FIRST INVESTORS SERIES FUND II INC, 485APOS, 1995-11-13

FIRST INVESTORS SERIES FUND II INC
485APOS, 1995-11-13

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As filed with the Securities and Exchange Commission on November 13, 1995

Registration No. 33-46924
811-6618

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Post-Effective Amendment No. 9 X

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940

Amendment No. 11 X

FIRST INVESTORS SERIES FUND II, INC.
(Exact name of Registrant as specified in charter)

Ms. Concetta Durso
Secretary and Vice President

First Investors Series Fund II, Inc.
95 Wall Street
New York, New York 10005
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: As soon as practicable
after the effective date of this Registration Statement

It is proposed that this filing will become effective on January
16, 1996 pursuant to paragraph (a) of Rule 485.

Pursuant to Rule 24f-2 under the Investment Company Act of 1940,
Registrant has previously elected to register an indefinite number of
shares of common stock, par value $.001 per share, under the
Securities Act of 1933. Registrant filed a Rule 24f-2 Notice for its
fiscal year ending October 31, 1994 on December 22, 1994.

<PAGE>

FIRST INVESTORS SERIES FUND II, INC.
CROSS-REFERENCE SHEET

N-1A Item No. Location
<S> <C>
PART A: PROSPECTUS

1. Cover Page . . . . . . . . . . . . . . . . . . Cover Page

2. Synopsis . . . . . . . . . . . . . . . . . . . Fee Table

3. Condensed Financial Information . . . . . . . . Financial Highlights

4. General Description of Registrant . . . . . . . Investment Objectives and
Policies; General Information
5. Management of the Fund . . . . . . . . . . . . Management

5A. Management's Discussion of
Fund Performance . . . . . . . . . . . . . . . Performance Information

6. Capital Stock and Other Securities . . . . . . Description of Shares;
Dividends and Other
Distributions; Taxes;
Determination of Net Asset
Value
7. Purchase of Securities Being Offered . . . . . Alternative Purchase Plan; How
to Buy Shares
8. Redemption or Repurchase . . . . . . . . . . . How to Exchange Shares; How to
Redeem Shares; Telephone
Transactions
9. Pending Legal Proceedings . . . . . . . . . . . Management

PART B: STATEMENT OF ADDITIONAL INFORMATION

10. Cover Page . . . . . . . . . . . . . . . . . . Cover Page

11. Table of Contents . . . . . . . . . . . . . . . Table of Contents

12. General Information and History . . . . . . . . General Information

13. Investment Objectives and Policies . . . . . . Investment Policies;
Investment Restrictions
14. Management of the Fund . . . . . . . . . . . . Directors and Officers

15. Control Persons and Principal
Holders of Securities . . . . . . . . . . . . Not Applicable

16. Investment Advisory and Other Services . . . . Management

17. Brokerage Allocation . . . . . . . . . . . . . Allocation of Portfolio
Brokerage
18. Capital Stock and Other Securities . . . . . . Determination of Net Asset
Value
19. Purchase, Redemption and Pricing
of Securities Being Offered . . . . . . . . . Reduced Sales Charges,
Additional Exchange and
Redemption Information and
Other Services; Determination
of Net Asset Value

<PAGE>

N-1A Item No. Location

20. Tax Status . . . . . . . . . . . . . . . . . . Taxes

21. Underwriters . . . . . . . . . . . . . . . . . Underwriter

22. Performance Data . . . . . . . . . . . . . . . Performance Information

23. Financial Statements . . . . . . . . . . . . . Not Applicable

</TABLE>
PART C: OTHER INFORMATION

Information required to be included in Part C is set forth under
the appropriate item so numbered, in Part C hereof.

<PAGE>

First Investors Series Fund II, Inc.
Growth & Income Fund
Made In The U.S.A. Fund
Utilities Income Fund

95 Wall Street, New York, New York 10005/1-800-423-4026

This is a Prospectus for First Investors Series
Fund II, Inc. ("Series Fund II"), an open-end diversified
management investment company. The Fund offers three
separate investment series, each of which has different
investment objectives and policies: Growth & Income
Fund, Made In The U.S.A. Fund and Utilities Income Fund
(each a "Fund"). Each Fund sells two classes of shares.
Investors may select Class A or Class B shares, each
with a public offering price that reflects different sales
charges and expense levels. See "Alternative Purchase
Plans."

Growth & Income Fund seeks long-term growth of
capital and current income. This Fund seeks to achieve its
objective by investing, under normal market conditions, at
least 65% of its total assets in securities that provide
the potential for growth and offer income, such as
dividend-paying stocks and securities convertible into
common stock.

Made In The U.S.A. Fund seeks long-term capital
growth. This Fund seeks to achieve its objective by
investing, under normal market conditions, at least 75%
of its total assets in common and preferred stocks of
companies that its investment adviser considers to have
potential for capital growth. In addition, under normal
market conditions, 65% of the Fund's total assets will be
invested in securities of companies that have a medium
market capitalization and are incorporated and have their
principal place of business in the United States.

Utilities Income Fund primarily seeks high
current income. Long-term capital appreciation is a
secondary objective. This Fund seeks to achieve
its objectives by investing, under normal market
conditions, at least 65% of its total assets in equity
and debt securities issued by companies primarily engaged
in the public utilities industry.

There can be no assurance that any Fund will achieve
its investment objective.

This Prospectus sets forth concisely the information
about the Funds that a prospective investor should know
before investing and should be retained for future
reference. First Investors Management Company, Inc.
("FIMCO" or "Adviser") serves as investment adviser to
the Funds and First Investors Corporation ("FIC" or
"Underwriter") serves as distributor of the Funds'
shares. A Statement of Additional Information ("SAI"),
dated January 16, 1996 (which is incorporated by
reference herein), has been filed with the Securities and
Exchange Commission. The SAI is available at no
charge upon request to the Funds at the address or
telephone number indicated above.

An investment in these securities is not a deposit or
obligation of, or guaranteed or endorsed by, any bank and
is not federally insured or protected by the Federal
Deposit Insurance Corporation, the Federal Reserve Board or
any other government agency.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

The date of this Prospectus is January 16, 1996

<PAGE>

FEE TABLE
[To be updated]

The following table is intended to assist
investors in understanding the expenses associated with
investing in each class of shares of a Fund. Shares of the
Funds issued prior to January 12, 1995 have been designated
as Class A shares.

Shareholder Transaction Expenses
<TABLE>
<CAPTION>
Class A Class B
Shares Shares
<S> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) . . . . . . . . . . . . . 6.25% None

Deferred Sales Load
(as a percentage of the lower of original purchase
price or redemption proceeds) . . . . . . . . . . . . . . . . None* 4% in the first year;
declining to 0% after
the sixth year
Exchange Fee** None None
</TABLE>

<TABLE>
<CAPTION>
Annual Fund Operating Expenses
(as a percentage of average net assets)

Growth & Income Fund Made in the U.S.A. Fund Utilities Income Fund

Class A Class B(1) Class A Class B(1) Class A Class B(1)
Shares Shares Shares Shares Shares Shares
<S> <C> <C> <C> <C> <C> <C>
Management Fees(2) . . . . . . 0.75% 0.75% 0.75% 0.75% 0.75% 0.75%

12b-1 Fees(3) . . . . . . . . . 0.30 1.00 0.30 1.00 0.30 1.00

Other Expenses(4) . . . . . . . 0.45 0.45 0.45 0.45 0.45 0.45

Total Fund Operating Expenses(5) 1.50 2.20 1.50 2.20 1.50 2.20
</TABLE>

* A contingent deferred sales charge ("CDSC") of 1.00%
will be assessed on certain redemptions of Class A
shares that are purchased without a sales charge. See
"How to Buy Shares."
** Although there is a $5.00 exchange fee for exchanges
into a Fund, this fee is being assumed by that Fund for
a minimum period ending October 31, 1995. Each Fund
reserves the right to change or suspend this privilege
after October 31, 1995. See "How to Exchange Shares."
(1) Other Expenses and Total Fund Operating Expenses
are based on estimated amounts for the fiscal year
ending October 31, 1995.
(2) Management Fees have been restated to reflect the
maximum Management Fees that may be incurred by each
Fund for a minimum period ending October 31, 1995.
The Adviser will waive 0.25% of Management Fees for
Made In The U.S.A. Fund for a minimum period
ending October 31, 1995. Otherwise, such fee would be
1.00%.
(3) 12b-1 Fees have been restated to reflect the maximum
distribution expenses that may be incurred by each Fund
for a minimum period ending October 31, 1995.
(4) Other Expenses for each Fund are net of reimbursed
expenses. The Adviser intends to reimburse each Fund
for Other Expenses in excess of 0.45% of average net
assets through October 31, 1995. Otherwise, Other
Expenses would have been as follows: Growth &
Income Fund - 0.78%; Made In The U.S.A. Fund 1.02%; and
Utilities Income Fund - 0.54% for each class of shares.
(5) Net of waived Management Fees and/or reimbursed
expenses. If certain Management Fees and Other
Expenses were not waived or reimbursed, Total Fund
Operating Expenses would have been 1.83% for Growth &
Income Fund; 2.32% for Made In The U.S.A. Fund; and
1.59% for Utilities Income Fund for Class A shares and
are estimated to be 2.53% for Growth & Income
Fund; 3.02% for Made In The U.S.A. Fund; and 2.22% for
Utilities Income Fund for Class B shares.

2
<PAGE>

For a more complete description of the various
costs and expenses, see "Alternative Purchase Plans," "How
to Buy Shares," "How to Redeem Shares," "Management" and
"Distribution Plans." Due to the imposition of 12b-1 fees,
it is possible that long-term shareholders of a Fund may
pay more in total sales charges than the economic
equivalent of the maximum front-end sales charge
permitted by the rules of the National Association of
Securities Dealers, Inc.

The Example below is based on Class A and Class
B expense data for each Fund's fiscal year ended October
31, 1995, except that certain Operating Expenses have been
restated, as noted above.

EXAMPLE

You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and (2)
redemption at the end of each time period:

<TABLE>
<CAPTION>
One Year Three Years Five Years Ten Years
<S> <C> <C> <C> <C>
Growth & Income Fund
Class A . . . . . . . . . . . . . . . . . . . $77 $107 $139 $230
Class B . . . . . . . . . . . . . . . . . . . 62 99 138 253
Made In The U.S.A. Fund
Class A . . . . . . . . . . . . . . . . . . . $77 $107 $139 $230
Class B . . . . . . . . . . . . . . . . . . . 62 99 138 253

Utilities Income Fund
Class A . . . . . . . . . . . . . . . . . . . $77 $107 $139 $230
Class B . . . . . . . . . . . . . . . . . . . 62 99 138 253
</TABLE>

You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and (2) no
redemption at the end of each time period:

One Year Three Years Five Years Ten Years
<S> <C> <C> <C> <C>
Growth & Income Fund
Class A . . . . . . . . . . . . . . . . . . . $77 $107 $139 $230
Class B . . . . . . . . . . . . . . . . . . . 22 69 118 253

Made In The U.S.A. Fund
Class A . . . . . . . . . . . . . . . . . . . $77 $107 $139 $230
Class B . . . . . . . . . . . . . . . . . . . 22 69 118 253

Utilities Income Fund
Class A . . . . . . . . . . . . . . . . . . . $77 $107 $139 $230
Class B . . . . . . . . . . . . . . . . . . . 22 69 118 253
</TABLE>

The expenses in the Example should not be
considered a representation by the Funds of past or future
expenses. Actual expenses in future years may be greater
or less than those shown.

<PAGE>

FINANCIAL HIGHLIGHTS
[To be updated]

The table below sets forth the per share
operating performance data for a share of common stock
outstanding, total return, ratios to average net
assets and other supplemental data for each period
indicated. The table has been derived from financial
statements which have been examined by Tait, Weller &
Baker, independent certified public accountants, whose
report thereon appears in the SAI. This information should
be read in conjunction with the Financial Statements and
Notes thereto, which also appear in the SAI, available at
no charge upon request to the Funds.

PER SHARE DATA
Income From Investment Operations Less Distributions from

Net Realized Total
Net Asset Value Net and Unrealized from Net Net Realized
Beginning of Investment Gain (Loss) on Investment Investment Gain on Total Net Asset Value
Period Income Investments Operations Income Investments Distributions End of Period
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GROWTH & INCOME FUND
10/4/93* to 10/31/93 $ 6.56 $ .005 $ -- $ .005 $ .005 $ -- $ .005 $ 6.56
11/1/93 to 10/31/94 6.56 .128 .109 .237 .107 -- .107 6.69

MADE IN THE USA FUND
8/24/92* to 10/31/92 $11.64 $ .036 $ .050 $ .086 $ .026 $ -- $ .026 $11.70
11/1/92 to 10/31/93 11.70 .122 .373 .495 .045 -- .045 12.15
11/1/93 to 10/31/94 12.15 .078 (.326) (.248) .122 -- .122 11.78

UTILITIES INCOME FUND
2/22/93* to 10/31/93 $ 5.59 $ .118 $ .317 $ .435 $ .105 $ -- $ .105 $ 5.92
11/1/93 to 10/31/94 5.92 .239 (.839) (.600) .227 .013 .240 5.08
</TABLE>

(a) Annualized
* Commencement of operations
** Calculated without sales charge
|| Some or all expenses have been waived or assumed from commencement
of operations through October 31, 1994.

<PAGE>

RATIOS / SUPPLEMENTAL DATA
Ratio to Average Net Assets Before
Ratio to Average Net Assets|| Expenses Waived or Assumed
Net Assets Net Net Portfolio Average
Total End of Period Investment Investment Turnover Commission
Return|(%) (in thousands) Expenses(%) Income(%) Expenses(%) Income(%) Rate(%) Rate Paid(%)
<S> <C> <C> <C> <C> <C> <C> <C>
.99(a) $ 3,407 -- 1.02(a) 1.37(a) (.35)(a) 0
3.67 34,489 0.67 2.26 1.83 1.11 6
3.86(a) $ 8,150 .06(a) 1.87(a) 2.64(a) (.72)(a) 0
4.23 15,586 .81 .96 2.03 (.26) 52
(2.05) 7,651 .90 .45 2.32 (.97) 29
11.28(a) $58,373 .35(a) 3.84(a) 1.80(a) 2.39(a) 17
(10.15) 62,671 .80 4.59 1.59 3.80 58

</TABLE>

<PAGE>

INVESTMENT OBJECTIVES AND POLICIES

Growth & Income Fund

The investment objective of Growth & Income Fund
is to seek long-term growth of capital and current income.
The Fund seeks its objective by investing, under normal
market conditions, at least 65% of its total assets in
securities that provide the potential for growth and offer
income, such as dividend-paying stocks and securities
convertible into common stock. The portion of the Fund's
assets invested in equity securities and in debt
securities may vary from time to time due to changes in
interest rates and economic and other factors. The Fund
is not designed for investors seeking a steady flow of
income distributions. Rather, the Fund's policy of
investing in income producing securities is intended to
provide investors with a more consistent total return than
may be achieved by investing solely in growth stocks.

The convertible securities in which the Fund
may invest are not subject to any limitations as to ratings
and may include high, medium, lower and unrated
securities. However, the Fund may not invest more than
20% of its total assets in convertible securities rated
below Baa by Moody's Investors Service, Inc. ("Moody's")
or BBB by Standard & Poor's ("S&P") (including
convertible securities that have been downgraded), or in
unrated convertible securities that are of comparable
quality as determined by the Fund's subadviser, Wellington
Management Company ("WMC" or "Subadviser"). Convertible
securities rated lower than BBB by S&P or Baa by Moody's,
commonly referred to as "junk bonds," are speculative and
generally involve a higher risk of loss of principal
and income than higher-rated securities. See "Debt
Securities-Risk Factors" below, and Appendix A to the SAI
for a description of convertible security ratings.

The Fund may invest up to 35% of its total
assets in the following instruments: money market
instruments, including U.S. bank certificates of deposit,
bankers' acceptances, commercial paper issued by domestic
corporations and repurchase agreements; fixed income
securities, including obligations issued or guaranteed as
to principal and interest by the U.S. Government, its
agencies or instrumentalities ("U.S. Government
Obligations"), including mortgage-backed securities, and
corporate debt securities rated at least Baa by Moody's or
BBB by S&P, commonly known as "investment grade securities"
or unrated securities that are of comparable quality as
determined by the Subadviser; and common stock and
securities convertible into common stock of companies that
are not paying a dividend if there exists the potential for
growth of capital or future income. See "Description
of Certain Securities, Other Investment Policies and Risk
Factors," below, and the SAI for additional
information concerning these securities. It is the Fund's
policy to attempt to sell, within a reasonable time period,
a debt security which has been downgraded below investment
grade (other than convertible securities, as previously
discussed), provided that such disposition is in the best
interests of the Fund and its shareholders. See "Debt
Securities-Risk Factors," below, and Appendix A to the SAI
for a description of corporate bond ratings.

Generally, the prices of equity securities could be
affected by such factors as a change in a company's
earnings, fluctuations in interest rates or changes in the
rate of economic growth. To the extent the Fund invests
in issuers with small capitalizations, the Fund
would be subject to greater risk than may be involved in
investing in companies with larger capitalizations. These
securities generally include newer and less seasoned
companies which are more speculative than securities issued
by well-established issuers. Other risks may include
less available information about the

6
<PAGE>

issuer, the absence of a business history or historical
pattern of performance, as well as normal risks which
accompany the development of new products, markets or
services.

The Fund may invest up to 20% of its total assets in
securities of well-established foreign companies in
developed countries which are traded on a recognized
domestic or foreign securities exchange. Although such
foreign securities may be denominated in foreign
currencies, the Fund anticipates that the majority of its
foreign investments will be in American Depository
Receipts ("ADRs") and Global Depository Receipts ("GDRs").
See "Foreign Securities-Risk Factors" and "American
Depository Receipts and Global Depository Receipts."
Although it does not intend to engage in these strategies
in the coming year, the Fund may enter into forward
currency contracts to protect against uncertainty in the
level of future exchange rates. The Subadviser will not
attempt to time actively either short-term market trends or
short-term currency trends in any market. See "Hedging
and Option Income Strategies" in the SAI.

The Fund may also borrow money for temporary or
emergency purposes in amounts not exceeding 5% of its net
assets, make loans of portfolio securities and
invest in securities issued on a "when-issued" or delayed
delivery basis. In addition, in any period of market
weakness or of uncertain market or economic conditions,
the Fund may establish a temporary defensive position to
preserve capital by having up to 100% of its assets
invested in short-term fixed income securities or retained
in cash or cash equivalents. See "Description of Certain
Securities, Other Investment Policies and Risk Factors" for
additional information concerning these securities.

Made In The U.S.A. Fund

Made In The U.S.A. Fund seeks long-term capital growth
by investing, under normal market conditions, at least 75%
of its total assets in common and preferred stocks of
companies that the Adviser considers to have potential for
capital growth. In addition, under normal market
conditions, 65% of the Fund's total assets will be
invested in securities of companies that have a medium
market capitalization and are incorporated and have their
principal place of business in the United States,
irrespective of whether they have most of their operations
in the United States. The Fund offers shareholders an
opportunity to invest in a portfolio without any direct
foreign investment or currency risk. The Fund may invest
in U.S. companies that conduct business overseas, which
would indirectly affect the company's performance and the
Fund's return.

The Fund seeks to invest in growth equity
securities, including securities of companies with above-
average earnings growth as compared to the average of
the stocks in the Standard & Poor's 500 Composite Stock
Price Index, other companies that the Adviser believes
demonstrate changing or accelerating growth records, and
companies with outstanding growth records and potential
based on the Adviser's fundamental analysis of the
company. The companies in which the Fund will invest will
be primarily those with medium market capitalization.
Market capitalization is the total market value of a
company's outstanding common stock. Companies with
medium capitalization are those companies with a market
capitalization of between $750 million and $5 billion,
but which could be higher under certain market conditions.
Growth equity securities tend to have above-average
price/earnings ratios and less-than-average current yields
compared to non-growth equity securities.

7
<PAGE>

The payment of dividend income will not be a primary
consideration in the selection of equity investments.

The majority of the Fund's equity investments are
securities listed on the New York Stock Exchange ("NYSE"),
other national securities exchanges or securities
that have an established over-the-counter ("OTC") market,
although the depth and liquidity of the OTC market may
vary from time to time and from security to security.
The Fund's policy of investing in seasoned companies with
above-average earnings growth, other companies with
changing or accelerating growth profiles and companies with
outstanding growth records and potential subjects the Fund
to greater risk than may be involved in investing in
securities that are not selected for such growth
characteristics.

The Fund may invest up to 25% of its total assets in
U.S. Government Obligations, including mortgage- backed
securities, and investment grade debt securities or unrated
securities that are of comparable quality as determined
by the Adviser, repurchase agreements, investment grade
securities convertible into common stock, warrants to
purchase common stock and zero coupon and pay-in-kind
securities. See "Description of Certain Securities, Other
Investment Policies and Risk Factors," below, and
"Investment Policies" in the SAI for information on
these securities. The Fund may borrow money for temporary
or emergency purposes in an amount not exceeding 5% of
its net assets, invest in securities issued on a
"when-issued" or delayed delivery basis and engage in
short sales "against the box." The Adviser
continually monitors the investments in the Fund's
portfolio and carefully evaluates on a case-by-case basis
whether to dispose of or retain a debt security that has
been downgraded below investment grade. No more than 5% of
the Fund's net assets will remain invested in such
downgraded securities. See Appendix A to the SAI for a
description of corporate bond ratings.

In any period of market weakness or of uncertain
market or economic conditions, the Fund may establish a
temporary defensive position to preserve capital by
having all or part of its assets invested in short- term
fixed income securities or retained in cash or cash
equivalents, including U.S. Government Obligations,
mortgage-backed securities, bank certificates of deposit,
bankers' acceptances and commercial paper issued by
domestic corporations. See "Description of Certain
Securities, Other Investment Policies and Risk Factors."

Utilities Income Fund

The primary investment objective of Utilities
Income Fund is to seek high current income. Long-term
capital appreciation is a secondary objective. The
Fund seeks its objectives by investing, under normal market
conditions, at least 65% of its total assets in
equity and debt securities issued by companies primarily
engaged in the public utilities industry. Equity
securities in which the Fund may invest include common
stocks, preferred stocks, securities convertible into
common stocks or preferred stocks and warrants to purchase
common or preferred stocks. Debt securities in which the
Fund may invest will be rated at the time of investment
at least A by Moody's or S&P or will be of comparable
quality as determined by the Adviser. The Fund's policy
is to attempt to sell, within a reasonable time period, a
debt security in its portfolio which has been downgraded
below A, provided that such disposition is in the best
interests of the Fund and its shareholders. See
Appendix A to the SAI for a description of corporate bond
ratings. The portion of the Fund's assets invested in
equity securities and in debt securities will vary from
time to time due to changes in interest rates and economic
and other factors.

8
<PAGE>

The utilities companies in which the Fund will
invest include companies primarily engaged in the ownership
or operation of facilities used to provide
electricity, gas, water or telecommunications (including
telephone, telegraph and satellite, but not companies
engaged in public broadcasting or cable television). For
these purposes, "primarily engaged" means that (1) more
than 50% of the company's assets are devoted to the
ownership or operation of one or more facilities as
described above, or (2) more than 50% of the company's
operating revenues are derived from the business or
combination of any of the businesses described above. It
should be noted that based on this definition, the Fund may
invest in companies which are also involved to a
significant degree in non-public utilities activities.

Utilities stocks generally offer dividend yields
that exceed those of industrial companies and their prices
tend to be less volatile than stocks of industrial
companies. However, utilities stocks can still be affected
by the risks of the stock of industrial companies.
Because the Fund concentrates its investments in public
utilities companies, the value of its shares will be
especially affected by factors peculiar to the utilities
industry, and may fluctuate more widely than the value of
shares of a fund that invests in a broader range of
industries. See "Utilities Industries - Risk Factors."

The Fund may invest up to 35% of its total assets in
the following instruments: debt securities (rated at least
A by Moody's or S&P) and common and preferred stocks of
non-utilities companies; U.S. Government Obligations;
mortgage-backed securities; cash; and money market
instruments consisting of prime commercial paper, bankers'
acceptances, certificates of deposit and repurchase
agreements. The Fund may invest in securities on a
"when-issued" or delayed delivery basis, engage in short
sales "against the box" and make loans of portfolio
securities. The Fund may invest up to 10% of its net
assets in ADRs. The Fund may borrow money for temporary
or emergency purposes in amounts not exceeding 5% of its
net assets. The Fund also may invest in zero coupon and
pay-in-kind securities. In addition, in any period of
market weakness or of uncertain market or economic
conditions, the Fund may establish a temporary defensive
position to preserve capital by having up to 100% of
its assets invested in short-term fixed income securities
or retained in cash or cash equivalents. See "Description
of Certain Securities, Other Investment Policies and Risk
Factors," below, and "Investment Policies" in the SAI for a
description of these securities.

