Exhibit 5.3
CONNECTICUT MUTUAL INVESTMENT ACCOUNTS, INC.
FORM OF
INVESTMENT ADVISORY AGREEMENT FOR SUBADVISER
AGREEMENT made as of the ____ day of _______________, 1996, by and among
OppenheimerFunds, Inc. (the "Investment Adviser") and Pilgrim Xxxxxx &
Associates, Ltd. (the "Subadviser").
Connecticut Mutual Investment Accounts, Inc., a Maryland corporation (the
"Company"), is an open-end, management investment company, registered under the
Investment Company Act of 1940, as amended (the "1940 Act"). The CMIA LifeSpan
Balanced Account (the "Account") is a series of the Company. The Investment
Adviser and the Subadviser are investment advisers registered under the
Investment Advisers Act of 1940 (the "Advisers Act").
Pursuant to authority granted the Investment Adviser by the Company's Board
of Directors and pursuant to the provisions of the Investment Advisory Agreement
between the Investment Adviser and Company, on behalf of the Account, the
Investment Adviser has selected the Subadviser to act as an investment
subadviser of the Account and to provide certain other services, as more fully
set forth below, and the Subadviser is willing to act as such sub-investment
adviser and to perform such services under the terms and conditions hereinafter
set forth. Accordingly, the Investment Adviser and the Subadviser agree as
follows:
1. The Subadviser will regularly provide the Account with advice
concerning the investment management of the Small Capitalization U.S. equity
portfolio of the Account (the "Sub-Account"), designated by the Investment
Adviser. Such advice shall be consistent with the investment objectives and
policies of the Account as set forth in the Account's Prospectus and Statement
of Additional Information, and any investment guidelines or other instructions
received in writing from the Investment Adviser. The Subadviser will determine
what securities shall be purchased for the Sub-Account, and what securities
shall be held or sold by the Sub-Account, subject always to the provisions of
Section 9 hereof.
The Investment Adviser shall oversee the management of the Sub-Account by
the Subadviser. The Investment Adviser shall manage directly, or by engaging
other subadvisers, and the Subadviser shall not be responsible for the
management of, any portion of the Account not designated as part of the
Sub-Account. The Subadviser shall not be responsible for the provision of
administrative, bookkeeping or accounting services to the Account, except as
otherwise provided herein, as required by the Advisers Act as may be necessary
for the Subadviser to supply to the Investment Adviser, the Company or the
Company's Board of Directors the information required to be supplied under this
Agreement. Any records required to be maintained shall be the property of the
Company and shall be surrendered promptly to the Company upon request.
In the performance of the Subadviser's duties hereunder, the Subadviser is
and shall be an independent contractor and unless otherwise expressly provided
herein or otherwise authorized in writing, shall have no authority to act for or
represent the Company, the Account or the Investment Adviser in any way or
otherwise be deemed to be an agent of the Company, the Account or the Investment
Adviser. The Subadviser will make its officers and employees available to meet
with the Company's officers and Board of Directors at least quarterly on due
notice to review the investments and investment program of the Account in the
light of current and prospective economic and market conditions.
2. The Subadviser will bear its own costs of providing services hereunder.
Other than as herein specifically indicated, the Subadviser shall not be
responsible for the Account's expenses, including brokerage and other expenses
incurred in placing orders for the purchase and sale of securities.
Specifically, the Subadviser will not be responsible for expenses of the Account
including, but not limited to, the following: legal expenses; auditing and
accounting expenses; expenses of maintenance of the Account's books and records
relating to the Account, including computation of the Account's daily net asset
value per share and dividends; interest, taxes, governmental fees and membership
dues; fees of custodians, transfer agents, registrars or other agents; expenses
of preparing share certificates; expenses relating to the redemption or
repurchase of the Account's shares; expenses of registering and qualifying
Account shares for sale under applicable federal and state law; expenses of
preparing, setting in print, printing and distributing prospectuses, reports,
notices and dividends to Account shareholders; cost of stationery; costs of
shareholders and other meetings of the Account; traveling expenses of officers,
Directors and employees of the Company or Account, if any; fees of the Company's
Directors and salaries of any officers or employees of the Company or Account;
and the Account's pro rata portion of premiums on any fidelity bond and other
insurance covering the Company, the Account and their officers and Directors.
