Shares having the
same name as the Trust,  and said  Shares  shall be divided  into four  Classes,
which shall be designated  Class A, Class B, Class C and Class Y. In addition to
the rights and  preferences  described in parts 1 and 2 of this  Article  FOURTH
with respect to Series and Classes,  the Series and Classes  established  hereby
shall have the relative rights and preferences  described in this part 3 of this
Article FOURTH.  The Shares of any Series or Class that may from time to time be
established and designated by the Trustees shall (unless the Trustees  otherwise
determine with respect to some Series or Classes at the time of establishing and
designating the same) have the following relative rights and preferences:

           (a) Assets Belonging to Series or Class. All  consideration  received
by the Trust for the issue or sale of Shares of a particular Series or any Class
thereof,  together  with all assets in which such  consideration  is invested or
reinvested,  all income, earnings,  profits, and proceeds thereof, including any
proceeds derived from the sale,  exchange or liquidation of such assets, and any
funds or payments  derived from any  reinvestment  of such  proceeds in whatever
form  the same may be,  shall  irrevocably  belong  to that  Series  (and may be
allocated to any Classes  thereof) for all purposes,  subject only to the rights
of  creditors,  and shall be so recorded upon the books of account of the Trust.
Such consideration,  assets,  income,  earnings,  profits, and proceeds thereof,
including any proceeds  derived from the sale,  exchange or  liquidation of such
assets,  and any  funds  or  payments  derived  from  any  reinvestment  of such
proceeds,  in whatever  form the same may be,  together  with any General  Items
allocated  to that  Series as  provided in the  following  sentence,  are herein
referred to as "assets  belonging  to" that Series.  In the event that there are
any assets, income, earnings,  profits, and proceeds thereof, funds, or payments
which  are not  readily  identifiable  as  belonging  to any  particular  Series
(collectively  "General Items"),  the Trustees shall allocate such General Items
to and among any one or more of the Series  established and designated from time
to time in such manner and on such basis as they, in their sole discretion, deem
fair and  equitable;  and any General Items so allocated to a particular  Series
shall belong to that Series (and be allocable to any Classes thereof). Each such
allocation by the Trustees shall be conclusive and binding upon the Shareholders
of all Series (and any Classes  thereof) for all  purposes.  No  Shareholder  or
former  Shareholder of any Series or Class shall have a claim on or any right to
any assets allocated or belonging to any other Series or Class.

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

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

           (c) Dividends.  Dividends and distributions on Shares of a particular
Series or Class may be paid to the  holders  of Shares of that  Series or Class,
with  such  frequency  as the  Trustees  may  determine,  which  may be daily or
otherwise pursuant to a standing  resolution or resolutions adopted only once or
with such  frequency  as the Trustees  may  determine,  from such of the income,
capital  gains  accrued or realized,  and capital and  surplus,  from the assets
belonging  to that Series,  or in the case of a Class,  belonging to such Series
and  being  allocable  to such  Class,  as the  Trustees  may  determine,  after
providing for actual and accrued liabilities  belonging to such Series or Class.
All dividends and  distributions on Shares of a particular Series or Class shall
be  distributed  pro  rata  to the  Shareholders  of such  Series  or  Class  in
proportion  to the  number  of  Shares  of such  Series  or  Class  held by such
Shareholders at the date and time of record  established for the payment of such
dividends  or  distributions,  except that in  connection  with any  dividend or
distribution program or procedure the Trustees may determine that no dividend or
distribution  shall be payable on Shares as to which the Shareholder's  purchase
order and/or payment have not been received by the time or times  established by
the Trustees under such program or procedure.  Such dividends and  distributions
may be made in cash or Shares of that Series or Class or a  combination  thereof
as  determined  by the Trustees or pursuant to any program that the Trustees may
have in effect at the time for the election by each  Shareholder  of the mode of
the  making of such  dividend  or  distribution  to that  Shareholder.  Any such
dividend  or  distribution  paid in Shares  will be paid at the net asset  value
thereof  as  determined  in  accordance   with  part  13  of  Article   SEVENTH.
Notwithstanding  anything  in this  Declaration  of Trust to the  contrary,  the
Trustees  may at any time  declare and  distribute  a dividend of stock or other
property pro rata among the Shareholders of a particular  Series or Class at the
date and  time of  record  established  for the  payment  of such  dividends  or
distributions.

           (d)  Liquidation.  In the event of the  liquidation or dissolution of
the Trust or any Series or Class thereof,  the  Shareholders  of each Series and
all Classes of each Series that have been  established  and  designated  and are
being  liquidated  and  dissolved  shall be entitled to receive,  as a Series or
Class, when and as declared by the Trustees,  the excess of the assets belonging
to that  Series  or,  in the  case of a  Class,  belonging  to that  Series  and
allocable to that Class, over the liabilities belonging to that Series or Class.
Upon the liquidation or dissolution of the Trust or any Series or Class pursuant
to this part 3(d) of this Article FOURTH the Trustees shall make  provisions for
the payment of all outstanding obligations, taxes and other liabilities, accrued
or contingent, of the Trust or that Series or Class. The assets so distributable
to the  Shareholders  of any  particular  Class and Series shall be  distributed
among such  Shareholders  in  proportion to the relative net asset value of such
Shares.  The liquidation of the Trust or any particular  Series or Class thereof
may be  authorized  at any  time  by  vote  of a  majority  of the  Trustees  or
instrument  executed by a majority of their number then in office,  provided the
Trustees find that it is in the best interest of the Shareholders of such Series
or Class or as otherwise provided in this Declaration of Trust or the instrument
establishing  such Series or Class. The Trustees shall provide written notice to
affected  shareholders  of a termination  effected  under this part 3(d) of this
Article FOURTH.

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

           (f)  Equality.  Except  as  provided  herein  or  in  the  instrument
designating  and  establishing  any Series or Class,  all Shares of a particular
Series or Class shall  represent an equal  proportionate  interest in the assets
belonging  to that Series,  or in the case of a Class,  belonging to that Series
and  allocable  to that Class,  (subject to the  liabilities  belonging  to that
Series or that Class), and each Share of any particular Series or Class shall be
equal to each other Share of that Series or Class;  but the  provisions  of this
sentence  shall not restrict  any  distinctions  permissible  under this Article
FOURTH  that may exist  with  respect  to Shares of the  different  Classes of a
Series.  The  Trustees may from time to time divide or combine the Shares of any
particular  Class or Series  into a greater  or lesser  number of Shares of that
Class or Series  provided that such division or combination  does not change the
proportionate  beneficial  interest  in the assets  belonging  to that Series or
allocable  to that  Class or in any way affect the rights of Shares of any other
Class or Series.

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

           (h) Conversion Rights. Subject to compliance with the requirements of
the 1940 Act, the Trustees  shall have the authority to provide that (i) holders
of Shares of any Series shall have the right to exchange said Shares into Shares
of one or more other Series of Shares, (ii) holders of shares of any Class shall
have the right to exchange  said Shares into Shares of one or more other Classes
of the same or a different  Series,  and/or (iii) the Trust shall have the right
to carry out  exchanges of the aforesaid  kind, in each case in accordance  with
such requirements and procedures as may be established by the Trustees.

           (i) Ownership of Shares. The ownership of Shares shall be recorded on
the books of the Trust or of a transfer  or similar  agent for the Trust,  which
books  shall be  maintained  separately  for the Shares of each Class and Series
that has been  established  and  designated.  No  certification  certifying  the
ownership  of  Shares  need be  issued  except  as the  Trustees  may  otherwise
determine  from time to time.  The Trustees may make such rules as they consider
appropriate  for the  issuance  of  Share  certificates,  the  use of  facsimile
signatures,  the transfer of Shares and similar matters. The record books of the
Trust as kept by the Trust or any transfer or similar agent, as the case may be,
shall be  conclusive  as to who are the  Shareholders  and as to the  number  of
Shares of each Class and Series held from time to time by each such Shareholder.

