FIRST INVESTORS SERIES FUND II, INC.
INVESTMENT ADVISORY AGREEMENT
This Agreement is made as of June 13, 1994, by and between FIRST
INVESTORS SERIES FUND II, INC., a Maryland corporation ("Company"), and
FIRST INVESTORS MANAGEMENT COMPANY INC., a New York corporation
("Manager").
WHEREAS, the Company is registered under the Investment Company Act
of 1940, as amended ("1940 Act"), as an open-end, diversified management
investment company consisting of one or more separate series of shares
("Series"), each having its own assets and investment policies; and
WHEREAS, the Manager is an investment adviser under the Investment
Advisers Act of 1940, as amended; and
WHEREAS, the Company desires to retain the Manager as investment
adviser to furnish investment advisory and portfolio management services
to each Series of the Company as now exists and to each such other
Series of the Company hereinafter established as agreed to from time to
time by the parties hereto (hereinafter, "Series" shall refer to each
Series of the Company which is subject to this Agreement), and the
Manager is willing to furnish such services.
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as
follows:
1. Appointment. The Company hereby appoints the Manager as
investment adviser of the Company and each Series listed on Schedule A
of this Agreement (as such Schedule may be amended from time to time)
for the period and on the terms set forth in this Agreement. The
Manager accepts such appointment and agrees to render the services
herein set forth for compensation as set forth on Schedule A. In the
performance of its duties, the Manager will act in the best interests of
the Company and the Series and will comply with (a) applicable laws and
regulations, including, but not limited to, the 1940 Act, (b) the terms
of this Agreement, (c) the Company's Articles of Incorporation, By-Laws
and currently effective registration statement under the Securities Act
of 1933, as amended, and the 1940 Act, and any amendments thereto, (d)
relevant undertakings to state securities regulators which also have
been provided to the Manager, (e) the stated investment objective(s),
policies and restrictions of each applicable Series, and (f) such other
guidelines as the Company's Board of Directors ("Board") reasonably may
establish.
2. Duties of the Manager.
(a) Investment Program. Subject to supervision by the
Board, the Manager will provide a continuous investment program for each
Series and shall determine what securities and other investments will be
purchased, retained or sold by each Series.
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The Manager will exercise full discretion and act for each Series
in the same manner and with the same force and effect as such
Series itself might or could do with respect to purchases, sales,
or other transactions, as well as with respect to all other things
necessary or incidental to the furtherance or conduct of such
purchases, sales or other transactions.
(b) Other Management Services. The Manager agrees to conduct
the business and details of the operation of the Series as shall be
agreed to from time to time by the parties hereto; provided, however,
that the Manager shall not act as custodian for Series assets. The
Manager also agrees, at its own cost, to provide the Series with certain
executive, administrative and clerical personnel and to provide the
Series with office facilities and supplies.
(c) Execution of Transactions. The Manager will place orders
pursuant to its investment determinations for each Series either
directly with the issuer or through any brokers or dealers. In the
selection of brokers or dealers and the placement of orders for the
purchase and sale of portfolio investments for each Series, the Manager
shall use its best efforts to obtain for each Series the most favorable
price and execution available, except to the extent that it may be
permitted to pay higher brokerage commissions for brokerage or research
services as described below. In using its best efforts to obtain the
most favorable price and execution available, the Manager, bearing in
mind each Series' best interests at all times, shall consider all
factors it deems relevant, including by way of illustration, price, the
size of the transaction, the nature of the market for the security, the
amount of the commission, the timing of the transaction taking into
account market prices and trends, the reputation, experience and
financial stability of the broker or dealer involved and the quality of
service rendered by the broker or dealer in other transactions. Subject
to such policies as the Board may determine, the Manager shall not be
deemed to have acted unlawfully or to have breached any duty created by
this Agreement or otherwise solely by reason of its having caused a
Series to pay a broker that provides brokerage or research services to
the Manager an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker would
have charged for effecting that transaction if the Manager determines in
good faith that such amount of commission is reasonable in relation to
the value of the brokerage or research services provided by such broker
or dealer, viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to such Series and to
other clients of the Manager as to which the Manager exercises
investment discretion.
