EXHIBIT 5.2
CONNECTICUT MUTUAL FINANCIAL SERVICES SERIES FUND I, 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 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 Capital Appreciation 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 dated ______________, 1996, between the
Investment Adviser and the 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
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 Portfolio agree with the Subadviser as follows:
1. The Subadviser will regularly provide the Portfolio with advice
concerning the investment management of the High Yield Fixed Income portion
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, Portfolio or the Investment Adviser in
any way or otherwise be deemed to be an agent of the Company, 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 Sub-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 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 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 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 any compensation in connection with the purchase or sale of
investment securities by the
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Sub-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 Sub-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
Sub-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
Sub-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
Sub-Portfolio 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 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 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-Portfolio, all in such detail as the Portfolio 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-Portfolio in its discretion to vote,
tender or convert any securities in the Sub-Portfolio; to execute proxies,
waivers, consents, account documentation, agreements, contracts and other
instruments with respect to such securities and the assets of the
Sub-Portfolio; 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 Subadviser shall not incur
any liability to the Investment Adviser or the Sub-Portfolio 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
Portfolio or its shareholders by reason of: (a) the Subadviser negligently
causing the Sub-Portfolio to be in violation of any federal or state law,
rule or regulation or any investment policy or restriction set forth in the
Portfolio'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-Portfolio 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 Portfolio, 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 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 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
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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 account 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 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
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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: 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 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.
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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: _________________________
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-Portfolio as follows:
(a) the High Yield Sub-Portfolio of the CMIA LifeSpan Diversified Income
Portfolio; (b) the High Yield Sub-Portfolio of the Series Fund I LifeSpan
Diversified Income Portfolio; (c) the High Yield Sub-Portfolio of the CMIA
LifeSpan Balanced Portfolio; (d) the High Yield Sub-Portfolio of the Series
Fund I LifeSpan Balanced Portfolio; (e) the High Yield Sub-Portfolio of the
CMIA LifeSpan Capital Appreciation Portfolio; and (f) the High Yield
Sub-Portfolio 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-Portfolios 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 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 BEA
for LifeSpan Capital Appreciation Portfolio.
2. Investment Subadvisory Agreement among OFI and BEA
for LifeSpan Diversified Income Portfolio.