SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant / X /
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/ / Definitive proxy statement
/X / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
OPPENHEIMER MULTI-SECTOR INCOME TRUST
- ------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
OPPENHEIMER MULTI-SECTOR INCOME TRUST
- ------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/ / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1) or
14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
/ / Fee Computed on table below per Exchange Act Rules 14a
-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: 1
(4) Proposed maximum aggregate value of transaction:
/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the form or schedule and the
date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing Party:
(4) Date Filed:
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1 - Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE>
OPPENHEIMER MULTI-SECTOR INCOME TRUST
Two World Trade Center, New York, New York 10048-0203
Notice Of Annual Meeting Of Shareholders
To Be Held May 5, 1997
To The Shareholders of Oppenheimer Multi-Sector Income Trust:
Notice is hereby given that the Annual Meeting of the Shareholders
of Oppenheimer Multi-Sector Income Trust (the "Fund") will be held
at 6803 South Tucson Way, Englewood, Colorado 80112, at 11:00 A.M.,
Denver time, on Monday, May 5, 1997, or any adjournments thereof
(the "Meeting"), for the following purposes:
(1) To elect three Trustees in Class A to hold office until the
term of such class shall expire in 2000, or until their successors
are elected and shall qualify;
(2) To ratify the selection of KPMG Peat Marwick LLP as the
independent certified public accountants and auditors of the Fund
for the fiscal year commencing November 1, 1996 (Proposal No. 1);
(3) To approve an Investment Advisory Agreement between the Fund
and OppenheimerFunds, Inc. (the "Adviser") (Proposal No. 2); and
(4) To transact such other business as may properly come before
the Meeting.
Shareholders of record at the close of business on March 7, 1997
are entitled to vote at the Meeting. The election of Trustees and
the Proposal 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 Fund recommends a vote to elect each of its
nominees as Trustee and in favor of the Proposals. WE URGE YOU TO
SIGN, DATE AND MAIL THE ENCLOSED PROXY PROMPTLY.
By Order of the Board of Trustees,
Andrew J. Donohue, Secretary
March 25, 1997
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Shareholders who do not expect to attend the Meeting are requested
to indicate voting instructions on the enclosed proxy and to date,
sign and return it in the accompanying postage-paid envelope. To
avoid unnecessary expense and duplicate mailings, we ask your
cooperation in promptly mailing your proxy no matter how large or
small your holdings may be.
<PAGE>
OPPENHEIMER MULTI-SECTOR INCOME TRUST
Two World Trade Center, New York, New York 10048-0203
PROXY STATEMENT
Annual Meeting Of Shareholders
To Be Held May 5, 1997
This Proxy Statement is furnished to the shareholders of
Oppenheimer Multi-Sector Income Trust (the "Fund") in connection
with the solicitation by the Fund's Board of Trustees of proxies to
be used at the Annual Meeting of Shareholders to be held at 6803
South Tucson Way, Englewood, Colorado 80112, at 11:00 A.M., Denver
time, on Tuesday, May 5, 1997, or any adjournments thereof (the
"Meeting"). It is expected that the mailing of this Proxy
Statement will be made on or about March 25, 1997. For a free copy
of the annual report covering the operations of the Fund for the
fiscal year ended October 31, 1996, call the Fund's transfer agent,
Shareholder Financial Services, Inc., at 1-800-647-7374.
The enclosed proxy, if properly executed and returned, will be
voted (or counted as an abstention or withheld from voting) in
accordance with the choices specified thereon, and will be included
in determining whether there is a quorum to conduct the Meeting.
The proxy will be voted in favor of the nominees for Trustee named
in this Proxy Statement unless a choice is indicated to withhold
authority to vote for all listed nominees or any individual
nominee. The proxy will be voted in favor of the Proposals unless
a choice is indicated to vote against or to abstain from voting on
a Proposal. 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 under applicable stock exchange rules), as record
holder, vote such shares in the same proportion as that broker-
dealer votes street account shares for which voting instructions
were timely received. 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 herein for Trustee and in favor of the Proposals.
The proxy may be revoked at any time prior to the voting by: (1)
writing to the Secretary of the Fund at Two World Trade Center, New
York, New York 10048-0203; (2) attending the Meeting and voting in
person; or (3) signing and returning a new proxy (if returned and
received in time to be voted).
The cost of the preparation and distribution of these proxy
materials is an expense of the Fund. In addition to the
solicitation of proxies by mail, proxies may be solicited by
officers or employees of the Fund's transfer agent, Shareholder
Financial Services, Inc. (a subsidiary of OppenheimerFunds, Inc.,
the Fund's investment adviser), or by officers or employees of the
Fund's investment adviser, personally or by telephone or telegraph;
any expenses so incurred will also be borne by the Fund. 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. For those services they will be reimbursed by the Fund
for their out-of-pocket expenses.
Shares Outstanding and Entitled to Vote. As of March 7, 1997, the
record date, there were 29,116,067 shares of the Fund issued and
outstanding. All shares of the Fund have equal voting rights as to
the election of Trustees and as to the Proposal described herein,
and the holders of shares are entitled to one vote for each share
(and a fractional vote for a fractional share) held of record at
the close of business on the record date. As of the record date,
no person owned of record or was known by the management of the
Fund to be the beneficial owner of 5% or more of the outstanding
shares of the Fund.
ELECTION OF TRUSTEES
The Fund's Declaration of Trust provides that the Board of Trustees
shall consist of three classes of Trustees with overlapping three
year terms. One class of Trustees is to be elected each year with
terms extending to the third succeeding annual meeting after such
election, or until their successors shall be duly elected and shall
have qualified. At the Meeting, three Class A Trustees are to be
elected for a three year term, as described below, or until their
respective successors shall be 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. The proxies being solicited hereby cannot be voted for
more than three nominees.
Each of the Class A Nominees, Leon Levy, Bridget A. Macaskill and
Clayton K. Yeutter, are presently Trustees of the Fund. All
present Trustees of the Fund have been previously elected by the
Fund's shareholders. A twelfth Trustee in Class C, Professor
Sidney M. Robbins, resigned as a Trustee as of December 31, 1996,
at which time the size of the Fund's Board was changed to eleven
Trustees. Each nominee has agreed to be nominated and to serve as
a Trustee. Class A Trustees to be elected at the Meeting shall
serve as such for a three year term and constitute the first class
of the Board. The classes of the Board and the expiration dates of
their terms of office are shown below.