General. Each Fund's net asset value
fluctuates based mainly upon changes in the value of its
portfolio securities. Each Fund's investment objective and
certain investment policies set forth in the SAI that are
designated fundamental policies may not be changed without
shareholder approval. There can be no assurance that any
Fund will achieve its investment objective.

Description of Certain Securities, Other Investment
Policies and Risk Factors

American Depository Receipts and Global
Depository Receipts. Growth & Income Fund may invest in
sponsored and unsponsored ADRs and GDRs. ADRs are receipts
typically issued by a U.S. bank or trust company evidencing
ownership of the underlying securities of foreign issuers,
and other forms of depository receipts for securities of
foreign issuers. Generally, ADRs, in registered form, are
denominated in U.S. dollars and are designed for use in the
U.S. securities markets. Thus, these securities are not
denominated in the same currency as the securities into
which they may be converted. In addition, the issuers of
the securities underlying unsponsored ADRs are not
obligated to disclose material information in the United
States and, therefore, there may be less information
available regarding such issuers and there may not be a
correlation between such information and the market value
to the ADRs. GDRs are issued globally and evidence a
similar ownership

9
<PAGE>

arrangement. Generally, GDRs are designed for trading in
non-U.S. securities markets. ADRs and GDRs are considered
to be foreign securities by the Fund. See "Foreign
Securities - Risk Factors."

Convertible Securities. A convertible security is
a bond, debenture, note, preferred stock or other security
that may be converted into or exchanged for a prescribed
amount of common stock of the same or a different issuer
within a particular period of time at a specified price or
formula. A convertible security entitles the holder to
receive interest paid or accrued on debt or dividends paid
on preferred stock until the convertible security matures
or is redeemed, converted or exchanged. Convertible
securities have unique investment characteristics in
that they generally (1) have higher yields than common
stocks, but lower yields than comparable non-convertible
securities, (2) are less subject to fluctuation in value
than the underlying stock because they have fixed income
characteristics, and (3) provide the potential for capital
appreciation if the market price of the underlying common
stock increases. Lower-rated and certain unrated
convertible securities are subject to certain risks that
may not be present with investments in higher-grade
securities. See "Debt Securities-Risk Factors," below,
and "Risk Factors of High Yield Securities" in the SAI.

Debt Securities - Risk Factors. The market value of
debt securities, including convertible securities, is
influenced primarily by changes in the level of interest
rates. Generally, as interest rates rise, the market
value of debt securities decreases. Conversely, as
interest rates fall, the market value of debt securities
increases. Factors which could result in a rise in
interest rates, and a decrease in the market value of
debt securities, include an increase in inflation or
inflation expectations, an increase in the rate of U.S.
economic growth, an expansion in the Federal budget
deficit, or an increase in the price of commodities such as
oil. In addition to interest rate risk, there is also
credit risk involved in investing in debt securities. Debt
obligations rated lower than Baa by Moody's or BBB by S&P,
commonly referred to as "junk bonds," are speculative
and generally involve a higher risk of loss of principal
and income than higher-rated securities. See Appendix
A to the SAI for a description of corporate bond and
convertible security ratings.

The prices of lower-rated debt obligations, including
convertible securities, tend to be less sensitive to
interest rate changes than higher-rated investments,
but may be more sensitive to adverse economic changes or
individual corporate developments. Thus, there could be
a higher incidence of default. This would affect the
value of such securities and thus a Fund's net asset value.
Further, if the issuer of a security owned by a Fund
defaults, the Fund might incur additional expenses to seek
recovery. Generally, when interest rates rise, the
value of fixed rate debt obligations tends to decrease;
when interest rates fall, the value of fixed rate debt
obligations tends to increase. If a Fund experiences
unexpected net redemptions in a rising interest rate
market, it might be forced to sell certain securities,
regardless of investment merit. This could result in
decreasing the assets to which Fund expenses could be
allocated and in a reduced rate of return for the Fund.
While it is impossible to protect entirely against this
risk, diversification of a Fund's portfolio and the
careful analysis by the Adviser or the Subadviser of
prospective portfolio securities should minimize the
impact of a decrease in value of a particular security or
group of securities in a Fund's portfolio.

The credit ratings issued by credit rating
services may not fully reflect the true risks of an
investment. For example, credit ratings typically
evaluate the safety of principal and interest payments, not
market value risk, of lower-rated debt securities. Also,
credit rating agencies may fail to change on a timely
basis a credit rating to reflect changes in economic or
company conditions that affect a security's market value.
Although the Adviser or the Subadviser consider ratings of
recognized rating services such as Moody's and S&P, the
Adviser or the Subadviser primarily rely on

10
<PAGE>

their own credit analysis, which includes a study of
existing debt, capital structure, ability to service
debt and to pay dividends, the issuer's sensitivity to
economic conditions, its operating history and the
current trend of earnings. Growth & Income Fund may
invest in securities rated B by S&P or Moody's or, if
unrated, deemed to be of comparable quality by the
Subadviser. Debt obligations with these ratings, while
currently having the capacity to meet interest payments
and principal repayments, have a greater vulnerability
to default. The Subadviser continually monitors the
investments in the Fund's portfolio and carefully evaluates
whether to dispose of or retain lower-rated debt securities
whose credit ratings have changed. See Appendix A to the
SAI for a description of corporate bond ratings.

Lower-rated debt securities are typically traded
among a smaller number of broker-dealers than in a broad
secondary market. Purchasers of such securities tend to
be institutions, rather than individuals, which is a
factor that further limits the secondary market. To
the extent that no established retail secondary market
exists, many lower-rated debt securities may not be as
liquid as higher-grade securities. A less active and
thinner market for such securities than that available for
higher quality securities may result in more volatile
valuations of a Fund's holdings and more difficulty in
executing trades at fair value during unsettled market
conditions. The ability of a Fund to value or sell
lower-rated debt securities will be adversely affected to
the extent that such securities are thinly traded or
illiquid. See "Risks Factors of High Yield Securities" in
the SAI.

Foreign Securities - Risk Factors. Growth & Income
Fund may sell a security denominated in a foreign currency
and retain the proceeds in that foreign currency to
use at a future date (to purchase other securities
denominated in that currency) or the Fund may buy
foreign currency outright to purchase securities
denominated in that foreign currency at a future date.
Because the Fund does not presently intend to hedge its
foreign investments against the risk of foreign currency
fluctuations, changes in the value of these currencies
can significantly affect the Fund's share price. In
addition, the Fund will be affected by changes in
exchange control regulations and fluctuations in the
relative rates of exchange between the currencies of
different nations, as well as by economic and political
developments. Other risks involved in foreign securities
include the following: there may be less publicly available
information about foreign companies comparable to the
reports and ratings that are published about companies in
the United States; foreign companies are not generally
subject to uniform accounting, auditing and financial
reporting standards and requirements comparable to those
applicable to U.S. companies; some foreign stock markets
have substantially less volume than U.S. markets, and
securities of some foreign companies are less liquid and
more volatile than securities of comparable U.S.
companies; there may be less government supervision and
regulation of foreign stock exchanges, brokers and
listed companies than exist in the United States; and there
may be the possibility of expropriation or confiscatory
taxation, political or social instability or diplomatic
developments which could affect assets of the Fund held in
foreign countries.

Hedging and Option Income Strategies. Utilities
Income Fund may attempt to reduce the overall risk of its
investments (hedge) by using options and futures
contracts and may engage in certain strategies involving
options to attempt to enhance income. Growth & Income Fund
may use forward currency contracts to protect against
uncertainty in the level of future exchange rates.
A Fund's ability to use these instruments may be limited
by market conditions, regulatory limits and tax
considerations. Neither Fund presently intends to
engage in these strategies. See the SAI for more
information regarding hedging and option income strategies.

11
<PAGE>

Money Market Instruments. Investments in commercial
paper are limited to obligations rated Prime-1 by Moody's
or A-1 by S&P. Commercial paper includes notes, drafts, or
similar instruments payable on demand or having a
maturity at the time of issuance not exceeding nine
months, exclusive of days of grace or any renewal thereof.
Investments in certificates of deposit will be made only
with domestic institutions with assets in excess of $500
million. See the SAI for more information regarding money
market instruments and Appendix B to the SAI for a
description of commercial paper ratings.

Mortgage-Backed Securities. Mortgage loans often are
assembled into pools, the interests in which are issued
and guaranteed by an agency or instrumentality of the U.S.
Government, though not necessarily by the U.S. Government
itself. Interests in such pools are referred to herein
as "mortgage-backed securities." The market value of these
securities can and will fluctuate as interest rates and
market conditions change. In addition, prepayment of
principal by the mortgagees which often occurs with
mortgage-backed securities when interest rates decline,
can significantly change the realized yield of these
securities. See the SAI for more information concerning
mortgage-backed securities.

Preferred Stock. A preferred stock is a blend of
the characteristics of a bond and common stock. It can
offer the higher yield of a bond and has priority over
common stock in equity ownership, but does not have the
seniority of a bond and, unlike common stock, its
participation in the issuer's growth may be limited.
Preferred stock has preference over common stock in the
receipt of dividends and in any residual assets after
payment to creditors should the issuer be dissolved.
Although the dividend is set at a fixed annual rate, in
some circumstances it can be changed or omitted by the
issuer.

Repurchase Agreements. Repurchase agreements are
transactions in which a Fund purchases securities from a
bank or recognized securities dealer and simultaneously
commits to resell the securities to the bank or dealer at
an agreed-upon date and price reflecting a market rate of
interest unrelated to the coupon rate or maturity of the
purchased securities. Each Fund's risk is limited to
the ability of the seller to repurchase the securities at
the agreed-upon price upon the delivery date. See the SAI
for more information regarding repurchase agreements.

Restricted and Illiquid Securities. Each Fund
may invest up to 15% of its net assets in illiquid
securities, including (1) securities that are illiquid
due to the absence of a readily available market or due to
legal or contractual restrictions on resale and (2)
repurchase agreements maturing in more than seven days.
However, illiquid securities for purposes of this
limitation do not include securities eligible for resale
under Rule 144A under the Securities Act of 1933, as
amended, which the Board of Directors or the Adviser or
the Subadviser has determined are liquid under
Board-approved guidelines. See the SAI for more
information regarding restricted and illiquid securities.

U.S. Government Obligations. Securities issued or
guaranteed as to principal and interest by the U.S.
Government include (1) U.S. Treasury obligations which
differ only in their interest rates, maturities and times
of issuance as follows: U.S. Treasury bills (maturities
of one year or less), U.S. Treasury notes (maturities of
one to ten years) and U.S. Treasury bonds (generally
maturities of greater than ten years), and (2)
obligations issued or guaranteed by U.S. Government
agencies and instrumentalities that are backed by the
full faith and credit of the U.S., such as securities
issued by the Federal Housing Administration, Government
National Mortgage Association, the Department of Housing
and Urban Development, the Export-Import Bank, the
General Services Administration

12
<PAGE>

and the Maritime Administration and certain securities
issued by the Farmers Home Administration and the Small
Business Administration. The range of maturities of U.S.
Government Obligations is usually three months to thirty
years.

Utilities Industries - Risk Factors. Many utilities
companies, especially electric and gas and other
energy-related utilities companies, have historically
been subject to the risk of increases in fuel and other
operating costs, changes in interest rates on borrowings
for capital improvement programs, changes in applicable
laws and regulations, and costs and operating
constraints associated with compliance with environmental
regulations. In particular, regulatory changes with
respect to nuclear and conventionally- fueled power
generating facilities could increase costs or impair the
ability of utilities companies to operate such facilities
or obtain adequate return on invested capital.

Certain utilities, especially gas and telephone
utilities, have in recent years been affected by increased
competition, which could adversely affect the
profitability of such utilities companies. In addition,
expansion by companies engaged in telephone
communication services of their non-regulated activities
into other businesses (such as cellular telephone services,
data processing, equipment retailing, computer services
and financial services) has provided the opportunity
for increases in earnings and dividends at faster rates
than have been allowed in traditional regulated
businesses. However, technological innovations and other
structural changes also could adversely affect the
profitability of such companies.

Because securities issued by utilities companies
are particularly sensitive to movement in interest rates,
the equity securities of such companies are more affected
by movement in interest rates than are the equity
securities of other companies.

Each of these risks could adversely affect the ability
and inclination of public utilities companies to declare
or pay dividends and the ability of holders of common
stock, such as Utilities Income Fund, to realize any value
from the assets of the company upon liquidation or
bankruptcy.

ALTERNATIVE PURCHASE PLANS

Each Fund has two classes of shares, Class A
and Class B, which represent interests in the same
portfolio of securities and have identical voting,
dividend, liquidation and other rights and the same terms
and conditions, except that each class (i) is subject
to a different sales charge and bears its separate
distribution and certain other class expenses; (ii)
has exclusive voting rights with respect to matters
affecting only that class; and (iii) has different exchange
privileges.

Class A Shares. Class A shares are sold with an
initial sales charge of up to 6.25% of the amount invested
with discounts available for volume purchases. Class A
shares pay a 12b-1 fee at the annual rate of 0.30% of each
Fund's average daily net assets attributable to Class A
shares, of which no more than 0.25% may be paid as a
service fee and the balance thereof paid as an asset-based
sales charge. The initial sales charge is waived for
certain purchases and a CDSC may be imposed on such
purchases. See "How to Buy Shares."

Class B Shares. Class B shares are sold without an
initial sales charge, but are generally subject to a CDSC
which declines in steps from 4% to 0% during a six-year
period and bear a higher 12b-1 fee than Class A shares.
Class B shares pay a 12b-1 fee at the annual rate of
1.00% of each Fund's average daily net assets attributable
to Class B shares, of which no more than 0.25% may be

13
<PAGE>

paid as a service fee and the balance thereof paid as
an asset-based sales charge. Class B shares automatically
convert into Class A shares after eight years. See "How to
Buy Shares."

Factors to Consider in Choosing a Class of Shares.
In deciding which alternative is most suitable, an investor
should consider several factors, as discussed below.
Regardless of whether an investor purchases Class A or
Class B shares, your Representative, as defined under "How
to Buy Shares," receives compensation for selling shares of
a Fund, which may differ for each class.

The principal advantages of purchasing Class A shares
are the lower overall expenses, the availability of
quantity discounts on volume purchases and certain
account privileges which are not offered to Class B
shareholders. If an investor plans to make a substantial
investment, the sales charge on Class A shares may either
be lower due to the reduced sales charges available on
volume purchases of Class A shares or waived for certain
eligible purchasers. Because of the reduced sales charge
available on quantity purchases of Class A shares, it
is recommended that investments of $250,000 or more
be made in Class A shares. Investments in excess of
$1,000,000 will only be accepted as purchases of Class A
shares. Distributions paid by each Fund with respect to
Class A shares will also generally be greater than those
paid with respect to Class B shares because expenses
attributable to Class A shares will generally be lower.

The principal advantage of purchasing Class B
shares is that, since no initial sales charge is paid, all
of an investor's money is put to work from the outset.
Furthermore, although any investment in a Fund should only
be viewed as a long-term investment, if a redemption
must be made soon after purchase, an investor will pay a
lower sales charge than if Class A shares had been
purchased. Conversely, because Class B shares are subject
to a higher asset-based sales charge, long-term Class B
shareholders may pay more in an asset-based sales charge
than the economic equivalent of the maximum sales charge on
Class A shares. The automatic conversion of Class B
shares into Class A shares is designed to reduce the
probability of this occurring.

HOW TO BUY SHARES

You may buy shares of a Fund through a First Investors
registered representative ("FIC Representative") or through
a registered representative ("Dealer Representative") of an
unaffiliated broker-dealer ("Dealer") which is authorized
to sell shares of a Fund. Your FIC Representative
or Dealer Representative (collectively, "Representative")
may help you complete and submit an application to open an
account with a Fund. Applications accompanied by
checks drawn on U.S. banks made payable to "FIC" received
in FIC's Woodbridge offices by the close of regular
trading on the New York Stock Exchange ("NYSE"), generally
4:00 P.M. (New York City time), will be processed and
shares will be purchased at the public offering price
determined at the close of regular trading on the NYSE on
that day. The "public offering price" is defined in this
Prospectus as net asset value plus the applicable sales
charge for Class A shares and net asset value for Class B
shares. Orders given to Representatives before the close
of regular trading on the NYSE and received by FIC at
their Woodbridge offices before the close of its business
day, generally 5:00 P.M. (New York City time), will be
executed at the public offering price determined at the
close of regular trading on the NYSE on that day. It is
the responsibility of Representatives to promptly transmit
orders they receive to FIC. Each Fund reserves the right
to reject any application or order for its shares for any
reason and to suspend the offering of its shares.

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<PAGE>

When you open a Fund account, you must specify
which class of shares you wish to purchase. If not, your
order will be processed as follows: (1) if you are
opening an account with a new registration with First
Investors, your order will not be processed until the
Fund receives notification of which class of shares to
purchase; (2) if you have existing First Investors
accounts solely in either Class A shares or Class B shares
with the identical registration, your investment in the
Fund will be made in the same class of shares as your
existing account(s); (3) if you are an existing First
Investors shareholder and own a combination of Class A
and Class B shares with an identical registration, your
investment in the Fund will be made in Class B shares;
and (4) if you own in the aggregate at least $250,000 in
any combination of classes, your investment will be made in
Class A shares.

Initial Investment in a Fund. You may open a
Fund account with as little as $1,000. This account
minimum is waived if you open an account for a particular
class of shares through a full exchange of shares of the
same class of another "Eligible Fund," as defined below.
Class A share accounts opened through an exchange of
shares from First Investors Cash Management Fund, Inc.
or First Investors Tax-Exempt Money Market Fund, Inc.
(collectively, "Money Market Funds") may be subject to an
initial sales charge. You may open a Fund account with
$250 for individual retirement accounts ("IRAs") or, at the
Fund's discretion, a lesser amount for Simplified
Employee Pension Plans ("SEPs"), salary reduction SEPs
("SARSEPs") and qualified or other retirement plans.
Automatic investment plans allow you to open an account
with as little as $50, provided you invest at least $600 a
year. See "Systematic Investing."

Additional Purchases. After you make your first
investment in a Fund, you may purchase additional shares
of a Fund by mailing a check made payable to FIC, directly
to First Investors Corporation, 581 Main Street,
Woodbridge, NJ 07095-1198, Attn: Dept. CP. Include your
account number on the face of the check. There is no
minimum on additional purchases of Fund shares.

Eligible Funds. The funds in the First Investors
family of funds, except as noted below, are eligible to
participate in certain shareholder privileges noted in this
Prospectus and the SAI (singularly, "Eligible Fund" and,
collectively, "Eligible Funds"). First Investors Special
Bond Fund, Inc., First Investors Life Series Fund and
First Investors U.S. Government Plus Fund are not deemed to
be Eligible Funds. The Money Market Funds, unless
otherwise noted, are not deemed to be Eligible Funds.
The series of Executive Investors Trust ("Executive
Investors") are deemed to be Eligible Funds provided the
shares of any such series either have been (a) acquired
through an exchange from an Eligible Fund which imposes a
maximum sales charge of 6.25%, or (b) held for at least one
year from their date of purchase.

Systematic Investing. You may arrange for
automatic investments in a Fund on a systematic basis
through First Investors Money Line and through automatic
payroll investments. You may also elect to invest in
Class A shares of a Fund at net asset value all the
cash distributions or Systematic Withdrawal Plan payments
from the same class of shares of another Eligible Fund. If
you wish to participate in any of these systematic
investment plans, please see the SAI or call Shareholder
Services at 1-800-423-4026.

Class A Shares. Class A shares of each Fund are
sold at the public offering price, which will vary with the
size of the purchase, as shown in the following table:

15
<PAGE>

Sales Charge as % of Concession to
Offering Net Amount Dealers as % of
Amount of Investment Price Invested Offering Price
<S> <C> <C> <C>
Less than $25,000 . . . . . . . . . . . . . . . . . 6.25% 6.67% 5.13%
$25,000 but under $50,000 . . . . . . . . . . . . . 5.75 6.10 4.72
$50,000 but under $100,000 . . . . . . . . . . . . 5.50 5.82 4.51
$100,000 but under $250,000 . . . . . . . . . . . . 4.50 4.71 3.69
$250,000 but under $500,000 . . . . . . . . . . . . 3.50 3.63 2.87
$500,000 but under $1,000,000 . . . . . . . . . . . 2.50 2.56 2.05
</TABLE>

There is no sales charge on transactions of $1
million or more, including transactions of this amount
which are subject to the Cumulative Purchase Privilege or a
Letter of Intent. The Underwriter will pay from its own
resources a sales commission to FIC Representatives and a
concession equal to 0.90% of the amount invested to
Dealers on such purchases. If shares are redeemed within
24 months of purchase (this holding period is 18 months
for shares purchased prior to May 1, 1995), a CDSC of 1.00%
will be deducted from the redemption proceeds. The CDSC
will be calculated in the same manner as the CDSC on the
Class B shares. See "Class B Shares."

Cumulative Purchase Privilege and Letters of
Intent. You may purchase Class A shares of a Fund at a
reduced sales charge through the Cumulative Purchase
Privilege or by executing a Letter of Intent. For more
information, see the SAI, call your Representative or call
Shareholder Services at 1-800-423-4026.

Waivers of Class A Sales Charges. Sales charges on
Class A shares do not apply to: (1) any purchase by an
officer, director, trustee or full-time employee (who has
completed the introductory period) of a Fund, the
Underwriter, the Adviser, or their affiliates, by a
Representative, or by the spouse, or by the children and
grandchildren under the age of 21 of any such person; (2)
any purchase by a former officer, director, trustee or
full-time employee of Series Fund II, the Underwriter, the
Adviser, or their affiliates, or by a former FIC
Representative; provided they had acted as such for at
least five years and had retired or otherwise terminated
the relationship in good standing; (3) the proceeds of any
settlement reached with FIC, FIMCO and/or certain First
Investors funds; and (4) any reinvestment of the loan
repayments by a participant in the First Investors 403(b)
Loan Program.

Additionally, policyholders of participating life
insurance policies issued by First Investors Life Insurance
Company ("FIL"), an affiliate of the Adviser and
Underwriter, may elect to invest dividends earned on such
policies in Class A shares of a Fund at net asset value,
provided the annual dividend is at least $50 and the
policyholder has an existing account with the Fund.

Holders of certain unit trusts ("Unitholders") who
have elected to invest the entire amount of cash
distributions from either principal, interest income
or capital gains or any combination thereof ("Unit
Distributions") from the following trusts may invest such
Unit Distributions in Class A shares of a Fund at a reduced
sales charge. Unitholders of various series of New York
Insured Municipals-Income Trust sponsored by Van Kampen
Merritt Inc. (the "New York Trust"); Unitholders of
various series of the Multistate Tax Exempt Trust
sponsored by Advest Inc.; and Unitholders of various series
of the Municipal Insured National Trust, J.C. Bradford &
Co. as agent, may purchase Class A shares of a Fund with
Unit Distributions at an offering price which is the net
asset value per share plus a sales charge of 1.5%.
Unitholders of various series of tax-exempt trusts,
other than the New York Trust, sponsored by Van Kampen
Merritt Inc. may purchase Class A shares of a Fund with Unit

16
<PAGE>

Distributions at an offering price which is the net
asset value per share plus a sales charge of 1.0%.
Each Fund's initial minimum investment requirement is
waived for purchases of Class A shares with Unit
Distributions. Shares of a Fund purchased by Unitholders
may be exchanged for Class A shares of any Eligible Fund
subject to the terms and conditions set forth under "How to
Exchange Shares."

Retirement Plans. You may invest in shares of a
Fund through an IRA, SEP, SARSEP or any retirement plan.
Participant directed plans, such as 401(k) plans, profit
sharing and money purchase plans and 403(b) plans, that
are subject to Title I of ERISA (each, a "Qualified
Plan") are entitled to a special reduced sales charge based
upon the number of employees who are eligible to
participate, as follows:

Sales Charge as % of Concession to
Number of Offering Net Amount Dealers as % of
Eligible Employees Price Invested Offering Price
<S> <C> <C> <C>
99 or less . . . . . . . . . . . . . . . . 3.00% 3.09% 2.55%
100 or more . . . . . . . . . . . . . . . . 1.00% 1.01% 0.85%

The reduced sales charge will be available
regardless of whether the account is registered with the
Transfer Agent in the name of the individual
participant or the sponsoring employer or plan trustee. A
Qualified Plan account will be subject to the lower of
the sales charge for Qualified Plans or the sales charge
for the purchase of Fund shares (see page 16).

