FIRST INVESTORS INCOME FUNDS
FIRST INVESTORS LIFE SERIES FUNDS
SUBADVISORY AGREEMENT
Agreement made as of the 19th day of January 2011, as amended May 17, 2012, by
and among FIRST INVESTORS MANAGEMENT COMPANY, INC., a New York corporation (the
"Adviser"), MUZINICH & CO., INC., a Delaware corporation (the "Subadviser"),
and FIRST INVESTORS INCOME FUNDS and FIRST INVESTORS LIFE SERIES FUNDS (each a
"Trust" and collectively, the "Trusts"), each a Delaware statutory trust.
W I T N E S S E T H:
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated January 19, 2011 (the "Advisory Agreement") with each Trust,
pursuant to which the Adviser acts as investment adviser of each
Series of the Trust (the "Series"); and
WHEREAS, the Adviser and each Trust desire to retain the Subadviser to
provide investment advisory services to the First Investors Fund
For Income, a series of First Investors Income Funds and the First
Investors Life Series High Yield Fund, a series of First Investors
Life Series Funds, and the Subadviser is willing to render such
investment advisory services (hereinafter, "Series" shall refer to
the Series of each Trust 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 Trusts' Board of Trustees (the "Board"), the Subadviser
shall manage the investment operations and such portion of the
assets of the Series that is allocated to it by the Adviser, in
accordance with the 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 the 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 (A) each Trust's
Trust Instrument, as amended and restated from time to time,
By-Laws, and the Prospectus and Statement of Additional
Information applicable to the Series, (B) instructions and
directions of the Adviser and of the Board, (C) the Trusts'
compliance procedures and other policies, procedures or
guidelines as the Board or the Adviser may establish from
time to time, and (D) requirements of the Investment Company
Act of 1940, as amended (the "1940 Act") and Investment
Advisers Act of 1940, as amended, and the rules under each,
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.
(A) With respect to the securities and other investments to
be purchased or sold for the Series, the Subadviser
shall place orders with or through such persons,
brokers, dealers or futures commission merchants
selected by the Subadviser, provided, however, that
such orders shall (1) be consistent with the brokerage
policy set forth in the Prospectus and Statement of
Additional Information applicable to the Series, or
approved by the Board, (2) conform with federal
securities laws, and (3) 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.
(B) Subject to the foregoing requirements, the Adviser
shall have the right to request that transactions
giving rise to brokerage commissions, in an amount to
be agreed upon by the Adviser and the Subadviser, shall
be executed by brokers and dealers that provide
brokerage or research services to the Adviser, or as
to which an on-going relationship will be of value to
the Series in the management of their assets, which
services and relationship may, but need not, be of
direct benefit to the Series.
(C) On occasions when the Subadviser deems the purchase or
sale of a security or futures contract to be in the
best interest of the 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 Trusts and to such
other clients.
(iv) Records, Reports and Personnel. 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, at its expense, shall render to the Board such
periodic and special reports as the Board may reasonably
request. The Subadviser, at its expense, will make available
to the Board and the Adviser, at reasonable times, its
portfolio managers and other appropriate personnel to review
the investment policies of the Series and to consult with the
Board and the Adviser regarding the investment affairs of the
Series, including economic, statistical and investment matters relevant
to the Subadviser's duties hereunder.
(v) Transaction Reports. The Subadviser shall
provide the custodian of the Series on each
business day with information relating to all
transactions concerning the Series' assets and
shall provide the Adviser with such information
upon the Adviser's request.
(vi) Trust Policies. The Subadviser will comply
with all policies and procedures of the Trusts,
including the portfolio holdings information
policy.
(vii) Valuation. In accordance with procedures and
methods established by the Board, which may be
amended from time to time, the Subadviser will
provide assistance to the Adviser in
determining the fair value of all securities
and other investments owned by the Series, and
use reasonable efforts to arrange for the
provision of valuation information or prices
from parties independent of the Subadviser
with respect to the securities or other
investments owned by the Series for which
market prices are not readily available. The
Subadviser will monitor the securities and
other investments owned by the Series for
potential significant events that could affect
their values and notify the Adviser when, in
its opinion, a significant event has occurred
that may not be reflected in the market values
of such securities.
(viii) Compliance Matters. The Subadviser, at its
expense, will provide the Adviser with such
compliance reports and certifications relating
to its duties under this Agreement and the
federal securities laws as may be agreed upon
by such parties from time to time. The
Subadviser also shall: (i) cooperate with and
provide reasonable assistance to the Adviser,
the Trusts' administrator, custodian, transfer
agent and pricing agents and all other agents
and representatives of the Series, the Trust
and the Adviser; (ii) keep all such persons
fully informed as to such matters as they may
reasonably deem necessary to the performance
of their obligations to the Series, the Trust
and the Adviser;
(iii) provide prompt responses to reasonable
requests made by such persons; and (iv)
maintain any appropriate interfaces with each
so as to promote the efficient exchange of
information.
(ix) Proxy Voting. The Subadviser will vote all
proxies solicited by or with respect to the
issuers of securities in which assets of the
Series may be invested from time to time in
accordance with the Subadviser's proxy voting
policies and procedures, as approved by the
Board.
(x) Consultation with Other Subadvisers. The
Subadviser agrees that it will not consult
with any other Subadviser for either Trust or
Series concerning any transaction by the Series
in securities or other assets.
(b) Subadviser's Directors, Officers and Employees. Services to be
furnished by the Subadviser under this Agreement may be
furnished through any of its directors, officers or
employees. The Subadviser will notify the Adviser and
the Trusts of any change of control of the Subadviser
and any changes in the key personnel who are either
the portfolio manager(s) of the Funds or senior
management of the Subadviser, in each case prior to
or immediately after such change.