Each of the nominees and other Trustees is also a trustee or
director of Oppenheimer Fund, Oppenheimer Discovery Fund,
Oppenheimer Global Fund, Oppenheimer Multiple Strategies Fund
(formerly known as Oppenheimer Asset Allocation Fund), Oppenheimer
Global Emerging Growth Fund, Oppenheimer Global Growth & Income
Fund, Oppenheimer Growth Fund, Oppenheimer Capital Appreciation
Fund (formerly named "Oppenheimer Target Fund"), Oppenheimer
Municipal Bond Fund, Oppenheimer Gold & Special Minerals Fund,
Oppenheimer California Municipal Fund, Oppenheimer Multi-State
Municipal Trust, Oppenheimer Money Market Fund, Inc., Oppenheimer
Series Fund, Inc., Oppenheimer U.S. Government Trust, Oppenheimer
New York Municipal Fund, Oppenheimer International Growth Fund,
Oppenheimer Enterprise Fund, Oppenheimer World Bond Fund (formerly
named "Oppenheimer Multi-Government Trust") and Oppenheimer
Developing Markets Fund (together with the Fund, the "New York-
based Oppenheimer funds"), except that Ms. Macaskill is not a
director of Oppenheimer Money Market Fund, Inc. Ms. Macaskill is
President, Mr. Levy is Chairman and Mr. Spiro is Vice Chairman of
the Fund and each of the other New York-based Oppenheimer funds.
The nominees and other Trustees indicated below by an asterisk are
"interested persons" (as that term is defined in the Investment
Company Act of 1940, as amended, hereinafter referred to as the
"Investment Company Act") of the Fund due to the positions
indicated with the Adviser or its affiliates or other positions
described. The year given below indicates when the nominees and
the other Trustees first became a trustee or director of any of the
New York-based Oppenheimer funds without a break in service. If
any of the nominees should be unable to accept nomination or
election, it is the intention of the persons named as attorneys-in-
fact in the enclosed proxy to vote such proxy for the election of
such other person or persons selected and nominated by
disinterested Trustees as the Board of Trustees may, in its
discretion, recommend.
As of March 7, 1997, the Trustees held shares of the Fund, as
follows: Donald W. Spiro beneficially owned 25,000 shares of the
Fund held in an account for which Mr. Spiro is a trustee; Benjamin
Lipstein disclaims beneficial ownership of 1,000 shares of the Fund
held by his wife, and Robert G. Galli held 3,000 shares of the
Fund in a joint tenancy account and disclaims beneficial ownership
of such shares. Except for the foregoing, no other Trustee and no
officers of the Fund beneficially owned any shares of the Fund as
of March 7, 1997.
<TABLE>
<CAPTION>
Term
Name and Business Experience Curently
Other Information During the Past Five Years Expires
<S> <C> <C>
Class A
Leon Levy General Partner of 1997
first became a Odyssey Partners, L.P.(investment
Trustee in 1959 partnership); and Chairman of
Age: 71 Avatar Holdings, Inc. (real estate
development).
Bridget A. Macaskill* President and CEO and a director 1997
first became a of the Adviser; Chairman and
Trustee in 1995 a director of Shareholder Services,
Age: 48 Inc. ( SSI ) and Shareholder Financial
Services, Inc. ( SFSI ); President and
a director of Oppenheimer Acquisition
Corp. ( OAC ), HarbourView Asset
Management Corporation ( HarbourView )
and Oppenheimer Partnership Holdings,
Inc., a holding company subsidiary of
the Adviser; a director of Oppenheimer
Real Asset Management, Inc.; and formerly
Executive Vice President of the Adviser.
________________________
* A Trustee who is an "interested person" of the Fund or the Adviser under the
Investment Company Act.
<PAGE>
Clayton K. Yeutter Of Counsel to Hogan & Hartson 1997
first became a (a law firm); a director of B.A.T.
Trustee in 1993 Industries, Ltd. (tobacco and
Age: 66 financial services), Caterpillar, Inc.
(machinery), ConAgra, Inc. (food and
agricultural products), Farmers
Insurance Company (insurance), FMC Corp.
(chemicals and machinery), IMC Global,
Inc. (chemicals and animal feed)
and Texas Instruments, Inc.
(electronics); formerly Counsellor
to the President (Bush) for
Domestic Policy, Chairman of the
Republican National Committee,
Secretary of the U.S. Department
of Agriculture, and U.S. Trade
Representative.
Class B
Robert G. Galli Vice Chairman of the Adviser; 1998
first became a formerly he held the following
Trustee in 1993 positions: Vice President and
Age: 63 Counsel of OAC, the Adviser's
parent holding company; Executive
Vice President and General Counsel
and a director of the Adviser and
OppenheimerFunds Distributor, Inc.,
Vice President and a director of
HarbourView and Centennial Asset
Management Corporation ("Centennial"),
investment adviser subsidiaries of the
Adviser, a director of SFSI and SSI,
transfer agent subsidiaries of the
Adviser, and an officer of other
Oppenheimer funds.
Benjamin Lipstein Professor Emeritus of Marketing, 1998
first became a Stern Graduate School of Business
Trustee in 1974 Administration, New York University;
Age: 73 a director of Sussex Publishers,
Inc. (publishers of Psychology
Today and Mother Earth News) and Spy
Magazine, L.P.
________________________
* A Trustee who is an "interested person" of the Fund or the Adviser
under the Investment Company Act.
Kenneth A. Randall A director of Dominion Resources, Inc. 1998
first became a (electric utility holding company),
Trustee in 1980 Dominion Energy, Inc. (electric power and
Age: 69 and oil & gas producer), Enron-Dominion
Cogen Corp. (cogeneration company),
Kemper Corporation (insurance and
financial services company) and Fidelity
Life Association (mutual life insurance
company); formerly Chairman of
the board of ICL, Inc. (Information
Systems), President and Chief Executive
Officer of The Conference Board,
Inc. (international economic and
business research), a director of
Lumbermens Mutual Casualty Company,
American Motorists Insurance
Company and American Manufactures
Insurance Company.
Edward V. Regan Chairman of Municipal Assistance 1998
first became a Corporation for the City of New York;
Trustee in 1993 Senior Fellow of Jerome Levy Economics
Age: 66 Institute, Bard College; a member of
the U.S. Competitiveness Policy Council;
a director of GranCare, Inc.
(health care provider); formerly
New York State Comptroller and
trustee, New York State and Local
Retirement Fund.
Russell S. Reynolds, Jr. Founder Chairman of Russell 1998
first became a Reynolds Associates, Inc.
Trustee in 1989 (executive recruiting);
Age: 65 Chairman of Directorship,
Inc. (corporate governance consulting);
a director of Professional Staff
Limited (U.K.); and a trustee
of Mystic Seaport Museum,
International House and Greenwich
Historical Society.
Class C
Elizabeth B. Moynihan Author and architectural historian; 1999
first became a a trustee of the Freer Gallery of
Trustee in 1992 Art(Smithsonian Institution), the
Age: 67 Institute of Fine Arts (New York
University), and National Building
Museum; a member of the
Trustees Council, Preservation League
of New York State; and a member of
the Indo-U.S. Sub-Commission on
Education and Culture.
Donald W. Spiro Chairman Emeritus and a director 1999
first became a of the Adviser; formerly Chairman
Trustee in 1985 of the Adviser and OppenheimerFunds
Age: 71 Distributor, Inc.
