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
/ X / Definitive proxy statement
/ / 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
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(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 ______________ 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., Openheimer 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.
Term
Name and Business Experience Currently
Other Information During the Past Five Years Expires
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.
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 Advisers, 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; Robert G. Galli and
James C. Swain, Vice Chairmen; Robert C. Doll, 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; 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 other 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<PAGE>
</TABLE>
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.
- --------------------------------------------------------------------------
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
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.
- -------------------------------------------------------------------------
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