Class B Shares. The public offering price of Class
B shares of each Fund is the next determined net asset
value, with no initial sales charge imposed. A CDSC,
however, is imposed upon most redemptions of Class B shares
at the rates set forth below:

</TABLE>
<TABLE>
<CAPTION>
Contingent Deferred Sales Charge
Year Since Purchase as a Percentage of Dollars Invested
Payment Made or Redemption Proceeds
<S> <C>
First . . . . . . . . . . . . . . . . . . 4%
Second . . . . . . . . . . . . . . . . . 4
Third . . . . . . . . . . . . . . . . . . 3
Fourth . . . . . . . . . . . . . . . . . 3
Fifth . . . . . . . . . . . . . . . . . . 2
Sixth . . . . . . . . . . . . . . . . . . 1
Seventh and thereafter . . . . . . . . . 0
</TABLE>

The CDSC will not be imposed on (1) the redemption
of Class B shares acquired as dividends or other
distributions, or (2) any increase in the net asset
value of redeemed shares above their initial purchase price
(in other words, the CDSC will be imposed on the lower
of net asset value or purchase price). In determining
whether a CDSC is payable on any redemption, it will be
assumed that the redemption is made first of any Class B
shares acquired as dividends or distributions, second of
Class B shares that have been held for a sufficient
period of time such that the CDSC no longer is applicable
to such shares and finally of Class B shares held
longest during the period of time that a CDSC is applicable
to such shares. This will result in your paying the lowest
possible CDSC.

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<PAGE>

As an example, assume an investor purchased 100
shares of Class B shares at $10 per share for a total cost
of $1,000 and in the second year after purchase, the net
asset value per share is $12 and, during such time, the
investor has acquired 10 additional Class B shares as
dividends. If at such time the investor makes his or her
first redemption of 50 shares (proceeds of $600), 10 shares
will not be subject to a CDSC charge because redemptions
are first made of shares acquired through dividend
reinvestment. With respect to the remaining 40 shares,
the charge is applied only to the original cost of $10 per
share and not to the increase in net asset value of
$2 per share. Therefore, $400 of the $600 redemption
proceeds will be charged at a rate of 4.00% (the applicable
rate in the second year after purchase).

For purposes of determining the CDSC on Class B
shares, all purchases made during a calendar month will be
deemed to have been made on the first business day of
that month at the average cost of all purchases made
during that month. The holding period of Class B
shares acquired through an exchange with another Eligible
Fund will be calculated from the first business day of
the month that the Class B shares were initially acquired
in the other Eligible Fund. The amount of any CDSC
will be paid to FIC. The CDSC imposed on the purchase of
Class B shares will be waived under certain circumstances.
See "Waivers of CDSC on Class B Shares" in the SAI.

Conversion of Class B Shares. A shareholder's
Class B shares will automatically convert to Class A shares
approximately eight years after the date of purchase,
together with a pro rata portion of all Class B shares
representing dividends and other distributions paid in
additional Class B shares. The Class B shares so
converted will no longer be subject to the higher expenses
borne by Class B shares. The conversion will be effected
at the relative net asset values per share of the two
classes on the first business day of the month following
that in which the eighth anniversary of the purchase of
the Class B shares occurs. If a shareholder effects one or
more exchanges between Class B shares of the Eligible Funds
during the eight-year period, the holding period for the
shares so exchanged will commence upon the date of the
purchase of the original shares. Because the per share net
asset value of the Class A shares may be higher than that
of the Class B shares at the time of conversion, a
shareholder may receive fewer Class A shares than the
number of Class B shares converted. See "Determination of
Net Asset Value."

General. The Underwriter may at times agree to
reallow to Dealers up to an additional 0.25% of the dollar
amount of shares of the Funds and/or certain other First
Investors funds sold by such Dealers during a specific
period of time. From time to time, the
Underwriter also will pay, through additional reallowances
or other sources, a bonus or other compensation to Dealers
which employ a Dealer Representative who sells a minimum
dollar amount of the shares of the Funds and/or certain
other First Investors or Executive Investors funds during
a specific period of time. Such bonus or other
compensation may take the form of reimbursement of certain
seminar expenses, co-operative advertising, or payment for
travel expenses, including lodging incurred in
connection with trips taken by qualifying Dealer
Representatives to the Underwriter's principal office in
New York City.

HOW TO EXCHANGE SHARES

Should your investment needs change, you may
exchange, at net asset value, shares of a Fund for shares
of any Eligible Fund, including the Money Market
Funds. In addition, Class A shares of a Fund may be
exchanged at net asset value for units of any single
payment plan ("plan") sponsored by the Underwriter. Shares
of a particular class may be exchanged only for shares of
the same class of another fund. Exchanges can only be
made into accounts registered to identical

18
<PAGE>

owners. If your exchange is into a new account, it must
meet the minimum investment and other requirements of the
fund or plan into which the exchange is being made.
Additionally, the fund or plan must be available for sale
in the state where you reside. A $5.00 exchange fee is
charged for each exchange. However, currently this fee is
being voluntarily borne by the fund into which you are
making the exchange and, thus, that fund's shareholders are
bearing the fee ratably. Before exchanging Fund shares for
shares of another fund or plan, you should read the
Prospectus of the fund or plan into which the exchange is
to be made. You may obtain Prospectuses and information
with respect to which funds or plans qualify for the
exchange privilege free of charge by calling Shareholder
Services at 1- 800-423-4026. Exchange requests received
in "good order" by the Transfer Agent before the close of
regular trading on the NYSE will be processed at the net
asset value determined as of the close of regular trading
on the NYSE on that day; exchange requests received
after that time will be processed on the following trading
day.

Exchanges By Mail. To exchange shares by
mail, you should mail requests to Administrative Data
Management Corp. (the "Transfer Agent"), 581 Main
Street, Woodbridge, NJ 07095-1198. Shares will be
exchanged after the request is received in "good order"
by the Transfer Agent. "Good order" means that an exchange
request must include: (1) the names of the funds,
account numbers (if existing accounts), the dollar amount,
number of shares or percentage of the account you wish to
exchange; and (2) the signature of all registered owners
exactly as the account is registered. If the request
is not in good order or information is missing, the
Transfer Agent will seek additional information from
you and process the exchange on the day it receives such
information. There are various account registrations which
may require additional legal documentation in order to
exchange. To ensure that your request is processed as
quickly and accurately as possible, please call Shareholder
Services at 1-800-423-4026 to review these requirements.

Exchanges By Telephone. See "Telephone Transactions."

Additional Exchange Information. Exchanges should be
made for investment purposes only. A pattern of frequent
exchanges may be contrary to the best interests of a Fund's
other shareholders. Accordingly, each Fund has the
right, at its sole discretion, to limit the amount of an
exchange, reject any exchange, or, upon 60 days' notice,
materially modify or discontinue the exchange privilege.
Each Fund will consider all relevant factors in
determining whether a particular frequency of
exchanges is contrary to the best interests of the Fund
and/or a class of the Fund and its other shareholders. Any
such restriction will be made by a Fund on a prospective
basis only, upon notice to the shareholder not later than
ten days following such shareholder's most recent exchange.

HOW TO REDEEM SHARES

You may redeem your Fund shares at the next
determined net asset value, less any applicable CDSC, on
any day the NYSE is open, directly through the Transfer
Agent. Your Representative may help you with this
transaction. Shares may be redeemed by mail or
telephone (provided written authorization for telephone
transactions is on file). Redemption requests received
in "good order" by the Transfer Agent before the close of
regular trading on the NYSE, will be processed at the net
asset value, less any applicable CDSC, determined as of
the close of regular trading on the NYSE on that day.
Payment of redemption proceeds will be made within three
days. If the shares being redeemed were recently purchased
by check, payment may be delayed to verify that the check
has been honored, normally not more than fifteen days.

19
<PAGE>

Redemptions By Mail. Written redemption requests
should be mailed to Administrative Data Management Corp.,
581 Main Street, Woodbridge, NJ 07095-1198. For your
redemption request to be in good order, you must include:
(1) the name of the Fund; (2) your account number; (3) the
dollar amount, number of shares or percentage of the
account you want redeemed; (4) share certificates, if
issued; (5) the original signatures of all registered
owners exactly as the account is registered; (6) signature
guarantees as described below; and (7) additional
documents required for redemptions by corporations, trusts,
partnerships, organizations, retirement, pension or
profit sharing plans and for requests from anyone other
than the shareholder(s) of record. There are various
account registrations which may require additional legal
documentation in order to redeem. To ensure that your
request is processed as quickly and accurately as possible,
please call Shareholder Services at 1-800-423-4026 to
review these requirements. If your redemption request is
not in good order or information is missing, the
Transfer Agent will seek additional information and process
the redemption on the day it receives such information.

Signature Guarantees. In order to protect you,
the Funds and their agents, each Fund reserves the right to
require signature guarantees in order to process certain
exchange or redemption requests. Members of the STAMP
(Securities Transfer Agents Medallion Program, MSP (New
York Stock Exchange Medallion Signature Program), SEMP
(Stock Exchanges Medallion Program) or FIC are eligible
signature guarantors. A notary public is not an
acceptable guarantor. See the SAI or call Shareholder
Services at 1-800-423-4026 for instances when signature
guarantees are required.

Redemptions By Telephone. See "Telephone Transactions."

Systematic Withdrawal Plan. If you own
noncertificated Class A shares, you may set up a plan for
redemptions to be made automatically at regular intervals.
You may elect to have the payments automatically (a) sent
directly to you or persons you designate; or (b) invested
in shares of the same class of any other Eligible Fund,
including the Money Market Funds; or (c) paid to FIL for
the purchase of a life insurance policy or a variable
annuity. See the SAI for more information on the
Systematic Withdrawal Plan. To establish a Systematic
Withdrawal Plan, call Shareholder Services at
1-800-423-4026.

Repurchase through Underwriter. You may redeem Class
A shares for which a certificate has been issued through a
Dealer. In this event, the Underwriter, acting as agent
for each Fund, will offer to repurchase or accept an
offer to sell such shares at a price equal to the net
asset value next determined after the making of such
offer. The Dealer may charge you an added
commission for handling any redemption transaction.

Redemption of Low Balance Accounts. Because
each Fund incurs certain fixed costs in maintaining
shareholder accounts, each Fund may redeem without your
consent, on at least 60 days' prior written notice (which
may appear on your account statement), any Fund account of
Class A or Class B shares which has a net asset value of
less than $500. To avoid such redemption, you may,

20
<PAGE>

during such 60-day period, purchase additional Fund
shares of the same class so as to increase your account
balance to the required minimum. There will be no CDSC
imposed on such redemptions of Class B shares. A Fund will
not redeem accounts that fall below $500 solely as a
result of a reduction in net asset value. Accounts
established under a Systematic Investment Plan which have
been discontinued prior to meeting the $1,000 minimum are
subject to this policy.

Additional information concerning how to redeem
shares of the Fund is available upon request to your
Representative or Shareholder Services at 1-800-423-4026.

TELEPHONE TRANSACTIONS

Provided you have selected telephone privileges on
your account application, you may redeem or exchange
noncertificated shares of a Series by calling the
Special Services Department at 1-800-342-6221 weekdays
(except holidays) between 9:00 A.M. and 5:00 P.M. (New
York City time). Exchange or redemption requests received
before the close of regular trading on the NYSE, will be
processed at the net asset value, less any applicable
CDSC, determined as of the close of business on
that day. For your convenience, you may authorize your
FIC Representative (or your Dealer Representative,
provided certain minimum sales requirements are met) to
exchange or redeem shares for you.

Telephone Exchanges. Exchange requests may be made
by telephone (for shares held on deposit only). You are
limited to one telephone exchange within any 30-day period
for each account authorized. Telephone exchanges to Money
Market Funds are not available if your address of record
has changed within 60 days prior to the exchange request.
Telephone exchange instructions will be accepted from any
one owner or any one authorized individual.

Telephone Redemptions. The telephone redemption
privilege may be used provided: (1) the redemption proceeds
are being mailed to the address of record; (2) your
address of record has not changed within the past 60
days; (3) the shares to be redeemed have not been issued
in certificate form; (4) the proceeds of the redemption do
not exceed $50,000; and (5) shares have not been redeemed
by telephone from the account in the past 30 days.
For joint accounts, telephone redemption instructions will
be accepted from any one owner.

Additional Information. Series Fund II, the Adviser
the Underwriter and their officers, directors and employees
will not be liable for any loss, damage, cost or expense
arising out of any instruction (or any interpretation of
such instruction) received by telephone which they
reasonably believe to be authentic. In acting upon
telephone instructions, these parties use procedures
which are reasonably designed to ensure that such
instructions are genuine. This policy places the
entire risk of loss for unauthorized or fraudulent
transactions on the shareholder, except that if
Series Fund II, the Underwriter or their affiliates do
not follow reasonable procedures, some or all of them may
be liable for any such losses. For more information on
telephone transactions see the SAI. Each Fund has the
right, at its sole discretion, upon 60 days' notice, to
materially modify or discontinue the telephone exchange and
redemption privilege. During times of drastic economic or
market changes, telephone exchanges or redemptions may be
difficult to implement. If you experience difficulty
in making a telephone exchange or redemption, your
exchange or redemption request may be made by regular or
express mail, and it will be implemented at the next
determined net asset value, less any applicable CDSC,
following receipt by the Transfer Agent.

21
<PAGE>

MANAGEMENT

Board of Directors. Series Fund II's Board of
Directors, as part of its overall management
responsibility, oversees various organizations responsible
for each Fund's day-to-day management.

Adviser. First Investors Management Company,
Inc. supervises and manages each Fund's investments,
supervises all aspects of each Fund's operations and, for
Made In The U.S.A. Fund and Utilities Income Fund,
determines those Funds' portfolio transactions. The
Adviser is a New York corporation located at 95 Wall
Street, New York, NY 10005. The Adviser presently acts
as investment adviser to 14 mutual funds. First Investors
Consolidated Corporation ("FICC") owns all of the voting
common stock of the Adviser and all of the outstanding
stock of FIC and the Transfer Agent. Mr. Glenn O. Head
(and members of his family) and Mrs. Julie W. Grayson
(as executrix of the estate of her deceased husband,
David D. Grayson) are controlling persons of FICC and,
therefore, jointly control the Adviser.

As compensation for its services, the Adviser
receives an annual fee from each of the Funds, which is
payable monthly. For the fiscal year ended October
31, 1995, advisory fees, net of waiver for Growth & Income
Fund, Made In The U.S.A. Fund and Utilities Income Fund
were %, % and %, respectively, of each
Fund's average daily net assets.
<PAGE>
Each Fund bears all expenses of its operations other
than those incurred by the Adviser or Underwriter under
the terms of its advisory or underwriting agreements. Fund
expenses include, but are not limited to: the advisory
fee; shareholder servicing fees and expenses; custodian
fees and expenses; legal and auditing fees; expenses of
communicating to existing shareholders, including
preparing, printing and mailing prospectuses and
shareholder reports to such shareholders; and proxy and
shareholder meeting expenses.

Subadviser-Growth & Income Fund. Wellington
Management Company has been retained by the Adviser and
Series Fund II as the investment subadviser to
Growth & Income Fund. The Adviser has delegated
discretionary trading authority to WMC with respect to
all of the Fund's assets, subject to the continuing
oversight and supervision by the Adviser. As compensation
for its services, WMC is paid by the Adviser, and not by
the Fund, a fee which is computed daily and paid monthly.

WMC, located at 75 State Street, Boston, MA
02109, is a Massachusetts general partnership of which
Robert W. Doran, Duncan M. McFarland and John B.
Neff are Managing Partners. WMC is a professional
investment counseling firm which provides investment
services to investment companies, employee benefit plans,
endowment funds, foundations and other institutions and
individuals. As of June 30, 1995, WMC held investment
management authority with respect to approximately $96.0
billion of assets. Of that amount, WMC acted as
investment adviser or subadviser to approximately 110
registered investment companies or series of such
companies, with net assets of approximately $67.2 billion
as of June 30, 1995. WMC is not affiliated with the
Adviser or any of its affiliates.

For the fiscal year ended October 31, 1995, the
Subadviser's fees amounted to % of Growth & Income
Fund's average daily net assets, all of which was paid by
the Adviser and not by the Fund.

<PAGE>

Portfolio Managers. Patricia D. Poitra, Director of
Equities, has been primarily responsible for the day-to-day
management of the Made In The U.S.A. Fund since October
1994. Ms. Poitra is assisted by a team of portfolio
analysts. Ms. Poitra also is responsible for the
management of the Special Situation Series, the Blue Chip
Series and the small capitalization equity portion of the
Total Return Series, all Series of First Investors Series
Fund. In addition, Ms. Poitra is responsible for the
management of the Blue Chip Fund and Discovery Fund of
First Investors Life Series Fund and the Blue Chip Fund of
Executive Investors Trust. Ms. Poitra joined FIMCO in 1985
as a Senior Equity Analyst.

Margaret R. Haggerty has been Portfolio Manager
for Utilities Income Fund since its inception in February
1993. Ms. Haggerty joined FIMCO in 1990 as an analyst
for several First Investors equity funds. In addition, she
monitored the management of several First Investors funds
for which WMC was the subadviser. Ms. Haggerty has been
Portfolio Manager of the Utilities Income Fund of First
Investors Life Series Fund since its inception in November
1993.

Growth & Income Fund has been managed since its
inception in 1993 by Laura J. Allen, Vice President of WMC.
Ms. Allen joined WMC in 1981 as a portfolio assistant and
became a portfolio manager in 1984.

Brokerage. Each Fund may allocate brokerage
commissions, if any, to broker-dealers in consideration of
Fund share distribution, but only when execution and
price are comparable to that offered by other broker-
dealers. See the SAI for more information on allocation of
portfolio brokerage.

Underwriter. Series Fund II has entered into
an Underwriting Agreement with First Investors
Corporation, 95 Wall Street, New York, NY 10005, as
Underwriter. The Underwriter receives all sales charges in
connection with the sale of each Fund's Class A shares
and all contingent deferred sales charges in connection
with each Fund's Class B shares and may receive payments
under a plan of distribution. See "How to Buy Shares" and
"Distribution Plans."

DISTRIBUTION PLANS

Pursuant to separate distribution plans pertaining to
each Fund's Class A and Class B shares ("Class A Plan" or
"Class B Plan," and collectively, "Plans"), each Fund is
authorized to compensate the Underwriter for certain
expenses incurred in the distribution of that Fund's
shares ("distribution fees") and the servicing or
maintenance of existing Fund shareholder accounts
("service fees"). Pursuant to the Plans, distribution
fees are paid for activities relating to the distribution
of Fund shares, including costs of printing and
dissemination of sales material or literature, prospectuses
and reports used in connection with the sale of Fund
shares. Service fees are paid for the ongoing
maintenance and servicing of existing shareholder
accounts, including payments to Representatives who
provide shareholder liaison services to their customers who
are holders of that Fund, provided they meet certain
criteria.

Pursuant to the Class A Plan, each Fund is authorized
to pay the Underwriter a distribution fee at the annual
rate of 0.05% of that Fund's average daily net assets
attributable to Class A shares and a service fee of 0.25%
of that Fund's average daily net assets attributable to
Class A shares. Pursuant to the Class B Plan, each Fund
is authorized to pay the Underwriter a distribution fee at
the annual rate of 0.75% of that Fund's average daily
net assets attributable to Class B shares and a service
fee of 0.25% of that Fund's average daily net assets
attributable to Class B shares.

23
<PAGE>

Payments made to the Underwriter under the Plans represent
compensation for distribution and service activities,
not reimbursement for specific expenses incurred.

Although Class B shares are sold without an
initial sales charge, the Underwriter pays from its own
resources a sales commission to FIC Representatives and a
concession equal to 3.5% of the amount invested to Dealers
who sell Class B shares. In addition, the Underwriter will
make quarterly payments of service fees to Representatives
commencing after the thirteenth month following the initial
sale of Class B shares. The Underwriter will make such
payments at an annual rate of up to 0.25% of the average
net asset value of Class B shares which are
attributable to shareholders for whom the Representatives
are designated as dealer of record.

A Fund may suspend or modify payments under the
Plans at any time, and payments are subject to the
continuation of each Plan, the terms of any dealer
agreements between Dealers and the Underwriter and any
applicable limits imposed by the National Association of
Securities Dealers, Inc. Each Fund will not carry over
any fees under the Plans to the next fiscal year. See
"Distribution Plans" in the SAI for a full discussion of
the various Plans.

DETERMINATION OF NET ASSET VALUE
The net asset value of each Fund's shares
fluctuates and is determined separately for each class of
shares. The per share net asset value of the Class B
shares will generally be lower than that of the Class A
shares because of the higher expenses borne by the Class
B shares. The net asset value of shares of a given class
of each Fund is determined as of the close of regular
trading on the NYSE (generally 4:00 P.M., New York City
time) on each day the NYSE is open for trading, and at
such other times as the Board of Directors deems
necessary, by dividing the market value of the securities
held by such Fund, plus any cash and other assets, less
all liabilities, by the number of shares of the applicable
class outstanding. If there is no available market
value, securities will be valued at their fair value as
determined in good faith pursuant to procedures adopted
by the Board of Directors. The NYSE currently observes the
following holidays: New Year's Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.

DIVIDENDS AND OTHER DISTRIBUTIONS

Dividends from net investment income are generally
declared and paid quarterly by Growth & Income Fund and
Utilities Income Fund and annually by Made In The U.S.A.
Fund. Unless you direct the Transfer Agent otherwise,
dividends declared on a class of shares of a Fund are paid
in additional shares of that class at the net asset
value generally determined as of the close of business
on the business day immediately following the record
date of the dividend. Net investment income includes
interest, earned discount, dividends and other income
earned on portfolio securities less expenses.

Each Fund also distributes with its regular
dividend at the end of the year substantially all of its
net capital gain (the excess of net long-term capital gain
over net short-term capital loss) and net short- term
capital gain, if any, after deducting any available
capital loss carryovers and, for Growth & Income Fund, any
net realized gains from foreign currency transactions.
Unless you direct the Transfer Agent otherwise, these
distributions are paid in additional shares of the same
class of the distributing Fund at the net asset value
generally determined as of the close of business on the
business day immediately following the record date of
the distribution. A Fund may make an

24
<PAGE>

additional distribution in any year if necessary to avoid a
Federal excise tax on certain undistributed income and
capital gain.

Dividends and other distributions paid on both
classes of a Fund's shares are calculated at the same time
and in the same manner. Dividends on Class B shares of a
Fund are expected to be lower than those for its Class A
shares because of the higher distribution fees borne by the
Class B shares. Dividends on each class also might be
affected differently by the allocation of other
class-specific expenses.

In order to be eligible to receive a dividend or other
distribution, you must own Fund shares as of the close of
business on the record date of the distribution. You may
elect to receive dividends and/or other distributions in
cash by notifying the Transfer Agent by telephone or in
writing prior to the record date of any such distribution.
If you elect this form of payment, the payment date
generally is two weeks following the record date of any
such distribution. Your election remains in effect until
you revoke it by written notice to the Transfer Agent.

You may elect to invest the entire amount of any
cash distribution on Class A shares in shares of the same
class of any Eligible Fund, including the Money Market
Funds, by notifying the Transfer Agent. See the SAI or
call Shareholder Services at 1-800-423-4026 for more
information. The investment will be made at the net asset
value per share of the other fund, generally
determined as of the close of business, on the business day
immediately following the record date of any such
distribution.

A dividend or other distribution paid on a class of
shares of a Fund will be paid in additional shares of that
class and not in cash if any of the following
events occurs: (1) the total amount of the distribution
is under $5, (2) the Fund has received notice of your
death on an individual account (until written alternate
payment instructions and other necessary documents
are provided by your legal representative), or (3) a
distribution check is returned to the Transfer
Agent, marked as being undeliverable, by the U.S. Postal
Service after two consecutive mailings.

TAXES

Each Fund intends to continue to qualify for treatment
as a regulated investment company under the Code so that
it will be relieved of Federal income tax on that part
of its investment company taxable income (consisting
generally of net investment income, net short-term capital
gain and, for Growth & Income Fund, net gains from
certain foreign currency transactions) and net capital
gain that is distributed to its shareholders.

Dividends from a Fund's investment company taxable
income are taxable to you as ordinary income, to the extent
of the Fund's earnings and profits, whether paid in cash or
in additional Fund shares. Distributions of a Fund's net
capital gain, when designated as such, are taxable to you
as long-term capital gain, whether paid in cash or in
additional Fund shares, regardless of the length of time
you have owned your shares. If you purchase shares
shortly before the record date for a dividend or other
distribution, you will pay full price for the shares and
receive some portion of the price back as a taxable
distribution. You will receive an annual statement
following the end of each calendar year describing the tax
status of distributions paid by the Fund during that year.

25
<PAGE>

Each Fund is required to withhold 31% of all
dividends, capital gain distributions and redemption
proceeds payable to you (if you are an individual or
certain other non-corporate shareholder) if the Fund is not
furnished with your correct taxpayer identification
number, and that percentage of dividends and such
distributions in certain other circumstances.

Your redemption of Fund shares will result in a
taxable gain or loss to you, depending on whether the
redemption proceeds are more or less than your
adjusted basis for the redeemed shares (which normally
includes any initial sales charge paid on Class A
shares). An exchange of Fund shares for shares of any
Eligible Fund generally will have similar tax
consequences. However, special tax rules apply when a
shareholder (1) disposes of Class A shares through a
redemption or exchange within 90 days of purchase and (2)
subsequently acquires Class A shares of an Eligible Fund
without paying a sales charge due to the 90-day
reinvestment privilege or exchange privilege. In these
cases, any gain on the disposition of the original Class A
shares will be increased, or loss decreased, by the amount
of the sales charge paid when the shares were acquired,
and that amount will increase the basis of the Eligible
Fund's shares subsequently acquired. In addition, if you
purchase Fund shares within 30 days before or after
redeeming other shares of that Fund (regardless of class)
at a loss, all or a portion of the loss will not be
deductible and will increase the basis of the newly
purchased shares. No gain or loss will be recognized to a
shareholder as a result of a conversion of Class B shares
into Class A shares.