Pauline Trigere Chairman and Chief Executive 1999
first became a Officer of Trigere, Inc.
Trustee in 1977 (design and sale of women's
Age: 84 fashions).
________________________
* A Trustee who is an "interested person" of the Fund or the Adviser under the
Investment Company Act.
</TABLE>
Vote Required. An affirmative vote of the holders of a majority
of the voting shares of the Fund represented in person or by
proxy and entitled to vote at the Meeting is required for the
election of a nominee as Trustee. The Board of Trustees
recommends a vote for the election of each nominee.
Functions of the Board of Trustees. 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 Adviser, which is responsible for the Fund's day-to-
day operations. Six regular meetings of the Trustees were held
during the fiscal year ended October 31, 1996. Each of the
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 of the Fund have appointed an Audit Committee, comprised
of Messrs. Randall (Chairman), Lipstein, and Regan, none of whom
is an "interested person" (as that term is defined in the
Investment Company Act) of the Adviser or the Fund. The
functions of the Committee include (i) making recommendations to
the Board concerning the selection of independent auditors for
the Fund (subject to shareholder ratification); (ii) reviewing
the methods, scope and results of audits and the fees charged;
(iii) reviewing the adequacy of the Fund's internal accounting
procedures and controls; and (iv) establishing a separate line of
communication between the Fund's independent auditors and its
independent Trustees. The Committee met three times during the
fiscal year ended October 31, 1996. The Board of Trustees does
not have a standing nominating or compensation committee.
Remuneration of Trustees. The officers of the Fund and
certain Trustees of the Fund (Ms. Macaskill and Messrs. Galli
and Spiro) who are affiliated with the Adviser receive no salary
or fee from the Fund. The remaining Trustees of the Fund
received the compensation shown below. The compensation from the
Fund was paid during its fiscal year ended October 31, 1997. The
compensation from all of the New York-based Oppenheimer funds
includes the Fund and is compensation received as a director,
trustee or member of a committee of the Board during the calendar
year 1996.
Total
Compensation Aggregate Retirement Benefits
From All
Name and Compensation Accrued as Part of New
York-based
Position from Fund Fund Expenses
Oppenheimer funds1
Leon Levy $8,375 $15,221
$152,750
Chairman and Trustee
Benjamin Lipstein $5,120 $9,305 $91,350
Study Committee
Chairman2 Audit
Committee Member
and Trustee
Elizabeth B. Moynihan $5,120 $9,305 $91,350
Study Committee
Member and Trustee
Kenneth A. Randall $4,656 $8,463 $83,450
Audit Committee
Chairman and Trustee
Edward V. Regan $4,086 $7,427 $78,150
Proxy Committee
Chairman2, Audit
Committee Member
and Trustee
Russell S. Reynolds Jr. $3,094
$5,624 $58,800
Proxy Committee
Member2 and Trustee
Pauline Trigere $3,094 $5,624 $55,300
Trustee
Clayton K. Yeutter $3,094 $5,624 $58,800
Proxy Committee
Member2 and
Trustee
______________________
1 For the 1996 calendar year.
2 Committee position held during a portion of the period
shown.
The Fund has adopted a retirement plan that provides for
payment to a retired Trustee of up to 80% of the average
compensation paid during that Trustee's five years of service in
which the highest compensation was received. A Trustee must serve
in that capacity for any of the New York-based Oppenheimer funds
for at least 15 years to be eligible for the maximum payment.
Because each Trustee's retirement benefits will depend on the
amount of the Trustee's future compensation and length of service,
the amount of those benefits cannot be determined at this time, nor
can the Fund estimate the number of years of credited service that
will be used to determine those benefits.
Officers of the Fund. Each officer of the Fund is elected by the
Trustees to serve an annual term. Information is given below about
the Fund's executive officers who are not Trustees of the Fund,
including their business experience during the past five years.
Messrs. Bishop, Bowen, Donohue, Farrar and Zack serve in a similar
capacity with the other New York-based Oppenheimer funds.
Robert E. Patterson, Vice President and Portfolio Manager; Age: 53.
Senior Vice President of the Adviser; an officer of other
Oppenheimer funds.
Thomas P. Reedy, Vice President and Portfolio Manager; Age: 35.
Vice President of the Adviser; an officer of other Oppenheimer
funds; formerly a Securities Analyst for the Adviser.
David A. Rosenberg, Vice President and Portfolio Manager; Age: 38.
Vice President of the Adviser; an officer of other Oppenheimer
funds; formerly an officer and portfolio manager for Delaware
Investment Advisors.
Ashwin K. Vasan, Vice President and Portfolio Manager; Age: 34.
Vice President of the Adviser; an officer of other Oppenheimer
funds; formerly a Securities Analyst for the Adviser, prior to
which he was a Securities Analyst for Citibank, N.A.
Carol E. Wolf, Vice President and Portfolio Manager; Age: 45.
Vice President of the Adviser and Centennial; an officer of
other Oppenheimer funds.
Arthur J. Zimmer, Vice President and Portfolio Manager; Age: 50.
Vice President of the Adviser and Centennial; an officer of
other Oppenheimer funds.
Andrew J. Donohue, Secretary; Age: 46
Executive Vice President and General Counsel of the Adviser
and the Distributor; President and a director of Centennial;
Executive Vice President, General Counsel and a director of
HarbourView, SSI, SFSI and Oppenheimer Partnership Holdings,
Inc.; Executive Vice President, General Counsel and a director
of MultiSource Services, Inc. ( a broker-dealer); President
and director of Oppenheimer Real Asset Management, Inc.;
General Counsel of OAC; an officer of other Oppenheimer funds;
formerly Senior Vice President and Associate General Counsel
of the Adviser and the Distributor, Partner in Kraft &
McManimon (a law firm), an officer of First Investors
Corporation (a broker-dealer) and First Investors Management
Company, Inc. (broker-dealer and investment adviser), and
director and an officer of First Investors Family of Funds and
First Investors Life Insurance Company.
George C. Bowen, Treasurer; Age: 60
6803 South Tucson Way, Englewood, Colorado 80112
Senior Vice President and Treasurer of the Adviser; Vice
President and Treasurer of the Distributor and HarbourView;
Senior Vice President, Treasurer and Assistant Secretary and
a director of Centennial; Senior Vice President, Treasurer and
Secretary of SSI; Vice President, Treasurer and Secretary of
SFSI; Treasurer of OAC; Vice President and Treasurer of
Oppenheimer Real Asset Management, Inc.; Chief Executive
Officer, Treasurer and a director of MultiSource Services,
Inc. and an officer of other Oppenheimer funds.
Robert G. Zack, Assistant Secretary; Age: 48
Senior Vice President and Associate General Counsel of the
Adviser; Assistant Secretary of SSI and SFSI; an officer of
other Oppenheimer funds.