The Account shall reimburse the Subadviser for any such expenses or other
expenses of the Account, as may be reasonably incurred by such Subadviser on the
Account's behalf. The Subadviser shall keep and supply to the Account and the
Investment Adviser adequate records of all such expenses.
3. For all investment management services to be rendered hereunder, the
Investment Adviser will pay the Subadviser an annual fee, payable quarterly, as
described in Schedule A hereto. For any period less than a full fiscal quarter
during which this Agreement is in effect, the fee shall be prorated according to
the proportion which such period bears to a full fiscal quarter. The Account
shall have no responsibility for any fee payable to the Subadviser.
In the event that the advisory fee payable by the Account to the Investment
Adviser shall be reduced as required by the securities laws or regulations of
any jurisdiction in which the Account's shares are offered for sale, the amount
payable by the Investment Adviser to the Subadviser shall be likewise reduced by
a proportionate amount.
4. In connection with purchases or sales of securities for the
Account, neither the Subadviser nor any of its partners, directors, officers
or employees will act as a principal or agent or receive directly or
indirectly any compensation in connection with the purchase or sale of
investment securities by the Sub-Account, other than as provided in this
Agreement. The Subadviser, or its agent, shall arrange for the placing of all
orders for the purchase and sale of securities for the Sub-Account with
brokers or dealers selected by the Subadviser, provided that the Subadviser
shall not be responsible for payment of brokerage commissions. In the
selection of such brokers or dealers and the placing of such orders, the
Subadviser is directed at all times to seek for the Account the best
execution available. Neither the Subadviser nor any affiliate of the
Subadviser will act as principal or receive directly or indirectly any
compensation in connection with the purchase or sale of investment securities
by the Account, other than compensation provided for in this Agreement or in
the Investment Advisory Agreement of the Account and such brokerage
commissions as are permitted by the 1940 Act. If and to the extent authorized
to act as
broker in the relevant jurisdiction, the Subadviser or any of its affiliates may
act as broker for the Account in the purchase and sale of securities. The
Subadviser agrees that all transactions effected through the Subadviser or
brokers affiliated with the Subadviser shall be effected in compliance with
Section 17(e) of the 1940 Act and written procedures established from time to
time by the Board of Directors of the Company pursuant to Rule 17e-1 under the
1940 Act, as amended, copies of which shall be provided to the Subadviser by the
Investment Adviser.
5. It is also understood that it is desirable for the Account that the
Subadviser have access to supplemental investment and market research and
security and economic analyses provided by certain brokers who may execute
brokerage transactions at higher commissions to the Account than may result when
allocating brokerage to other brokers on the basis of seeking the most favorable
price and efficient execution. Therefore, the Subadviser is authorized to place
orders for the purchase and sale of securities for the Account with such certain
brokers, subject to review by the Company's Board of Directors from time to time
with respect to the extent and continuation of this practice. It is understood
that the services provided by such brokers may be useful to the Subadviser in
connection with its services to other clients. If any occasion should arise in
which the Subadviser gives any advice to its clients concerning the shares of
the Account, the Subadviser will act solely as investment counsel for such
clients and not in any way on behalf of the Account. The Subadviser's services
to the Account pursuant to this Agreement are not to be deemed to be exclusive
and it is understood that the Subadviser may render investment advice,
management and other services to others.
Provided the investment objectives of the Account are adhered to, and such
aggregation is in the best interests of the Account, the Subadviser may
aggregate sales and purchase orders of securities held for the Account with
similar orders being made simultaneously for other accounts managed by the
Subadviser, if in the Subadviser's reasonable judgment, such aggregation is
equitable and consistent with the Subadviser's fiduciary obligation to the
Account and shall result in an overall economic benefit to the Account, taking
into consideration the advantageous selling or purchase price, brokerage
commission and other expenses. In accounting for such aggregated order price,
commission and other expenses shall be averaged on a per bond or share basis
daily.