           (j) Investments in the Trust. The Trustees may accept  investments in
the Trust from such  persons and on such terms and for such  consideration,  not
inconsistent  with the  provisions  of the 1940  Act,  as they from time to time
authorize or determine.  Such investments may be in the form of cash, securities
or other property in which the appropriate Series is authorized to invest,  hold
or own,  valued as  provided  in part 13,  Article  SEVENTH.  The  Trustees  may
authorize any distributor,  principal underwriter,  custodian, transfer agent or
other person to accept orders for the purchase or sale of Shares that conform to
such  authorized  terms and to reject  any  purchase  or sale  orders for Shares
whether or not conforming to such authorized terms.

      ARTICLE FIFTH - SHAREHOLDERS' VOTING POWERS AND MEETINGS

      The following  provisions are hereby adopted with respect to voting Shares
of the Trust and certain other rights:

      1. The Shareholders shall have the power to vote only (a) for the election
of Trustees when that issue is submitted to Shareholders, or removal of Trustees
to the  extent  and as  provided  in  Article  SIXTH,  (b) with  respect  to the
amendment of this Declaration of Trust to the extent and as provided in part 12,
Article  NINTH,  (c) with respect to  transactions  with respect to the Trust, a
Series or Class as provided in part 4(a),  Article NINTH, (d) to the same extent
as the shareholders of a Massachusetts  business  corporation,  as to whether or
not a court  action,  proceeding  or  claim  should  be  brought  or  maintained
derivatively  or as a class  action on behalf of the Trust any Series,  Class or
the Shareholders, (e) with respect to those matters relating to the Trust as may
be required by the 1940 Act or required by law, by this Declaration of Trust, or
the By-Laws of the Trust or any  registration  statement of the Trust filed with
the Commission or any State, or as the Trustees may consider desirable,  and (f)
with  respect  to any  other  matter  as to which the  Trustees,  in their  sole
discretion, shall submit to the Shareholders.

      2. The Trust will not hold  shareholder  meetings  unless  required by the
1940 Act, the provisions of this  Declaration of Trust, or any other  applicable
law. The Trustees may call a meeting of shareholders from time to time.

      3. As to each matter submitted to a vote of Shareholders, each Shareholder
shall  be  entitled  to one vote for each  whole  Share  and to a  proportionate
fractional vote for each fractional Share standing in such Shareholder's name on
the books of the Trust  irrespective  of the Series thereof or the Class thereof
and all Shares of all Series and Classes  shall vote together as a single Class;
provided,  however,  that (i) as to any matter with  respect to which a separate
vote of one or more Series or Classes thereof is required by the 1940 Act or the
provisions of the writing establishing and designating the Series or Class, such
requirements  as to a separate  vote by such Series or Class thereof shall apply
in lieu of all Shares of all Series and  Classes  thereof  voting  together as a
single Class;  and (ii) as to any matter which affects only the interests of one
or more particular Series or Classes thereof,  only the holders of Shares of the
one or more affected  Series or Classes  thereof shall be entitled to vote,  and
each such Series or Class shall vote as a separate Class. All Shares of a Series
shall have identical voting rights,  and all Shares of a Class of a Series shall
have identical voting rights. Shares may be voted in person or by proxy. Proxies
may be given by or on behalf of a  Shareholder  orally or in writing or pursuant
to any computerized, telephonic, or mechanical data gathering process.

      4.  Except  as  required  by the  1940 Act or other  applicable  law,  the
presence in person or by proxy of one-third of the Shares entitled to vote shall
be a  quorum  for  the  transaction  of  business  at a  Shareholders'  meeting,
provided,  however,  that if any  action  to be taken by the  Shareholders  of a
Series or Class  requires  an  affirmative  vote of a  majority,  or more than a
majority,  of the Shares  outstanding and entitled to vote, then with respect to
voting  on that  particular  issue  the  presence  in  person or by proxy of the
holders of a majority of the Shares  outstanding  and entitled to vote at such a
meeting shall  constitute a quorum for the  transaction of business with respect
to  such  issue.  Any  number  less  than  a  quorum  shall  be  sufficient  for
adjournments.  If at any meeting of the Shareholders  there shall be less than a
quorum  present with respect to a particular  issue to be voted on, such meeting
may be adjourned,  without further notice,  with respect to such issue from time
to time until a quorum shall be present  with respect to such issue,  but voting
may take place with respect to issues for which a quorum is present. Any meeting
of  Shareholders,  whether or not a quorum is  present,  may be  adjourned  with
respect to any one or more items of business  for any lawful  purpose,  provided
that no  meeting  shall  be  adjourned  for  more  than six  months  beyond  the
originally scheduled date. Any adjourned session or sessions may be held, within
a reasonable time after the date for the original  meeting without the necessity
of further notice. A majority of the Shares voted at a meeting at which a quorum
is present  shall decide any  questions  and a plurality  shall elect a Trustee,
except when a different  vote is  required by any  provision  of the 1940 Act or
other applicable law or by this Declaration of Trust or By-Laws.

      5. Each  Shareholder,  upon request to the Trust in proper form determined
by the Trust,  shall be  entitled  to require  the Trust to redeem  from the net
assets  of that  Series  all or part of the  Shares  of such  Series  and  Class
standing in the name of such Shareholder. The method of computing such net asset
value,  the time at which such net asset value  shall be  computed  and the time
within  which the Trust shall make  payment  therefor,  shall be  determined  as
hereinafter   provided  in  Article  SEVENTH  of  this   Declaration  of  Trust.
Notwithstanding the foregoing, the Trustees, when permitted or required to do so
by the 1940 Act, may suspend the right of the  Shareholders to require the Trust
to redeem Shares.

      6. No  Shareholder  shall,  as such holder,  have any right to purchase or
subscribe  for any  Shares of the Trust  which it may issue or sell,  other than
such right, if any, as the Trustees, in their discretion, may determine.

      7. All persons who shall acquire  Shares shall acquire the same subject to
the provisions of the Declaration of Trust.

      8. Cumulative voting for the election of Trustees shall not be allowed.

      ARTICLE SIXTH - THE TRUSTEES

      1. The persons who shall act as Trustees  until their  successors are duly
chosen and qualify are the trustees  executing this  Declaration of Trust or any
counterpart  thereof.  However,  the  By-Laws of the Trust may fix the number of
Trustees at a number  greater or lesser than the number of initial  Trustees and
may  authorize  the Trustees to increase or decrease the number of Trustees,  to
fill any  vacancies  on the Board which may occur for any reason  including  any
vacancies  created by any such  increase in the number of  Trustees,  to set and
alter the terms of office of the  Trustees  and to lengthen or lessen  their own
terms of  office or make  their  terms of office  of  indefinite  duration,  all
subject  to the 1940 Act,  as  amended  from time to time,  and to this  Article
SIXTH.  Unless otherwise provided by the By-Laws of the Trust, the Trustees need
not be Shareholders.

      2. A Trustee at any time may be removed  either  with or without  cause by
resolution duly adopted by the affirmative  vote of the holders of two-thirds of
the  outstanding  Shares,  present  in  person  or by  proxy at any  meeting  of
Shareholders  called  for such  purpose;  such a meeting  shall be called by the
Trustees  when  requested in writing to do so by the record  holders of not less
than ten per centum of the outstanding  Shares. A Trustee may also be removed by
the Board of Trustees, as provided in the By-Laws of the Trust.