Robert J. Bishop, Assistant Treasurer; Age: 38
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Adviser/Mutual Fund Accounting; an
officer of other Oppenheimer funds; previously a Fund
Controller of the Adviser, prior to which he was an Accountant
for Yale & Seffinger, P.C., an accounting firm, and previously
an Accountant and Commissions Supervisor for Stuart James
Company Inc., a broker-dealer.
Scott T. Farrar, Assistant Treasurer; Age: 31
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Adviser/Mutual Fund Accounting; an
officer of other Oppenheimer funds; previously a Fund
Controller for the Adviser.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
(Proposal No. 1)
The Investment Company Act requires that independent certified
public accountants and auditors ("auditors") be selected annually
by the Board of Trustees and that such selection be ratified by the
shareholders at the next-convened annual meeting of the Fund, if
one is held. The Board of Trustees of the Fund, including a
majority of the Trustees who are not "interested persons" (as
defined in the Investment Company Act) of the Fund or the Adviser,
at a meeting held October 10, 1996, selected KPMG Peat Marwick LLP
("Peat Marwick") as auditors of the Fund for the fiscal year
beginning November 1, 1996. Peat Marwick also serves as auditors
for certain other funds for which the Adviser acts as investment
adviser. At the Meeting, a resolution will be presented for the
shareholders' vote to ratify the selection of Peat Marwick as
auditors. Representatives of Peat Marwick are not expected to be
present at the Meeting but will be available should any matter
arise requiring their presence. The Board of Trustees recommends
approval of the selection of Peat Marwick as auditors of the Fund.
APPROVAL OF THE CURRENT INVESTMENT ADVISORY AGREEMENT
(Proposal No. 2)
The Fund has an Investment Advisory Agreement dated October 22,
1990 with the Adviser (the "Agreement") which was most recently
approved by the Fund's Board of Trustees, including a majority of
the Trustees who are not "interested persons" (as defined in the
Investment Company Act) of the Fund or of the Adviser, in October
1990. Prior to January 5, 1996, the Adviser was known as
Oppenheimer Management Corporation. The Agreement was approved by
shareholders of the Fund at a meeting held on October 1, 1990. A
copy of the Agreement is included in this Proxy Statement as
Exhibit A. If approved by the shareholders at this meeting, the
Agreement will continue in effect until December 31, 1997, and
thereafter from year to year unless terminated, but only so long as
such continuance is approved in accordance with the Investment
Company Act.
Under the Agreement, the Adviser supervises the investment
operations of the Fund and the composition of its portfolio and
furnishes the Fund advice and recommendations with respect to
investments, investment policies and the purchase and sale of
securities. Under the Agreement, the Fund pays the Adviser an
advisory fee computed and paid weekly at an annual rate of 0.65% of
the net assets of the Fund at the end of that week. The Fund also
pays the Adviser an annual fee of $24,000, plus out-of-pocket costs
and expenses reasonably incurred, for performing limited accounting
services for the Fund. During the fiscal year ended October 31,
1996, the Fund paid the Adviser a fee of $1,939,377 under the
Agreement. The Adviser also acts as investment adviser to other
funds that have similar or comparable investment objectives. A list
of those funds and the net assets and advisory fee rates paid by
those funds is contained in Exhibit B to this Proxy Statement.
The Agreement requires the Adviser, at its expense, to provide the
Fund with adequate office space, facilities and equipment as well
as to provide, and supervise the activities of all administrative
and clerical personnel required to provide effective administration
for the Fund, including the compilation and maintenance of records
with respect to its operations, the preparation and filing of
specified reports, and composition of proxy materials and
registration statements for continuous public sale of shares of the
Fund. Expenses not expressly assumed by the Adviser under the
Agreement or by the Distributor of the Fund's shares are paid by
the Fund. The Agreement lists examples of expenses paid by the
Fund, the major categories of which relate to interest, taxes,
brokerage commissions, fees to certain Trustees, legal and audit
expenses, custodian and transfer agent expenses, share certificate
issuance costs, certain printing and registration costs, and non-
recurring expenses, including litigation.
The Agreement contains no expense limitation. However,
independently of the Agreement, the Adviser has undertaken that the
total expenses of the Fund in any fiscal year (including the
management fee but excluding taxes, interest, brokerage fees and
any extraordinary non-recurring expenses, such as litigation)
shall not exceed the most stringent applicable state regulatory
limitation. The payment of the management fee at the end of any
month will be reduced so that there will not be any accrued but
unpaid liability under this expense limitation. The Adviser has
reserved the right to change or eliminate this expense limitation
at any time. Due to changes in federal securities laws, such state
regulatory limitations no longer apply, and the Adviser anticipates
that it will withdraw its undertaking with the Fund's next updated
Prospectus and Statement of Additional Information. During the
Fund's most recent fiscal period ended October 31, 1996, the Fund's
expenses did not exceed the most stringent state regulatory limit
and the voluntary undertaking was not invoked.
The Agreement provides that in the absence of willful misfeasance,
bad faith or gross negligence in the performance of its duties or
reckless disregard of its obligations under the Agreement, the
Adviser is not liable for any loss sustained by reason of any
investment, or the purchase, sale or retention of any security, or
for any act or omission in performing the services required by the
Agreement. The Agreement permits the Adviser to act as investment
adviser for any other person, firm or corporation and to use the
name "Oppenheimer" in connection with other investment companies
for which it may act as investment adviser. If the Adviser shall
no longer act as investment adviser to the Fund, the right of the
Fund to use the name "Oppenheimer" as part of its name may be
withdrawn.
Brokerage Provisions of the Agreement. One of the duties of the
Adviser under the Agreement is to arrange the portfolio
transactions for the Fund. The Agreement contains provisions
relating to the employment of broker-dealers ("brokers") to effect
the Fund's portfolio transactions. In doing so, the Adviser is
authorized by the Agreement to employ such broker-dealers,
including "affiliated" brokers, as that term is defined in the
Investment Company Act, as may, in its best judgment based on all
relevant factors, implement the policy of the Fund to obtain, at
reasonable expense, the "best execution" (prompt and reliable
execution at the most favorable price obtainable) of such
transactions. The Adviser need not seek competitive commission
bidding but is expected to be aware of the current rates of
eligible brokers and to minimize the commissions paid to the extent
consistent with the interest and policies of the Fund as
established by its Board of Trustees. Purchases of securities from
underwriters include a commission or concession paid by the issuer
to the underwriter, and purchases from dealers include a spread
between the bid and asked price.
Under the Agreement, the Adviser is authorized to select brokers
that provide brokerage and/or research services for the Fund and/or
the other accounts over which the Adviser or its affiliates have
investment discretion. The commissions paid to such brokers may be
higher than another qualified broker would have charged if a good
faith determination is made by the Adviser that the commission is
fair and reasonable in relation to the services provided. Subject
to the foregoing considerations, the Adviser may also consider
sales of shares of the Fund and other investment companies managed
by the Adviser or its affiliates as a factor in the selection of
brokers for the Fund's portfolio transactions.