The foregoing is only a summary of some of the
important Federal tax considerations generally affecting
each Fund and its shareholders; see the SAI for a
further discussion. There may be other Federal, state and
local tax considerations applicable to a particular
investor. You therefore are urged to consult you own tax
adviser.

PERFORMANCE INFORMATION

For purposes of advertising, each Fund's
performance may be calculated for each class of its shares
based on average annual total return and total return.
Each of these figures reflects past performance and does
not necessarily indicate future results. Average
annual total return shows the average annual percentage
change in an assumed $1,000 investment. It reflects the
hypothetical annually compounded return that would have
produced the same total return if a Fund's performance had
been constant over the entire period. Because average
annual total return tends to smooth out variations in a
Fund's return, you should recognize that it is not the
same as actual year-by-year results. Average annual total
return includes the effect of paying the maximum sales
charge (in the case of Class A shares) or the deduction of
any applicable CDSC (in the case of Class B shares) and
payment of dividends and other distributions in additional
shares. One, five and ten year periods will be shown
unless the class has been in existence for a shorter
period. Total return is computed using the same
calculations as average annual total return. However, the
rate expressed is the percentage change from the initial
$1,000 invested to the value of the investment at the end
of the stated period. Total return calculations
assume reinvestment of dividends and other
distributions.

Utilities Income Fund also may advertise its yield for
each class of shares. Yield reflects investment income
net of expenses over a 30-day (or one-month) period on
a Fund share, expressed as an annualized percentage of the
maximum offering price per share for Class A shares and the
net asset value per share for Class B shares at the
end of the period. Yield computations differ from other
accounting methods and therefore may differ from
dividends actually paid or reported net income. Utilities
Income Fund may also advertise its "distribution rate"
for each class of shares.

26
<PAGE>

This is computed in the same manner as yield except that
actual income dividends declared per share during the
period in question are substituted for net investment
income per share. In addition, Utilities Income Fund
calculates its "distribution rate" based upon net asset
value for dissemination to existing shareholders.
<PAGE>
Each of the above performance calculations may be
based on investment at reduced sales charge levels or at
net asset value. Any quotation of performance figures
not reflecting the maximum sales charge will be greater
than if the maximum sales charge were used. Additional
performance information is contained in the Funds' Annual
Report which may be obtained without charge by contacting
the Funds at 1-800-423-4026.

GENERAL INFORMATION

Organization. Series Fund II is a Maryland
corporation organized on April 1, 1992. Series Fund II is
authorized to issue 400 million shares of common
stock, $0.001 par value, in such separate and distinct
series and classes of shares as Series Fund II's Board of
Directors shall from time to time establish. The shares of
common stock of Series Fund II are presently divided into
three separate and distinct series, each having two
classes, designated Class A shares and Class B shares.
Each class of a Fund represents interests in the same
assets of that Fund. The classes differ in that (1) each
class has exclusive voting rights on matters affecting
only that class, (2) Class A shares are subject to an
initial sales charge and relatively lower ongoing
distribution fees, (3) Class B shares bear higher ongoing
distribution fees, are subject to a CDSC upon certain
redemptions and will automatically convert to Class A
shares approximately eight years after purchase, (4) each
class may bear differing amounts of certain other
class-specific expenses, and (5) each class has different
exchange privileges. The Board of Directors anticipates
that there will not be any conflicts among the interests
of the holders of the different classes of each Fund's
shares. On an ongoing basis, the Board of Directors
will consider whether any such conflict exists and, if so,
take appropriate action. Series Fund II does not hold
annual shareholder meetings. If requested to do so by the
holders of at least 10% of Series Fund II's outstanding
shares, the Board of Directors will call a special meeting
of shareholders for any purpose, including the removal of
Directors. Each share of each Fund has equal voting rights
except as noted above. Each share of a Fund is
entitled to participate equally in dividends and other
distributions and the proceeds of any liquidation except
that, due to the higher expenses borne by the Class B
shares, such dividends and proceeds are likely to be lower
for the Class B shares than for the Class A shares.

Custodian. The Bank of New York, 48 Wall Street,
New York, NY 10286, is custodian of the securities and
cash of each Fund and may employ foreign sub-custodians
to provide custody of Growth & Income Fund's foreign
assets.

Transfer Agent. Administrative Data Management
Corp., 581 Main Street, Woodbridge, NJ 07095-1198, an
affiliate of FIMCO and FIC, acts as transfer and dividend
disbursing agent for each Fund and as redemption agent for
regular redemptions. The Transfer Agent's telephone number
is 1-800-423-4026.

Share Certificates. The Funds do not issue
certificates for Class B shares or for Class A shares
purchased under any retirement account. The Funds,
however, will issue share certificates on Class A shares at
the shareholder's request. Ownership of shares of
each Fund is recorded on a stock

27
<PAGE>

register by the Transfer Agent and shareholders have
the same rights of ownership with respect to such
shares as if certificates had been issued.

Confirmations and Statements. You will receive
confirmations of purchases and redemptions of shares of a
Fund. A statement of shares owned will be sent to you
following a transaction in the account, including payment
of a dividend or capital gain distribution in additional
shares or cash.

Shareholder Inquiries. Shareholder inquiries can be
made by calling Shareholder Services at 1-800-423- 4026.

Annual and Semi-Annual Reports to Shareholders. It is
the Funds' practice to mail only one copy of its annual and
semi-annual reports to any address at which more than one
shareholder with the same last name has indicated that
mail is to be delivered. Additional copies of the
reports will be mailed if requested in writing or by
telephone by any shareholder. The Funds will ensure that
an additional copy of such reports are sent to any
shareholder who subsequently changes his or her mailing
address.

<PAGE>

FIRST INVESTORS SERIES FUND II, INC.
Growth & Income Fund
Made In The U.S.A. Fund
Utilities Income Fund

95 Wall Street 1-800-423-4026
New York, New York 10005

Statement of Additional Information
dated January 16, 1996

This is a Statement of Additional Information ("SAI")
for First Investors Series Fund II, Inc. ("Series Fund II"), an
open-end diversified management investment company. Series
Fund II offers three separate series, each of which has
different investment objectives and policies: Growth & Income
Fund, Made In The U.S.A. Fund and Utilities Income Fund (each,
a "Fund"). The investment objectives of each Fund is as
follows:

Growth & Income Fund seeks long-term growth of capital
and current income.

Made In The U.S.A. Fund seeks long-term capital growth.

Utilities Income Fund primarily seeks high current
income. Long-term capital appreciation is a secondary
objective.

There can be no assurance that any Fund will achieve
its investment objective.

This SAI is not a prospectus. It should be read in
conjunction with the Funds' Prospectus dated January 16, 1996,
which may be obtained free of cost from the Funds at the
address or telephone number noted above.

1
<PAGE>

TABLE OF CONTENTS

Page

Investment Policies . . . . . . . . . . . . . . . . . . . . . .
Hedging and Option Income Strategies . . . . . . . . . . . . .
Investment Restrictions . . . . . . . . . . . . . . . . . . . .
Directors and Officers . . . . . . . . . . . . . . . . . . . .
Management . . . . . . . . . . . . . . . . . . . . . . . . . .
Underwriter . . . . . . . . . . . . . . . . . . . . . . . . . .
Distribution Plan . . . . . . . . . . . . . . . . . . . . . . .
Determination of Net Asset Value . . . . . . . . . . . . . . .
Allocation of Portfolio Brokerage . . . . . . . . . . . . . . .
Reduced Sales Charges, Additional Exchange and
Redemption Information and Other Services . . . . . . . . . .
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Performance Information . . . . . . . . . . . . . . . . . . . .
General Information . . . . . . . . . . . . . . . . . . . . . .
Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . .
Appendix B . . . . . . . . . . . . . . . . . . . . . . . . . .
Appendix C . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements . . . . . . . . . . . . . . . . . . . . .

<PAGE>

INVESTMENT POLICIES

Bankers' Acceptances. Each Fund may invest in bankers'
acceptances. Bankers' acceptances are short-term credit
instruments used to finance commercial transactions.
Generally, an acceptance is a time draft drawn on a bank by an
exporter or importer to obtain a stated amount of funds to pay
for specific merchandise. The draft is then "accepted" by a
bank that, in effect, unconditionally guarantees to pay the
face value of the instrument on its maturity date. The
acceptance may then be held by the accepting bank as an asset
or it may be sold in the secondary market at the going rate of
interest for a specific maturity. Although maturities for
acceptances can be as long as 270 days, most acceptances have
maturities of six months or less.

Certificates of Deposit. Each Fund may invest in bank
certificates of deposit ("CDs") subject to the restrictions set
forth in the Prospectus. The Federal Deposit Insurance
Corporation is an agency of the U.S. Government which insures
the deposits of certain banks and savings and loan associations
up to $100,000 per deposit. The interest on such deposits may
not be insured if this limit is exceeded. Current Federal
regulations also permit such institutions to issue insured
negotiable CDs in amounts of $100,000 or more, without regard
to the interest rate ceilings on other deposits. To remain
fully insured, these investments currently must be limited to
$100,000 per insured bank or savings and loan association.

Convertible Securities. While no securities investment
is without some risk, investments in convertible securities
generally entail less risk than the issuer's common stock,
although the extent to which such risk is reduced depends in
large measure upon the degree to which the convertible security
sells above its value as a fixed income security. First
Investors Management Company, Inc. ("FIMCO" or "Adviser"), or
for Growth & Income Fund, its subadviser, Wellington Management
Company ("WMC" or "Subadviser"), will decide to invest based
upon a fundamental analysis of the long-term attractiveness of
the issuer and the underlying common stock, the evaluation of
the relative attractiveness of the current price of the
underlying common stock, and the judgment of the value of the
convertible security relative to the common stock at current
prices.

Loans of Portfolio Securities. Growth & Income Fund
and Utilities Income Fund may loan securities to qualified
broker-dealers or other institutional investors provided: the
borrower pledges to a Fund and agrees to maintain at all times
with the Fund collateral equal to not less than 100% of the
value of the securities loaned (plus accrued interest or
dividend, if any); the loan is terminable at will by the Fund;
the Fund pays only reasonable custodian fees in connection with
the loan; and the Adviser or the Subadviser monitors the
creditworthiness of the borrower throughout the life of the
loan. Such loans may be terminated by a Fund at any time and
the Fund may vote the proxies if a material event affecting the
investment is to occur. The market risk applicable to any
security loaned remains a risk of the Fund. The borrower must
add to the collateral whenever the market value of the
securities rises above the level of such collateral. A Fund
could incur a loss if the borrower should fail financially at a
time when the value of the loaned securities is greater than
the collateral.

Mortgage-Backed Securities. Each Fund may invest in
mortgage-backed securities, including those representing an
undivided ownership interest in a pool of mortgage loans. Each
of the certificates described below is characterized by monthly
payments to the security holder, reflecting the monthly
payments made by the mortgagees of the underlying mortgage
loans. The payments to the security holders (such as a Fund),
like the payments on the underlying loans, represent both
principal and interest. Although the underlying mortgage loans
are for specified periods of time, such as twenty to thirty
years,

3
<PAGE>

the borrowers can, and typically do, repay them sooner. Thus,
the security holders frequently receive prepayments of
principal, in addition to the principal which is part of the
regular monthly payments. A borrower is more likely to prepay
a mortgage which bears a relatively high rate of interest.
Thus, in times of declining interest rates, some higher
yielding mortgages might be repaid resulting in larger cash
payments to a Fund, and the Fund will be forced to accept lower
interest rates when that cash is used to purchase additional
securities.

Interest rate fluctuations may significantly alter the
average maturity of mortgage-backed securities, due to the
level of refinancing by homeowners. When interest rates rise,
prepayments often drop, which should increase the average
maturity of the mortgage-backed security. Conversely, when
interest rates fall, prepayments often rise, which should
decrease the average maturity of the mortgage-backed security.

GNMA Certificates. Government National
Mortgage Association ("GNMA") certificates ("GNMA
Certificates") are mortgage-backed securities, which evidence
an undivided interest in a pool of mortgage loans. GNMA
Certificates differ from bonds in that principal is paid back
monthly by the borrower over the term of the loan rather than
returned in a lump sum at maturity. GNMA Certificates that the
Fund purchase are the "modified pass-through" type. "Modified
pass-through" GNMA Certificates entitle the holder to receive a
share of all interest and principal payments paid and owed on
the mortgage pool net of fees paid to the "issuer" and GNMA,
regardless of whether or not the mortgagor actually makes the
payment.

GNMA Guarantee. The National Housing Act
authorizes GNMA to guarantee the timely payment of principal
and interest on securities backed by a pool of mortgages
insured by the Federal Housing Administration ("FHA") or the
Farmers' Home Administration ("FMHA"), or guaranteed by the
Department of Veteran Affairs ("VA"). The GNMA guarantee is
backed by the full faith and credit of the U.S. Government.
GNMA also is empowered to borrow without limitation from the
U.S. Treasury if necessary to make any payments required under
its guarantee.

Life of GNMA Certificates. The average life
of a GNMA Certificate is likely to be substantially less than
the original maturity of the mortgage pools underlying the
securities. Prepayments of principal by mortgagors and mortgage
foreclosures will usually result in the return of the greater
part of principal investment long before maturity of the
mortgages in the pool. A Fund normally will not distribute
principal payments (whether regular or prepaid) to its
shareholders. Rather, it will invest such payments in
additional mortgage-backed securities of the types described
above. Interest received by the Fund will, however, be
distributed to shareholders. Foreclosures impose no risk to
principal investment because of the GNMA guarantee. As
prepayment rates of the individual mortgage pools vary widely,
it is not possible to predict accurately the average life of a
particular issue of GNMA Certificates.

Yield Characteristics of GNMA Certificates.
The coupon rate of interest on GNMA Certificates is lower than
the interest rate paid on the VA-guaranteed or FHA-insured
mortgages underlying the Certificates by the amount of the fees
paid to GNMA and the issuer. The coupon rate by itself,
however, does not indicate the yield which will be earned on
GNMA Certificates. First, Certificates may trade in the
secondary market at a premium or discount. Second, interest is
earned monthly, rather than semi-annually as with traditional
bonds; monthly compounding raises the effective yield earned.
Finally, the actual yield of a GNMA Certificate is influenced
by the prepayment experience of the mortgage pool underlying
it. For example, if the higher-yielding mortgages from the
pool are prepaid, the yield on the remaining pool will be
reduced.

4
<PAGE>

FHLMC Securities. The Federal Home Loan
Mortgage Corporation ("FHLMC") issues two types of mortgage
pass-through securities, mortgage participation certificates
("PCs") and guaranteed mortgage certificates ("GMCs"). PCs
resemble GNMA Certificates in that each PC represents a pro
rata share of all interest and principal payments made and owed
on the underlying pool.

FNMA Securities. The Federal National
Mortgage Association ("FNMA") issues guaranteed mortgage
pass-through certificates ("FNMA Certificates"). FNMA
Certificates resemble GNMA Certificates in that each FNMA
Certificate represents a pro rata share of all interest and
principal payments made and owed on the underlying pool. FNMA
guarantees timely payment of interest on FNMA Certificates and
the full return of principal.

Risk of foreclosure of the underlying mortgages is
greater with FHLMC and FNMA securities because, unlike GNMA
Certificates, FHLMC and FNMA securities are not guaranteed by
the full faith and credit of the U.S. Government.

Portfolio Turnover. Although each Fund generally will
not invest for short-term trading purposes, portfolio
securities may be sold from time to time without regard to the
length of time they have been held when, in the opinion of the
Adviser or the Subadviser investment considerations warrant
such action. Portfolio turnover rate is calculated by dividing
(1) the lesser of purchases or sales of portfolio securities
for the fiscal year by (2) the monthly average of the value of
portfolio securities owned during the fiscal year. A 100%
turnover rate would occur if all the securities in a Fund's
portfolio, with the exception of securities whose maturities at
the time of acquisition were one year or less, were sold and
either repurchased or replaced within one year. A high rate of
portfolio turnover generally leads to transaction costs and may
result in a greater number of taxable transactions. See
"Allocation of Portfolio Brokerage."

For the fiscal year ended October 31, 1994, the
portfolio turnover rate for Growth & Income Fund, Made In The
U.S.A. Fund and Utilities Income Fund was 6%, 29% and 58%,
respectively. For the fiscal year ended October 31, 1995, the
portfolio turnover rate for Growth & Income Fund, Made In The
U.S.A. Fund and Utilities Income Fund was %, % and
%.

Repurchase Agreements. Although each Fund may enter
into repurchase agreements with banks which are members of the
Federal Reserve System or securities dealers who are members of
a national securities exchange or are market makers in
government securities, Made In The U.S.A. Fund and Utilities
Income Fund do not currently intend to do so. The period of
these repurchase agreements will usually be short, from
overnight to one week, and at no time will a Fund invest in
repurchase agreements with more than one year in time to
maturity. The securities which are subject to repurchase
agreements, however, may have maturity dates in excess of one
year from the effective date of the repurchase agreement. Each
Fund will always receive, as collateral, securities whose
market value, including accrued interest, which will at all
times be at least equal to 100% of the dollar amount invested
by the Fund in each agreement, and the Fund will make payment
for such securities only upon physical delivery or evidence of
book entry transfer to the account of the Fund's custodian. If
the seller defaults, a Fund might incur a loss if the value of
the collateral securing the repurchase agreement declines, and
might incur disposition costs in connection with liquidating
the collateral. In addition, if bankruptcy or similar
proceedings are commenced with respect to the seller of the
security, realization upon the collateral by a Fund may be
delayed or limited. Repurchase agreements maturing in more than
seven days are considered illiquid.

5
<PAGE>

Restricted and Illiquid Securities. No Fund will
purchase or otherwise acquire any security if, as a result,
more than 15% of its net assets (taken at current value) would
be invested in securities that are illiquid by virtue of the
absence of a readily available market or legal or contractual
restrictions on resale. This policy includes foreign issuers'
unlisted securities with a limited trading market and
repurchase agreements maturing in more than seven days. This
policy does not include restricted securities eligible for
resale pursuant to Rule 144A under the Securities Act of 1933,
as amended ("1933 Act"), which the Board of Directors or the
Adviser or the Subadviser has determined under Board-approved
guidelines are liquid. As a result of undertakings to certain
state securities commissions, Made In The U.S.A. Fund and
Utilities Income Fund each will not invest more than 5% of its
total assets in restricted securities (excluding Rule 144A
securities) or more than 10% of its total assets in Rule 144A
securities and Growth & Income Fund will not invest more than
5% of its total assets in restricted securities (excluding Rule
144A securities).

Restricted securities which are illiquid may be sold
only in privately negotiated transactions or in public
offerings with respect to which a registration statement is in
effect under the 1933 Act. Such securities include those that
are subject to restrictions contained in the securities laws of
other countries. Securities that are freely marketable in the
country where they are principally traded, but would not be
freely marketable in the United States, will not be subject to
this 15% limit. Where registration is required, a Fund may be
obligated to pay all or part of the registration expenses and a
considerable period may elapse between the time of the decision
to sell and the time the Fund may be permitted to sell a
security under an effective registration statement. If, during
such a period, adverse market conditions were to develop, a
Fund might obtain a less favorable price than prevailed when it
decided to sell.

In recent years, a large institutional market has
developed for certain securities that are not registered under
the 1933 Act, including private placements, repurchase
agreements, commercial paper, foreign securities and corporate
bonds and notes. These instruments are often restricted
securities because the securities are either themselves exempt
from registration or sold in transactions not requiring
registration. Institutional investors generally will not seek
to sell these instruments to the general public, but instead
will often depend on an efficient institutional market in which
such unregistered securities can be readily resold or on an
issuer's ability to honor a demand for repayment. Therefore,
the fact that there are contractual or legal restrictions on
resale to the general public or certain institutions is not
dispositive of the liquidity of such investments.

Rule 144A under the 1933 Act establishes a "safe
harbor" from the registration requirements of the 1933 Act for
resales of certain securities to qualified institutional
buyers. Institutional markets for restricted securities that
might develop as a result of Rule 144A could provide both
readily ascertainable values for restricted securities and the
ability to liquidate an investment in order to satisfy share
redemption orders. An insufficient number of qualified
institutional buyers interested in purchasing Rule
144A-eligible securities held by a Fund, however, could affect
adversely the marketability of such portfolio securities and a
Fund might be unable to dispose of such securities promptly or
at reasonable prices.

6
<PAGE>

Risk Factors of High Yield Securities. High yield,
high risk securities (commonly referred to as "junk bonds"),
are subject to certain risks that may not be present with
investments of higher grade securities. These risks also apply
to lower-rated and certain unrated convertible securities.

Effect of Interest Rate and Economic Changes.
The prices of High Yield Securities tend to be less sensitive
to interest rate changes than higher-rated investments, but may
be more sensitive to adverse economic changes or individual
corporate developments. Periods of economic uncertainty and
changes generally result in increased volatility in the market
prices and yields of High Yield Securities and thus in a Fund's
net asset value. A strong economic downturn or a substantial
period of rising interest rates could severely affect the
market for High Yield Securities. In these circumstances,
highly leveraged companies might have greater difficulty in
making principal and interest payments, meeting projected
business goals, and obtaining additional financing. Thus,
there could be a higher incidence of default. This would
affect the value of such securities and thus a Fund's net asset
value. Further, if the issuer of a security owned by a Fund
defaults, that Fund might incur additional expenses to seek
recovery.

Generally, when interest rates rise, the value of fixed
rate debt obligations, including High Yield Securities, tends
to decrease; when interest rates fall, the value of fixed rate
debt obligations tends to increase. If an issuer of a High
Yield Security containing a redemption or call provision
exercises either provision in a declining interest rate market,
a Fund would have to replace the security, which could result
in a decreased return for shareholders. Conversely, if a Fund
experiences unexpected net redemptions in a rising interest
rate market, it might be forced to sell certain securities,
regardless of investment merit. This could result in
decreasing the assets to which Fund expenses could be allocated
and in a reduced rate of return for that Fund. While it is
impossible to protect entirely against this risk,
diversification of a Fund's portfolio and the Adviser's careful
analysis of prospective portfolio securities should minimize
the impact of a decrease in value of a particular security or
group of securities in a Fund's portfolio.

The High Yield Securities Market. The market
for below investment grade bonds expanded rapidly in the
1980's, and its growth paralleled a long economic expansion.
During that period, the yields on below investment grade bonds
were very high. Such higher yields did not reflect the value
of the income stream that holders of such bonds expected, but
rather the risk that holders of such bonds could lose a
substantial portion of their value as a result of the issuers'
financial restructuring or default. In fact, from 1989 to 1991
during a period of economic recession, the percentage of lower
quality securities that defaulted rose significantly, although
the default rate decreased in subsequent years. There can be
no assurance that such declines in the below investment grade
market will not reoccur. The market for below investment grade
bonds generally is thinner and less active than that for higher
quality bonds, which may limit a Fund's ability to sell such
securities at fair value in response to changes in the economy
or the financial markets. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis, may
also decrease the values and liquidity of lower rated
securities, especially in a thinly traded market.
<PAGE>
Liquidity and Valuation. Lower-rated bonds
are typically traded among a smaller number of broker-dealers
than in a broad secondary market. Purchasers of High Yield
Securities tend to be institutions, rather than individuals,
which is a factor that further limits the secondary market. To
the extent that no established retail secondary market exists,
many High Yield Securities may not be as liquid as higher-grade
bonds. A less active and thinner market for High Yield
Securities than that available for higher quality securities
may result in more volatile valuations of a Fund's holdings and
more difficulty in executing trades at favorable prices during
unsettled market conditions.

7
<PAGE>

The ability of a Fund to value or sell High Yield
Securities will be adversely affected to the extent that such
securities are thinly traded or illiquid. During such periods,
there may be less reliable objective information available and
thus the responsibility of the Board of Directors to value High
Yield Securities becomes more difficult, with judgment playing
a greater role. Further, adverse publicity about the economy or
a particular issuer may adversely affect the public's
perception of the value, and thus liquidity, of a High Yield
Security, whether or not such perceptions are based on a
fundamental analysis. See "Determination of Net Asset Value."

Legislation. Provisions of the Revenue
Reconciliation Act of 1989 limit a corporate issuer's deduction
for a portion of the original issue discount on "high yield
discount" obligations (including certain pay-in-kind
securities). This limitation could have a materially adverse
impact on the market for certain High Yield Securities. From
time to time, legislators and regulators have proposed other
legislation that would limit the use of high yield debt
securities in leveraged buyouts, mergers and acquisitions. It
is not certain whether such proposals, which also could
adversely affect High Yield Securities, will be enacted into
law.