      3. The Trustees  shall make available a list of names and addresses of all
Shareholders as recorded on the books of the Trust,  upon receipt of the request
in writing signed by not less than ten Shareholders  (who have been shareholders
for at least six months) holding in the aggregate  shares of the Trust valued at
not less  than  $25,000  at  current  offering  price  (as  defined  in the then
effective Prospectus and/or Statement of Additional  Information relating to the
Shares  under  the  Securities  Act of 1933,  as  amended  from time to time) or
holding  not less than 1% in amount of the  entire  amount of Shares  issued and
outstanding;  such request must state that such Shareholders wish to communicate
with other  Shareholders with a view to obtaining  signatures to a request for a
meeting  to  take  action  pursuant  to  part 2 of  this  Article  SIXTH  and be
accompanied by a form of communication to the Shareholders. The Trustees may, in
their  discretion,  satisfy their  obligation under this part 3 by either making
available the Shareholder list to such  Shareholders at the principal offices of
the Trust,  or at the  offices of the Trust's  transfer  agent,  during  regular
business hours, or by mailing a copy of such  communication and form of request,
at the expense of such requesting Shareholders,  to all other Shareholders,  and
the Trustees may also take such other action as may be permitted  under  Section
16(c) of the 1940 Act.

      ARTICLE SEVENTH - POWERS OF TRUSTEES

      The following  provisions  are hereby adopted for the purpose of defining,
limiting  and  regulating  the  powers  of  the  Trust,  the  Trustees  and  the
Shareholders.

      1. As soon as any  Trustee  is duly  elected  by the  Shareholders  or the
Trustees and shall have accepted this Trust,  the Trust estate shall vest in the
new Trustee or Trustees,  together  with the  continuing  Trustees,  without any
further act or conveyance, and he or she shall be deemed a Trustee hereunder.

      2. The death, declination, resignation, retirement, removal, or incapacity
of the Trustees, or any one of them, shall not operate to annul or terminate the
Trust or any  Series  but the Trust  shall  continue  in full  force and  effect
pursuant to the terms of this Declaration of Trust.

      3. The  assets  of the Trust  shall be held  separate  and apart  from any
assets now or hereafter held in any capacity other than as Trustee  hereunder by
the Trustees or any successor Trustees.  All of the assets of the Trust shall at
all times be considered as vested in the Trustees. No Shareholder shall have, as
a holder of  beneficial  interest in the Trust,  any  authority,  power or right
whatsoever to transact  business for or on behalf of the Trust,  or on behalf of
the Trustees,  in connection with the property or assets of the Trust, or in any
part thereof.

      4. The  Trustees in all  instances  shall act as  principals,  and are and
shall be free from the control of the Shareholders. The Trustees shall have full
power  and  authority  to do any and all acts and to make  and  execute,  and to
authorize the officers and agents of the Trust to make and execute,  any and all
contracts and  instruments  that they may consider  necessary or  appropriate in
connection with the management of the Trust. Except as otherwise provided herein
or in the 1940 Act,  the  Trustees  shall not in any way be bound or  limited by
present or future laws or customs in regard to Trust investments, but shall have
full  authority and power to make any and all  investments  which they, in their
uncontrolled  discretion and to the same extent as if the Trustees were the sole
owners of the assets of the Trust and the  business  in their own  right,  shall
deem proper to accomplish  the purpose of this Trust.  Subject to any applicable
limitation in this  Declaration of Trust or by the By-Laws of the Trust,  and in
addition to the powers otherwise  granted herein,  the Trustees shall have power
and authority:

           (a) to adopt By-Laws not inconsistent  with this Declaration of Trust
providing  for the conduct of the business of the Trust,  including  meetings of
the  Shareholders  and  Trustees,  and other related  matters,  and to amend and
repeal  them  to  the  extent  that  they  do  not  reserve  that  right  to the
Shareholders;

           (b) to elect and remove such officers and appoint and terminate  such
officers as they consider  appropriate with or without cause, and to appoint and
terminate  agents and consultants and hire and terminate  employees,  any one or
more of the  foregoing  of  whom  may be a  Trustee,  and  may  provide  for the
compensation  of all of the  foregoing;  to appoint and designate from among the
Trustees  or  other  qualified  persons  such  committees  as the  Trustees  may
determine  and to  terminate  any such  committee  and remove any member of such
committee;

           (c) to employ  as  custodian  of any  assets of the Trust one or more
banks,  trust  companies,  companies  that are members of a national  securities
exchange, or any other entity qualified and eligible to act as a custodian under
the 1940 Act, as modified by or interepreted  by any applicable  order or orders
of the Commission or any rules or regulations  adopted or intrepretive  releases
of the  Commission  thereunder,  subject  to any  conditions  set  forth in this
Declaration  of Trust or in the By-Laws,  and may authorize  such  depository or
custodian to employ subcustodians or agents;

           (d) to retain one or more transfer agents and  shareholder  servicing
agents,  or both, and may authorize such transfer agents or servicing  agents to
employ sub-agents;

           (e) to  provide  for the  distribution  of  Shares  either  through a
principal underwriter or the Trust itself or both or otherwise;

           (f) to set  record  dates by  resolution  of the  Trustees  or in the
manner provided for in the By-Laws of the Trust;

           (g) to delegate  such  authority  as they  consider  desirable to any
officers  of the Trust and to any  investment  adviser,  manager,  custodian  or
underwriter, or other agent or independent contractor;

           (h) to vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property held in Trust hereunder; and to
execute and deliver  powers of attorney to or  otherwise  authorize  by standing
policies  adopted by the Trustees,  such person or persons as the Trustees shall
deem proper,  granting to such person or persons such power and discretion  with
relation to securities or property as the Trustees shall deem proper;

           (i) to exercise  powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities held in trust hereunder;

           (j) to hold any  security or property  in a form not  indicating  any
trust,  whether in bearer,  unregistered or other negotiable form, either in its
own name or in the name of a custodian, subcustodian or a nominee or nominees or
otherwise;

           (k) to consent to or participate in any plan for the  reorganization,
consolidation or merger of any corporation or concern,  any security of which is
held in the Trust; to consent to any contract,  lease,  mortgage,  purchase,  or
sale  of  property  by  such  corporation  or  concern,  and  to  pay  calls  or
subscriptions with respect to any security or instrument held in the Trust;

           (l) to join with  other  holders of any  security  or  instrument  in
acting through a committee, depositary, voting trustee or otherwise, and in that
connection to deposit any security or instrument  with, or transfer any security
to, any such  committee,  depositary  or  trustee,  and to delegate to them such
power and authority  with relation to any security  (whether or not so deposited
or transferred)  as the Trustees shall deem proper,  and to agree to pay, and to
pay, such portion of the expenses and compensation of such committee, depositary
or trustee as the Trustees shall deem proper;

           (m)  to sue or be sued in the name of the Trust;

           (n) to compromise,  arbitrate, or otherwise adjust claims in favor of
or against the Trust or any matter in controversy including, but not limited to,
claims for taxes;

           (o) to make, by resolutions  adopted by the Trustees or in the manner
provided  in the  By-Laws,  distributions  of  income  and of  capital  gains to
Shareholders;

           (p) to borrow money and to pledge, mortgage or hypothecate the assets
of the Trust or any part thereof,  to the extent and in the manner  permitted by
the 1940 Act;

           (q) to  enter  into  investment  advisory  or  management  contracts,
subject  to the  1940  Act,  with  any one or more  corporations,  partnerships,
trusts, associations or other persons;

           (r) to make loans of cash and/or  securities  or other  assets of the
Trust;

           (s) to  change  the name of the  Trust or any  Class or Series of the
Trust as they consider appropriate without prior shareholder approval;

           (t) to establish  officers' and Trustees'  fees or  compensation  and
fees or  compensation  for committees of the Trustees to be paid by the Trust or
each Series thereof in such manner and amount as the Trustees may determine;