Description of Brokerage Practices. Subject to the provisions of
the Agreement, and the procedures and rules described above,
allocations of brokerage are generally made by the Adviser's
portfolio traders based upon recommendations from the Adviser's
portfolio managers. In certain instances, portfolio managers may
directly place trades and allocate brokerage, also subject to the
provisions of the Agreement and the procedures and rules described
above. In either case, brokerage is allocated under the
supervision of the Adviser's executive officers. Transactions in
securities other than those for which an exchange is the primary
market are generally done with principals or market makers.
Brokerage commissions are paid primarily for effecting
transactions in listed securities or for certain fixed-income
agency transactions in the secondary market and are otherwise paid
only if it appears likely that a better price or execution can be
obtained. When the Fund engages in an option transaction,
ordinarily the same broker will be used for the purchase or sale of
the option and any transaction in the securities to which the
option relates. When possible, concurrent orders to purchase or
sell the same security by more than one of the accounts managed by
the Adviser or its affiliates are combined. The transactions
effected pursuant to such combined orders are averaged as to price
and allocated in accordance with the purchase or sale orders
actually placed for each account. Option commissions may be
relatively higher than those which would apply to direct purchases
and sales of portfolio securities.
The research services provided by a particular broker may be useful
only to one or more of the advisory accounts of the Adviser and its
affiliates, and investment research received for the commissions of
those other accounts may be useful both to the Fund and one or more
of such other accounts. Such research, which may be supplied by a
third party at the instance of a broker, includes information and
analyses on particular companies and industries as well as market
or economic trends and portfolio strategy, receipt of market
quotations for portfolio evaluations, information systems, computer
hardware and similar products and services. If a research service
also assists the Adviser in a non-research capacity (such as
bookkeeping or other administrative functions), then only the
percentage or component that provides assistance to the Adviser in
the investment decision-making process may be paid in commission
dollars. The Board of Trustees permits the Adviser to use
concessions on fixed price offerings to obtain research, in the
same manner as is permitted for agency transactions. The Board
also permits the Adviser to use stated commissions on secondary
fixed-income agency trades to obtain research where the broker has
represented to the Adviser that: (i) the trade is not from or for
the broker's own inventory; (ii) the trade was executed by the
broker on an agency basis at the stated commission; and (iii) the
trade is not a riskless principal transaction.
The research services provided by brokers broaden the scope and
supplement the research activities of the Adviser, by making
available additional views for consideration and comparisons, and
by enabling the Adviser to obtain market information for the
valuation of securities held in the Fund's portfolio or being
considered for purchase. The Board of Trustees, including the
"independent" Trustees of the Fund (those Trustees of the Fund who
are not "interested persons" as defined in the Investment Company
Act, and who have no direct or indirect financial interest in the
operation of the Agreement or the Distribution and Service Plans
described below) annually reviews information furnished by the
Adviser as to the commissions paid to brokers furnishing such
services so that the Board may ascertain whether the amount of such
commissions was reasonably related to the value or benefit of such
services.
The Adviser, the Distributor and the Transfer Agent. Subject to
the authority of the Board of Trustees, the Adviser 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 Adviser, is the
general distributor (the "Distributor") of the Fund's shares.
Shareholder Financial Services, Inc. ("SFSI"), a subsidiary of the
Adviser, acts as primary transfer agent, shareholder servicing
agent and dividend paying agent for the Fund. Fees paid to SFSI
are based on the number of shareholder accounts and the number of
shareholder transactions, plus out-of-pocket costs and expenses.
The Fund incurred approximately $59,643 in expenses for the fiscal
year ended October 31, 1996 for services provided by SFSI.
The Adviser (including a subsidiary) currently manages investment
companies, including other Oppenheimer funds, with assets of more
than $62 billion as of December 31, 1996, and with more than 3
million shareholder accounts. The Adviser is a wholly-owned
subsidiary of Oppenheimer Acquisition Corp. ("OAC"), a holding
company controlled by Massachusetts Mutual Life Insurance Company
("MassMutual"). The Adviser, 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 Adviser on October 22, 1990. As indicated below,
the common stock of OAC is owned by (i) certain officers and/or
directors of the Adviser, (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. At December
31, 1996, MassMutual held (i) all of the 2,160,000 shares of Class
A voting stock, (ii) 716,943 shares of Class B voting stock, and
(iii) 1,353,873 shares of Class C non-voting stock. This
collectively represented 86.2% of the outstanding common stock and
94.2% of the voting power of OAC as of that date. Certain officers
and/or directors of the Adviser held (i) 407,866 shares of the
Class B voting stock, representing 8.3% of the outstanding common
stock and 4.1% of the voting power, and (ii) options acquired
without cash payment which, when they become exercisable, allow the
holders to purchase up to 684,407 shares of Class C non-voting
stock. That group includes persons who serve as officers of the
Fund, and Ms. Macaskill and Messrs. Galli and Spiro, who serve as
Trustees 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 Adviser).
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 November 1, 1995 to
December 31, 1996, the only transactions by persons who serve as
Trustees of the Fund were by Ms. Macaskill, who surrendered to OAC
20,000 stock appreciation rights issued in tandem with the Class C
OAC options, for cash payments aggregating $1,421,800 and Mr.
Galli, who sold 50,000 shares of Class B OAC common stock to
MassMutual for an aggregate of $6,025,700.
The names and principal occupations of the executive officers and
directors of the Adviser are as follows: Bridget A. Macaskill,
President, Chief Executive Officer and a director; Donald W. Spiro,
Chairman Emeritus and a director; Robert G. Galli and James C.
Swain, Vice Chairmen; Robert C. Doll, Executive Vice President and
a director; O. Leonard Darling, Paula Gabriele, Barbara Hennigar,
James Ruff, Loretta McCarthy, Tilghman G. Pitts III and Nancy
Sperte, Executive Vice Presidents; Andrew J. Donohue, Executive
Vice President and General Counsel and a director; George C. Bowen,
Senior Vice President and Treasurer; Peter M. Antos, Victor Babin,
Robert A. Densen, Ronald H. Fielding, Robert E. Patterson, Richard
Rubinstein, Arthur Steinmetz, Ralph Stellmacher, John Stoma, Jerry
A. Webman, William L. Wilby and Robert G. Zack, Senior Vice
Presidents. These officers are located at one of the four offices
of the Adviser: Two World Trade Center, New York, NY 10048; 6803
South Tucson Way, Englewood, Colorado 80112; 350 Linden Oaks,
Rochester, NY 14625 and One Financial Plaza, 755 Main Street,
Hartford, CT 06103.
The Administrator. Mitchell Hutchins Asset Management Inc. (the
"Administrator") serves as the Fund's Administrator pursuant to an
Administration Agreement between the Fund and the Administrator.
The address of the Administrator, an affiliate of Paine Webber
Incorporated, is 1285 Avenue of the Americas, New York, New York
10019.