Short Sales. Although they do not intend to do so in
the foreseeable future, Made In The U.S.A. Fund and Utilities
Income Fund may borrow securities for cash sale to others.
This type of transaction is commonly known as a "short sale."
Each Fund will only make short sales "against the box," which
occurs when a Fund enters into a short sale with a security
identical to one it already owns or has the immediate and
unconditional right, at no cost, to obtain the identical
security.

Warrants. Each Fund may purchase warrants, which are
instruments that permit a Fund to acquire, by subscription, the
capital stock of a corporation at a set price, regardless of
the market price for such stock. Warrants may be either
perpetual or of limited duration. There is a greater risk that
warrants might drop in value at a faster rate than the
underlying stock. Each Fund's investments in warrants and
stock rights will be limited to 5% of its total assets, of
which no more than 2% may not be listed on the New York or
American Stock Exchange.

When-Issued Securities. Each Fund may invest up to 10%
of its net assets in securities issued on a when-issued or
delayed delivery basis at the time the purchase is made. A
Fund generally would not pay for such securities or start
earning interest on them until they are issued or received.
However, when a Fund purchases debt obligations on a
when-issued basis, it assumes the risks of ownership, including
the risk of price fluctuation, at the time of purchase, not at
the time of receipt. Failure of the issuer to deliver a
security purchased by the Fund on a when-issued basis may
result in the Fund's incurring a loss or missing an opportunity
to make an alternative investment. When a Fund enters into a
commitment to purchase securities on a when-issued basis, it
establishes a separate account with its custodian consisting of
cash or liquid high-grade debt securities equal to the amount
of the Fund's commitment, which are valued at their fair market
value. If on any day the market value of this segregated
account falls below the value of the Fund's commitment, the
Fund will be required to deposit additional cash or qualified
securities into the account until equal to the value of the
Fund's commitment. When the securities to be purchased are
issued, a Fund will pay for the securities from available cash,
the sale of securities in the segregated account, sales of
other securities and, if necessary, from sale of the
when-issued securities themselves although this is not
ordinarily expected. Securities purchased on a when- issued
basis are subject to the risk that yields available in the
market, when delivery takes place, may be higher than the rate
to be received on the securities a Fund is committed to
purchase. Sale of

8
<PAGE>

securities in the segregated account or other securities owned
by a Fund and when-issued securities may cause the realization
of a capital gain or loss.

Zero Coupon and Pay-In-Kind Securities. Although there
is no intention to do so in the foreseeable future, Made In The
U.S.A. Fund and Utilities Income Fund may each invest in zero
coupon and pay-in-kind securities. Zero coupon securities are
debt obligations that do not entitle the holder to any periodic
payment of interest prior to maturity or a specified date when
the securities begin paying current interest. They are issued
and traded at a discount from their face amount or par value,
which discount varies depending on the time remaining until
cash payments begin, prevailing interest rates, liquidity of
the security and the perceived credit quality of the issuer.
Pay-in-kind securities are those that pay interest through the
issuance of additional securities. The market prices of zero
coupon and pay-in-kind securities generally are more volatile
than the prices of securities that pay interest periodically
and in cash and are likely to respond to changes in interest
rates to a greater degree than do other types of debt
securities having similar maturities and credit quality.
Original issue discount earned on zero coupon securities and
the "interest" on pay-in-kind securities must be included in a
Fund's income. Thus, to continue to qualify for tax treatment
as a regulated investment company and to avoid a certain excise
tax on undistributed income, a Fund may be required to
distribute as a dividend an amount that is greater than the
total amount of cash it actually receives. See "Taxes." These
distributions must be made from a Fund's cash assets or, if
necessary, from the proceeds of sales of portfolio securities.
Each Fund will not be able to purchase additional
income-producing securities with cash used to make such
distributions, and its current income ultimately could be
reduced as a result.

HEDGING AND OPTION INCOME STRATEGIES

Although it does not intend to engage in these
strategies in the coming year, Utilities Income Fund may engage
in certain options and futures strategies to hedge its
portfolio and in other circumstances permitted by the Commodity
Futures Trading Commission ("CFTC") and may engage in certain
options strategies to enhance income. The instruments
described below are sometimes referred to collectively as
"Hedging Instruments" and are defined in Appendix C. Certain
special characteristics of and risks associated with using
Hedging Instruments are discussed below. In addition to the
investment guidelines (described below) adopted by the Board of
Directors to govern the Fund's investments in Hedging
Instruments, use of these instruments is subject to the
applicable regulations of the Securities and Exchange
Commission ("SEC"), the several options and futures exchanges
upon which options and futures contracts are traded, the CFTC
and various state regulatory authorities. In addition, the
Fund's ability to use Hedging Instruments will be limited by
tax considerations. See "Taxes."

Participation in the options or futures markets
involves investment risks and transaction costs to which the
Fund would not be subject absent the use of these strategies.
If the Adviser's prediction of movements in the direction of
the securities and interest rate markets are inaccurate, the
adverse consequences to the Fund may leave the Fund in a worse
position than if such strategies were not used. The Fund might
not employ any of the strategies described below, and there can
be no assurance that any strategy will succeed. The use of
these strategies involve certain special risks, including (1)
dependence on the Adviser's ability to predict correctly
movements in the direction of interest rates and securities
prices; (2) imperfect correlation between the price of options,
futures contracts and options thereon and movements in the
prices of the securities being hedged; (3) the fact that skills
needed to use these strategies are different from those needed
to select portfolio securities; (4) the possible absence of a
liquid

9
<PAGE>

secondary market for any particular instrument at any time; and
(5) the possible need to defer closing out certain hedged
positions to avoid adverse tax consequences.

The Fund may buy and sell put and call options on stock
indices and securities that are traded on national securities
exchanges or in the over-the-counter ("OTC") market to enhance
income or to hedge the Fund's portfolio. The Fund also may
write put and covered call options to generate additional
income through the receipt of premiums, purchase put options in
an effort to protect the value of a security that it owns
against a decline in market value and purchase call options in
an effort to protect against an increase in the price of
securities it intends to purchase. The Fund also may purchase
put and call options to offset previously written put and call
options of the same Fund. The Fund also may write put and call
options to offset previously purchased put and call options of
the same Fund. Other than to effect closing transactions, the
Fund will write only covered call options, including options on
futures contracts.

The Fund may buy and sell financial futures contracts
and options thereon that are traded on a commodities exchange
or board of trade for hedging purposes. These futures
contracts and related options may be on stock indices,
financial indices or debt securities. However, as a
non-fundamental policy, Series Fund II has undertaken to a
certain state securities commission that the Fund will not
purchase interest rate futures contracts or options thereon.

Cover for Hedging and Option Income Strategies. The
Fund will not use leverage in its hedging and option income
strategies. In the case of each transaction entered into as a
short hedge, the Fund will hold securities, or other options or
futures positions whose values are expected to offset ("cover")
its obligations hereunder. The Fund will not enter into a
hedging or option income strategy that exposes the Fund to an
obligation to another party unless it owns either (1) an
offsetting ("covered") position in securities, or other options
or futures contracts or (2) cash, receivables and short-term
debt securities with a value sufficient at all times to cover
its potential obligations. The Fund will comply with
guidelines established by the SEC with respect to coverage of
hedging and option income strategies by mutual funds and, if
required, will set aside cash and/or liquid, high-grade debt
securities in a segregated account with its custodian in the
prescribed amount. Securities or other options or futures
positions used for cover and securities held in a segregated
account cannot be sold or closed out while the hedging or
option income strategy is outstanding unless they are replaced
with similar assets. As a result, there is a possibility that
the use of cover or segregation involving a large percentage of
the Fund's assets could impede portfolio management or the
Fund's ability to meet redemption requests or other current
obligations.

Options Strategies. The Fund may purchase call options
on securities that the Adviser intends to include in the Fund's
portfolio in order to fix the cost of a future purchase. Call
options also may be used as a means of participating in an
anticipated price increase of a security. In the event of a
decline in the price of the underlying security, use of this
strategy would serve to limit the Fund's potential loss to the
option premium paid; conversely, if the market price of the
underlying security increases above the exercise price and the
Fund either sells or exercises the option, any profit
eventually realized will be reduced by the premium. The Fund
may purchase put options in order to hedge against a decline in
the market value of securities held in its portfolio. The put
option enables the Fund to sell the underlying security at the
predetermined exercise price; thus the potential for loss to
the Fund below the exercise price is limited to the option
premium paid. If the market price of the underlying security
is higher than the exercise price of the put option, any profit
the Fund realizes on the sale of the security will be reduced
by the premium paid for the put option less any amount for
which the put option may be sold.

<PAGE>

The Fund may write covered call options on securities
to increase income in the form of premiums received from the
purchasers of the options. Because it can be expected that a
call option will be exercised if the market value of the
underlying security increases to a level greater than the
exercise price, the Fund will write covered call options on
securities generally when the Adviser believes that the premium
received by the Fund, plus anticipated appreciation in the
market price of the underlying security up to the exercise
price of the option, will be greater than the total
appreciation in the price of the security. The strategy may be
used to provide limited protection against a decrease in the
market price of the security in an amount equal to the premium
received for writing the call option less any transaction
costs. Thus, if the market price of the underlying security
held by the Fund declines, the amount of such decline will be
offset wholly or in part by the amount of the premium received
by the Fund. If, however, there is an increase in the market
price of the underlying security and the option is exercised,
the Fund will be obligated to sell the security at less than
its market value. The Fund gives up the ability to sell the
portfolio securities used to cover the call option while the
call option is outstanding. Such securities may also be
considered illiquid in the case of OTC options written by the
Fund and therefore subject to investment restrictions. See
"Restricted and Illiquid Securities." In addition, the Fund
could lose the ability to participate in an increase in the
value of such securities above the exercise price of the call
option because such an increase would likely be offset by an
increase in the cost of closing out the call option (or could
be negated if the buyer chose to exercise the call option at an
exercise price below the securities' current market value).

The Fund may purchase put and call options and write
covered call options on stock indices in much the same manner
as the more traditional equity and debt options discussed
above, except that stock index options may serve as a hedge
against overall fluctuations in the securities markets (or a
market sector) rather than anticipated increases or decreases
in the value of a particular security. A stock index assigns
relative values to the stock included in the index and
fluctuates with changes in such values. Stock index options
operate in the same way as the more traditional equity options,
except that settlements of stock index options are effected
with cash payments and do not involve delivery of securities.
Thus, upon settlement of a stock index option, the purchaser
will realize, and the writer will pay, an amount based on the
difference between the exercise price and the closing price of
the stock index. The effectiveness of hedging techniques using
stock index options will depend on the extent to which price
movements in the stock index selected correlate with price
movements of the securities in which the Fund invests.

The Fund may write put options on securities or on a
stock index. A put option on a security gives the purchaser of
the option the right to sell, and the writer (seller) the
obligation to buy, the underlying security at the exercise
price during the option period. So long as the obligation of
the writer continues, the writer may be assigned an exercise
notice by the broker- dealer through which such option was
sold, requiring it to make payment of the exercise price
against delivery of the underlying security. A written put
option on a stock index is similar to a written put option on a
security except that, on exercise, the writer pays the buyer a
settlement payment in cash equal to the difference between the
exercise price and the value of the index. The operation of
put options in other respects, including their related risks
and rewards, is substantially identical to that of call
options. The Fund may write covered put options in
circumstances when the Adviser believes that the market price
of the securities will not decline below the exercise price
less the premiums received. If the put option is not
exercised, the Fund will realize income in the amount of the
premium received. This technique could be used to enhance
current return during periods of market uncertainty. The risk
in such a transaction would be that the

11
<PAGE>

market price of the underlying security would decline below the
exercise price less the premiums received, in which case the
Fund would expect to suffer a loss.

Currently, many options on equity securities are
exchange-traded, whereas options on debt securities are
primarily traded on the OTC market. Exchange-traded options in
the U.S. are issued by a clearing organization affiliated with
the exchange on which the option is listed which, in effect,
guarantees completion of every exchange-traded option
transaction. In contrast, OTC options are contracts between
the Fund and the opposite party with no clearing organization
guarantee. Thus, when the Fund purchases an OTC option, it
relies on the dealer from which it has purchased the OTC option
to make or take delivery of the securities underlying the
option. Failure by the dealer to do so would result in the
loss of the premium paid by the Fund as well as the loss of the
expected benefit of the transaction.

Options Guidelines. In view of the risks involved in
using options, the Board of Directors has adopted
non-fundamental investment guidelines to govern the Fund's use
of options that may be modified by the Board without
shareholder vote: (1) options will be purchased or written
only when the Adviser believes that there exists a liquid
secondary market in such options; and (2) the Fund may not
purchase a put or call option if the value of the option's
premium, when aggregated with the premiums on all other options
held by the Fund, exceeds 5% of the Fund's total assets.
However, this does not limit the amount of the Fund's assets at
risk to 5%.

Special Characteristics and Risks of Options Trading.
The Fund may effectively terminate its right or obligation
under an option by entering into a closing transaction. If the
Fund wishes to terminate its obligation to sell securities
under a call option it has written, the Fund may purchase a
call option of the same series (that is, a call option
identical in its terms to the call option previously written);
this is known as a closing purchase transaction. Conversely,
in order to terminate its right to purchase or sell specified
securities under a call or put option it has purchased, the
Fund may write an option of the same series, as the option
held; this is known as a closing sale transaction. Closing
transactions essentially permit the Fund to realize profits or
limit losses on its options positions prior to the exercise or
expiration of the option.

The value of an option position will reflect, among
other things, the current market price of the underlying
security or stock index, the time remaining until expiration,
the relationship of the exercise price to the market price, the
historical price volatility of the underlying security or stock
index and general market conditions. For this reason, the
successful use of options depends upon the Adviser's ability to
forecast the direction of price fluctuations in the underlying
securities or, in the case of stock index options, fluctuations
in the market sector represented by the index selected.

Options normally have expiration dates of up to nine
months. Unless an option purchased by the Fund is exercised or
unless a closing transaction is effected with respect to that
position, a loss will be realized in the amount of the premium
paid and any transaction costs.

A position in an exchange-listed option may be closed
out only on an exchange that provides a secondary market for
identical options. The ability to establish and close out
positions on the exchanges is subject to the maintenance of a
liquid secondary market. Although the Fund intends to purchase
or write only those exchange-traded options for which there
appears to be a liquid secondary market, there is no assurance
that a liquid secondary market will exist for any particular
option at any particular time. Closing transactions may be
effected with respect to options traded in the OTC markets
(currently the

12
<PAGE>

primary markets for options on debt securities) only by
negotiating directly with the other party to the option
contract or in a secondary market for the option if such market
exists. Although the Fund will enter into OTC options only
with dealers that agree to enter into, and that are expected to
be capable of entering into, closing transactions with the
Fund, there is no assurance that the Fund will be able to
liquidate an OTC option at a favorable price at any time prior
to expiration. In the event of insolvency of the opposite
party, the Fund may be unable to liquidate an OTC option.
Accordingly, it may not be possible to effect closing
transactions with respect to certain options, with the result
that the Fund would have to exercise those options that it has
purchased in order to realize any profit. With respect to
options written by the Fund, the inability to enter into a
closing transaction may result in material losses to the Fund.
For example, because the Fund must maintain a covered position
with respect to any call option it writes, the Fund may not
sell the underlying assets used to cover an option during the
period it is obligated under the option. This requirement may
impair the Fund's ability to sell a portfolio security or make
an investment at a time when such a sale or investment might be
advantageous.

Stock index options are settled exclusively in cash.
If the Fund purchases an option on a stock index, the option is
settled based on the closing value of the index on the exercise
date. Thus, a holder of a stock index option who exercises it
before the closing index value for that day is available runs
the risk that the level of the underlying index may
subsequently change. For example, in the case of a call
option, if such a change causes the closing index value to fall
below the exercise price of the option on the index, the
exercising holder will be required to pay the difference
between the closing index value and the exercise price of the
option.

The Fund's activities in the options markets may result
in a higher portfolio turnover rate and additional brokerage
costs; however, the Fund also may save on commissions by using
options as a hedge rather than buying or selling individual
securities in anticipation or as a result of market movements.

Futures Strategies. The Fund may engage in futures
strategies to attempt to reduce the overall investment risk
that would normally be expected to be associated with ownership
of the securities in which it invests. The Fund may sell stock
index futures contracts in anticipation of a general market or
market sector decline that could adversely affect the market
value of the Fund's portfolio. To the extent that a portion of
the Fund's portfolio correlates with a given stock index, the
sale of futures contracts on that index could reduce the risks
associated with a market decline and thus provide an
alternative to the liquidation of securities positions. The
Fund may purchase a stock index futures contract if a
significant market or market sector advance is anticipated.
Such a purchase would serve as a temporary substitute for the
purchase of individual stocks, which stocks may then be
purchased in an orderly fashion. This strategy may minimize
the effect of all or part of an increase in the market price of
securities that the Fund intends to purchase. A rise in the
price of the securities should be partially or wholly offset by
gains in the futures position.

The Fund may purchase a call option on a stock index
future to hedge against a market advance in equity securities
that the Fund plans to purchase at a future date. The Fund may
also write put options on a stock index futures contract as a
partial hedge against a market advance in equity securities the
Fund plans to purchase at a future date. The Fund may write
covered call options on stock index futures as a partial hedge
against a decline in the prices of stocks held in the Fund's
portfolio. The Fund also may purchase put options on stock
index futures contracts.

13
<PAGE>

The Fund may use interest rate futures contracts and
options thereon to hedge the debt portion of its portfolio
against changes in the general level of interest rates. The
Fund may purchase an interest rate futures contract when it
intends to purchase debt securities but has not yet done so.
This strategy may minimize the effect of all or part of an
increase in the market price of those securities because a rise
in the price of the securities prior to their purchase may
either be offset by an increase in the value of the futures
contract purchased by the Fund or avoided by taking delivery of
the debt securities under the futures contract. Conversely, a
fall in the market price of the underlying debt securities may
result in a corresponding decrease in the value of the futures
position. The Fund may sell an interest rate futures contract
in order to continue to receive the income from a debt
security, while endeavoring to avoid part or all of the decline
in the market value of that security that would accompany an
increase in interest rates.

The Fund may purchase a call option on an interest rate
futures contract to hedge against a market advance in debt
securities that the Fund plans to acquire at a future date.
The seller may also write a put option on an interest rate
futures contract as a partial hedge against a market advance in
debt securities that the Fund plans to acquire at a future
date. The Fund also may write covered call options on interest
rate futures contracts as a partial hedge against a decline in
the price of debt securities held in the Fund's portfolio or
purchase put options on interest rate futures contracts in
order to hedge against a decline in the value of debt
securities held in the Fund's portfolio. Series Fund II, on
behalf of the Fund, has undertaken to a certain state
securities commission that the Fund will not purchase interest
rate futures contracts or options thereon.

Futures Guidelines. In view of the risks involved in
using futures strategies described above, the Board of
Directors has adopted non-fundamental investment guidelines to
govern the Fund's use of such investments that may be modified
by the Board without shareholder vote. The Fund will not
purchase or sell futures contracts or related options if,
immediately thereafter, the sum of the amount of initial margin
deposits on the Fund's existing futures positions and initial
margin and premiums paid for related options would exceed 5% of
the market value of the Fund's total assets. The value of all
futures sold will not exceed the total market value of the
Fund's portfolio.

Special Characteristics and Risks of Futures Trading.
No price is paid upon entering into futures contracts.
Instead, upon entering into a futures contract, the Fund is
required to deposit with its custodian in a segregated account
in the name of the futures broker through which the transaction
is effected an amount of cash, U.S. Government securities or
other liquid, high-grade debt instruments generally equal to
10% or less of the contract value. This amount is known as
"initial margin." When writing a call or put option on a
futures contract, margin also must be deposited in accordance
with applicable exchange rules. Initial margin on futures
contracts is in the nature of a performance bond or good-faith
deposit that is returned to the Fund upon termination of the
transaction, assuming all obligations have been satisfied.
Under certain circumstances, such as periods of high
volatility, the Fund may be required by an exchange to increase
the level of its initial margin payment. Additionally, initial
margin requirements may be increased generally in the future by
regulatory action. Subsequent payments, called "variation
margin," to and from the broker, are made on a daily basis as
the value of the futures position varies, a process known as
"marking to market." Variation margin does not involve
borrowing to finance the futures transactions, but rather
represents a daily settlement of the Fund's obligation to or
from a clearing organization.

Holders and writers of futures positions and options
thereon can enter into offsetting closing transactions, similar
to closing transactions on options on securities, by selling or
purchasing, respectively,

14
<PAGE>

a futures position or options position with the same terms as
the position or option held or written. Positions in futures
contracts and options thereon may be closed only on an exchange
or board of trade providing a secondary market for such futures
or options.

Under certain circumstances, futures exchanges may
establish daily limits on the amount that the price of a
futures contract or related option may vary either up or down
from the previous day's settlement price. Once the daily limit
has been reached in a particular contract, no trades may be
made that day at a price beyond that limit. The daily limit
governs only price movements during a particular trading day
and therefore does not limit potential losses because prices
could move to the daily limit for several consecutive trading
days with little or no trading and thereby prevent prompt
liquidation of unfavorable positions. In such event, it may
not be possible for the Fund to close a position and, in the
event of adverse price movements the Fund would have to make
daily cash payments of variation margin (except in the case of
purchased options). However, in the event futures contracts
have been used to hedge portfolio securities, such securities
will not be sold until the contracts can be terminated. In
such circumstances, an increase in the price of the securities,
if any, may partially or completely offset losses on the
futures contract. However, there is no guarantee that the
price of the securities will, in fact, correlate with the price
movements in the contracts and thus provide an offset to losses
on the contracts.

Successful use by the Fund of futures contracts and
related options will depend upon the Adviser's ability to
predict movements in the direction of the overall securities
and interest rate markets, which requires different skills and
techniques than predicting changes in the prices of individual
securities. Moreover, futures contracts relate not to the
current price level of the underlying instrument but to the
anticipated levels at some point in the future. There is, in
addition, the risk that the movements in the price of the
futures contract or related option will not correlate with the
movements in prices of the securities being hedged. In
addition, if the Fund has insufficient cash, it may have to
sell assets from its portfolio to meet daily variation margin
requirements. Any such sale of assets may or may not be made
at prices that reflect the rising market. Consequently, the
Fund may need to sell assets at a time when such sales are
disadvantageous to the Fund. If the price of the futures
contract or related option moves more than the price of the
underlying securities, the Fund will experience either a loss
or a gain on the futures contract or related option that may or
may not be completely offset by movements in the price of the
securities that are the subject of the hedge.

In addition to the possibility that there may be an
imperfect correlation, or no correlation at all, between price
movements in the futures position or related option and the
securities being hedged, movements in the prices of futures
contracts and related options may not correlate perfectly with
movements in the prices of the hedged securities because of
price distortions in the futures market. As a result, a
correct forecast of general market trends may not result in
successful hedging through the use of futures contracts or
related options over the short term.

Positions in futures contracts and related options may
be closed out only on an exchange or board of trade that
provides a secondary market for such futures contracts or
related options. Although the Fund intends to purchase or sell
futures and related options only on exchanges or boards of
trade where there appears to be a liquid secondary market,
there is no assurance that such a market will exist for any
particular contract or option at any particular time. In such
event, it may not be possible to close a futures or option
position and, in the event of adverse price movements, the Fund
would continue to be required to make variation margin
payments.

15
<PAGE>

Like options on securities, options on futures
contracts have a limited life. A purchased option that expires
unexercised has no value.

Purchasers of options on futures contracts pay a
premium in cash at the time of purchase. This amount and the
transaction costs are all that is at risk. Sellers of options
on a futures contract, however, must post initial margin and
are subject to additional margin calls that could be
substantial in the event of adverse price movements. In
addition, although the maximum amount at risk when the Fund
purchases an option is the premium paid for the option and the
transaction costs, there may be circumstances when the purchase
of an option on a futures contract would result in a loss to
the Fund when the use of a futures contract would not, such as
when there is no movement in the level of the underlying stock
index or the value of the securities being hedged.

The Fund's activities in the futures and related
options markets may result in a higher portfolio turnover rate
and additional transaction costs in the form of added brokerage
commissions; however, the Fund also may save on commissions by
using futures and related options as a hedge rather than buying
or selling individual securities in anticipation or as a result
of market movements.

Forward Currency Contracts. Although it does not
intend to do so in the foreseeable future, Growth & Income Fund
may use forward currency contracts to protect against
uncertainty in the level of future exchange rates. The Fund
will not speculate with forward currency contracts or foreign
currency exchange rates.

The Fund may enter into forward currency contracts with
respect to specific transactions. For example, when the Fund
enters into a contract for the purchase or sale of a security
denominated in a foreign currency, or when the Fund anticipates
the receipt in a foreign currency of dividend or interest
payments on a security that it holds, the Fund may desire to
"lock-in" the U.S. dollar price of the security or the U.S.
dollar equivalent of such payment, as the case may be, by
entering into a forward contract for the purchase or sale, for
a fixed amount of U.S. dollars or foreign currency, of the
amount of foreign currency involved in the underlying
transaction. The Fund will thereby be able to protect itself
against a possible loss resulting from an adverse change in the
relationship between the currency exchange rates during the
period between the date on which the security is purchased or
sold, or on which the payment is declared, and the date on
which such payments are made or received.