           (u) to invest all or any portion of the Trust's  assets in any one or
more registered investment companies,  including investment by means of transfer
of such assets in  exchange  for an interest  or  interests  in such  investment
company or investment companies or by any other means approved by the Trustees;

           (v) to determine  whether a minimum and/or maximum value should apply
to accounts  holding shares,  to fix such values and establish the procedures to
cause the involuntary  redemption of accounts that do not satisfy such criteria;
and

           (w) to enter into joint ventures, general or limited partnerships and
any other combinations or associations;

           (x) to  endorse  or  guarantee  the  payment  of any  notes  or other
obligations  of any person;  to make  contracts  of guaranty or  suretyship,  or
otherwise assume liability for payment thereof;

           (y) to  purchase  and pay for  entirely  out of Trust  property  such
insurance  and/or  bonding as they may deem  necessary  or  appropriate  for the
conduct of the  business,  including,  without  limitation,  insurance  policies
insuring the assets of the Trust and payment of  distributions  and principal on
its portfolio  investments,  and insurance  policies  insuring the Shareholders,
Trustees,  officers,   employees,  agents,  consultants,   investment  advisers,
managers, administrators,  distributors,  principal underwriters, or independent
contractors,  or any thereof (or any person connected  therewith),  of the Trust
individually  against  all claims and  liabilities  of every  nature  arising by
reason of  holding,  being or having  held any such  office or  position,  or by
reason of any action alleged to have been taken or omitted by any such person in
any such capacity,  including any action taken or omitted that may be determined
to  constitute  negligence,  whether  or not the Trust  would  have the power to
indemnify such person against such liability;
           (z) to pay pensions for faithful  service,  as deemed  appropriate by
the Trustees,  and to adopt,  establish  and carry out pension,  profit-sharing,
share bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans, trusts and provisions, including the purchasing of life insurance
and  annuity  contracts  as a means  of  providing  such  retirement  and  other
benefits, for any or all of the Trustees,  officers, employees and agents of the
Trust;

           (aa) to adopt on behalf of the Trust or any  Series  with  respect to
any Class thereof a plan of distribution and related agreements thereto pursuant
to the terms of Rule 12b-1 of the 1940 Act and to make  payments from the assets
of the Trust or the relevant Series pursuant to said Rule 12b-1 Plan;

           (bb) to  operate  as and  carry  on the  business  of an  investment
company  and to  exercise  all the  powers  necessary  and  appropriate  to the
conduct of such operations;

           (cc) to issue, sell, repurchase,  redeem,  retire,  cancel,  acquire,
hold, resell, reissue,  dispose of, and otherwise deal in Shares and, subject to
the provisions  set forth in Article FOURTH and part 4, Article FIFTH,  to apply
to any such repurchase, redemption,  retirement,  cancellation or acquisition of
Shares any funds or  property  of the  Trust,  or the  particular  Series of the
Trust, with respect to which such Shares are issued;

           (dd) in general to carry on any other business in connection  with or
incidental to any of the foregoing powers, to do everything necessary,  suitable
or proper for the  accomplishment of any purpose or the attainment of any object
or the  furtherance  of any power  hereinbefore  set forth,  either  alone or in
association  with  others,  and to do every  other  act or thing  incidental  or
appurtenant  to or growing out of or connected  with the  aforesaid  business or
purposes, objects or powers.

      The foregoing  clauses shall be construed  both as objectives  and powers,
and the foregoing  enumeration of specific  powers shall not be held to limit or
restrict in any manner the general powers of the Trustees.  Any action by one or
more of the  Trustees  in their  capacity as such  hereunder  shall be deemed an
action on behalf of the Trust or the  applicable  Series and not an action in an
individual capacity.

      5. No one dealing with the Trustees  shall be under any obligation to make
any  inquiry  concerning  the  authority  of  the  Trustees,  or to  see  to the
application of any payments made or property transferred to the Trustees or upon
their order.

      6. (a) The Trustees shall have no power to bind any Shareholder personally
or to  call  upon  any  Shareholder  for the  payment  of any  sum of  money  or
assessment  whatsoever  other  than  such  as the  Shareholder  may at any  time
personally agree to pay by way of subscription to any Shares or otherwise.  This
paragraph shall not limit the right of the Trustees to assert claims against any
shareholder  based upon the acts or  omissions  of such  shareholder  or for any
other reason.

           (b)  Whenever  this  Declaration  of Trust  calls for or permits  any
action to be taken by the Trustees hereunder,  such action shall mean that taken
by the Board of Trustees by vote of the  majority of a quorum of Trustees as set
forth from time to time in the  By-Laws of the Trust or as  required by the 1940
Act.

           (c) The  Trustees  shall  possess  and  exercise  any  and  all  such
additional  powers as are  reasonably  implied from the powers herein  contained
such as may be  necessary  or  convenient  in the  conduct  of any  business  or
enterprise of the Trust,  to do and perform  anything  necessary,  suitable,  or
proper for the  accomplishment of any of the purposes,  or the attainment of any
one or more of the objects, herein enumerated, or which shall at any time appear
conducive to or expedient for the protection or benefit of the Trust,  and to do
and perform all other acts and things  necessary or  incidental  to the purposes
herein  before  set  forth,  or that may be deemed  necessary  by the  Trustees.
Without limiting the generality of the foregoing,  except as otherwise  provided
herein or in the 1940 Act, the Trustees shall not in any way be bound or limited
by present or future laws or customs in regard to trust  investments,  but shall
have full  authority  and power to make any and all  investments  that they,  in
their discretion, shall deem proper to accomplish the purpose of this Trust.

           (d) The Trustees shall have the power, to the extent not inconsistent
with the 1940 Act, to determine conclusively whether any moneys,  securities, or
other  properties  of the Trust  are,  for the  purposes  of this  Trust,  to be
considered as capital or income and in what manner any expenses or disbursements
are to be borne as between  capital and income  whether or not in the absence of
this provision such moneys, securities, or other properties would be regarded as
capital or income  and  whether or not in the  absence  of this  provision  such
expenses or disbursements would ordinarily be charged to capital or to income.

      7. The  By-Laws of the Trust may  divide the  Trustees  into  classes  and
prescribe the tenure of office of the several  classes,  but no class of Trustee
shall be elected for a period  shorter  than that from the time of the  election
following  the  division  into  classes  until the next  meeting of Trustees and
thereafter for a period shorter than the interval  between  meetings of Trustees
or for a period  longer than five years,  and the term of office of at least one
class shall expire each year.

      8. The  Shareholders  shall,  for any  lawful  purpose,  have the right to
inspect the  records,  documents,  accounts  and books of the Trust,  subject to
reasonable regulations of the Trustees, not contrary to Massachusetts law, as to
whether  and to what  extent,  and at what  times and  places,  and  under  what
conditions and regulations, such right shall be exercised.

      9. Any officer elected or appointed by the Trustees or by the Shareholders
or otherwise, may be removed at any time, with or without cause.

      10. The  Trustees  shall have  power to hold  their  meetings,  to have an
office or offices and,  subject to the provisions of the laws of  Massachusetts,
to keep the books of the Trust  outside of said  Commonwealth  at such places as
may from time to time be designated by them. Action may be taken by the Trustees
without a meeting by unanimous written consent or by telephone or similar method
of communication.

      11.  Securities  held by the Trust shall be voted in person or by proxy by
the President or a  Vice-President,  or such officer or officers of the Trust or
such other  agent of the Trust as the  Trustees  shall  designate  or  otherwise
authorize by standing policies adopted by the Trustees for the purpose,  or by a
proxy or proxies thereunto duly authorized by the Trustees.