The Subadviser will advise the Account's custodian and the Investment
Adviser on a prompt basis of each purchase and sale of a portfolio security,
specifying the name of the issuer, the description and amount or number of
shares of the security purchased, the market price, commission and gross or net
price, trade date, settlement date and identity of the effecting broker or
dealer, and such other information as may be reasonably required. From time to
time as the Board of Directors of the Company or the Investment Adviser may
reasonably request, the Subadviser will furnish to the Company's officers and to
each of its Directors, at the Subadviser's expense, reports on portfolio
transactions and reports on issues of securities held in the portfolio, all in
such detail as the Account or the Investment Adviser may reasonably request.
6. In the absence of willful misfeasance, bad faith, negligence, or
reckless disregard of the performance of the duties of the Subadviser to the
Account, the Subadviser shall not be subject to liabilities to the Account, the
Investment Adviser, the Company, or to any shareholder of the Account for any
error of judgment or mistake of law or for any other action or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security, or
otherwise.
Notwithstanding the above, the Subadviser will indemnify and hold harmless
the Investment Adviser from, against, for and in respect to losses, damages,
costs and expenses
incurred by the Investment Adviser, including attorneys' fees reasonably
incurred, in the event of the Subadviser's willful misfeasance, bad faith or
negligence in the performance of its duties or obligations hereunder or by
reason of its reckless disregard of such duties or obligations; provided,
however, that the Investment Adviser shall not be so indemnified for such
losses, damages, costs and expenses, including such attorneys' fees, to the
extent they result from the Investment Adviser's willful misfeasance, bad faith
or negligence. The Investment Adviser shall indemnify and hold harmless the
Subadviser to the same extent and subject to the same limitations as the
Subadviser shall indemnify the Investment Adviser pursuant to the previous
sentence.
7. This Agreement shall remain in force until December 31, 1997, and from
year to year thereafter, but only so long as such continuance, and the
continuance of the Investment Adviser as investment adviser of the Account, is
specifically approved at least annually by the vote of a majority of the
Directors of the Company who are not interested persons of the Subadviser, the
Investment Adviser or the Account, cast in person at a meeting called for the
purpose of voting on such approval and by a vote of the Board of Directors or of
a majority of the outstanding voting securities of the Account. The aforesaid
requirement that continuance of this Agreement be "specifically approved at
least annually" shall be construed in a manner consistent with the 1940 Act and
the rules, regulations and interpretations thereunder. This Agreement may be
terminated at any time without the payment of any penalty, (a) by the Company,
by the Board of Directors, or by vote of a majority of the outstanding voting
securities of the Account, upon 60 days' written notice to the Investment
Adviser and Subadviser, (b) by the Investment Adviser, upon 60 days' written
notice to the Account and the Subadviser, or (c) by the Subadviser, upon 90
days' written notice to the Account and Investment Adviser. This Agreement shall
automatically terminate in the event of its assignment. In interpreting the
provisions of this Agreement, the definitions contained in Section 2(a) of the
1940 Act (particularly the definitions of "interested person," "assignment" and
"majority of the outstanding voting securities"), as from time to time amended,
shall be applied, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission by any rule, regulation or order.
8. No provisions of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, and no amendment of this Agreement shall be effective until approved by
vote of the holders of a majority of the outstanding voting securities of the
Account and by the Board of Directors, including a majority of the Directors who
are not interested persons of the Investment Adviser, the Subadviser or the
Account, cast in person at a meeting called for the purpose of voting on such
approval.
It shall be the responsibility of the Subadviser to furnish to the Board
of Directors of the Company such information as may reasonably be necessary
in order for such Directors to evaluate this Agreement or any proposed
amendments thereto for the purposes of casting a vote pursuant to paragraphs
7 or 8 hereof.