Considerations by the Board of Trustees. In connection with the
approval of the Agreement, the Adviser provided extensive
information to the Independent Trustees. The Independent Trustees
were provided with data as to the qualifications of the Adviser's
personnel, the quality and extent of the services rendered and its
commitment to its mutual fund advisory business. The Independent
Trustees also considered data presented by the Adviser showing the
extent to which it had expanded its investment personnel and other
services dedicated to the equity area of its mutual fund advisory
activities. Information prepared specifically for the purpose of
assisting the Independent Trustees in their evaluation of the
Agreement included an analysis of the performance and expenses of
the Fund as compared to other similar funds.
Analysis of Nature, Quality and Extent of Services. In determining
whether to approve the Agreement and to recommend its approval by
the Fund's shareholders, the Independent Trustees particularly
considered: (1) the effect of the investment management fee on the
expense ratio of the Fund; (2) the investment record of the Adviser
in managing the Fund, and the investment record of other investment
companies for which it acts as investment adviser; and (3) data as
to investment performance, advisory fees and expense ratios of
other investment companies not advised by the Adviser but believed
to be in the same overall investment and size category as the Fund.
The Independent Trustees also considered the following factors,
among others: (1) the necessity of the Adviser maintaining and
enhancing its ability to retain and attract capable personnel to
serve the Fund; (2) the Adviser's overall profitability; (3) pro-
forma profitability data giving effect to the investment management
fee but before marketing and promotional expenses anticipated to be
paid by the Adviser and its affiliates; (4) possible economies of
scale; (5) other benefits to the Adviser from serving as investment
adviser to the Fund, as well as benefits to its affiliates acting
as principal underwriter and its division acting as transfer agent
to the Fund; (6) current and developing conditions in the financial
services industry, including the entry into the industry of larger
and highly capitalized companies which are spending and appear to
be prepared to continue to spend substantial sums to engage
personnel and to provide services to competing investment
companies; and (7) the financial resources of the Adviser and the
desirability of appropriate incentives to assure that the Adviser
will continue to furnish high quality services to the Fund.
Analysis of Profitability of the Adviser. The Independent Trustees
were advised that the Adviser does not maintain its financial
records on a fund-by-fund basis. However, the Adviser does provide
the Independent Adviser on an annual basis with its allocation of
expenses on a fund-by-fund basis. The Independent Trustees
considered information provided by the Adviser regarding its
profitability and also considered comparative information relating
to the profitability of other mutual fund investment managers. The
Independent Trustees also noted the substantial marketing and
promotional activities in which the Adviser and its affiliates
engage and propose to engage on behalf of the Fund.
Determination by the Independent Trustees and the Board of
Trustees. After completion of its review, the Independent Trustees
recommended that the Board of Trustees approve, and the Board
unanimously approved, the Agreement.
Vote Required. An affirmative vote of the holders of a "majority"
(as defined in the Investment Company Act) of all outstanding
voting securities of the Fund is required for approval of the
Agreement; the classes do not vote separately. Such majority vote
is defined in the Investment Company Act as the vote of the holders
of the lesser of: (i) 67% or more of the voting securities present
or represented by proxy at the shareholder meeting, if the holders
of more than 50% of the outstanding voting securities are present
or represented by proxy, or (ii) more than 50% of the outstanding
voting securities. The Board of Trustees recommends a vote in
favor of approving the Investment Advisory Agreement.
RECEIPT OF SHAREHOLDER PROPOSALS
Any shareholder who wishes to present a proposal for action at the
next annual meeting of shareholders and who wishes to have it set
forth in a proxy statement and identified in the form of proxy
prepared by the Fund must notify the Fund in such a manner so that
such notice is received by the Fund by December 1, 1997 and in such
form as is required under the rules and regulations promulgated by
the Securities and Exchange Commission.
OTHER BUSINESS
Management of the Fund knows of no business other than the matters
specified above that will be presented at the Meeting. 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 may 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.
By Order of the Board of Trustees,
Andrew J. Donohue, Secretary
March 25, 1997
PROXY/680#7
<PAGE>
Exhibit A
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 22nd day of October, 1990, by and
between OPPENHEIMER MULTI-SECTOR INCOME TRUST (hereinafter called
the "Trust"), and OPPENHEIMER MANAGEMENT CORPORATION (hereinafter
called the "Adviser").
WHEREAS, the Trust is a closed-end, diversified management
investment company registered as such with the Securities and
Exchange Commission (the "Commission") pursuant to the Investment
Company Act of 1940 (the "Investment Company Act"), and the
Adviser is a registered investment adviser;
NOW, THEREFORE, in consideration of the mutual promises and
agreements hereinafter set forth, it is agreed by and between the
parties as follows:
1. In General The Adviser agrees, all as more fully set forth
herein, to act as investment adviser to the Trust with respect to
the investment of its assets; to supervise and arrange the
purchases of securities for and the sale of securities held in
the portfolio of the Trust; and to furnish facilities and furnish
and supervise personnel as shall be required to provide the
services described herein.
2. Duties and Obligations of the Adviser with respect to
investment of assets of the Trust
(a) Subject to the succeeding provisions of this section
and subject to the direction and control of the Board of
Trustees, the Adviser shall:
(i) Regularly provide investment advice and
recommendations to the Trust with respect to its
investments, investment policies and the purchase
and sale of securities and other investments
(collectively, "securities");
(ii) Supervise continuously the investment program of
the Trust and the composition of its portfolio;
(iii) Arrange, subject to the provisions of
paragraph "4" hereof, for the purchase of
securities and other investments and for the
sale of securities and other investments held
in the portfolio of the Trust; and
(iv) Prepare proxy materials for meetings of the
Trust's shareholders and such registrations and
reports as may be required by federal securities
laws.
(b) Any investment advice furnished by the Adviser under
this section shall at all times conform to, and be in accordance
with, any requirements imposed by: (1) the provisions of the
Investment Company Act of 1940, and of any rules or regulations
in force thereunder; (2) any other applicable provision of law;
(3) the provisions of the Declaration of Trust and By-Laws of the
Trust as amended from time to time; (4) any policies and
determinations of the Board of Trustees of the Trust; and (5) the
terms of the registration statement of the Trust, as amended
from time to time under the Securities Act of 1933 and the
Investment Company Act of 1940.
(c) Nothing in this Agreement shall prevent the Adviser or
any officer thereof from acting as investment adviser for any
other person, firm or corporation and shall not in any way limit
or restrict the Adviser or any of its directors, officers,
stockholders or employees from buying, selling or trading any
securities for its or their own accounts or for the accounts of
others for whom it or they may be acting, provided, however, that
the Adviser expressly represents that it will undertake no
activities which, in its judgment, will adversely affect the
performance of its obligations to the Trust under this Agreement.