(d) Reports to the Board. Upon request, the Manager will
provide the Board with economic and investment analyses and reports and
make available to the Board any economic, statistical and investment
services normally available to institutional or other customers of the
Manager.
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(e) Delegation of Authority. Any of the foregoing duties
specified in this paragraph 2 with respect to one or more Series may be
delegated by the Manager, at the Manager's expense, to an appropriate
party, subject to such approval by the Board and shareholders of the
applicable Series as may be required by the 1940 Act. The Manager shall
oversee the performance of delegated duties by any such other party and
shall furnish the Board with periodic reports concerning the performance
of delegated responsibilities by such party.
3. Services Not Exclusive. The services furnished by the Manager
hereunder are not to be deemed exclusive and the Manager shall be free
to furnish similar services to others so long as its services under this
Agreement are not impaired thereby. Nothing in this Agreement shall
limit or restrict the right of any director, officer or employee of the
Manager, who may also be a Director, officer or employee of the Company,
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 other
business, whether of a similar nature or a dissimilar nature.
4. Books and Records. In compliance with the requirements of Rule
31a-3 under the 1940 Act, the Manager hereby agrees that all records
which it maintains for the Company are the property of the Company and
further agrees to surrender promptly to the Company any of such records
upon the Company's request. The Manager further agrees to preserve for
the periods prescribed by Rule 31a-2 under the 1940 Act the records
required to be maintained by Rule 31a-1 under the 1940 Act.
5. Expenses.
(a) Expenses of the Company. During the term of this
Agreement, each Series will bear all expenses not specifically assumed
by the Manager incurred in its operations and the offering of its
shares. Expenses borne by each Series will include, but not be limited
to, the following (or each Series' proportionate share of the
following): brokerage commissions relating to securities purchased or
sold by the Series or any losses incurred in connection therewith; fees
payable to and expenses incurred on behalf of the Series by the Manager;
expenses of organizing the Series; filing fees and expenses relating to
the registration and qualification of the Series' shares under federal
or state securities laws and maintaining such registrations and
qualifications; distribution fees; fees and salaries payable to the
members of the Board and officers who are not officers or employees of
the Manager; taxes (including any income or franchise taxes) and
governmental fees; costs of any liability, uncollectible items of
deposit and other insurance or fidelity bonds; any costs, expenses or
losses arising out of any liability of or claim for damage or other
relief asserted against the Company or Series for violation of any law;
legal, accounting and auditing expenses, including legal fees of special
counsel for the independent directors; charges of custodians, transfer
agents and other agents; costs of
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preparing share certificates; expenses of setting in type and
printing prospectuses and supplements thereto for existing
shareholders, reports and statements to shareholders and proxy
materials; any extraordinary expenses (including fees and
disbursements of counsel) incurred by the Company or Series; and
fees and other expenses incurred in connection with membership in
investment company organizations.
(b) Fee Waivers and Reimbursements. If the expenses borne by
a Series in any fiscal year exceed the applicable expense limitations
imposed by the securities regulations of any state in which shares are
registered or qualified for sale to the public, the Manager will waive
its fee or reimburse such Series for any excess up to the amount of the
fee payable to it during that fiscal year pursuant to paragraph 6
hereof.
6. Compensation. For the services provided and the expenses
assumed pursuant to this Agreement with respect to each Series, the
Company will pay the Manager, 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 percentages 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 period bears to the full month in which such
effectiveness or termination occurs.
7. Limitation of Liability of the Manager. The Manager shall not
be liable for any error of judgment or mistake of law or for any loss
suffered by the Company or any Series in connection with the matters to
which this Agreement relate except a loss resulting from the willful
misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement. Any person, even though
also an officer, partner, employee, or agent of the Manager, who may be
or become an officer, Board member, employee or agent of the Company
shall be deemed, when rendering services to the Company or acting in any
business of the Company, to be rendering such services to or acting
solely for the Company and not as an officer, partner, employee, or
agent or one under the control or direction of the Manager even though
paid by it.
