FIRST INVESTORS SERIES FUND II, INC.
SUBADVISORY AGREEMENT
Agreement made as of this 8th day of March, 1999, by and among FIRST
INVESTORS MANAGEMENT COMPANY, INC., a New York corporation (the "Adviser"),
XXXXXXX AND X. XXXXXXXXXXXX, INC., a New York Corporation (the "Subadviser"),
and FIRST INVESTORS SERIES FUND II, INC. (the "Fund"), a Maryland corporation
and a diversified open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act").
WITNESSETH:
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated June 13, 1994 (the "Advisory Agreement") with the Fund, pursuant to which
the Adviser acts as investment adviser of each Series of the Fund (the
"Series"); and
WHEREAS, the Adviser and the Fund each desire to retain the Subadviser to
provide investment advisory services to certain Series of the Fund in connection
with the management of that Series and the Subadviser is willing to render such
investment advisory services (hereinafter, "Series" shall refer to each Series
of the Fund which is subject to this Agreement).
NOW, THEREFORE, the parties, intending to be legally bound, agree as
follows:
1. SUBADVISER'S DUTIES.
(a) PORTFOLIO MANAGEMENT. Subject to supervision by the Adviser and
the Fund's Board of Directors, the Subadviser shall manage the investment
operations and the composition of that portion of assets of a particular Series
as the Adviser shall determine from time to time, as set forth in Schedule A
hereto (as such Schedule may be amended from time to time), which is allocated
to it from time to time by the Adviser (which portion can include any or all of
that Series' assets), including the purchase, retention and disposition thereof,
in accordance with that Series' investment objectives, policies and
restrictions, and subject to the following understandings:
(i) INVESTMENT DECISIONS. The Subadviser shall determine from
time to time what investments and securities will be purchased, retained, sold
or loaned by each Series, and what portion of such assets will be invested or
held uninvested as cash.
(ii) INVESTMENT LIMITS. In the performance of its duties and
obligations under this Agreement, the Subadviser shall act in conformity with
applicable limits and requirements, as amended from time to time, as set forth
in the (A) Fund's Articles of Incorporation, as amended and restated from time
to time, By-Laws, Prospectus and Statement of Additional Information applicable
to a Series, (B) instructions and directions of the Adviser and of the Board of
Directors of the Fund, and (C) requirements of the 1940 Act, the Internal
Revenue Code of 1986, as amended, as applicable to the Series, and all other
applicable federal and state laws and regulations.
(iii) PORTFOLIO TRANSACTIONS. With respect to the securities and
other investments to be purchased or sold for each Series, the Subadviser shall
place orders with or through such persons, brokers, dealers, or futures
commission merchants (including, but not limited to, broker-dealers which are
affiliated with the Adviser or Subadviser) selected by the Subadviser, provided,
however, that such orders shall (A) be consistent with the brokerage policy set
forth in the Prospectus and Statement of Additional Information applicable to
that Series, or approved by the Fund's Board of Directors, (B) conform with
federal securities laws, and (C) be consistent with securing the most favorable
price and efficient execution. Within the framework of this policy, the
Subadviser may consider the research, investment information and other services
provided by, and the financial responsibility of, brokers, dealers or futures
commission merchants who may effect, or be a party to, any such transaction or
other transactions to which the Subadviser's other clients may be a party.
On occasions when the Subadviser deems the purchase or sale of a security
or futures contract to be in the best interest of a Series as well as other
clients of the Subadviser, the Subadviser, to the extent permitted by applicable
laws and regulations, may, but shall be under no obligation to, aggregate the
securities or futures contracts to be sold or purchased in order to obtain the
most favorable price or lower brokerage commissions and efficient execution. In
such event, allocation of the securities or futures contracts so purchased or
sold, as well as the expenses incurred in the transaction, will be made by the
Subadviser in the manner the Subadviser considers to be the most equitable and
consistent with its fiduciary obligations to the Fund and to such other clients;
provided, however, that such allocations shall (A) be consistent with policies
and procedures approved by the Board of Directors of the Fund, and (B) conform
with federal securities laws.