(d) The Adviser may obtain investment information, research
or assistance from any other person, firm or corporation to
supplement, update or otherwise improve its investment management
services, provided that the Trust shall not be required to pay
any compensation other than as provided by the terms of this
Agreement and subject to the provisions of Paragraph 4 hereof.
3. Trust Administration and Allocation of Expenses. The
Adviser shall at its expense provide all executive,
administrative and clerical personnel as shall be required to
provide effective administration for the Trust, except such
services, facilities and personnel as the Trust has contracted to
obtain pursuant to the Administration Agreement annexed hereto as
Exhibit A. Services to be provided by the Adviser hereunder
shall include the compilation and maintenance of such records
with respect to the Trust's operations as may reasonably be
required; the preparation and filing of such reports with respect
thereto as shall be required by the Securities and Exchange
Commission and periodic reports with respect to its operations
for the shareholders of the Trust except required reports to
shareholders and Form N-SAR (or such other form as the SEC may
substitute therefor); preparation of proxy materials for meetings
of the Trust's shareholders; and the preparation of such
registrations and reports as may be required by Federal
securities laws. The Adviser shall, at its own cost and expense,
also provide the Trust with adequate office space, facilities and
equipment. The Adviser shall, at its own expense, provide such
officers for the Trust as the Trust's Board may request.
All other costs and expenses not expressly assumed by the
Adviser under this Agreement shall be paid by the Trust,
including, but not limited to: (i) interest and taxes, including
issue and transfer taxes, incurred by or levied on the Fund; (ii)
insurance premiums for fidelity and other coverage requisite to
its operations; (iii) compensation and expenses of its Trustees
other than those associated or affiliated with the Adviser; (iv)
legal and audit expenses; (v) custodian, dividend paying agent,
registrar and transfer agent fees and expenses (including charges
and expenses of the Trust's Dividend Reinvestment Plan Agent) and
brokerage commissions, if any; (viii) fees and expenses, other
than as hereinabove provided, incident to the registration, under
Federal law, of shares of the Trust for public sale; (ix) except
as noted above, all other expenses incidental to holding meetings
of the Trust's shareholders; (x) payments under the Trust's
Administration Agreement; (xi) fees and expenses of listing and
maintaining the listing of the Trust's shares of any national
securities exchange; (xii) cost of certificates representing the
Trust's shares; and (xiii) such non-recurring expenses as may
arise, including litigation affecting the Trust and the legal
obligation which the Trust may have to indemnify its officers and
Trustees with respect thereto.
4. Portfolio Transactions and Brokerage.
(a) The Adviser is authorized, in arranging the purchase
and sale of the Trust's portfolio securities, to employ or deal
with such members of securities or commodities exchanges, brokers
or dealers (hereinafter "broker-dealers"), including "affiliated"
broker-dealers (as that term is defined in the Investment Company
Act), as may, in its best judgment, implement the policy of the
Trust to obtain, at reasonable expense, the "best execution"
(prompt and reliable execution at the most favorable security
price obtainable) of the Trust's portfolio transactions as well
as to obtain, consistent with the provisions of subparagraph (c)
of this paragraph 4, the benefit of such investment information
or research as will be of significant assistance to the
performance by the Adviser of its investment management
functions.
(b) The Adviser shall select broker-dealers to effect the
Trust's portfolio transactions on the basis of its estimate of
their ability to obtain best execution of particular and related
portfolio transactions. The abilities of a broker-dealer to
obtain best execution of particular portfolio transaction(s) will
be judged by the Adviser on the basis of all relevant factors and
considerations including, insofar as feasible, the execution
capabilities required by the transaction or transactions; the
ability and willingness of the broker-dealer to facilitate the
Trust's portfolio transactions by participating therein for its
own account; the importance to the Trust of speed, efficiency or
confidentiality; the broker-dealer's apparent familiarity with
sources from or to whom particular securities might be purchased
or sold; as well as any other matters relevant to the selection
of a broker-dealer for particular and related transactions of the
Trust.
(c) The Adviser shall have discretion, in the interests of
the Trust, to allocate brokerage on the Trust's portfolio
transactions to broker-dealers, other than an affiliated broker-
dealer, qualified to obtain best execution of such transactions
who provide brokerage and/or research services (as such services
are defined in Section 28(e)(3) of the Securities Exchange Act of
1934) for the Trust and/or other accounts for which the Adviser
or its affiliates exercise "investment discretion" (as that term
is defined in Section 3(a)(35) of the Securities Exchange Act of
1934) and to cause the Trust to pay such broker-dealers a
commission for effecting a portfolio transaction for the Trust
that is in excess of the amount of commission another broker-
dealer adequately qualified to effect such transaction would have
charged for effecting that transaction, if the Adviser
determines, in good faith, that such commission is reasonable in
relation to the value of the brokerage and/or research services
provided by such broker-dealer, viewed in terms of either that
particular transaction or the overall responsibilities of the
Adviser or its affiliates with respect to the accounts as to
which they exercise investment discretion. In reaching such
determination, the Adviser will not be required to place or
attempt to place a specific dollar value on the brokerage and/or
research services provided or being provided by such broker-
dealer. In demonstrating that such determinations were made in
good faith, the Adviser shall be prepared to show that all
commissions were allocated for purposes contemplated by this
Agreement and that the total commissions paid by the Trust over a
representative period selected by the Trust's trustees were
reasonable in relation to the benefits to the Trust.
(d) The Adviser shall have no duty or obligation to seek
advance competitive bidding for the most favorable commission
rate applicable to any particular portfolio transactions or to
select any broker-dealer on the basis of its purported or
"posted" commission rate but will, to the best of its ability,
endeavor to be aware of the current level of the charges of
eligible broker-dealers and to minimize the expense incurred by
the Trust for effecting its portfolio transactions to the extent
consistent with the interests and policies of the Trust as
established by the determinations of the Board of Trustees of the
Trust and the provisions of this paragraph 4.
(e) The Trust recognizes that an affiliated broker-dealer:
(i) may act as one of the Trust's regular brokers so long as it
is lawful for it so to act; (ii) may be a major recipient of
brokerage commissions paid by the Trust; and (iii) may effect
portfolio transactions for the Trust only if the commissions,
fees or other remuneration received or to be received by it are
determined in accordance with procedures contemplated by any
rule, regulation or order adopted under the Investment Company
Act for determining the permissible level of such commissions.
(f) Subject to the foregoing provisions of this paragraph
4, the Adviser may also consider sales of shares of the Trust and
the other funds advised by the Adviser and its affiliates as a
factor in the selection of broker-dealers for its portfolio
transactions.
5. Compensation of the Adviser. The Trust agrees to pay the
Adviser and the Adviser agrees to accept as full compensation for
all services rendered by the Adviser as such, a fee payable
weekly in an amount computed by applying the annual rate of .65
of 1% to the end of week net assets of the Trust, determined as
of the close of business of the New York Stock Exchange each
Friday. When the New York Stock Exchange is not open on a
Friday, then the net assets shall be determined as of the close
of business of the New York Stock Exchange on the day on which
the New York Stock Exchange was open next preceding such Friday.