      12. (a) Subject to the provisions of the 1940 Act, any Trustee, officer or
employee,  individually,  or any  partnership  of which any Trustee,  officer or
employee  may be a  member,  or any  corporation  or  association  of which  any
Trustee,  officer or employee  may be an officer,  partner,  director,  trustee,
employee or stockholder,  or otherwise may have an interest,  may be a party to,
or may be pecuniarily or otherwise interested in, any contract or transaction of
the Trust, and in the absence of fraud no contract or other transaction shall be
thereby affected or invalidated;  provided that in such case a Trustee,  officer
or employee or a  partnership,  corporation  or  association of which a Trustee,
officer  or  employee  is a member,  officer,  director,  trustee,  employee  or
stockholder  is so  interested,  such fact shall be disclosed or shall have been
known to the Trustees including those Trustees who are not so interested and who
are neither  "interested" nor "affiliated" persons as those terms are defined in
the 1940 Act, or a majority  thereof;  and any Trustee who is so interested,  or
who is also a director,  officer,  partner,  trustee, employee or stockholder of
such other  corporation or a member of such partnership or association  which is
so interested,  may be counted in  determining  the existence of a quorum at any
meeting of the Trustees which shall  authorize any such contract or transaction,
and may vote thereat to authorize  any such contract or  transaction,  with like
force and effect as if he were not so interested.

           (b) Specifically,  but without limitation of the foregoing, the Trust
may enter into a management  or  investment  advisory  contract or  underwriting
contract  and other  contracts  with,  and may  otherwise  do business  with any
manager or investment adviser for the Trust and/or principal  underwriter of the
Shares  of the Trust or any  subsidiary  or  affiliate  of any such  manager  or
investment adviser and/or principal  underwriter and may permit any such firm or
corporation  to enter into any  contracts or other  arrangements  with any other
firm or corporation  relating to the Trust  notwithstanding that the Trustees of
the Trust may be composed in part of partners,  directors, officers or employees
of any such firm or corporation,  and officers of the Trust may have been or may
be or become  partners,  directors,  officers or  employees  of any such firm or
corporation,  and in the  absence  of  fraud  the  Trust  and any  such  firm or
corporation may deal freely with each other, and no such contract or transaction
between the Trust and any such firm or  corporation  shall be  invalidated or in
any way  affected  thereby,  nor shall any  Trustee  or  officer of the Trust be
liable to the Trust or to any  Shareholder  or creditor  thereof or to any other
person for any loss incurred by it or him solely because of the existence of any
such contract or  transaction;  provided  that nothing  herein shall protect any
director or officer of the Trust  against any  liability  to the trust or to its
security  holders  to which he would  otherwise  be subject by reason of willful
misfeasance,  bad faith,  gross  negligence or reckless  disregard of the duties
involved in the conduct of his office.

           (c) As used in this  paragraph  the  following  terms  shall have the
meanings set forth below:

                (i) the term  "indemnitee"  shall  mean any  present  or  former
Trustee,  officer or  employee  of the  Trust,  any  present or former  Trustee,
partner,  Director  or officer of another  trust,  partnership,  corporation  or
association  whose  securities  are or were  owned by the  Trust or of which the
Trust is or was a  creditor  and who  served or serves in such  capacity  at the
request of the Trust, and the heirs, executors,  administrators,  successors and
assigns of any of the foregoing;  however,  whenever conduct by an indemnitee is
referred to, the conduct  shall be that of the original  indemnitee  rather than
that of the heir, executor, administrator, successor or assignee;

                (ii) the term "covered  proceeding"  shall mean any  threatened,
pending or  completed  action,  suit or  proceeding,  whether  civil,  criminal,
administrative or investigative,  to which an indemnitee is or was a party or is
threatened  to be made a party by reason of the fact or facts  under which he or
it is an indemnitee as defined above;

                (iii)the   term   "disabling   conduct"   shall   mean   willful
misfeasance,  bad faith,  gross  negligence or reckless  disregard of the duties
involved in the conduct of the office in question;

                (iv) the term "covered expenses" shall mean expenses  (including
attorney's fees),  judgments,  fines and amounts paid in settlement actually and
reasonably  incurred by an indemnitee in connection  with a covered  proceeding;
and

                (v) the term  "adjudication  of liability" shall mean, as to any
covered proceeding and as to any indemnitee,  an adverse determination as to the
indemnitee whether by judgment, order, settlement,  conviction or upon a plea of
nolo contendere or its equivalent.

           (d) The Trust  shall not  indemnify  any  indemnitee  for any covered
expenses  in any  covered  proceeding  if  there  has  been an  adjudication  of
liability  against  such  indemnitee  expressly  based on a finding of disabling
conduct.

           (e)  Except as set forth in  paragraph  (d)  above,  the Trust  shall
indemnify any indemnitee for covered expenses in any covered proceeding, whether
or not  there  is an  adjudication  of  liability  as to such  indemnitee,  such
indemnification  by the  Trust  to be to the  fullest  extent  now or  hereafter
permitted  by any  applicable  law  unless the  By-laws  limit or  restrict  the
indemnification  to which any indemnitee may be entitled.  The Board of Trustees
may adopt by-law provisions to implement subparagraphs (c), (d) and (e) hereof.

           (f) Nothing  herein  shall be deemed to affect the right of the Trust
and/or any  indemnitee to acquire and pay for any insurance  covering any or all
indemnities  to the extent  permitted by  applicable  law or to affect any other
indemnification  rights to which any  indemnitee  may be  entitled to the extent
permitted by applicable law. Such rights to indemnification shall not, except as
otherwise provided by law, be deemed exclusive of any other rights to which such
indemnitee may be entitled under any statute, By-Law, contract or otherwise.

      13. The Trustees are empowered, in their absolute discretion, to establish
the bases or times,  or both, for  determining  the net asset value per Share of
any  Class and  Series  in  accordance  with the 1940 Act and to  authorize  the
voluntary purchase by any Class and Series, either directly or through an agent,
of Shares of any Class and Series  upon such terms and  conditions  and for such
consideration  as the Trustees shall deem advisable in accordance  with the 1940
Act.

      14.  Payment  of the net asset  value  per  Share of any Class and  Series
properly  surrendered  to it for  redemption  shall be made by the Trust  within
seven days, or as specified in any applicable law or regulation, after tender of
such stock or request for redemption to the Trust for such purpose together with
any additional documentation that may be reasonably required by the Trust or its
transfer  agent to evidence the  authority of the tenderor to make such request,
plus any period of time  during  which the right of the holders of the shares of
such Class of that  Series to require  the Trust to redeem  such shares has been
suspended. Any such payment may be made in portfolio securities of such Class of
that  Series  and/or in cash,  as the  Trustees  shall  deem  advisable,  and no
Shareholder  shall have a right,  other than as determined  by the Trustees,  to
have Shares redeemed in kind.

      15. The Trust shall have the right,  at any time,  without prior notice to
the  Shareholder  to redeem Shares of the Class and Series held by a Shareholder
held in any account  registered in the name of such  Shareholder for its current
net  asset  value,  for any  reason,  including,  but not  limited  to,  (i) the
determination  that such redemption is necessary to reimburse either that Series
or Class of the Trust or the distributor  (i.e.,  principal  underwriter) of the
Shares  for any loss  either  has  sustained  by reason of the  failure  of such
Shareholder  to make timely and good payment for Shares  purchased or subscribed
for  by  such  Shareholder,   regardless  of  whether  such  Shareholder  was  a
Shareholder at the time of such purchase or subscription,  (ii) the failure of a
Shareholder  to supply a tax  identification  number if required to do so, (iii)
the failure of a  Shareholder  to pay when due for the purchase of Shares issued
to him and subject to and upon such terms and  conditions  as the  Trustees  may
from time to time prescribe,  (iv) pursuant to authorization by a Shareholder to
pay fees or make other payments to one or more third parties, including, without
limitation,  any affiliate of the investment  adviser of the Trust or any Series
thereof,  or (v) if the  aggregate  net  asset  value  of  all  Shares  of  such
Shareholder  (taken at cost or  value,  as  determined  by the  Board)  has been
reduced below an amount  established  by the Board of Trustees from time to time
as the minimum amount required to be maintained by Shareholders.