The parties hereby agree that the Subadviser is authorized to execute
portfolio transactions in its capacity as a broker-dealer or through a
broker-dealer affiliated with the Subadviser as long as it does not consider
research provided to the Fund by it as a reason for directing brokerage business
to itself or an affiliate, it does not enter into any principal transactions
with the Fund, it complies with its obligation to seek best execution, it
reports the aggregate amount of such commissions to the Board of Directors of
the Fund on an annual basis or more frequently if requested by the Board, it
complies with procedures adopted by the Fund under Section 17(e) of the 1940
Act, and it complies with Section 11(a) of the Securities Exchange Act of 1934
and any rules adopted thereunder.
(iv) RECORDS AND REPORTS. The Subadviser shall maintain such
books and records required by Rule 31a-1 under the 1940 Act as shall be agreed
upon from time to time by the parties hereto, and shall render to the Fund's
Board of
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Directors such periodic and special reports as the Board of Directors of the
Fund may reasonably request.
(v) TRANSACTION REPORTS. The Subadviser shall provide the
custodian of each Series on each business day with information relating to all
transactions concerning that Series' assets and shall provide the Adviser with
such information upon the Adviser's request.
(b) SUBADVISER'S DIRECTORS, OFFICERS AND EMPLOYEES. The Subadviser
shall authorize and permit any of its directors, officers and employees who
maybe elected as directors or officers of the Fund to serve in the capacities in
which they are elected. Services to be furnished by the Subadviser under this
Agreement may be furnished through any such directors, officers, or employees.
(c) MAINTENANCE OF RECORDS. The Subadviser shall timely furnish to
the Adviser all information relating to the Subadviser's services hereunder
which are needed by the Adviser to maintain the books and records of the Series
required by Rule 31a-1 under the 1940 Act. The Subadviser agrees that all
records which it maintains for the Series are the property of the Fund and the
Subadviser will surrender promptly to the Fund any of such records upon the
Fund's request; provided, however, that the Subadviser may retain a copy of such
records. The Subadviser further agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any such records as are required to be maintained
by it pursuant to paragraph 1(a) hereof.
(d) FIDELITY BOND AND CODE OF ETHICS. The Subadviser will provide
the Fund with reasonable evidence that, with respect to its activities on behalf
of the Fund and/or each Series, the Subadviser is maintaining (i) adequate
fidelity bond insurance, and (ii) an appropriate Code of Ethics and related
reporting procedures.
2. ADVISER'S DUTIES. The Adviser shall continue to have responsibility
for all other services to be provided to the Fund and each Series pursuant to
the Advisory Agreement and shall oversee and review the Subadviser's performance
of its duties under this Agreement. The Adviser shall also retain direct
portfolio management responsibility with respect to any assets of the Series
which are not allocated by it to the portfolio management of the Subadviser as
provided in paragraph 1(a) hereof.
3. DOCUMENTS PROVIDED TO THE SUBADVISER. The Adviser has or will
deliver to the Subadviser current copies and supplements thereto of each of the
following documents, and will deliver to it all future amendments and
supplements, if any:
(a) the Certificate of Incorporation of the Fund, as filed with the
Maryland Department of Assessment and Taxation;
(b) the By-Laws of the Fund;
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(c) certified resolutions of the Board of Directors of the Fund
authorizing the appointment of the Adviser and the Subadviser and approving the
form of this Agreement;
(d) the Fund's Registration Statement on Form N-1A under the 1940
Act and the Securities Act of 1933, as amended ("1933 Act"), pertaining to a
Series, as filed with the Securities and Exchange Commission; and
(e) the Prospectus and Statement of Additional Information
pertaining to that Series.
4. COMPENSATION OF THE SUBADVISER. For the services provided and the
expenses assumed pursuant to this Agreement, the Adviser will pay to the
Subadviser, effective from the date of this Agreement, a fee which is computed
daily and paid monthly from each Series' assets at the annual rates as a
percentage of that Series' average daily net assets as set forth in the attached
Schedule A, which Schedule can be modified from time to time to reflect changes
in annual rates or the addition or deletion of a Series from the terms of this
Agreement, subject to appropriate approvals required by the 1940 Act. If this
Agreement becomes effective or terminates with respect to any Series before the
end of any month, the fee for the period from the effective date to the end of
the month or from the beginning of such month to the date of termination, as the
case may be, shall be prorated according to the proportion that such month bears
to the full month in which such effectiveness or termination occurs.