6. Use of Name. The Adviser hereby grants to the Trust a
royalty-free, non-exclusive license to use the name "Oppenheimer"
in the name of the Trust for the duration of this Agreement and
any extensions or renewals thereof. To the extent necessary to
protect the Adviser's rights to the name "Oppenheimer" under
applicable law, such license shall allow the Adviser to inspect
and, subject to control by the Trust's Board, control the nature
and quality of services offered by the Trust under such name.
Such license may, upon termination of this Agreement, be
terminated by the Adviser, in which event the Trust shall
promptly take whatever action may be necessary to change its name
and discontinue any further use of the name "Oppenheimer" in the
name of the Trust or otherwise. The name "Oppenheimer" may be
used or licensed by the Adviser in connection with any of its
activities, or licensed by the Adviser to any other party.
7. Duration and Termination.
(a) This Agreement will take effect on the date first set
forth above. This Agreement shall continue in effect until
December 31, 1991, and thereafter from year to year, so long as
such continuance shall be approved at least annually (a) by the
Board of Trustees, including the vote of a majority of the
Trustees of the Trust who are not parties to this Agreement or
"interested persons" (as defined in the Investment Company Act of
1940) of any such party cast in person at a meeting called for
the purpose of voting on such approval, or (b) by the vote of
the holders of a "majority" (as defined in the Investment Company
Act) of the outstanding voting securities of the Trust and by
such aforementioned vote of the Board of Trustees.
(b) This Agreement may be terminated by the Adviser at any
time without penalty upon sixty days' written notice to the Trust
(which notice may be waived by the Trust) and may be terminated
by the Trust at any time without penalty upon sixty days' notice
to the Adviser (which notice may be waived by the Adviser),
provided that such termination by the Trust shall be directed or
approved by the vote of a majority of all the Trustees of the
Trust then in office or by the vote of the holders of a
"majority" (as defined in the Investment Company Act of 1940) of
the outstanding voting securities of the Trust. This Agreement
shall automatically terminate in the event of its assignment (as
"assignment" is defined in the Investment Company Act of 1940).
8. Liability.
(a) Provided that nothing herein shall be deemed to protect
the Adviser from willful misfeasance, bad faith or gross
negligence in the performance of its duties, or reckless
disregard of its obligations and duties under this Agreement, the
Adviser shall not be liable for any loss sustained by reason of
good faith errors or omissions in connection with any matters to
which this Agreement relates.
(b) The Adviser understands and agrees that the obligations
of the Trust under this Agreement are not binding upon any
Trustee or shareholder of the Trust personally, but bind only the
Trust and the Trust's property; the Adviser represents that it
has notice of the provisions of the Declaration of Trust of the
Trust disclaiming Trustee or shareholder liability for acts or
obligations of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by their duly authorized officers as of
the day and year first above written.
OPPENHEIMER MULTI-SECTOR INCOME TRUST
Attest:
By: /s/ Robert G. Galli
------------------------
Robert G. Galli, Secretary
OPPENHEIMER MANAGEMENT CORPORATION
Attest:
By: /s/ Katherine P. Feld
----------------------
Katherine P. Feld
Vice President & Secretary
<PAGE>
EXHIBIT B
<TABLE>
<CAPTION>
Approximate Net Advisory Fee Rate as
Assets as of 12/31/96 % of Average Annual
Name of Fund ($ Millions) Net Assets
<S> <C> <C>
Oppenheimer International $175.7 .75% on the first $200 Bond
Fund million,
Oppenheimer High Yield Fund $1513.4 .72% on the next $200
million,
Oppenheimer Strategic $6778 .69% on the next $200 Income
Fund million,
Oppenheimer Bond Fund $235 .66% on the next $200
million,
.60% on the next $200
million, and
.50% of net assets in
excess of $1 billion
Oppenheimer Champion $653.6 .70% on the first $250 Income
Fund million,
.65% on the next $250
million,
.60% on the next $500
million, and
.55% of net assets in
excess of $1 billion
Oppenheimer Limited-Term $627.6 .50% on the first $100 Government
Fund million,
.45% on the next $150
million,
.425% on the next $250
million, and
.40% of net assets in
excess of $500 million
Oppenheimer U.S. $534 .65% on the first $200 Government
Trust million,
.60% on the next $100
million,
.57% on the next $100
million,
.55% on the next $400
million, and
.50% of net assets in
excess of $800 million
/TABLE
<PAGE>
OPPENHEIMER MULTI-SECTOR INCOME TRUST
PROXY FOR ANNUAL SHAREHOLDERS MEETING TO BE HELD MAY 5, 1997
Your shareholder vote is important!
Your prompt response can save your 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.
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Oppenheimer Multi-Sector Income Trust
Proxy for Annual Shareholders Meeting to be held May 5, 1997
The undersigned shareholder of Oppenheimer Multi-Sector Income
Trust (the "Fund") does hereby appoint Robert Bishop, George C.
Bowen, Andrew J. Donohue and Scott Farrar, and each of them, as
attorneys-in-fact and proxies of the undersigned, with full power
of substitution, to attend the Annual Meeting of Shareholders of
the Fund to be held May 5, 1997, at 6803 South Tucson Way,
Englewood, Colorado 80112 at 11:00 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 Proposal specified on the reverse
side. Said attorneys-in-fact shall vote in accordance with their
best judgment as to any other matter.
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES, WHICH
RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES FOR TRUSTEE
AND FOR THE PROPOSAL ON THE REVERSE SIDE. THE SHARES REPRESENTED
HEREBY WILL BE VOTED AS INDICATED ON THE REVERSE SIDE OR FOR IF
NO CHOICE IS INDICATED.
OVER
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Oppenheimer Multi-Sector Income Trust/Proxy for Annual
Shareholders Meeting to be held May 5, 1997
Your shareholder vote is important!
Your prompt response can save your Fund money.
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.
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1. Election of Trustees
A) Leon Levy
B) Bridget A. Macaskill
C) Clayton K. Yeutter
_______FOR all nominees listed ______WITHHOLD AUTHORITY
except as marked to the contrary to vote for all
nominees listed at at left.
left.
Instruction: To withhold authority to vote for any individual
nominee, line out that nominee's name at left.
2. Ratification of selection of KPMG Peat Marwick LLP as
independent auditors (Proposal No. 1)
FOR____ AGAINST____ ABSTAIN____
3. To approve the current Investment Advisory Agreement between
the Fund and OppenheimerFunds, Inc. (the "Adviser") (Proposal
No. 2)
FOR____ AGAINST____ ABSTAIN____
Dated: _______________________, 1997
(Month) (Day)
___________________________________
Signature(s)
___________________________________
Signature(s)
Please read both sides of this ballot.
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 behalf of such entity and give his or her
title.
proxy\680#7