8. Duration and Termination.
(a) Effectiveness. This Agreement shall become effective
upon the date hereinabove written, provided that, with respect to a
Series, this Agreement shall not take effect unless it has first been
approved (i) by a vote of a majority of those members of the
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Board who are not parties to this Agreement or interested persons
of any such party ("Independent Board Members") cast in person at
a meeting called for the purpose of voting on such approval, and
(ii) by an affirmative vote of a majority of the outstanding
voting securities of such Series.
(b) Renewal. Unless sooner terminated as provided herein, this
Agreement shall continue in effect for two years from the above written
date. Thereafter, if not terminated, this Agreement shall continue
automatically for successive periods of twelve months each, provided
that such continuance is specifically approved at least annually (i) by
a vote of a majority of the Independent Board Members cast in person at
a meeting called for the purpose of voting on such approval, and (ii) by
the Board or, with respect to any given Series, by an affirmative vote
of a majority of the outstanding voting securities of such Series.
(c) Termination. Notwithstanding the foregoing, with respect
to any Series, this Agreement may be terminated at any time by vote of
the Board or by vote of a majority of the outstanding voting securities
of such Series on 60 days' written notice delivered or mailed by
registered mail, postage prepaid, to the Manager. The Manager may at
any time terminate this Agreement on 60 days' written notice delivered
or mailed by registered mail, postage prepaid, to the Company. This
Agreement automatically and immediately will terminate in the event of
its assignment. Termination of this Agreement pursuant to this
paragraph 8 shall be without the payment of any penalty. 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.
9. Amendment of This Agreement. No provision 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 material
amendment of this Agreement as to a given Series shall be effective
until approved by vote of the holders of a majority of the outstanding
voting securities of such Series.
10. Name of Company. The Company or any Series may use the name
"First Investors" only for so long as this Agreement or any extension,
renewal or amendment hereof remains in effect, including any similar
agreement with any organization which shall have succeeded to the
business of the Manager. At such time as such an agreement shall no
longer be in effect, the Company and each Series will (to the extent
that it lawfully can) cease to use any name derived from First Investors
Management Company, Inc. or any successor organization.
11. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York, without giving effect
to the conflicts of laws principles thereof, and in accordance with the
1940 Act. To the extent that the applicable
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laws of the State of New York conflict with the applicable
provisions of the 1940 Act, the latter shall control.
12. Definitions. As used in this Agreement, the terms "majority
of the outstanding voting securities," "interested person," and
"assignment" shall have the same meanings as such terms have in the 1940
Act.
13. Severability. 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. This
Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors.
14. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
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.
FIRST INVESTORS SERIES FUND II, INC.
Attest: MARKET FUND, INC.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Head
X. Xxxxx, Secretary Xxxxx X. Head, President
FIRST INVESTORS MANAGEMENT
Attest: COMPANY, INC.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Head
Xxxxx X. Xxxxxx, Xxxxxxx X. Head, President
Secretary
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FIRST INVESTORS SERIES FUND II, INC.
INVESTMENT ADVISORY AGREEMENT
SCHEDULE A
Compensation pursuant to Paragraph 6 of this First Investors
Series Fund II, Inc. Investment Advisory Agreement shall be calculated
in accordance with the following schedules:
Growth & Income Fund
Utilities Income Fund
Advisory Fee as %
Average Daily of Average Daily
Net Assets Net Assets
Up to $300 million 0.75%
In excess of $300 million to $500 million 0.72%
In excess of $500 million to $750 million 0.69%
Over $750 million 0.66%
Made In The U.S.A. Fund
Advisory Fee as %
Average Daily of Average Daily
Net Assets Net Assets
Up to $200 million 1.00%
In excess of $200 million to $500 million 0.75%
In excess of $500 million to $750 million 0.72%
In excess of $750 million to $1.0 billion 0.69%
Over $1.0 billion 0.66%
Dated: June 13, 1994
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