5. LIMITATION ON LIABILITY OF THE SUBADVISER. The Subadviser shall not
be liable for any loss sustained by the Fund or its officers, directors or
shareholders or any other person on account of the services which the Subadviser
may render or fail to render under this Agreement, except for any loss resulting
from its willful misfeasance, bad faith or negligence in the performance of its
duties, or by reason of its reckless disregard of its obligations and duties
under this Agreement; provided, however, that nothing in this Agreement shall
protect the Subadviser from any liabilities which it may have under the 1933 Act
or the 1940 Act.
6. DURATION AND TERMINATION. Unless sooner terminated as provided
herein, this Agreement shall continue in effect for a period of more than two
years from the date written above only so long as such continuance is
specifically approved at least annually in conformity with the requirements of
the 1940 Act; provided, however, that this Agreement may be terminated at any
time with respect to any Series, without the payment of any penalty, by the
Board of Directors of the Fund or by vote of a majority of the outstanding
voting securities (as defined in the 0000 Xxx) of such Series, or by the
Subadviser at any time, without the payment of any penalty, on not more than 60
days' nor less than 30 days' written notice to the other parties. This Agreement
shall terminate automatically in the event of its assignment (as defined in the
0000 Xxx) or upon the termination of the Advisory Agreement. Termination of this
Agreement with respect to a given Series shall not affect the continued validity
of this Agreement or the performance thereunder with respect to any other
Series.
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7. SUBADVISER'S SERVICES ARE NOT EXCLUSIVE. Nothing in this Agreement
shall limit or restrict the right of any of the Subadviser's directors, officers
or employees who may also be a director, officer or employee of the Fund to
engage in any other business or to devote his or her time and attention in part
to the management or other aspects of any business, whether of a similar or a
dissimilar nature, or limit or restrict the Subadviser's right to engage in any
other business or to render services of any kind to any other corporation, firm,
individual or association.
8. REFERENCES TO THE SUBADVISER. During the term of this Agreement, the
Adviser agrees to furnish to the Subadviser at its principal office all
prospectuses, proxy statements, reports to shareholders, sales literature or
other material prepared for distribution to sales personnel, shareholders of the
Series or the public, which refer to the Subadviser or its clients in any way,
prior to use thereof and not to use such material if the Subadviser reasonably
objects in writing five business days (or such other time as may be mutually
agreed upon) after receipt thereof. Sales literature may be furnished to the
Subadviser hereunder by first-class or overnight mail, facsimile transmission
equipment or hand delivery.
9. AMENDMENTS. This Agreement may be amended with respect to a given
Series by mutual consent, subject to approval by the Fund's Board of Directors
and such Series' shareholders to the extent required by the 1940 Act.
10. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of New York.
11. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding among the parties hereto, and supersedes all prior agreements and
understandings relating to the subject matter hereof.
12. SEVERABILITY. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
13. THE 1940 ACT. Where the effect of a requirement of the 1940 Act
reflected in any provision of this Agreement is altered by a rule, regulation or
order of the Securities and Exchange Commission, whether of special or general
application, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
14. HEADINGS. The headings in this Agreement are intended solely as a
convenience, and are not intended to modify any other provision herein.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
Attest: FIRST INVESTORS MANAGEMENT
COMPANY, INC.
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Head
--------------------- -------------------
Xxxxx X. Xxxxxx, Assistant Secretary Xxxxxxx X. Head, President
Attest: FIRST INVESTORS SERIES FUND II,
INC.
/s/ X. Xxxxx By: /s/ XXxxx X. Head
--------------------- -----------------
X. Xxxxx, Secretary Xxxxx X. Head, President
Attest: XXXXXXX AND S. BLEICHROEDER,
INC.
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxx X. Xxxxxxx
--------------------- --------------------
Xxxxx X. Xxxxxxxx, Senior Vice President Xxxx X. Xxxxxxx, Co-President
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FIRST INVESTORS SERIES FUND II, INC.
SUBADVISORY AGREEMENT
SCHEDULE A
Compensation pursuant to Paragraph 4 of the First Investors Series Fund
II, Inc. Subadvisory Agreement shall be calculated in accordance with the
following schedule:
FIRST INVESTORS FOCUSED EQUITY FUND
Advisory Fee as % of
Average Daily of Average Daily
NET ASSETS* NET ASSETS
------------------ --------------------
Up to $100 million 0.400%
In excess of $100 million to $500 million 0.275%
Over $500 million 0.200%
Dated: January 21, 1999
* Applies to average daily net assets that are subject to the Subadviser's
investment discretion.
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