The precise matching of the forward contract amounts
and the value of the securities involved will not generally be
possible because the future value of such securities in foreign
currencies will change as a consequence of market movements in
the value of those securities between the date the forward
contract is entered into and the date it matures. Accordingly,
it may be necessary for the Fund to purchase additional foreign
currency on the spot (i.e., cash) market and bear the expense
of such purchase if the market value of the security is less
than the amount of foreign currency the Fund is obligated to
deliver and if a decision is made to sell the security and make
delivery of the foreign currency. Conversely, it may be
necessary to sell on the spot market some of the foreign
currency received upon the sale of the portfolio security if
its market value exceeds the amount of foreign currency the
Fund is obligated to deliver. The projection of short- term
currency market movements is extremely difficult, and the
successful execution of a short-term hedging strategy is highly
uncertain. Forward contracts involve the risk that anticipated
currency movements will not be accurately predicted, causing
the Fund to sustain losses on these contracts and transactions
costs. The Fund may enter into formal contracts or maintain a
net exposure to such contracts only if the Fund maintains cash,
U.S. Government securities or liquid, high-

16
<PAGE>

grade debt securities in a segregated account in an amount not
less than the value of the Fund's total assets committed to the
consummation of the contract, as marked to market daily.

At or before the maturity date of a forward contract
requiring the Fund to sell a currency, the Fund may either sell
a portfolio security and use the sale proceeds to make delivery
of the currency or retain the security and offset its
contractual obligation to deliver the currency by purchasing a
second contract pursuant to which the Fund will obtain, on the
same maturity date, the same amount of the currency that it is
obligated to deliver. Similarly, the Fund may close out a
forward contract requiring it to purchase a specified currency
by entering into a second contract entitling it to sell the
same amount of the same currency on the maturity date of the
first contract. The Fund would realize a gain or loss as a
result of entering into an offsetting forward currency contract
under either circumstance to the extent the exchange rate or
rates between the currencies involved moved between the
execution dates of the first contract and the offsetting
contract. There can be no assurance that new forward contracts
or offsets always will be available for the Fund. Forward
currency contracts also involve a risk that the other party to
the contract may fail to deliver currency when due, which could
result in substantial losses to the Fund. The cost to the Fund
of engaging in forward currency contracts varies with factors
such as the currencies involved, the length of the contract
period and the market conditions then prevailing. Because
forward currency contracts are usually entered into on a
principal basis, no fees or commissions are involved.

INVESTMENT RESTRICTIONS

The investment restrictions set forth below have been
adopted by the respective Fund and, unless identified as
non-fundamental policies, may not be changed without the
affirmative vote of a majority of the outstanding voting
securities of that Fund, voting separately from any other
series of Series Fund II. As provided in the Investment Company
Act of 1940, as amended ("1940 Act"), a "vote of a majority of
the outstanding voting securities of the Fund" means the
affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the Fund or (2) 67% or more of the shares
of the Fund present at a meeting, if more than 50% of the
outstanding shares are represented at the meeting in person or
by proxy. Changes in values of a particular Fund's assets or
the assets of Series Fund II as a whole will not cause a
violation of the following investment restrictions so long as
percentage restrictions are observed by each Fund at the time
it purchases any security.

Growth & Income Fund. Growth & Income Fund will not:

(1) Issue senior securities or borrow money,
except that the Fund may borrow money from a bank for temporary
or emergency purposes in amounts not exceeding 5% (taken at the
lower of cost or current value) of its net assets (not
including the amount borrowed).

(2) Purchase any security (other than obligations
of the U.S. Government, its agencies or instrumentalities) if
as a result, with respect to 75% of the Fund's total assets,
more than 5% of such assets would then be invested in
securities of a single issuer.

(3) With respect to 75% of its total assets,
purchase more than 10% of the outstanding voting securities of
any one issuer or more than 10% of any class of securities of
one issuer (all debt and all preferred stock of an issuer are
each considered a single class for this purpose).

17
<PAGE>

(4) Pledge, mortgage or hypothecate any of its
assets, except that the Fund may pledge its assets to secure
borrowings made in accordance with paragraph (1) above,
provided the Fund maintains asset coverage of at least 300% for
all such borrowings.

(5) Buy or sell commodities or commodity
contracts, or real estate or interests in real estate, except
that the Fund may purchase and sell securities that are secured
by real estate, securities of companies which invest or deal in
real estate, and interests in real estate investment trusts.
As non-fundamental policies, Series Fund II, on behalf of the
Fund, has undertaken to certain state securities commissions
that the Fund will not invest in real estate partnership
interests or invest more than 10% of its net assets in real
estate investment trusts.

(6) Act as an underwriter, except to the extent
that, in connection with the disposition of portfolio
securities, it may be deemed to be an underwriter under certain
federal securities laws.

(7) Make loans, except loans of portfolio
securities and repurchase agreements.

The following investment restrictions are not
fundamental and may be changed without shareholder approval.
The Fund will not:

(1) Invest more than 15% of its net assets in
repurchase agreements maturing in more than seven days or in
other illiquid securities, including securities that are
illiquid by virtue of the absence of a readily available market
or legal or contractual restrictions as to resale. Securities
that have legal or contractual restrictions as to resale but
have a readily available market and securities eligible for
resale under Rule 144A under the 1933 Act, are not deemed
illiquid for purposes of this limitation.

(2) Invest more than 5% of its total assets in
securities of companies (including predecessors) which have
been in operation for less than three years.

(3) Invest in securities of other registered
investment companies, except by purchases in the open market
involving only customary brokerage commissions and as a result
of which not more than 5% of its total assets would be invested
in such securities, or except as part of a merger,
consolidation or other acquisition.

(4) Purchase oil, gas or other mineral leases.
However, the Fund may purchase and sell the securities of
companies engaged in the exploration, development, production,
refining, transporting and marketing of oil, gas or minerals.

(5) Purchase warrants if as a result the Fund
would then have more than 5% of its total assets, valued at the
lower of cost or market, invested in warrants (of which no more
than 2% may be warrants not listed on the New York or American
Stock Exchange).

(6) Make short sales of securities.

(7) Make investments for the purpose of exercising
control or management.

(8) Purchase any securities on margin.

18
<PAGE>

(9) Purchase or sell portfolio securities from or
to the Adviser or any director or officer thereof or of Series
Fund II, as principals.

(10) Invest in any securities of any issuer if, to
the knowledge of the Fund, any officer or director of Series
Fund II or of the Adviser owns more than 1/2 of 1% of the
outstanding securities of such issuer, and such officers or
directors who own more than 1/2 of 1% own in the aggregate more
than 5% of the outstanding securities of such issuer.

Notwithstanding non-fundamental investment restriction
(1) above, Series Fund II, on behalf of the Fund, has
undertaken to certain state securities commissions, that the
Fund will not invest more than 5% of its total assets in
restricted securities (excluding Rule 144A securities).

Notwithstanding non-fundamental investment restrictions
(1) and (2) above, Series Fund II, on behalf of the Fund, has
undertaken to a certain state securities commission that the
Fund will invest no more than 15% of its total assets in the
securities of issuers which together with any predecessors have
a record of less than three years continuous operation or
securities of issuers which are restricted as to disposition,
including Rule 144A securities.

Made In The U.S.A. Fund. Made In The U.S.A. Fund will not:

(2) Purchase any security (other than obligations
of the U.S. Government, its agencies or instrumentalities) if
as a result: (a) as to 75% of the Fund's total assets more than
5% of such assets would then be invested in securities of a
single issuer, or (b) 25% or more of the Fund's total assets
would be invested in a single industry.

(3) Purchase more than 10% of the outstanding
voting securities of any one issuer or more than 10% of any
class of securities of one issuer (all debt and all preferred
stock of an issuer are each considered a single class for this
purpose).

(5) Buy or sell commodities or commodity
contracts, including futures contracts, or real estate or
interests in real estate, although it may purchase and sell
securities which are secured by real estate, securities of
companies which invest or deal in real estate, and interests in
real estate investment trusts. As a non-fundamental policy,
Series Fund II, on behalf of the Fund, has undertaken to
certain state securities commissions that the Fund will not
invest in real estate limited partnership interests or in real
estate investment trusts that are not readily marketable.

(6) Act as an underwriter, except to the extent
that, in connection with the disposition of portfolio
securities, it may be deemed to be an underwriter under certain
Federal securities laws.

19
<PAGE>

(7) Make investments for the purpose of exercising
control or management.

(8) Purchase any securities on margin.

(9) Make loans, except through repurchase agreements.

(10) Purchase or sell portfolio securities from or
to the Adviser or any director or officer thereof or of Series
Fund II, as principals.

(11) Invest in any securities of any issuer if, to
the knowledge of the Fund, any officer or director of Series
Fund II or of the Adviser owns more than 1/2 of 1% of the
outstanding securities of such issuer, and such officers or
directors who own more than 1/2 of 1% own in the aggregate more
than 5% of the outstanding securities of such issuer.

The following investment restrictions are not
fundamental and may be changed without shareholder approval.
The Fund will not:

(1) Invest more than 15% of its net assets in
repurchase agreements maturing in more than seven days or in
other illiquid securities, including securities that are
illiquid by virtue of the absence of a readily available market
or legal or contractual restrictions as to resale. Securities
that have legal or contractual restrictions as to resale but
have a readily available market and securities eligible for
resale under Rule 144A under the Securities Act of 1933, as
amended, are not deemed illiquid for purposes of this
limitation; the Adviser will monitor the liquidity of such
restricted securities under the supervision of the Board of
Directors.

(2) Purchase any security if as a result the Fund
would then have more than 5% of its total assets invested in
securities of companies (including predecessors) less than
three years old.

(5) Write, purchase or sell options (puts, calls
or combinations thereof).

(6) Purchase warrants if as a result the Fund
would then have more than 5% of its total assets, valued at the
lower of cost or market, invested in warrants (of which no more
than 2% may be warrants not listed on the New York or American
Stock Exchange).

(7) Make short sales of securities, except short
sales "against the box."

20
<PAGE>

Notwithstanding non-fundamental investment restriction
(1) above, as a result of undertakings to certain state
securities commissions, the Fund will not invest more than 5%
of its total assets in restricted securities (excluding Rule
144A securities) or more than 10% of its total assets in Rule
144A securities.

Notwithstanding non-fundamental restrictions (1) and
(2) above, Series Fund II, on behalf of the Fund, has
undertaken to a certain state securities commission that the
Fund will not invest more than 15% of its total assets in the
securities of issuers which together with any predecessor have
a record of less than three years continuous operation or
securities of issuers which are restricted as to disposition,
including Rule 144A securities.

Utilities Income Fund. Utilities Income Fund will not:

(2) Purchase any security (other than obligations
of the U.S. Government, its agencies or instrumentalities) if
as a result as to 75% of the Fund's total assets more than 5%
of such assets would then be invested in securities of a single
issuer.

(5) Buy or sell commodities or commodity
contracts, or real estate or interests in real estate, except
that the Fund may purchase and sell futures contracts, options
on futures contracts, securities that are secured by real
estate, securities of companies which invest or deal in real
estate, and interests in real estate investment trusts.

(6) Act as an underwriter, except to the extent
that, in connection with the disposition of portfolio
securities, it may be deemed to be an underwriter under certain
federal securities laws.

(7) Make investments for the purpose of exercising
control or management.

(8) Purchase any securities on margin, except the
Fund may make deposits of margin in connection with futures
contracts and options.

(9) Make loans, except loans of portfolio
securities and repurchase agreements.

(10) Purchase or sell portfolio securities from or
to the Adviser or any director or officer thereof or of Series
Fund II, as principals.

21
<PAGE>

The following investment restrictions are not
fundamental and may be changed without shareholder approval.
The Fund will not:

(2) Invest more than 5% of its total assets in
securities of companies (including predecessors) which have
been in operation for less than three years.

(6) Make short sales of securities, except short
sales "against the box."

As non-fundamental policies, Series Fund II, on behalf
of the Fund, has filed the following undertakings with various
state securities commissions, which may be changed without
shareholder approval:

(1) The Fund will not invest in small emerging
growth companies.

(2) The Fund will not purchase interest rate
futures contracts or options thereon.

(3) The Fund will not purchase puts, calls,
straddles, spreads or any combination thereof, if by reason of
that purchase, the value of the Fund's investments in all such
securities exceeds 5% of the Fund's total assets.

(4) The Fund will not invest in real estate
limited partnership interests or in real estate investment
trusts that are not readily marketable.

22
<PAGE>

(5) The Fund will not invest more than 5% of its
total assets in restricted securities (excluding Rule 144A
securities) or more than 10% of its total assets in Rule 144A
securities.

(6) The Fund will not invest more than 15% of its
total assets in the securities of issuers which together with
any predecessor have a record of less than three years
continuous operation or securities of issuers which are
restricted as to disposition, including Rule 144A securities.

DIRECTORS AND OFFICERS

The following table lists the Directors and executive
officers of Series Fund II, their business address and
principal occupations during the past five years. Unless
otherwise noted, an individual's business address is 95 Wall
Street, New York, New York 10005.

Glenn O. Head*(dagger) (70), President and Director. Chairman of the
Board, Director and Treasurer, Administrative Data Management
Corp. ("ADM"); Chairman of the Board and Director, FIMCO,
Executive Investors Management Company, Inc. ("EIMCO"), First
Investors Corporation ("FIC"), Executive Investors Corporation
("EIC") and First Investors Consolidated Corporation ("FICC").

James J. Coy (81), Director, 90 Buell Lane, East Hampton, NY
11937. Retired; formerly Senior Vice President, James Talcott,
Inc. (financial institution).
<PAGE>

Roger L. Grayson* (39), Director. Director, FIC and FICC;
President and Director, First Investors Resources, Inc.;
Commodities Portfolio Manager.

Kathryn S. Head*(dagger) (41), Director, 581 Main Street, Woodbridge,
NJ 07095. President, FICC, EIMCO and FIMCO; Vice President,
Chief Financial Officer and Director, FIC and EIC; President
and Director, First Financial Savings Bank, S.L.A.; President
and Chief Financial Officer, ADM.

Rex R. Reed (83), Director, 76 Keats Way, Morristown, NJ
07960. Retired; formerly Senior Vice President, American
Telephone & Telegraph Company.

Herbert Rubinstein (84), Director, 145 Elm Drive, Roslyn, NY
11576. Retired; formerly President, Belvac International
Industries, Ltd. and President, Central Dental Supply.

James M. Srygley (63), Director, 33 Hampton Road, Chatham, NJ
07982. Principal, Hampton Properties, Inc., property
investment company.
<PAGE>

John T. Sullivan* (63), Director and Chairman of the Board;
Director, FIMCO, FIC, FICC and ADM; Of Counsel, Hawkins,
Delafield & Wood, Attorneys.

Robert F. Wentworth (66), Director, RR1, Box 2554, Upland Downs
Road, Manchester Center, VT 05255. Retired; formerly,
financial and planning executive with American Telephone &
Telegraph Company.

Joseph I. Benedek (38), Treasurer, 581 Main Street, Woodbridge,
NJ 07095. Treasurer, FIC FIMCO, EIMCO and EIC; Comptroller
and Treasurer, FICC.

23
<PAGE>

Concetta Durso (61), Vice President and Secretary. Vice
President, FIMCO, EIMCO and ADM; Assistant Vice President and
Assistant Secretary, FIC and EIC.
<PAGE>

Margaret Haggerty (30), Vice President. Portfolio Manager
since November 1993; Analyst from 1990 to 1993.

Carol R. Lerner (41), Assistant Secretary. Secretary, FIMCO,
EIMCO, FICC, EIC and ADM; Assistant Secretary, FIC.

* These Directors may be deemed to be "interested persons," as
defined in the 1940 Act.
(dagger) Mr. Glenn O. Head and Ms. Kathry S. Head are father
and daughter.

All of the officers and Directors, except for Ms.
Haggerty, hold identical or similar positions with Executive
Investors Trust and 13 other registered investment companies in
the First Investors family of funds. Mr. Head is also an
officer and/or Director of First Investors Asset Management
Company, Inc., First Investors Credit Funding Corporation,
First Investors Leverage Corporation, First Investors Realty
Company, Inc., First Investors Resources, Inc., N.A.K. Realty
Corporation, Real Property Development Corporation, Route 33
Realty Corporation, First Investors Life Insurance Company,
First Financial Savings Bank, S.L.A., First Investors Credit
Corporation and School Financial Management Services, Inc. Ms.
Head is also an officer and/or Director of First Investors Life
Insurance Company, First Investors Credit Corporation and
School Financial Management Services, Inc.

The following table lists compensation paid to the
Directors by Series Fund II for the fiscal year ended October
31, 1995.

Total
Pension or Estimated Compensation
Aggregate Retirement Benefits Annual Benefits From Fund and
Compensation Accrued as Part of Upon Fund Complex
Trustee From Fund Fund Expenses Retirement Paid to Directors
<S> <C> <C> <C> <C>
James J. Coy $-0- $-0- $-0- $-0-

Roger L. Grayson -0- -0- -0- -0-

Glenn O. Head -0- -0- -0- -0-
Kathryn S. Head -0- -0- -0- -0-

F. William Ortman -0- -0- -0- -0-

Rex R. Reed -0- -0- -0- -0-

Herbert Rubinstein -0- -0- -0- -0-
James M. Srygley -0- -0- -0- -0-

John T. Sullivan -0- -0- -0- -0-

Robert F. Wentworth -0- -0- -0- -0-

</TABLE>

Compensation to officers and interested Directors of
Series Fund II is paid by the Adviser. In addition,
compensation to non-interested Directors of Series Fund II is
currently voluntarily paid by the Adviser.

<PAGE>
MANAGEMENT

Adviser. Investment advisory services to each Fund are
provided by First Investors Management Company, Inc. pursuant
to an Investment Advisory Agreement ("Advisory Agreement")
dated June 13, 1994. The Advisory Agreement was approved by
the Board of Directors, including a majority of the Directors
who are not parties to the Funds' Advisory Agreement or
"interested persons" (as defined in the 1940 Act) of any such
party ("Independent Directors"), in person at a meeting called
for such purpose and by a majority of the public shareholders
of each Fund.

Pursuant to the Advisory Agreement, FIMCO shall
supervise and manage each Fund's investments, determine each
Fund's portfolio transactions and supervise all aspects of each
Fund's operations, subject to review by the Directors.
However, with respect to Growth & Income Fund, FIMCO has
delegated these duties to Wellington Management Company. See
"Subadviser." The Advisory Agreement also provides that FIMCO
shall provide the Funds with certain executive, administrative
and clerical personnel, office facilities and supplies, conduct
the business and details of the operation of Series Fund II and
each Fund and assume certain expenses thereof, other than
obligations or liabilities of the Funds. The Advisory
Agreement may be terminated at any time, with respect to a
Fund, without penalty by the Directors or by a majority of the
outstanding voting securities of such Fund, or by FIMCO, in
each instance on not less than 60 days' written notice, and
shall automatically terminate in the event of its assignment
(as defined in the 1940 Act). The Advisory Agreement also
provides that it will continue in effect, with respect to a
Fund, for a period of over two years only if such continuance
is approved annually either by the Directors or by a majority
of the outstanding voting securities of such Fund, and, in
either case, by a vote of a majority of the Independent
Directors voting in person at a meeting called for the purpose
of voting on such approval.

Under the Advisory Agreement, each Fund pays the
Adviser an annual fee, paid monthly, according to the following
schedules:

Made In The U.S.A. Fund
Annual
Average Daily Net Assets Rate
Up to $200 million 1.00%
In excess of $200 million up to $500 million 0.75
In excess of $500 million up to $750 million 0.72
In excess of $750 million up to $1.0 billion 0.69
Over $1.0 billion 0.66

Growth & Income Fund, Utilities Income Fund
Annual
Average Daily Net Assets Rate
Up to $300 million 0.75%
In excess of $300 million up to $500 million 0.72
In excess of $500 million up to $750 million 0.69
Over $750 million 0.66

25
<PAGE>

The SEC staff takes the position that annual advisory fees of
0.75% or greater are higher than those paid by most investment
companies.

[Advisory fees will be updated.]

For the period August 24, 1992 (commencement of
operations) through October 31, 1992, Made In The U.S.A. Fund's
advisory fees amounted to $6,878 or 1.00% (annualized) of its
average daily net assets, all of which were voluntarily waived
by the Adviser. In addition, the Advisor voluntarily
reimbursed or assumed expenses incurred by the Fund in the
amount of $3,003.

For the fiscal year ended October 31, 1993, Made In The
U.S.A. Fund's advisory fees amounted to $157,523 or 1.00% of
its average daily net assets, of which $115,451 was voluntarily
waived by the Adviser. In addition, for the same period,
expenses in the amount of $36,570 were voluntarily assumed or
reimbursed by the Adviser. For the period August 24, 1993
(commencement of operations) through October 31, 1993,
Utilities Income Fund's advisory fees amounted to $157,796 or
.75% of its average daily net assets, of which $113,242 was
voluntarily waived by the Adviser. In addition, for the same
period, expenses in the amount of $14,518 were voluntarily
assumed or reimbursed by the Adviser. For the period October
4, 1993 (commencement of operations) through October 31, 1993,
Growth & Income Fund's advisory fees amounted to $540 or 0.75%
of its average daily net assets, all of which were voluntarily
waived by the Adviser. In addition, for the same period,
expenses in the amount of $559 were voluntarily assumed or
reimbursed by the Adviser.

For the fiscal year ended October 31, 1994, Growth &
Income Fund's advisory fees amounted to $156,813 or 0.75% of
its average daily net assets, of which $95,778 was voluntarily
waived by the Adviser. For the fiscal year ended October 31,
1994, Made In the U.S.A. Fund's advisory fees amounted to
$104,221 or 1.00% of its average daily net assets, of which
$72,955 was voluntarily waived by the Adviser. For the fiscal
year ended October 31, 1994, Utilities Income Fund's advisory
fees amounted to $461,563 or 0.75% of its average daily net
assets, of which $266,649 was voluntarily waived by the
Adviser. In addition, for the fiscal year ended October 31,
1994, the Adviser voluntarily assumed or reimbursed expenses
for Growth & Income Fund, Made In The U.S.A. Fund and Utilities
Income Fund in the amounts of $10,831, $73,772 and $140,086,
respectively.

Pursuant to certain state regulations, the Adviser has
agreed to reimburse a Fund if and to the extent that Fund's
aggregate operating and management expenses, including advisory
fees but generally excluding interest, taxes, brokerage
commissions and extraordinary expenses, exceed any limitation
on expenses applicable to that Fund for any full fiscal year
(unless a waiver of such expense limitation is obtained). The
amount of any such reimbursement is limited to the amount of
the advisory fees paid or accrued to the Adviser for the fiscal
year. For the fiscal year ended December 31, 1994, no
reimbursement to any Fund was required pursuant to these
regulations.

The Adviser has an Investment Committee composed of
George V. Ganter, Margaret Haggerty, Glenn O. Head, Nancy W.
Jones, Patricia D. Poitra, Clark D. Wagner and Richard
Guinnessey. The Committee usually meets weekly to discuss the
composition of the portfolio of each Fund and to review
additions to and deletions from the portfolios.

Subadviser. Wellington Management Company has been
retained by the Adviser and Series Fund II as the investment
subadviser to Growth & Income Fund under a subadvisory
agreement dated

26
<PAGE>

June 13, 1994 ("Subadvisory Agreement"). The Subadvisory
Agreement was approved by the Board of Directors, including a
majority of Independent Directors in person at a meeting called
for such purpose and by a majority of the shareholders of the
Growth & Income Fund.

The Subadvisory Agreement provides that it will
continue for a period of more than two years from the date of
execution only so long as such continuance is approved annually
by either the Board of Directors or a majority of the
outstanding voting securities of the Growth & Income Fund and,
in either case, by a vote of a majority of the Independent
Directors voting in person at a meeting called for the purpose
of voting on such approval. The Subadvisory Agreement provides
that it will terminate automatically if assigned or upon the
termination of the Advisory Agreement, and that it may be
terminated at any time without penalty by the Board of
Directors or a vote of a majority of the outstanding voting
securities of the Growth & Income Fund or by the Subadviser
upon not more than 60 days' nor less than 30 days' written
notice. The Subadvisory Agreement provides that WMC will not
be liable for any error of judgment or for any loss suffered by
the Growth & Income Fund in connection with the matters to
which the Subadvisory Agreement relates, except a loss
resulting from a breach of fiduciary duty with respect to the
receipt of compensation or from willful misfeasance, bad faith,
gross negligence or reckless disregard of its obligations and
duties.

Under the Subadvisory Agreement, the Adviser will pay
to the Subadviser a fee at an annual rate of 0.325% of the
average daily net assets of Growth & Income Fund up to and
including $50 million; 0.275% of the average daily net assets
in excess of $50 million up to and including $150 million;
0.225% of the average daily net assets in excess of $150
million up to and including $500 million; and 0.200% of the
average daily net assets in excess of $500 million.