(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 that it maintains
for the Series are the property of the Trusts and the
Subadviser will surrender promptly to the Trusts any
of such records upon the Trusts' 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, Errors & Omissions Policy, and Compliance
Program. The Subadviser will provide the Trusts with
reasonable evidence that, with respect to its
activities on behalf of the Series, the Subadviser is
(i) maintaining adequate fidelity bond and errors &
omissions insurance, (ii) has adopted a compliance
program that meets the requirements of the federal
securities laws, including all required codes of
ethics, and (iii) has designated a Chief Compliance
Officer in accordance with the requirements
of the federal securities laws. The Subadviser shall
also make such compliance reports and certifications as
are required by the Trusts' compliance program.
2. Adviser's Duties. The Adviser shall continue to have responsibility
for all other services to be provided to the Trusts and the Series
pursuant to the Advisory Agreement and shall oversee and review the
Subadviser's performance of its duties under this Agreement.
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 Trust Instrument of each Trust, as filed with the Delaware
Secretary of State;
(b) the By-Laws of the Trusts;
(c) certified resolutions of the Board authorizing the appointment of
the Adviser and the Subadviser and approving the form of this
Agreement;
(d) each Trust's Registration Statement on Form N-1A under the 1940 Act
and the Securities Act of 1933, as amended ("1933 Act"),
pertaining to the Series, as filed with the Securities and
Exchange Commission; and
(e) the Prospectus and Statement of Additional Information pertaining
to the 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
the Series' assets at the annual rates set forth in the
attached Schedule A. If this Agreement becomes effective or
terminates 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.
The Subadviser agrees: (1) that the blended fee rate in basis points
charged to each Series will not exceed the blended fee rate in basis
points charged to an account with a substantially similar style having
the same or lower average daily net assets over a one-month period;
and (2) that the actual dollar fee paid by any other client with a
substantially similar style having the same or higher average daily
net assets over a one-month period for whom the Subadviser provides
investment advisory services will not be less than the actual dollar
fee paid by each Series. In the event that the fee charged to a Series
exceeds the fee charged to an account described in (1) or (2) above,
the fee charged to that Series shall automatically be reduced to match
the fee charged to such other account from the time such fee is charged
to such other account.
5. Liability of the Subadviser. The Subadviser agrees to perform
faithfully the services required to be rendered to the Trusts and the
Series under this Agreement, but nothing herein contained shall make
the Subadviser or any of its officers, partners or employees liable for
any loss sustained by the Trusts or its officers, Trustees or
shareholders or any other person on account of the services which the
Subadviser may render or fail to render under this Agreement; provided
however, that nothing herein shall protect the Subadviser against
liability to the Trusts, or to any of the Series' shareholders, to
which the Subadviser would otherwise be subject, by reason of its
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. Nothing in this Agreement
shall protect the Subadviser from any liabilities that 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, without the payment of any penalty, by
the Board or by vote of a majority of the outstanding voting securities
(as defined in the 0000 Xxx) of the 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.
7. Subadviser's Services are Not Exclusive. Nothing in this Agreement
shall limit or restrict the right of any of the Subadviser's partners,
officers or employees 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. The Subadviser agrees not to manage the assets of any
non-affiliated third party U.S. domiciled investment company that has
investment objectives and policies substantially similar to the
investment objectives and policies employed by the Series without
first providing written notice of such activity to the Adviser.
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.
9. Amendments. This Agreement may be amended by mutual consent, subject
to approval by the Board and the 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.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by theirofficers designated below as of the day and year first above
written.
FIRST INVESTORS MANAGEMENT
Attest: COMPANY, INC., a New York corporation
/s/ Xxxxx Xxxxxx Xxxxx By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxxx Xxxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
FIRST INVESTORS INCOME FUNDS, on behalf of First Investors Fund
For Income and FIRST INVESTORS LIFE SERIES FUNDS, on behalf of First Investors
Life Series High Yield Fund
Attest:
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxxxxxxx X. Xxxxxxxxx
Name: Xxxx X. Xxxxx Name: Xxxxxxxxxxx X. Xxxxxxxxx
Title: Secretary Title: President
MUZINICH & CO., INC., a Delaware corporation
Attest:
/s/ Xxxxxx Xxxxxx By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxx Name: Xxxxxx Xxxxxxxx
Title: Chief Compliance Officer Title: President
SCHEDULE A*
The fee paid to the Subadviser under this Agreement for managing portions
of the assets of the First Investors Fund For Income, a series of First
Investors Income Funds, and First Investors Life Series High Yield Fund, a
series of First Investors Life Series Funds, allocated to it by the Adviser
shall be calculated daily and paid monthly. The fee shall be computed in the
following manner.
1. The average daily net assets of First Investors Fund For Income shall be
aggregated with the average net assets (if any) of First Investors Life
Series High Yield Fund that are being managed by Muzinich & Co., Inc.;
2. A blended fee shall then be computed on the sum as if the two Series were
combined using the following schedule:
a. 0.25% on the first $250 million;
b. 0.225% on the next $250 million; and
c. 0.20% on all balances over $500 million.
3. The fee payable under this Agreement with respect to each Series shall then
be computed by multiplying the blended fee by the ratio of the average
daily net assets of each Series to the sum of the average daily net
assets of both Series that are being managed by Muzinich & Co., Inc.
* The Subadviser is compensated based on the assets it manages. Each Series'
cash balance is managed by the Adviser and as such is excluded from the daily
net assets of a Series for purposes of calculating the subadvisory fee.