      ARTICLE EIGHTH - LICENSE

      The name "Oppenheimer" included in the name of the Trust and of any Series
shall  be  used  pursuant  to  a   royalty-free,   non-exclusive   license  from
OppenheimerFunds,  Inc.  ("OFI"),  incidental  to and as part of any one or more
advisory,  management or supervisory  contracts which may be entered into by the
Trust with OFI.  Such  license  shall  allow OFI to inspect  and  subject to the
control of the Board of  Trustees  to control the nature and quality of services
offered by the Trust under such name.  The license may be terminated by OFI upon
termination  of such advisory,  management or  supervisory  contracts or without
cause upon 60 days'  written  notice,  in which case  neither  the Trust nor any
Series or Class shall have any further  right to use the name  "Oppenheimer"  in
its name or  otherwise  and the Trust,  the  Shareholders  and its  officers and
Trustees shall promptly take whatever action may be necessary to change its name
and the names of any Series or Classes accordingly.

      ARTICLE NINTH - MISCELLANEOUS:

      1. In case  any  Shareholder  or  former  Shareholder  shall be held to be
personally liable solely by reason of his being or having been a Shareholder and
not because of his acts or omissions or for some other reason,  the  Shareholder
or former Shareholder (or the Shareholders' heirs, executors,  administrators or
other legal representatives or in the case of a corporation or other entity, its
corporate or other general  successor) shall be entitled out of the Trust estate
to be held harmless from and  indemnified  against all loss and expense  arising
from such liability.  The Trust shall,  upon request by the Shareholder,  assume
the  defense of any such  claim  made  against  any  Shareholder  for any act or
obligation of the Trust and satisfy any judgment thereon.

      2. It is hereby expressly  declared that a trust is created hereby and not
a partnership, joint stock association, corporation, bailment, or any other form
of a legal  relationship  other than a trust, as  contemplated in  Massachusetts
General Laws Chapter 182. No individual  Trustee  hereunder shall have any power
to bind the Trust unless so authorized by the  Trustees,  or to personally  bind
the Trust's officers or any Shareholder.  All persons extending credit to, doing
business  with,  contracting  with or having or asserting  any claim against the
Trust or the Trustees  shall look only to the assets of the  appropriate  Series
for payment under any such credit,  transaction,  contract or claim; and neither
the  Shareholders  nor the  Trustees,  nor any of their  agents,  whether  past,
present  or  future,  shall  be  personally  liable  therefor;  notice  of  such
disclaimer and agreement thereto shall be given in each agreement, obligation or
instrument  entered into or executed by Trust or the  Trustees.  There is hereby
expressly  disclaimed  Shareholder  and  Trustee  liability  for  the  acts  and
obligations of the Trust.  Nothing in this  Declaration of Trust shall protect a
Trustee or officer  against any liability to which such Trustee or officer would
otherwise  be  subject  by reason  of  willful  misfeasance,  bad  faith,  gross
negligence  or reckless  disregard of the duties  involved in the conduct of the
office of Trustee or of such officer hereunder.

      3. The exercise by the Trustees of their powers and  discretion  hereunder
in good faith and with reasonable care under the circumstances  then prevailing,
shall be binding upon everyone  interested.  Subject to the provisions of part 2
of this Article  NINTH,  the Trustees shall not be liable for errors of judgment
or mistakes of fact or law. Subject to the foregoing,  (a) Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing of any officer,
agent, employee, consultant,  adviser,  administrator,  distributor or principal
underwriter,  custodian or transfer, dividend disbursing,  Shareholder servicing
or accounting  agent of the Trust,  nor shall any Trustee be responsible for the
act or  omission  of any other  Trustee;  (b) the  Trustees  may take  advice of
counsel or other  experts  with  respect to the meaning and  operations  of this
Declaration of Trust, applicable laws, contracts,  obligations,  transactions or
any other  business the Trust may enter into,  and subject to the  provisions of
part 2 of this  Article  NINTH,  shall  be  under  no  liability  for any act or
omission in  accordance  with such advice or for failing to follow such  advice;
and (c) in discharging  their duties,  the Trustees,  when acting in good faith,
shall be  entitled  to rely  upon the  books of  account  of the  Trust and upon
written  reports  made to the  Trustees by any officer  appointed  by them,  any
independent  public  accountant,  and (with respect to the subject matter of the
contract involved) any officer,  partner or responsible  employee of a party who
has been  appointed  by the  Trustees or with whom the Trust has entered  into a
contract pursuant to Article SEVENTH. The Trustees shall not be required to give
any bond as such, nor any surety if a bond is required.

      4. This Trust shall continue without limitation of time but subject to the
provisions of sub-sections (a) and (b) of this part 4.

(a)  Subject  to  applicable  Federal  and State law,  and  except as  otherwise
provided in part 5 of this Article NINTH,  the Trustees,  with the Majority Vote
of  Shareholders  of an  affected  Series or Class,  may sell and  convey all or
substantially  all the assets of that Series or Class (which sale may be subject
to the retention of assets for the payment of  liabilities  and expenses and may
be in the form of a statutory  merger to the extent permitted by applicable law)
to another issuer or to another Series or Class of the Trust for a consideration
which may be or include  securities  of such issuer or may merge or  consolidate
with any other  corporation,  association,  trust, or other  organization or may
sell,  lease,  or  exchange  all or a  portion  of the Trust  property  or Trust
property  allocated or  belonging  to such Series or Class,  upon such terms and
conditions and for such  consideration when and as authorized by such vote. Such
transactions may be effected  through  share-for-share  exchanges,  transfers or
sale of assets, shareholder in-kind redemptions and purchases,  exchange offers,
or any other method  approved by the  Trustees.  Upon making  provision  for the
payment of liabilities,  by assumption by such issuer or otherwise, the Trustees
shall  distribute the remaining  proceeds  among the holders of the  outstanding
Shares of the Series or Class, the assets of which have been so transferred,  in
proportion to the relative net asset value of such Shares.

           (b) Upon completion of the distribution of the remaining  proceeds or
the remaining  assets as provided in sub-section  (a) hereof or pursuant to part
3(d) of Article FOURTH, as applicable,  the Series the assets of which have been
so transferred shall terminate,  and if all the assets of the Trust have been so
transferred,  the Trust shall  terminate and the Trustees shall be discharged of
any and all further  liabilities and duties  hereunder and the right,  title and
interest of all parties shall be canceled and discharged.

      5. Subject to  applicable  Federal and state law, the Trustees may without
the  vote or  consent  of  Shareholders  cause  to be  organized  or  assist  in
organizing one or more  corporations,  trusts,  partnerships,  limited liability
companies,   associations,  or  other  organization,   under  the  laws  of  any
jurisdiction,  to take over all or a portion of the Trust  property  or all or a
portion of the Trust property  allocated or belonging to such Series or Class or
to carry on any business in which the Trust shall  directly or  indirectly  have
any interest,  and to sell,  convey and transfer the Trust property or the Trust
property allocated or belonging to such Series or Class to any such corporation,
trust, limited liability company,  partnership,  association, or organization in
exchange for the shares or securities  thereof or  otherwise,  and to lend money
to, subscribe for the shares or securities of, and enter into any contracts with
any  such  corporation,   trust,   partnership,   limited   liability   company,
association, or organization or any corporation,  partnership, limited liability
company, trust,  association,  or organization in which the Trust or such Series
or Class holds or is about to acquire shares or any other  interest.  Subject to
applicable  Federal  and state  law,  the  Trustees  may also  cause a merger or
consolidation  between the Trust or any successor thereto or any Series or Class
thereof and any such corporation, trust, partnership, limited liability company,
association, or other organization.  Nothing contained herein shall be construed
as requiring  approval of shareholders for the Trustees to organize or assist in
organizing one or more  corporations,  trusts,  partnerships,  limited liability
companies,  associations,  or other  organizations  and selling,  conveying,  or
transferring  the Trust  property  or a portion  of the Trust  property  to such
organization  or entities;  provided,  however,  that the Trustees shall provide
written notice to the affected Shareholders of any transaction whereby, pursuant
to this part 5, Article  NINTH,  the Trust or any Series or Class thereof sells,
conveys,  or  transfers  all or a  substantial  portion of its assets to another
entity or merges or consolidates  with another entity.  Such transactions may be
effected  through  share-for-share  exchanges,   transfer  or  sale  of  assets,
shareholder  in-kind  redemptions and purchases,  exchange offers,  or any other
approved by the Trustees.