UNDERWRITER

Series Fund II has entered into an Underwriting
Agreement ("Underwriting Agreement") with First Investors
Corporation ("Underwriter" or "FIC") which requires the
Underwriter to use its best efforts to sell shares of the
Funds. Pursuant to the Underwriting Agreement, the Underwriter
shall bear all expenses of sales material or literature,
including prospectuses and proxy materials, to the extent such
materials are used in connection with the sale of the Funds'
shares, unless the Funds have agreed to bear such costs
pursuant to a plan of distribution. See "Distribution Plans."
The Underwriting Agreement was approved by the Board of
Directors, including a majority of the Independent Directors.
The Underwriting Agreement provides that it will continue in
effect from year to year, with respect to a Fund, only so long
as such continuance is specifically approved at least annually
by the Board of Directors or by a vote of a majority of the
outstanding voting securities of such Fund, and in either case
by the vote of a majority of the Independent Directors, voting
in person at a meeting called for the purpose of voting on such
approval. The Underwriting Agreement will terminate
automatically in the event of its assignment.

[Underwriting commissions will be updated.]

For the period August 24, 1992 (commencement of
operations) through October 31, 1992 and the fiscal year ended
October 31, 1993, FIC received underwriting commissions with
respect to Made In The U.S.A. Fund of $467,280 and $485,701,
respectively. For the same periods, FIC allowed an additional
$5,793 and $7,653, respectively, to unaffiliated dealers. For
the period February 22, 1993 (commencement of operations)
through October 31, 1993, FIC received underwriting commissions
with respect to Utilities

27
<PAGE>

Income Fund of $2,518,361. For the same period, FIC allowed an
additional $23,008 to unaffiliated dealers. For the period
October 4, l993 (commencement of operations) through October
31, 1993, FIC received underwriting commissions with respect to
Growth & Income Fund of $187,995, none of which was allowed to
unaffiliated dealers.

For the fiscal year ended October 31, 1994, FIC
received underwriting commissions with respect to Growth &
Income Fund, Made In The U.S.A. Fund and Utilities Income Fund
of $1,187,272, $32,881 and $1,045,980, respectively. For the
same period, FIC allowed an additional $257 with respect to
Growth & Income Fund and $588 with respect to Made In The
U.S.A. Fund to unaffiliated dealers.

DISTRIBUTION PLANS

As stated in the Funds' Prospectus, pursuant to a
separate plan of distribution for each class of shares adopted
by Series Fund II pursuant to Rule 12b-1 under the 1940 Act
("Class A Plan" and "Class B Plan" and, collectively, "Plans"),
each Fund is authorized to compensate the Underwriter for
certain expenses incurred in the distribution of that Fund's
shares and the servicing or maintenance of existing Fund
shareholder accounts.

Each Plan was approved by the Board of Directors,
including a majority of the Independent Directors, and by a
majority of the outstanding voting securities of the relevant
class of each Fund. Each Plan will continue in effect from year
to year, with respect to a Fund, as long as its continuance is
approved annually be either the Board of Directors or by a vote
of a majority of the outstanding voting securities of the
relevant class of shares of such Fund. In either case, to
continue, each Plan must be approved by the vote of a majority
of the Independent Directors. The Board reviews quarterly and
annually a written report provided by the Treasurer of the
amounts expended under the applicable Plan and the purposes for
which such expenditures were made. While each Plan is in
effect, the selection and nomination of the Independent
Directors will be committed to the discretion of such
Independent Directors then in office.

Each Plan can be terminated at any time, with respect
to a Fund, by a vote of a majority of the Independent Directors
or by a vote of a majority of the outstanding voting securities
of the relevant class of shares of that Fund. Any change to
the Class B Plan that would materially increase the costs to
that class of shares of a Fund or any material change to the
Class A Plan may not be instituted without the approval of the
outstanding voting securities of the relevant class of shares
of that Fund. Such changes also require approval by a majority
of the Independent Directors.

In reporting amounts expended under the Plans to the
Directors, FIMCO will allocate expenses attributable to the
sale of each class of a Fund's shares to such class based on
the ratio of sales of such class to the sales of both classes
of shares. The fees paid by one class of a Fund's shares will
not be used to subsidize the sale of any other class of that
Fund's shares.

In approving each Fund's overall system of
distribution, the Board of Directors considered several
factors, including that implementation of the system would (1)
enable investors to choose the purchasing option better suited
to their individual situation, thereby encouraging current
shareholders to make additional investments in a Fund and
attracting new investors and assets to that Fund to the benefit
of the Fund and its shareholders; (2) facilitate distribution
of each Fund's shares; and (3) maintain the competitive

28
<PAGE>

position of each Fund in relation to other funds that have
implemented or are seeking to implement similar distribution
arrangements.

In adopting the Class B Plan, the Board of Directors
considered all the features of the distribution system,
including (1) the conditions under which a contingent differed
sales charge ("CDSC") would be imposed and the amount of such
charge, (2) the advantage to investors in having no initial
sales charges deducted from a Fund's purchase payments and
instead having the entire amount of their purchase payments
immediately invested in Fund shares, (3) the Underwriter's
belief that the ability to receive sales commissions and
service fees under the Class B Plan would prove attractive to
Representatives, resulting in greater growth of each Fund than
might otherwise be the case, (4) the advantages to the
shareholders of a Fund of economies of scale resulting from
growth in such Fund's assets, and (5) the Underwriter's
shareholder service and distribution-related expenses and
costs.

In adopting the Class A Plan, the Board of Directors
considered all relevant information and determined that there
is a reasonable likelihood that the Class A Plan will benefit
each Fund and their shareholders. The Board believes that the
amounts spent pursuant to the Fund's Class A Plan have assisted
each Fund in providing ongoing servicing to shareholders, in
competing with other providers of financial services and in
promoting sales, thereby increasing the net assets of each
Fund.

[Distribution fees will be updated.]

For the fiscal year ended October 31, 1994, Growth &
Income Fund, Made In The U.S.A. Fund and Utilities Income Fund
accrued $62,725, $31, 266 and $184,625, respectively in fees
pursuant to the Class A Plan. Of such amounts, $38,843, $1,318
and $25,461, respectively, was voluntarily waived by the
Underwriter.

The Underwriter incurred the following Class A
Plan-related expenses for the fiscal year ended October 31,
1994:

<TABLE>
<CAPTION>
Compensation Compensation to
Fund Advertising to sales personnel* Underwriter**
<S> <C> <C> <C>
Made In The U.S.A. Fund $-0- $9,133 $ 20,815
Growth & Income Fund -0- 5,154 18,728
Utilities Income Fund -0- 58,470 100,694
</TABLE>

* Represents service fees.
** Represents distribution fees.

DETERMINATION OF NET ASSET VALUE

Except as provided herein, a security listed or traded
on an exchange or the NASDAQ national market system is valued
at its last sale price on the exchange or market system where
the security is primarily traded, and lacking any sales on a
particular day, the security is valued at the mean between the
closing bid and asked prices on that day. Each security traded
in the market (including securities listed

29
<PAGE>

on exchanges whose primary market is believed to be OTC) is
valued at the mean between the last bid and asked prices based
upon quotes furnished by a market maker for such securities.
In the absence of market quotations, a Fund will determine the
value of bonds based upon quotes furnished by market makers, if
available, or in accordance with the procedures described
herein. In that connection, the Board of Directors has
determined that a Fund may use an outside pricing service. The
pricing service uses quotations obtained from investment
dealers or brokers for the particular securities being
evaluated, information with respect to market transactions in
comparable securities and other available information in
determining value. This service is furnished by Interactive
Data Corporation. Short-term debt securities that mature in 60
days or less are valued at amortized cost if their original
term to maturity from the date of purchase was 60 days or less,
or by amortizing their value on the 61st day prior to maturity
if their term to maturity from the date of purchase exceeded 60
days, unless the Board of Directors determines that such
valuation does not represent fair value. Securities for which
market quotations are not readily available are valued at fair
value as determined in good faith by or under the direction of
the Series Fund II's officers in a manner specifically
authorized by the Board of Directors.

With respect to each Fund, "when-issued securities" are
reflected in the assets of the Fund as of the date the
securities are purchased. Such investments are valued
thereafter at the mean between the most recent bid and asked
prices obtained from recognized dealers in such securities. For
valuation purposes, with respect to Growth & Income Fund,
quotations of foreign securities in foreign currencies are
converted into U.S. dollar equivalents using the foreign
exchange equivalents in effect.

The Board of Directors may suspend the determination of
a Fund's net asset value per share separately for each class of
shares for the whole or any part of any period (1) during which
trading on the New York Stock Exchange ("NYSE") is restricted
as determined by the SEC or the NYSE is closed for other than
weekend and holiday closings, (2) during which an emergency, as
defined by rules of the SEC in respect to the U.S. market,
exists as a result of which disposal by a Fund of securities
owned by it is not reasonably practicable for the Fund fairly
to determine the value of its net assets, or (3) for such other
period as the SEC has by order permitted.

ALLOCATION OF PORTFOLIO BROKERAGE

Purchases and sales of portfolio securities by the Fund
may be principal transactions. In principal transactions,
portfolio securities are normally purchased directly from the
issuer or from an underwriter or market maker for the
securities. There will usually be no brokerage commissions
paid by a Fund for such purchases. Purchases from underwriters
will include the underwriter's commission or concession and
purchases from dealers serving as market makers will include
the spread between the bid and asked price. Certain money
market instruments may be purchased by a Fund directly from an
issuer, in which no commission or discounts are paid. Each
Fund may purchase fixed income securities on a "net" basis with
dealers acting as principal for their own accounts without a
stated commission, although the price of the security usually
includes a profit to the dealer.

Each Fund may deal in securities which are not listed
on a national securities exchange or the NASDAQ national market
system but are traded in the OTC market. Each Fund also may
purchase listed securities through the "third market." When
transactions are executed in the OTC market, a Fund seeks to
deal with the primary market makers, but when advantageous it
utilizes the services of brokers.

30
<PAGE>

In effecting portfolio transactions, the Adviser or the
Subadviser seeks best execution of trades either (1) at the
most favorable and competitive rate of commission charged by
any broker or member of an exchange, or (2) with respect to
agency transactions, at a higher rate of commission if
reasonable in relation to brokerage and research services
provided to a Fund or the Adviser or the Subadviser by such
member or broker. Such services may include, but are not
limited to, any one or more of the following: information as
to the availability of securities for purchase or sale and
statistical or factual information or opinions pertaining to
investments. The Adviser or Subadviser may use research and
services provided to it by brokers in servicing all the funds
in the First Investors Group of Funds; however, not all such
services may be used by the Adviser or the Subadviser in
connection with a Fund. No portfolio orders are placed with an
affiliated broker, nor does any affiliated broker-dealer
participate in these commissions.

The Adviser or Subadviser may combine transaction
orders placed on behalf of a Fund and any other fund in the
First Investors Group of Funds, any Fund of Executive Investors
Trust and First Investors Life Insurance Company, affiliates of
the Funds for the purpose of negotiating brokerage commissions
or obtaining a more favorable transaction price; and where
appropriate, securities purchased or sold may be allocated, in
terms of price and amount, to a Fund according to the
proportion that the size of the transaction order actually
placed by a Fund bears to the aggregate size of the transaction
orders simultaneously made by other participants in the
transaction.

[Brokerage commissions will be updated]

For the period August 24, 1992 (commencement of
operations) through October 31, 1992, Made In The U.S.A. Fund
paid $10,640 in brokerage commissions. For the fiscal year
ended October 31, 1993, Made In The U.S.A. Fund paid $51,648 in
brokerage commissions. For the period February 22, 1993
(commencement of operations) through October 31, 1993,
Utilities Income Fund paid $139,950 in brokerage commissions.
Of that amount, $600 was paid in brokerage commissions to
brokers who furnished research services on portfolio
transactions in the amount of $200,850. For the period October
4, 1993 (commencement of operations) through October 31, 1993,
Growth & Income Fund did not pay any brokerage commissions.

For the fiscal year ended October 31, 1994, Made In The
U.S.A. Fund and Utilities Income Fund paid $24,767 and
$236,585, respectively, in brokerage commissions. For the
fiscal year ended October 31, 1994, Growth & Income Fund paid
$23,249 in brokerage commissions. Of that amount $6,732 was
paid in brokerage commissions to brokers who furnished research
services on portfolio transactions in the amount of $4,704,802.

REDUCED SALES CHARGES, ADDITIONAL EXCHANGE AND
REDEMPTION INFORMATION AND OTHER SERVICES

Reduced Sales Charges Class A Shares

Reduced sales charges are applicable to purchases made
at one time of Class A shares of any one or more of the Funds
or of any one or more of the Eligible Funds, as defined in the
Prospectus, by "any person," which term shall include an
individual, or an individual, his or her spouse and children
under the age of 21, or a trustee or other fiduciary of a
single trust, estate or fiduciary account (including a pension,

31
<PAGE>

profit-sharing or other employee benefit trust created pursuant
to a plan qualified under section 401 of the Internal Revenue
Code of 1986, as amended (the "Code")), although more than one
beneficiary is involved; provided, however, that the term "any
person" shall not include a group of individuals whose funds
are combined, directly or indirectly, for the purchase of
redeemable securities of a registered investment company, nor
shall it include a trustee, agent, custodian or other
representative of such a group of individuals.

Ownership of Class A and Class B shares of any Eligible
Fund, except as noted below, qualify for a reduced sales charge
on the purchase of Class A shares. Class A shares purchased at
net asset value, Class A shares of the Money Market Funds, or
shares owned under a Contractual Plan are not eligible for the
purchase of Class A shares of a Fund at a reduced sales charge
through a Letter of Intent or the Cumulative Purchase
Privilege.

Letter of Intent. Any of the eligible persons
described above may, within 90 days of their investment, sign a
statement of intent ("Letter of Intent") in the form provided
by the Underwriter, covering purchases of Class A shares of any
one or more of the Funds and of the other Eligible Funds to be
made within a period of thirteen months, provided said shares
are currently being offered to the general public and only in
those states where such shares may be legally sold, and thereby
become eligible for the reduced sales charge applicable to the
total amount purchased. A Letter of Intent filed after the
date of investment is considered retroactive to the date of
investment for determination of the thirteen-month period. The
Letter of Intent is not a binding obligation on either the
investor or the Fund. During the term of a Letter of Intent,
Administrative Data Management Corp. ("Transfer Agent") will
hold Class A shares representing 5% of each purchase in escrow,
which shares will be released upon completion of the intended
investment.

Purchases of Class A Shares made under a Letter of
Intent are made at the sales charge applicable to the purchase
of the aggregate amount of shares covered by the Letter of
Intent as if they were purchased in a single transaction. The
applicable quantity discount will be based on the sum of the
then current value at public offering price (i.e., net asset
value plus applicable sales charge) of all Class A shares and
the net asset value of all Class B shares of a Fund and of the
other Eligible Funds, including Class B shares of the Money
Market Funds, currently owned, together with the aggregate
offering price of purchases to be made under the Letter of
Intent. If all such shares are not so purchased, a price
adjustment is made, depending upon the actual amount invested
within such period, by the redemption of sufficient Class A
shares held in escrow in the name of the investor (or by the
investor paying the commission differential). A Letter of
Intent can be amended (1) during the thirteen-month period if
the purchaser files an amended Letter of Intent with the same
expiration date as the original Letter of Intent, or (2)
automatically after the end of the period, if total purchases
credited to the Letter of Intent qualify for an additional
reduction in the sales charge. The Letter of Intent privilege
may be modified or terminated at any time by the Underwriter.

Cumulative Purchase Privilege. Upon written notice to
FIC, Class A shares of a Fund are also available at a quantity
discount on new purchases if the then current value at the
current public offering price (i.e., net asset value plus
applicable sales charge) of all Class A shares and the net
asset value of all Class B shares of a Fund and of the other
Eligible Funds, including Class B shares of the Money Market
Funds, previously purchased and then owned, plus the value of
Class A shares being purchased at the current public offering
price, amount to $25,000 or more. Such quantity discounts may
be modified or terminated at any time by the Underwriter.

32
<PAGE>

Systematic Investing

First Investors Money Line. This service
allows you to invest in a Fund through automatic deductions
from your bank checking account. Scheduled investments may be
made on a bi- weekly, semi-monthly, monthly, quarterly,
semi-annual or annual basis provided a minimum total of $600 is
invested per year. Shares of the Fund are purchased at the
public offering price determined at the close of business on
the day your designated bank account is debited and a
confirmation will be sent to you after every transaction. You
may decrease the amount or discontinue this service at any time
by calling Shareholder Services or writing to Administrative
Data Management Corp., 581 Main Street, Woodbridge, NJ
07095-1198, Attn: Control Dept. To increase the amount, send a
written request to the Transfer Agent at the address noted
above, which may take up to five days to process. Money Line
application forms are available from your Representative or by
calling Shareholder Services at 1-800-423-4026.
<PAGE>

Automatic Payroll Investment. You also may
arrange for automatic investments into a Fund on a systematic
basis through salary deductions, provided your employer has
direct deposit capabilities. Shares of the Fund are purchased
at the public offering price determined as of the close of
business on the day the electronic fund transfer is received by
the Fund, and a confirmation will be sent to you after every
transaction. You may change the amount or discontinue the
service by contacting your employer. An application is
available from your Representative or by calling Shareholder
Services at 1-800-423-4026. Arrangements must also be made
with your employer's payroll department.

Cross-Investment of Cash Distributions. You
may elect to invest in Class A shares of a Fund at net asset
value all the cash distributions from the same class of shares
of another Eligible Fund. The investment will be made at the
net asset value per share of the Fund, generally determined as
of the close of business, on the business day immediately
following the record date of any such distribution. You may
also elect to invest cash distributions of a Fund's Class A
shares into the same class of another Eligible Fund, including
the Money Market Funds. If your distributions are to be
invested in a new account, you must invest a minimum of $600
per year. See "Dividends and Other Distributions" in the
Prospectus. To arrange for cross-investing, call Shareholder
Services at 1-800-423-4026.

Investment of Systematic Withdrawal Plan
Payments. You may elect to invest in Class A shares of a Fund
at net asset value through payments from a Systematic
Withdrawal Plan you maintain with any other Eligible Fund.
Scheduled investments may be made on a monthly, quarterly,
semi-annual or annual basis. You may also elect to invest
Systematic Withdrawal Plan payments of Class A shares from a
Fund into the same class of another Eligible Fund, including
the Money Market Funds. If your Systematic Withdrawal Payments
are to be invested in a new account, you must invest a minimum
of $600 per year. See "Systematic Withdrawal Plan," below. To
arrange for Systematic Withdrawal Plan investments, call
Shareholder Services at 1-800-423-4026.
<PAGE>

Systematic Withdrawal Plan. Shareholders who own
noncertificated Class A shares may establish a Systematic
Withdrawal Plan ("Withdrawal Plan"). If you have a Fund
account with a net asset value of at least $5,000, you may
elect to receive monthly, quarterly, semi-annual or annual
checks for any designated amount (minimum $25). You may have
the payments sent directly to you or persons you designate.
Regardless of the amount of your Fund account, you may also
elect to the have the Systematic Plan payments automatically
(i) invested at net asset value in shares of the same class of
any other Eligible Fund, including the Money Market Funds, or
(ii) paid to First Investors Life Insurance Company for the
purchase of a life insurance policy or a variable annuity. If
your Systematic Plan payments are to be

33
<PAGE>

invested in a new Eligible Fund account, you must invest a
minimum of $600 per year. If you own Class B shares in a
retirement account and qualify to receive distributions under
the Code, you may elect to receive redemptions at regular
intervals. The redemption proceeds, less any applicable CDSC,
will be automatically sent to you directly. Dividends and
other distributions, if any, are reinvested in additional
shares of the same class of the Fund. Shareholders may add
shares to the Withdrawal Plan or terminate the Withdrawal Plan
at any time. Withdrawal Plan payments will be suspended when a
distributing Fund has received notice of a shareholder's death
on an individual account. Payments may recommence upon receipt
of written alternate payment instructions and other necessary
documents from the deceased's legal representative. Withdrawal
payments will also be suspended when a payment check is
returned to the Transfer Agent marked as undeliverable by the
U.S. Postal Service after two consecutive mailings.

The withdrawal payments derived from the redemption of
sufficient shares in the account to meet designated payments in
excess of dividends and other distributions may deplete or
possibly extinguish the initial investment, particularly in the
event of a market decline, and may result in a capital gain or
loss depending on the shareholder's cost. Purchases of
additional shares of a Fund concurrent with withdrawals are
ordinarily disadvantageous to shareholders because of tax
liabilities and sales charges. To establish a Withdrawal Plan,
call Shareholder Services at 1-800-423-4026.

Conversion of Class B Shares. Class B Shares of a Fund
will automatically convert to Class A shares of that Fund,
based on the relative net asset values per share of the two
classes, as of the close of business on the first business day
of the month in which the eighth anniversary of the initial
purchase of such Class B shares occurs. For these purposes,
the date of initial purchase shall mean (1) the first business
day of the month in which such Class B shares were issued, or
(2) for Class B shares obtained through an exchange or a series
of exchanges, the first business day of the month in which the
original Class B shares were issued. For conversion purposes,
Class B shares purchased through the reinvestment of dividends
and other distributions paid in respect of Class B shares will
be held in a separate sub-account. Each time any Class B
shares in the shareholder's regular account (other than those
in the sub-account) convert to Class A shares, a pro rata
portion of the Class B shares in the sub-account also will
convert to Class A shares. The portion will be determined by
the ratio that the shareholder's Class B shares converting to
Class A shares bears to the shareholder's total Class B shares
not acquired through dividends and other distributions.

The availability of the conversion feature is subject
to the continuing applicability of a ruling of the Internal
Revenue Service ("IRS"), or an opinion of counsel, that: (1)
the dividends and other distributions paid on Class A and Class
B shares will not result in "preferential dividends" under the
Code; and (2) the conversion of shares does not constitute a
taxable event. If the conversion feature ceased to be
available, the Class B shares of the Fund would not be
converted and would continue to be subject to the higher
ongoing expenses of the Class B shares beyond eight years from
the date of purchase. FIMCO has no reason to believe that
these conditions for the availability of the conversion feature
will not continue to be met.

If a Fund implements any amendments to its Class A Plan
that would increase materially the costs that may be borne
under such Plan by Class A shareholders, Class B shares will
stop converting into Class A shares unless a majority of Class
B shareholders, voting separately as a class, approve the
proposal.

Waivers of CDSC on Class B Shares. The CDSC imposed on
Class B shares does not apply to: (a) any redemption pursuant
to the tax-free return of an excess contribution to an IRA or
other

34
<PAGE>

qualified retirement plan if the Fund is notified at the time
of such request; (b) any redemption of a lump-sum or other
distribution from qualified retirement plans or accounts
provided the shareholder has attained the minimum age of 70 1/2
years and has held the Class B shares for a minimum period of
three years; (c) any redemption by advisory accounts managed by
the Adviser or any of its affiliates or for shares held by the
Adviser or any of its affiliates; (d) any redemption by a
tax-exempt employee benefit plan if continuance of the
investment would be improper under applicable laws or
regulations; and (e) any redemption or transfer of ownership of
Class B shares following the death or disability, as defined in
Section 72(m)(7) of the Code, of a shareholder if the Fund is
provided with proof of death or disability and with all
documents required by the Transfer Agent within one year after
the death or disability. For more information on what specific
documents are required, call Shareholder Services at
1-800-423-4026.

Signature Guarantees. The words "Signature Guaranteed"
must appear in direct association with the signature of the
guarantor. Although each Fund reserves the right to require
signature guarantees at any other time, signature guarantees
are required whenever: (1) the amount of the redemption is
$50,000 or more, (2) an exchange in the amount of $50,000 or
more is made into the Money Market Funds, (3) a redemption
check is to be made payable to someone other than the
registered accountholder, other than institutions on behalf of
the shareholder, (4) a redemption check is to be mailed to an
address other than the address of record, other than to another
financial institution for the benefit of a shareholder, (5) an
account registration is being transferred to another owner, (6)
an account, other than an individual, joint, UGMA or UTMA
nonretirement account or a trustee-to- trustee transfer of a
retirement account, is being exchanged or redeemed, (7) the
redemption request is for certificated shares, or (8) your
address of record has changed within 60 days prior to a
redemption request.

Reinvestment after Redemption. If you redeem Class A
or Class B shares in your Fund account, you can reinvest within
ninety days from the date of redemption all or any part of the
proceeds in shares of the same class of the same Fund or any
other Eligible Fund (including the Money Market Funds), at net
asset value, on the date the Transfer Agent receives your
purchase request. If you reinvest the entire proceeds of a
redemption of Class B shares for which a CDSC has been paid,
you will be credited for the amount of the CDSC. If you
reinvest less than the entire proceeds, you will be credited
with a pro rata portion of the CDSC. All credits will be paid
in Class B shares of the fund into which the reinvestment is
being made. The period you owned the original Class B shares
prior to redemption will be added to the period of time you own
Class B shares acquired through reinvestment for purposes of
determining (a) the applicable CDSC upon a subsequent
redemption and (b) the date on which Class B shares
automatically convert to class A shares. If your reinvestment
is into a new account, other than the Money Market Funds, it
must meet the minimum investment and other requirements of the
fund into which the reinvestment is being made. If you
reinvest into a new Money Market Fund within one year from the
date of redemption, the minimum investment is $500. To take
advantage of this option, send your reinvestment check along
with a written request to the Transfer Agent within 90 days
from the date of your redemption. Include your account number
and a statement that you are taking advantage of the
"Reinvestment Privilege."

