Exhibit 5.4
CONNECTICUT MUTUAL INVESTMENT ACCOUNTS, INC.
FORM OF
SUBADVISORY AGREEMENT
AGREEMENT made as of the _____ day of _______________, 1996 by and among
OppenheimerFunds, Inc., a Colorado corporation, (the "Investment Adviser"),
and BEA Associates, a New York General Partnership (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 dated ______________, 1996, 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 investment subadviser and to perform such services under
the terms and conditions hereinafter set forth. Accordingly, the Investment
Adviser and the Company, on behalf of the Account agree with the Subadviser as
follows:
1. The Subadviser will regularly provide the Account with advice
concerning the investment management of the High Yield Fixed Income portion 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, Account or the Investment Adviser in any way or otherwise
be deemed to be an agent of the Company, 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 Sub-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 Adviser to the Subadviser shall be likewise reduced by a
proportionate amount.
4. In connection with the purchases or sales of portfolio securities on
behalf of 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 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 Sub-Account, other than compensation provided
for in this Agreement or in the Investment
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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 Sub-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 Sub-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 Sub-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 Sub-Account with
similar orders being made simultaneously for other funds 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 purchases, 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 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 Sub-Account, all in
such detail as the Account or the Investment Adviser may reasonably request.
Subject to any other written instructions of the Investment Adviser, the
Subadviser is hereby appointed the Investment Adviser's agent and
attorney-in-fact on behalf of the Sub-Account in its discretion to vote, tender
or convert any securities in the Sub-Account; to execute proxies, waivers,
consents, account documentation, agreements, contracts and other instruments
with respect to such securities and the assets of the Sub-Account; to endorse,
transfer or deliver
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such securities and to participate in or consent to any class action, plan of
reorganization, merger, combination, consolidation, liquidation or similar plan
with reference to such securities; and the Sub-Adviser shall not incur any
liability to the Investment Adviser or the Sub-Account by reason of any exercise
of, or failure to exercise, any such discretion in the absence of wilful
misfeasance, bad faith, or gross negligence.
6. The Subadviser will not be liable for any loss sustained by reason of
the adoption of any investment policy or the purchase, sale, or retention of
any security on the recommendation of the Subadviser whether or not such
recommendation shall have been based upon its own investigation and research or
upon investigation and research made by any other individual, firm or
corporation, if such recommendation shall have been made and such other
individual, firm, or corporation shall have been selected, with due care and in
good faith; but nothing herein contained will be construed to protect the
Subadviser against any liability to the Investment Adviser, the Company, the
Account or its shareholders by reason of: (a) the Subadviser negligently
causing the Sub-Account to be in violation of any federal or state law, rule or
regulation or any investment policy or restriction set forth in the Account's
prospectus or Statement of Additional Information or any written guidelines or
instruction provided in writing by the Company's Board of Directors or the
Investment Adviser, (b) the Subadviser negligently causing the Sub-Account to
fail to satisfy the requirements of Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code") due to the Subadviser's failure to comply with
the requirements set forth in the second paragraph of Section 9; or (c) the
Subadviser's willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement; provided that, with respect to (a)
and (b) above, the Subadviser shall be deemed not to have been negligent if it
acts in reliance upon written reports provided by the Investment Adviser, the
Company, the Account, or any of their respective authorized agents.
The Subadviser will indemnify the Investment Adviser to the fullest extent
permitted by law against any and all loss, damage, judgment, fines, amounts paid
in settlement and attorneys fees incurred by the Investment Adviser to the
extent resulting, in whole or in part, from any of the Subadviser's acts or
omissions specified in (a), (b) or (c) above or otherwise from the Subadviser's
willful misfeasance, bad faith, or gross negligence, provided, however, that
nothing herein contained will provide indemnity to the Investment Adviser for
liability resulting from its own willful misfeasance, bad faith, or gross
negligence in the performance of its duties or reckless disregard of such
duties.
7. This Agreement shall remain in force until ______________, 1998, 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 votingsecurities 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 Adviser and
Subadviser, (b) by the Investment Adviser, upon 60 days' written notice to the
Account and the Subadviser, or (c) by
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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 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
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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 Connecticut.
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: BEA Associates, One Citicorp Center, 000 Xxxx 00xx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000.
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 00000-0000,
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.
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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: Secretary
BEA ASSOCIATES, A General Partnership
By: __________________________
Its: _________________________
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SCHEDULE A
TO
SUBADVISORY AGREEMENT
The fee payable by the Investment Adviser to the Subadviser shall be at an
annual rate equal to a percentage of the average daily Net Assets Under
Management (as defined below) as follows:
Annual Rate
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.45% of the first $25 Million of such assets,
.40% of the next $25 Millon of such assets,
.35% of the next $50 Million of such assets, and
.25% of such assets over $100 Million.
For purposes of this Schedule A, Net Assets Under Management shall consist
of the aggregated net assets of each Sub-Account as follows:
(a) the High Yield Sub-Account of the CMIA LifeSpan Diversified Income
Account; (b) the High Yield Sub-Account of the Series Fund I LifeSpan
Diversified Income Portfolio; (c) the High Yield Sub-Account of the CMIA
LifeSpan Balanced Account; (d) the High Yield Sub-Account of the Series Fund I
LifeSpan Balanced Portfolio; (e) the High Yield Sub-Account of the CMIA LifeSpan
Capital Appreciation Account; and (f) the High Yield Sub-Account of the Series
Fund I LifeSpan Capital Appreciation Portfolio, in each case to the extent and
for so long as the Subadviser also manages such assets.
For purposes hereof, the value of net assets of the foregoing Sub-Accounts
and Portfolios shall be computed in the manner specified in the applicable
Prospectuses and Statements of Additional Information for the computation of the
value of the net assets in connection with the determination of net asset value
of their shares. On any day that the net asset value determination is suspended
as specified in the Prospectuses, the net asset value for purposes of
calculating the subadvisory fee with respect to each of the aforementioned shall
be calculated as of the date last determined.
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SCHEDULE OF OMITTED INVESTMENT SUBADVISORY AGREEMENTS
Due to the substantial similarity of the investment
subadvisory agreements among OppenheimerFunds, Inc. ("OFI") and
BEA Associates ("BEA") 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 BEA
for CMIA LifeSpan Capital Appreciation Account.
2. Investment Subadvisory Agreement among OFI and BEA
for CMIA LifeSpan Diversified Income Account.