9. The Subadviser will conform its conduct in accordance with and will
ensure that the Sub-Account conforms with the Company's Articles of
Incorporation and By-laws, each as amended from time to time, and the 1940 Act,
as amended, other applicable laws, and to the investment objectives, policies
and restrictions of the Account as each of the same shall be from time to time
in effect as set forth in the Account's Prospectus and Statement of Additional
Information, or any investment guidelines or other instructions received in
writing from the Investment Adviser, and subject, further, to such policies and
instructions as the Board of
Directors or the Investment Adviser may from time to time establish and deliver
to the Subadviser.
In addition, the Subadviser, taking into account only income and gains
realized with respect to the Sub-Account, will cause the Sub-Account to comply
with the requirements of: (a) Section 851(b)(2) of the Internal Revenue Code
(the "Code") regarding derivation of income from specified investment
activities; (b) Section 851(b)(3) of the Code limiting gains from the
disposition of securities and certain other investments held less than three
months, in each case as if the Sub-Account were a "regulated investment company"
as defined in Section 851(a) of the Code; and the regulations pertaining
thereto. The Subadviser shall not without the prior express written consent of
the Investment Adviser: (a) invest Sub-Account assets having a value exceeding
five percent of the Account's total (gross) assets in securities of one issuer;
or (b) cause the Sub-Account to acquire more than ten percent of the outstanding
voting securities of any one issuer; or (c) invest Sub-Account assets in
investments that are not cash, cash items (including receivables), Government
securities, securities of other regulated investment companies, or other
securities within the meaning of Section 851(b)(4) of the Code. For purposes of
clauses (a) and (b) of the foregoing sentence the term "securities" shall
exclude "Government securities" and "securities of other regulated investment
companies" as each such term is used in Section 851(b)(4) of the Code.
10. The Subadviser represents that it has reviewed the Registration
Statement of the Company as filed with the Securities and Exchange Commission
and represents and warrants that with respect to disclosure about the Subadviser
or information relating directly or indirectly to the Subadviser, such
Registration Statement contains, as of the date hereof, no untrue statement of
any material fact and does not omit any statement of material fact which was
required to be stated therein or necessary to make the statements contained
therein not misleading. The Subadviser further represents and warrants that it
is an investment adviser registered under the Advisers Act.
11. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
12. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
13. Any notice given to the Subadviser by the Investment Adviser
pursuant to the terms of this Agreement shall be deemed to have been given if
provided in writing (including by telecopy or similar hard copy reproduction)
and delivered or mailed, postpaid, to: Pilgrim Xxxxxx & Associates, Ltd.,
0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxx, PS 29087-1549, Attn: Xx. Xxxxx
Xxxxxxxx. Any notice given to the Investment Adviser by the Subadviser,
pursuant to the terms of this Agreement shall be deemed to have been given if
provided in writing (including by telecopy or similar hard copy reproduction)
and delivered to OppenheimerFunds, Inc., Xxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, XX
00000, attention: General Counsel.
14. It is understood and expressly stipulated that the Subadviser must
look solely to the property of the Account for the enforcement of any claims
against the Account and shall not look to or have recourse to the assets of the
Company generally or any other series of the Company.
15. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first written above, and effective as of
_________________, 1996.
OppenheimerFunds, Inc.
By: ________________________________
Its: ________________________________
PILGRIM XXXXXX & ASSOCIATES, LTD.
By: ________________________________
Its: ________________________________
SCHEDULE OF OMITTED INVESTMENT SUBADVISORY AGREEMENT
Due to the substantial similarity of the investment
subadvisory agreements among OppenheimerFunds, Inc. ("OFI") and
Pilgrim, Xxxxxx & Associates, Ltd. ("Pilgrim") for the respective
series of the Registrant, the following form of investment
subadvisory agreement for CMIA LifeSpan Balanced Account and this
schedule of omitted documents is filed in accordance with the
requirements of Rule 8b-31 under the Investment Company Act of
1940.
1. Investment Subadvisory Agreement among OFI and
Pilgrim for CMIA LifeSpan Capital Appreciation Account.