      6.  The  original  or a copy  of  this  instrument  and of  each  restated
declaration  of trust or  instrument  supplemental  hereto  shall be kept at the
office of the Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each  supplemental  or restated  declaration of trust shall be
filed with the Secretary of the  Commonwealth of  Massachusetts,  as well as any
other  governmental  office where such filing may from time to time be required.
Anyone  dealing  with the Trust may rely on a  certificate  by an officer of the
Trust as to whether or not any such  supplemental  or restated  declarations  of
trust  have  been  made and as to any  matters  in  connection  with  the  Trust
hereunder,  and, with the same effect as if it were the original,  may rely on a
copy certified by an officer of the Trust to be a copy of this  instrument or of
any such supplemental or restated declaration of trust. In this instrument or in
any such  supplemental  or restated  declaration  of trust,  references  to this
instrument, and all expressions like "herein", "hereof" and "hereunder" shall be
deemed  to  refer  to  this  instrument  as  amended  or  affected  by any  such
supplemental or restated  declaration of trust.  This instrument may be executed
in any number of counterparts, each of which shall be deemed an original.

      7. The Trust set forth in this  instrument  is created  under and is to be
governed  by  and  construed  and  administered  according  to the  laws  of the
Commonwealth of Massachusetts.  The Trust shall be of the type commonly called a
Massachusetts  business trust, and without limiting the provisions  hereof,  the
Trust may exercise all powers which are ordinarily exercised by such a trust.

      8. In the event that any person  advances the  organizational  expenses of
the Trust, such advances shall become an obligation of the Trust subject to such
terms and  conditions  as may be fixed by, and on a date fixed by, or determined
with criteria  fixed by the Board of Trustees,  to be amortized over a period or
periods to be fixed by the Board.

      9. Whenever any action is taken under this  Declaration of Trust including
action which is required or  permitted  by the 1940 Act or any other  applicable
law, such action shall be deemed to have been  properly  taken if such action is
in accordance with the construction of the 1940 Act or such other applicable law
then  in  effect  as  expressed  in "no  action"  letters  of the  staff  of the
Commission or any release,  rule,  regulation or order under the 1940 Act or any
decision of a court of competent  jurisdiction,  notwithstanding that any of the
foregoing  shall later be found to be invalid or otherwise  reversed or modified
by any of the foregoing.

      10.  Any  action  which may be taken by the Board of  Trustees  under this
Declaration of Trust or its By-Laws may be taken by the  description  thereof in
the  then  effective  prospectus  and/or  statement  of  additional  information
relating  to the  Shares  under  the  Securities  Act of  1933  or in any  proxy
statement of the Trust rather than by formal resolution of the Board.

      11.  Whenever under this  Declaration  of Trust,  the Board of Trustees is
permitted  or required to place a value on assets of the Trust,  such action may
be  delegated  by the Board,  and/or  determined  in  accordance  with a formula
determined by the Board, to the extent permitted by the 1940 Act.

      12. The  Trustee  may,  without  the vote or consent of the  Shareholders,
amend  or  otherwise  supplement  this  Declaration  of Trust  by  executing  or
authorizing  an  officer  of the Trust to  execute  on their  behalf a  Restated
Declaration  of  Trust or a  Declaration  of Trust  supplemental  hereto,  which
thereafter  shall  form a part  hereof,  provided,  however,  that  none  of the
following  amendments shall be effective unless also approved by a Majority Vote
of Shareholders:  (i) any amendment to parts 1, 3 and 4, Article FIFTH; (ii) any
amendment to this part 12, Article NINTH; (iii) any amendment to part 1, Article
NINTH; and (iv) any amendment to part 4(a),  Article NINTH that would change the
voting rights of Shareholders  contained  therein.  Any amendment required to be
submitted to the Shareholders that, as the Trustees determine,  shall affect the
Shareholders  of any Series or Class shall,  with respect to the Series or Class
so affected,  be authorized by vote of the  Shareholders of that Series or Class
and no vote of  Shareholders  of a Series or Class not affected by the amendment
with respect to that Series or Class shall be required. Notwithstanding anything
else herein,  any amendment to Article NINTH,  part 1 shall not limit the rights
to  indemnification  or  insurance  provided  therein  with respect to action or
omission or indemnities or Shareholder indemnities prior to such amendment.

      13. The captions  used herein are intended  for  convenience  of reference
only, and shall not modify or affect in any manner the meaning or interpretation
of any of the provisions of this Agreement.  As used herein,  the singular shall
include the plural,  the masculine gender shall include the feminine and neuter,
and the neuter  gender shall  include the  masculine  and  feminine,  unless the
context otherwise requires.

                    [Remainder of Page Intentionally Left Blank]

<PAGE>


      IN WITNESS  WHEREOF,  the undersigned  have executed this instrument as of
the ____ day of _________, 2000.


--------------------------                ---------------------------
Robert G. Avis                            Robert M. Kirchner
1706 Warson Estates Drive                 2800 S. University Blvd.
St. Louis, Missouri 63124                 Denver, Colorado 80210


--------------------------                ---------------------------
William A. Baker                          C. Howard Kast
197 Desert Lakes Drive                    2552 East Alameda
Palm Springs, California 92264            Denver, Colorado 80209


--------------------------                ----------------------------
Ned M. Steel                              Jon S. Fossel
3416 South Race Street                    810 Jack Creek Road
Englewood, Colorado 80110                 Ennis, Montana 59729

--------------------------                ------------------------------
Raymond J. Kalinowski                     Sam Freedman
44 Portland Drive                         4975 Lakeshore Drive
St. Louis, Missouri 63131                 Littleton, Colorado 80123


--------------------------                ------------------------------
James C. Swain                            Bridget A. Macaskill
355 Adams Street                          160 East 81st Street
Denver, Colorado 80206                    New York, New York 10028


--------------------------
George C. Bowen
9224 Bauer Court
Lone Tree, Colorado 80124




orgzn\190_2000.dot

<PAGE>

Oppenheimer Champion Income       Proxy for Shareholders Meeting To
Fund                              Be Held August 24, 2000

Your shareholder                  Your prompt response can save your
vote is important!                Fund the expense of another mailing.
                                  Please  mark your proxy on the  reverse  side,
                                  date and sign it,  and return it  promptly  in
                                  the accompanying  envelope,  which requires no
                                  postage if mailed in the United States.

            Please detach at perforation before mailing.

