EXHIBIT 5.1
CONNECTICUT MUTUAL FINANCIAL SERVICES SERIES FUND I, 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 Financial Services Series Fund I, 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 LifeSpan Balanced Portfolio (the "Portfolio") 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 Portfolio, the Investment Adviser has selected the Subadviser
to act as an investment subadviser of the Portfolio 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 Portfolio with
advice concerning the investment management of the Small Capitalization
U.S. equity portfolio of the Portfolio (the "Sub-Portfolio"), designated by
the Investment Adviser. Such advice shall be consistent with the investment
objectives and policies of the Portfolio as set forth in the Portfolio'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-Portfolio, and what securities shall be held or sold by the
Sub-Portfolio, subject always to the provisions of Section 9 hereof.
The Investment Adviser shall oversee the management of the
Sub-Portfolio 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 Portfolio not
designated as part of the Sub-Portfolio. The Subadviser shall not be
responsible for the provision of administrative, bookkeeping or accounting
services to the Portfolio, 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 Portfolio or the Investment Adviser
in any way or otherwise be deemed to be an agent of the Company, the
Portfolio 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 Portfolio 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 Portfolio'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 Portfolio including, but not limited to, the following: legal
expenses; auditing and accounting expenses; expenses of maintenance of the
Portfolio's books and records relating to the Portfolio, including
computation of the Portfolio'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
Portfolio's shares; expenses of registering and qualifying Portfolio shares
for sale under applicable federal and state law; expenses of preparing,
setting in print, printing and distributing prospectuses, reports, notices
and dividends to Portfolio shareholders; cost of stationery; costs of
shareholders and other meetings of the Portfolio; traveling expenses of
officers, Directors and employees of the Company or Portfolio, if any; fees
of the Company's Directors and salaries of any officers or employees of the
Company or Portfolio; and the Portfolio's pro rata portion of premiums on any
fidelity bond and other insurance covering the Company, the Portfolio and
their officers and Directors.
The Portfolio shall reimburse the Subadviser for any such expenses or
other expenses of the Portfolio, as may be reasonably incurred by such
Subadviser on the Portfolio's behalf. The Subadviser shall keep and supply
to the Portfolio 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 Portfolio shall have no responsibility for any fee payable to the
Subadviser.
In the event that the advisory fee payable by the Portfolio to the
Investment Adviser shall be reduced as required by the securities laws or
regulations of any jurisdiction in which the Portfolio'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
Portfolio, 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-Portfolio, 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-Portfolio 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 Portfolio the best
execution available. Neither the Subadviser nor any affiliate of the
Subadviser will act as principal or receive directly or indirectly
anycompensation in connection with the purchase or sale of investment
securities by the Portfolio, other than compensation provided for in this
Agreement or in the Investment Advisory Agreement of the Portfolio 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 Portfolio 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 Portfolio 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 Portfolio 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
Portfolio 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 Portfolio, the
Subadviser will act solely as investment counsel for such clients and not in
any way on behalf of the Portfolio. The Subadviser's services to the
Portfolio 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 Portfolio are adhered to, and
such aggregation is in the best interests of the Portfolio, the Subadviser
may aggregate sales and purchase orders of securities held for the Portfolio
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
Portfolio and shall result in an overall economic benefit to the Portfolio,
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 Portfolio'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 Portfolio 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
Portfolio, the Subadviser shall not be subject toliabilities to the
Portfolio, the Investment Adviser, the Company, or to any shareholder of the
Portfolio 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 Portfolio,
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 Portfolio, 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
Portfolio. 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 Portfolio, upon 60
days' written notice to the Investment Adviser and Subadviser, (b) by the
Investment Adviser, upon 60 days' written notice to the Portfolio and the
Subadviser, or (c) by the Subadviser, upon 90 days' written notice to the
Portfolio 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 Portfolio 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 Portfolio, 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-Portfolio 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 Portfolio as each of the same shall be from
time to time in effect as set forth in the Portfolio'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 Portfolio only income and gains
realized with respect to the Sub-Portfolio, will cause the Sub-Portfolio 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-Portfolio were a
"regulated investment company" as defined in Section 851(a) of the Code; and
Section 817(h) 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-Portfolio assets having a value exceeding
five percent of the Portfolio's total (gross) assets in securities of one
issuer; or (b) cause the Sub-Portfolio to acquire more than ten percent of
the outstanding voting securities of any one issuer; or (c) invest
Sub-Portfolio 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 orsimilar 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 Portfolio for the enforcement of any
claims against the Portfolio 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: ________________________________
PILGRIM XXXXXX & ASSOCIATES, LTD.
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
-----------
.60% of the total net assets under management
For purposes of this Schedule A, Net Assets Under Management shall
consist of the aggregated net assets of each Sub-Account or Sub-Portfolio as
follows:
(a) the Small Capitalization U.S. equity Sub-Account of the CMIA
LifeSpan Capital Appreciation Account; (b) the Small Capitalization U.S.
equity Sub-Portfolio of the Series Fund I Life Span Capital Appreciation
Portfolio; (c) the Small Capitalization U.S. equity Sub-Account of the CMIA
LifeSpan Balanced Account; and (d) the Small Capitalization U.S. equity
Sub-Portfolio of the Series Fund I LifeSpan Balanced Portfolio, in each case
to the extent and for so long as the Subadviser also manages such assets.
For purposes hereof, the value of the net assets of the foregoing
Sub-Accounts and Sub-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 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.
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 LifeSpan Balanced Portfolio 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 LifeSpan Capital Appreciation Portfolio.