Oppenheimer Champion Income       Proxy For Shareholders Meeting To
Fund                              Be Held August 24, 2000

The  undersigned  shareholder  of Proxy  solicited on behalf of the  Oppenheimer
Champion Income Board of Trustees,  which Fund (the "Fund"), does hereby appoint
recommends  a vote  FOR the  election  Robert  Bishop,  Allan  Adams  and of all
nominees for Trustee and FOR Scott  Farrar,  and each of them,  each Proposal on
the reverse side. as attorneys-in fact and proxies The shares represented hereby
of the  undersigned,  with  full  will be voted  as  indicated  on the  power of
substitution,  to  attend  reverse  side  or FOR if no  choice  the  Meeting  of
Shareholders of is indicated. the Fund to be held August 24, 2000, at 6803 South
Tucson Way,  Englewood,  Colorado  80112 at 10:00 A.M.,  Denver time, and at all
adjournments thereof, and to vote the shares held in the name of the undersigned
on the record  date for said  meeting for the  election  of Trustees  and on the
proposals  specified on the reverse side. Said  attorneys-in-fact  shall vote in
accordance with their best judgment as to any other matter.

                                                                            OVER

<PAGE>


Oppenheimer Champion Income   Proxy for Shareholders Meeting to be held
Fund                          August 24, 2000

Your shareholder              Your prompt response can save your Fund money.
vote is important!            Please  vote,  sign and mail  your  proxy  ballot
                              (this card) in the enclosed  postage-paid envelope
                              today,  no  matter  how many  shares  you  own.  A
                              majority of the Fund's shares must be  represented
                              in person or by proxy.  Please  vote your proxy so
                              your  Fund  can  avoid  the   expense  of  another
                              mailing.

            Please detach at perforation before mailing.

1. Election of Trustees     A) W. Armstrong   G) R. Kalinowski
   (Proposal No. 1)         B) R. Avis        H) C. Kast
                            C) G. Bowen       I) R. Kirchner
                            D) E. Cameron     J) B. Macaskill
                            E) J. Fossel      K) W. Marshall
                            F) S. Freedman    L) J. Swain

/   /   For   all nominees listed except as marked contrary at left.
/  /    Withhold authority to vote for all nominees listed at left.

Instruction: To withhold authority to vote for any individual nominees,
line out that nominee's name at left.

2.  Ratification  of  selection  / / For / / Against / / Abstain  of  Deloitte &
    Touche LLP as independent auditors (Proposal No. 2)

3. Approval of the Elimination of Certain
   Fundamental Restrictions of the Fund
   (Proposal No. 3)

   a.   Eliminate   the   Fund's   fundamental
        restriction             /  /   For  /  / Against  /  / Abstain
        on purchasing securities on margin or
        engaging in short sales
   b.  Eliminate  the  Fund's  fundamental
       restriction             / / For      / /  Against  / /  Abstain
        on investing in other investment companies
   c.  Eliminate the Fund's fundamental restriction
       on the purchase and sale of futures  /  / For /  /  Against  /  /Abstain
       contracts
   d.   Eliminate  the  Fund's  fundamental  / /  For  / /  Against  /  /Abstain
        restriction  on the types of put and call  options the Fund may purchase
        and sell
   e. Eliminate  the  Fund's  fundamental  / /  For  /  /  Against  / /  Abstain
      restriction on writing put options on interest rate futures
   f.  Eliminate  the  Fund's  fundamental  / /  For  / /  Against  / /  Abstain
       restriction on covered call writing
   g.  Eliminate  the  Fund's  fundamental  / /  For  / /  Against  / /  Abstain
       restriction on investing in warrants or rights
   h.  Eliminate  the  Fund's  fundamental  / /  For  /  /  Against  /  /Abstain
       restriction on purchasing put or call options
   i.  Eliminate  the  Fund's  fundamental  / /  For  / /  Against  / /  Abstain
       restriction on writing put options on debt securities
   j.  Eliminate  the  Fund's  fundamental  / /  For  /  /  Against  /  /Abstain
       restriction  on investing in securities  of issuers in which  officers or
       trustees have an interest
   k.  Eliminate  the  Fund's  fundamental  / /  For  / /  Against  / /  Abstain
       restriction on investing in unseasoned issuers
   l.  Eliminate  the  Fund's  fundamental  / /  For  / /  Against  / /  Abstain
       restriction  on  investing  in a company  for the  purpose  of  acquiring
       control
    m.    Eliminate  the  Fund's  fundamental  / / For / /  Against  / / Abstain
          restriction on investing in mineral-related
       programs or leases

4. Approval of Changes to Certain      /  / For  /  /  Against /  /  Abstain
   Fundamental Restrictions of the Fund
   (Proposal No. 4)

5. Authorization to permit the / / For / / Against / / Abstain Trustees to adopt
   an Amended and Restated Declaration of Trust (Proposal No. 5)

6. Approval  of the  Fund's  new Class C / / For / /  Against / / Abstain  12b-1
   Distribution  and Service  Plan and  Agreement  (Class C  shareholders  only)
   (Proposal No. 6)


<PAGE>


NOTE:  Please  sign  exactly as your  name(s)  appear  hereon.  When  signing as
custodian,  attorney, executor,  administrator,  trustee, etc., please give your
full title as such.  All joint owners should sign this proxy.  If the account is
registered in the name of a  corporation,  partnership  or other entity,  a duly
authorized individual must sign on its behalf and give title.

                     Dated:                                   , 2000
                     --------------------------------------
                     (Month)        (Day)

                     Signature(s)
                     -------------------------------------
                     Signature(s)
                     -------------------------------------


                             Please read both sides of this ballot.


proxy\190BALLOT

<PAGE>

Bridget A. Macaskill
President and                                  OppenheimerFunds Logo
Chief Executive Officer                        Two World Trade Center, 34th
Floor                                          New York, NY 10048-0203
                                               800.525.7048
                                               www.oppenheimerfunds.com


                                          June 28, 2000

Dear Oppenheimer Champion Income Fund Shareholder,

      We have  scheduled  a  shareholder  meeting on August 24,  2000 for you to
decide  upon some  important  proposals  for the Fund.  Your  ballot  card and a
detailed statement of the issues are enclosed with this letter

      Your Board of Trustees  believes the matters  being  proposed for approval
are in the best interests of the Fund and its shareholders and recommends a vote
"for" the election of Trustees and for each  Proposal.  Regardless of the number
of shares you own, it is important that your shares be represented and voted. So
we urge you to consider these issues carefully and make your vote count.

How do you vote?

      To cast your vote,  simply mark,  sign and date the enclosed  proxy ballot
and return it in the postage-paid envelope today.  Remember, it can be expensive
for the Fund--and ultimately for you as a shareholder--to  remail ballots if not
enough responses are received to conduct the meeting.

What are the issues?

o  Election of  Trustees.  Your being asked to consider and approve the election
   of twelve Trustees. You will find detailed information on the Trustees in the
   enclosed proxy statement.

o  Ratification of Auditors.  The Board is asking you to ratify the selection of
   Deloitte  &  Touche  LLP as  independent  certified  public  accountants  and
   auditors of the Fund for the current fiscal year.

o     Approval of Elimination of Certain Fundamental Investment Restrictions.
   Your approval is requested to eliminate certain of the Fund's fundamental
   investment restrictions.

o     Approval of Changes to Certain Fundamental Investment Restrictions.
   Your approval is requested to change certain of the Fund's fundamental
   investment restrictions.

o     Authorize the Trustees to adopt an amended and restated Declaration of
   Trust.

o  Approval  of  Distribution  and  Service  Plan for  Class C  Shares  (Class C
   shareholders  only).  You are asked to  approve  the Fund's new Class C 12b-1
   Distribution and Service Plan.

      Please read the enclosed  proxy  statement  for complete  details on these
proposals.  Of course, if you have any questions,  please contact your financial
advisor, or call us at 1-800-525-7048.  As always, we appreciate your confidence
in OppenheimerFunds and look forward to serving you for many years to come.

                                   Sincerely,


                                    Bridget A. Macaskill's signature
Enclosures


proxy\190letter



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