Telephone Transactions. To exchange or redeem
noncertificated Fund shares by telephone, you must select this
option on your original Account Application or complete the
telephone privileges authorization section on the Special
Services Application. You may use the privilege five days
after the Transfer Agent has processed your Account Application
or Special Services Application. Telephone exchanges are
available between nonretirement accounts and between IRA
accounts of the same class of shares registered in the same
name. Telephone exchanges are also available from an
individually

35
<PAGE>

registered nonretirement account to an IRA account of the same
class of shares in the same name (provided an IRA application
is on file). Telephone exchanges are not available for
exchanges of Fund shares for plan units.

As stated in the Fund's Prospectus, Series Fund II, the
Adviser, the Underwriter and their officers, directors and
employees will not be liable for any loss, damage, cost or
expense arising out of any instruction (or any interpretation
of such instruction) received by telephone which they
reasonably believe to be authentic. In acting upon telephone
instructions, these parties use procedures which are reasonably
designed to ensure that such instructions are genuine, such as
(1) obtaining some or all of the following information: account
number; name(s) and social security number registered to the
account; and personal identification; (2) recording all
telephone transactions; and (3) sending written confirmation of
each transaction to the registered owner.
<PAGE>
Retirement Plans

Profit-Sharing/Money Purchase Pension Plans. FIC
offers prototype Profit-Sharing, Money Purchase Pension and
401(k) Retirement Plans ("Retirement Plans") approved by the
Internal Revenue Service ("IRS") for corporations, sole
proprietorships and partnerships. The Custodial Agreement for
the above captioned Money Purchase Pension and Profit Sharing
Plan provides that First Financial Savings Bank, S.L.A. ("First
Financial Savings"), an affiliate of FIC, will furnish all
required custodial services.

FIC offers additional versions of prototype qualified
retirement plans for eligible employers, including 401(k),
money purchase, profit sharing and target benefit plans.

Currently, there are no annual service fees chargeable
to participants in connection with a Retirement Plan account.
Participants are, however, charged $5.00 for opening a
Retirement Plan account, other than a 401(k) Retirement Plan
account. Each Fund currently pays the annual $10.00 custodian
fee for each Retirement Plan account, if applicable,
maintained with such Fund. This policy may be changed at any
time by a Fund on 45 days' written notice. First Financial
Savings has reserved the right to waive its fees at any time or
to change the fees on 45 days' prior written notice.

The Retirement Plan documents contain further specific
information about the Retirement Plans and may be obtained from
your First Investors Representative. Prior to establishing a
Retirement Plan, you are advised to consult with your legal and
tax advisers.

Individual Retirement Accounts. A qualified individual
may purchase shares of a Fund through an individual retirement
account ("IRA") or, as an employee of a qualified employer,
through a Simplified Employee Pension-IRA ("SEP-IRA") or a
Salary Reduction Simplified Employee Pension-IRA ("SARSEP-IRA")
furnished by FIC. Under the related Custodial Agreements,
First Financial Savings acts as custodian of each of these
retirement plans.

The Funds offer IRA accounts with specific provisions
tailored to meet the needs of certain groups of investors. The
custodian fees are disclosed in the IRA documents provided to
investors in such accounts.

A taxpayer generally may make an annual IRA
contribution no greater than the lesser of: (a) 100% of his or
her compensation, or (b) $2,000 (or $2,250 when also
contributing to a spousal IRA). However,

36
<PAGE>

contributions are deductible only under certain conditions.
The requirements as to SEP-IRAs and SARSEP-IRAs are described
in IRS Form 5305-SEP and 5305A-SEP, respectively, which is
provided to employers. Employers are required to provide
copies of Forms 5305-SEP and 5305A-SEP to their eligible
employees. A disclosure statement setting forth complete
details of the IRA is given to each participant before the
contribution is invested.

Currently, there are no annual service fees chargeable
to a participant in connection with an IRA, SEP-IRA or
SARSEP-IRA. Each Fund currently pays the annual $10.00
custodian fee for each IRA account maintained with such Fund.
This policy may be changed at any time by a Fund on 45 days'
written notice to the holder of any IRA, SEP-IRA or SARSEP-IRA.
First Financial Savings has reserved the right to waive its
fees at any time or to change the fees on 45 days' prior
written notice to the holder of any IRA.

An application and other documents necessary to
establish an IRA, SEP-IRA or SARSEP-IRA, are available from
your Representative. Prior to establishing an IRA, SEP-IRA or
SARSEP-IRA, you are advised to consult with your legal and tax
advisers.

Retirement Benefit Plans for Employees of Eligible
Organizations. FIC makes available model custodial accounts
under Section 403(b)(7) of the Code ("Custodial Accounts") to
provide retirement benefits for employees of certain eligible
public educational institutions and other eligible non- profit
charitable, religious and humane organizations. The Custodial
Accounts are designed to permit contributions (up to a "maximum
exclusion allowance") by employees through salary reduction.
First Financial Savings acts as custodian of these accounts.

Contributions may be made to a Custodial Account under
the Optional Retirement Program for Employees of Texas
Institutions of Higher Education ("ORP"), either by salary
reduction agreement or otherwise, in accordance with the terms
and conditions of the ORP, and under the Texas Deferred
Compensation Plan Program for eligible state employees by
salary reduction agreement.

Currently, there are no annual service fees chargeable
to participants in connection with a Custodial Account. Each
Fund currently pays the annual $10.00 custodian fee for each
Custodial Account maintained with such Fund. This policy may
be changed at any time by a Fund on 45 days' written notice to
a Custodial Account participant. First Financial Savings has
reserved the right to waive its fees at any time or to change
the fees on 45 days' prior written notice to a Custodial
Account participant.

An application and other documents necessary to
establish a Custodial Account are available from your First
Investors Representative. Persons desiring to create a
Custodial Account are advised to confer with their legal and
tax advisers concerning the specifics of this type of
retirement benefit plan.

Mandatory income tax withholding, at the rate of 20%,
may be required for Federal income tax purposes on "eligible
rollover" distributions made from any of the foregoing
retirement plans (other than IRAs, including SEP-IRAs and
SARSEP-IRAs). If the recipient elects to directly transfer an
eligible rollover distribution to an "eligible retirement plan"
that permits acceptance of such distributions, no withholding
will apply. For distributions that are not "eligible rollover"
distributions, the recipient can elect, in writing, not to
require any withholding. This election must be submitted
immediately before, or must accompany, the distribution
request. The amount, if any, of any such optional withholding
depends

37
<PAGE>

on the amount and type of the distribution. Appropriate
election forms are available from the Custodian or Shareholder
Services. Other types of withholding nonetheless may apply.

Distribution Fees. A participant/shareholder's account
under any of the foregoing retirement plans (including IRAs)
may be charged a distribution fee (at the time of withdrawal)
of $7.00 for a single distribution of the entire account and
$1.00 for each periodic distribution therefrom.

TAXES

In order to continue to qualify for treatment as a
regulated investment company ("RIC") under the Code, a Fund --
each Fund being treated as a separate corporation for these
purposes -- must distribute to its shareholders for each
taxable year at least 90% of its investment company taxable
income (consisting generally of net investment income, net
short-term capital gain and, for Growth & Income Fund, net
gains from certain foreign currency transactions)
("Distribution Requirement") and must meet several additional
requirements. For each Fund these requirements include the
following: (1) the Fund must derive at least 90% of its gross
income each taxable year from dividends, interest, payments
with respect to securities loans and gains from the sale or
other disposition of securities or, for Growth & Income Fund,
foreign currencies, or other income (including gains from
options, futures or forward contracts) derived with respect to
its business of investing in securities or, for Growth & Income
Fund, those currencies ("Income Requirement"); (2) the Fund
must derive less than 30% of its gross income each taxable year
from the sale or other disposition of securities, or any of the
following, that were held for less than three months -- options
or futures, or foreign currencies (or forward contracts) that
are not directly related to the Fund's principal business of
investing in securities (or options and futures with respect
thereto) ("Short-Short Limitation"); (3) at the close of each
quarter of the Fund's taxable year, at least 50% of the value
of its total assets must be represented by cash and cash items,
U.S. Government securities, securities of other RICs and other
securities, with those other securities limited, in respect of
any one issuer, to an amount that does not exceed 5% of the
value of the Fund's total assets and that does not represent
more than 10% of the issuer's outstanding voting securities;
and (4) at the close of each quarter of the Fund's taxable
year, not more than 25% of the value of its total assets may be
invested in securities (other than U.S. Government securities
or the securities of other RICs) of any one issuer.

Dividends and other distributions declared by a Fund in
October, November or December of any year and payable to
shareholders of record on a date in any of those months are
deemed to have been paid by the Fund and received by the
shareholders on December 31 of that year if the distributions
are paid by the Fund during the following January.
Accordingly, those distributions will be taxed to shareholders
for the year in which that December 31 falls.

A portion of the dividends from a Fund's investment
company taxable income may be eligible for the
dividends-received deduction allowed to corporations. The
eligible portion may not exceed the aggregate dividends
received by the Fund from U.S. corporations. However,
dividends received by a corporate shareholder and deducted by
it pursuant to the dividends-received deduction are subject
indirectly to the alternative minimum tax.

If shares of a Fund are sold at a loss after being held
for six months or less, the loss will be treated as long-term,
instead of short-term, capital loss to the extent of any
capital gain distributions received on those shares.

38
<PAGE>

Each Fund will be subject to a nondeductible 4% excise
tax ("Excise Tax") to the extent it fails to distribute by the
end of any calendar year substantially all of its ordinary
income for that year and capital gain net income for the
one-year period ending on October 31 of that year, plus certain
other amounts.

Dividends and interest received by Growth & Income Fund
may be subject to income, withholding or other taxes imposed by
foreign countries that would reduce the yield on its
securities. Tax conventions between certain countries and the
United States may reduce or eliminate these foreign taxes,
however, and many foreign countries do not impose taxes on
capital gains in respect of investments by foreign investors.

Growth & Income Fund may invest in the stock of
"passive foreign investment companies" ("PFICs"). A PFIC is a
foreign corporation that, in general, meets either of the
following tests: (1) at least 75% of its gross income is
passive or (2) an average of at least 50% of its assets
produce, or are held for the production of, passive income.
Under certain circumstances, if the Fund holds stock of a PFIC,
it will be subject to Federal income tax on a portion of any
"excess distribution" received on the stock or of any gain on
disposition of the stock (collectively "PFIC income"), plus
interest thereon, even if the Fund distributes the PFIC income
as a taxable dividend to its shareholders. The balance of the
PFIC income will be included in the Fund's investment company
taxable income and, accordingly, will not be taxable to it to
the extent that income is distributed to its shareholders.

If Growth & Income Fund invests in a PFIC and elects to
treat the PFIC as a "qualified electing fund," then in lieu of
the foregoing tax and interest obligation, the Fund would be
required to include in income each year its pro rata share of
the qualified electing fund's annual ordinary earnings and net
capital gain (the excess of net long-term capital gain over net
short-term capital loss) -- which would have to be distributed
to satisfy the Distribution Requirement and avoid imposition of
the Excise Tax -- even if those earnings and gain were not
received by the Fund. In most instances it will be very
difficult, if not impossible, to make this election because of
certain requirements thereof.

Proposed regulations have been published pursuant to
which open-end RICs, such as Growth & Income Fund, would be
entitled to elect to "mark-to-market" their stock in certain
PFICs. "Marking- to-market," in this context, means
recognizing as gain for each taxable year the excess, as of the
end of that year, of the fair market value of such a PFIC's
stock over the adjusted basis in that stock (including
mark-to-market gain for each prior year for which an election
was in effect).

For Growth & Income Fund, income from foreign
currencies (except certain gains therefrom that may be excluded
by future regulations) will qualify as permissible income under
the Income Requirement. Income from the Fund's disposition of
foreign currencies that are not directly related to its
principal business of investing in securities also will be
subject to the Short-Short Limitation if they are held for less
than three months.

Made In The U.S.A. Fund and Utilities Income Fund may
acquire zero coupon securities issued with original issue
discount. As the holder of those securities, each such Fund
must include in its income the original issue discount that
accrues on the securities during the taxable year, even if the
Fund receives no corresponding payment on the securities during
the year. Similarly, each such Fund must include in its gross
income securities it receives as "interest" on pay-in-kind
securities. Because each Fund annually

39
<PAGE>

must distribute substantially all of its investment company
taxable income, including any original issue discount, in order
to satisfy the Distribution Requirement and to avoid imposition
of the Excise Tax, the Fund may be required in a particular
year to distribute as a dividend an amount that is greater than
the total amount of cash it actually receives. Those
distributions will be made from a Fund's cash assets or from
the proceeds of sales of portfolio securities, if necessary.
Each Fund may realize capital gains or losses from those sales,
which would increase or decrease its investment company taxable
income and/or net capital gain. In addition, any such gains
may be realized on the disposition of securities held for less
than three months. Because of the Short-Short Limitation, any
such gains would reduce a Fund's ability to sell other
securities, or options or certain forward contracts held for
less than three months that it might wish to sell in the
ordinary course of its portfolio management.

The use of hedging strategies, such as writing
(selling) and purchasing options and futures contracts and
entering into forward contracts, involves complex rules that
will determine for income tax purposes the character and timing
of recognition of the gains and losses Utilities Income Fund
and Growth & Income Fund realize in connection therewith.
Income from foreign currencies (except certain gains therefrom
that may be excluded by future regulations), and income from
transactions in options, futures and forward contracts derived
by a Fund with respect to its business of investing in
securities or foreign currencies, will qualify as permissible
income under the Income Requirement. However, income from
Utilities Income Fund's disposition of options and futures
contracts will be subject to the Short-Short Limitation if they
are held for less than three months. Income from Growth &
Income Fund's disposition of foreign currencies and forward
contracts that are not directly related to its principal
business of investing in securities also will be subject to the
Short-Short Limitation if they are held for less than three
months.

If a Fund satisfies certain requirements, then any
increase in value of a position that is part of a "designated
hedge" will be offset by any decrease in value (whether
realized or not) of the offsetting hedging position during the
period of the hedge for purposes of determining whether the
Fund satisfies the Short-Short Limitation. Thus, only the net
gain (if any) from the designated hedge will be included in
gross income for purposes of that limitation. Each Fund
intends that, when it engages in hedging strategies, it will
qualify for this treatment, but at the present time it is not
clear whether this treatment will be available for all of the
Fund's hedging transactions. To the extent this treatment is
not available, a Fund may be forced to defer the closing out of
options, futures or certain forward contracts beyond the time
when it otherwise would be advantageous to do so, in order for
the Fund to continue to qualify as a RIC.

PERFORMANCE INFORMATION

A Fund may advertise its performance in various ways.

Each Fund's "average annual total return" ("T") is an
average annual compounded rate of return. The calculation
produces an average annual total return for the number of years
measured. It is the rate of return based on factors which
include a hypothetical initial investment of $1,000 ("P") over
a number of years ("n") with an Ending Redeemable Value ("ERV")
of that investment, according to the following formula:

T=[(ERV/P)1/n]-1

<PAGE>

The "total return" uses the same factors, but does not
average the rate of return on an annual basis. Total return is
determined as follows:

[ERV-P]/P = TOTAL RETURN

Total return is calculated by finding the average
annual change in the value of an initial $1,000 investment over
the period. In calculating the ending redeemable value for
Class A shares, each Fund will deduct the maximum sales charge
of 6.25% (as a percentage of the offering price) from the
initial $1,000 payment and, for Class B shares, the applicable
CDSC imposed on a redemption of Class B shares held for the
period is deducted. All dividends and other distributions are
assumed to have been reinvested at net asset value on the
initial investment ("P"). Average annual total return and
total return may also be based on investment at reduced sales
charge levels or at net asset value. Any quotation of return
not reflecting the maximum sales charge will be greater than if
the maximum sales charge were used.

Return information may be useful to investors in
reviewing a Fund's performance. However, certain factors
should be taken into account before using this information as a
basis for comparison with alternative investments. No
adjustment is made for taxes payable on distributions. Return
will fluctuate over time and return for any given past period
is not an indication or representation by a Fund of future
rates of return on its shares. At times, the Adviser may
reduce its compensation or assume expenses of a Fund in order
to reduce the Fund's expenses. Any such waiver or
reimbursement would increase the Fund's return during the
period of the waiver or reimbursement.

AVERAGE ANNUAL TOTAL RETURN

Class A Shares
Year Inception1
Ended to
October 31, 1995 October 31, 1995
Made In The U.S.A. Fund % %
Utilities Income Fund
Growth & Income Fund

Class B Shares

Inception2
to
October 31, 1995
Made In The U.S.A. Fund %
Utilities Income Fund
Growth & Income Fund

1 The inception dates for the Fund are as follows:
Made In The U.S.A. Fund - August 24, 1992; Utilities
Income Fund - February 22, 1993; and Growth & Income
Fund - October 4, 1993.
<PAGE>
2 The commencement date for the offer of Class B shares.

<PAGE>

Yield is presented for a specified thirty-day period
("base period"). Yield is based on the amount determined by
(i) calculating the aggregate amount of dividends and interest
earned by a Fund during the base period less expenses accrued
for that period (net of reimbursement), and (ii) dividing that
amount by the product of (A) the average daily number of shares
of the Fund outstanding during the base period and entitled to
receive dividends and (B) the per share maximum public offering
price for Class A shares or the net asset value for Class B
shares of the Fund on the last day of the base period. The
result is annualized by compounding on a semi-annual basis to
determine the Fund's yield. For this calculation, interest
earned on debt obligations held by the Fund is generally
calculated using the yield to maturity (or first expected call
date) of such obligations based on their market values (or, in
the case of receivables-backed securities such as GNMA
Certificates, based on cost). Dividends on equity securities
are accrued daily at their estimated stated dividend rates.

For the 30 days ended October 31, 1995, the yield for
Class A shares and Class B shares of Utilities Income Fund was
% and %, respectively. During this period certain
expenses of the Fund were waived. Accordingly, yield is higher
than it would have been if such expenses had not been waived.
<PAGE>

The distribution rate for Utilities Income Fund is
presented for a twelve-month period. It is calculated by
adding the dividends for the last twelve months and dividing
the sum by (a) for Class A shares, the offering price, or (b)
for Class B shares, the net asset value after deducting the
applicable CDSC. The distribution rate for the Funds' Class A
and Class B shares also may be calculated by dividing the sum
of the dividends for the last twelve months by their respective
net asset values. Distribution rate calculations do not
include capital gain distributions, if any, paid. The
distribution rate for the twelve-month period ended October 31,
1995 for Class A shares of Utilities Income Fund calculated
using the offering price and net asset value was % and %,
respectively. The distribution rate for the period January
12 through October 31, 1995 for Class B shares of Utilities
Income Fund calculated using the net asset value and the net
asset value less the CDSC was % and %, respectively.
During this period certain expenses of Utilities Income Fund
were waived. Accordingly, the distribution rates are higher
than they would have been had such expenses not been waived.

Each Fund may include in advertisements and sales
literature, information, examples and statistics to illustrate
the effect of compounding income at a fixed rate of return to
demonstrate the growth of an investment over a stated period of
time resulting from the payment of dividends and capital gain
distributions in additional shares. These examples may also
include hypothetical returns comparing taxable versus
tax-deferred growth which would pertain to an IRA, section
403(b)(7) Custodial Account or other qualified retirement
program. The examples used will be for illustrative purposes
only and are not representations by the Funds of past or future
yield or return.

From time to time, in reports and promotional
literature, the Funds may compare their performance to, or cite
the historical performance of, Overnight Government repurchase
agreements, U.S. Treasury bills, notes and bonds, certificates
of deposit, and six-month money market certificates or indices
of broad groups of unmanaged securities considered to be
representative of, or similar to, the Funds' portfolio
holdings, such as:

Lipper Analytical Services, Inc. ("Lipper") is a
widely-recognized independent service that monitors and
ranks the performance of regulated investment
companies. The Lipper performance analysis includes
the reinvestment of capital gain distributions and
income dividends but does not

42
<PAGE>

take sales charges into consideration. The method of
calculating total return data on indices utilizes
actual dividends on ex-dividend dates accumulated for
the quarter and reinvested at quarter end. This
calculation is at variance with SEC release 327 of
August 8, 1972, which utilizes latest 12 month
dividends. The latter method is the one used by S&P.

Morningstar Mutual Funds ("Morningstar"), a
semi-monthly publication of Morningstar, Inc.
Morningstar proprietary ratings reflect historical
risk-adjusted performance and are subject to change
every month. Funds with at least three years of
performance history are assigned ratings from one star
(lowest) to five stars (highest). Morningstar ratings
are calculated from the funds' three-, five-, and
ten-year average annual returns (when available) and a
risk factor that reflects fund performance relative to
three-month Treasury bill monthly returns. Fund's
returns are adjusted for fees and sales loads. Ten
percent of the funds in an investment category receive
five stars, 22.5% receive four stars, 35% receive three
stars, 22.5% receive two stars, and the bottom 10%
receive one star.

Salomon Brothers Inc., "Market Performance," a monthly
publication which tracks principal return, total return
and yield on the Salomon Brothers Broad
Investment-Grade Bond Index and the components of the
Index.

Telerate Systems, Inc., a computer system to which the
Adviser subscribes which daily tracks the rates on
money market instruments, public corporate debt
obligations and public obligations of the U.S. Treasury
and agencies of the U.S. Government.

The Wall Street Journal, a daily newspaper publication
which lists the yields and current market values on
money market instruments, public corporate debt
obligations, public obligations of the U.S. Treasury
and agencies of the U.S. Government as well as common
stocks, preferred stocks, convertible preferred stocks,
options and commodities; in addition to indices
prepared by the research departments of such financial
organizations as Lehman Bros., Merrill Lynch, Pierce,
Fenner and Smith, Inc., First Boston, Salomon Brothers,
Morgan Stanley, Goldman, Sachs & Co., Donaldson, Lufkin
& Jenrette, Value Line, Datastream International, James
Capel, S.G. Warburg Securities, County Natwest and UBS
UK Limited, including information provided by the
Federal Reserve Board, Moody's, and the Federal Reserve
Bank.

Merrill Lynch, Pierce, Fenner & Smith, Inc., "Taxable
Bond Indices," a monthly corporate government index
publication which lists principal, coupon and total
return on over 100 different taxable bond indices which
Merrill Lynch tracks. They also list the par weighted
characteristics of each Index.

Lehman Brothers, Inc., "The Bond Market Report," a
monthly publication which tracks principal, coupon and
total return on the Lehman Govt./Corp. Index and Lehman
Aggregate Bond Index, as well as all the components of
these Indices.

Standard & Poor's 500 Composite Stock Price Index and
the Dow Jones Industrial Average of 30 stocks are
unmanaged lists of common stocks frequently used as
general measures of stock market performance. Their
performance figures reflect changes of market prices
and quarterly reinvestment of all distributions but are
not adjusted for commissions or other costs.

43
<PAGE>

The Consumer Price Index, prepared by the U.S. Bureau
of Labor Statistics, is a commonly used measure of
inflation. The Index shows changes in the cost of
selected consumer goods and does not represent a return
on an investment vehicle.

The NYSE composite of component indices unmanaged
indices of all industrial, utilities, transportation,
and finance stocks listed on the NYSE.

The Russell 2500 Index, prepared by the Frank Russell
Company, consists of U.S. publicly traded stocks of
domestic companies that rank from 500 to 3000 by market
capitalization. The Russell 2500 tracks the return on
these stocks based on price appreciation or
depreciation and does not include dividends and income
or changes in market values caused by other kinds of
corporate changes.

The Russell 2000 Index, prepared by the Frank Russell
Company, consists of U.S. publicly traded stocks of
domestic companies that rank from 1000 to 3000 by
market capitalization. The Russell 2000 tracks the
return on these stocks based on price appreciation or
depreciation and does not include dividends and income
or changes in market values caused by other kinds of
corporate changes.

Reuters, a wire service that frequently reports on
global business.

Standard & Poor's Utilities Index is an unmanaged
capitalization weighted index comprising common stock
in approximately 40 electric, natural gas distributors
and pipelines, and telephone companies. The Index
assumes the reinvestment of dividends.

Moody's Stock Index, an unmanaged index of utility
stock performance.

From time to time, in reports and promotional
literature, performance rankings and ratings reported
periodically in national financial publications such as MONEY,
FORBES, BUSINESS WEEK, BARRON'S, FINANCIAL TIMES and FORTUNE
may also be used. In addition, quotations from articles and
performance ratings and ratings appearing in daily newspaper
publications such as THE WALL STREET JOURNAL, THE NEW YORK
TIMES and NEW YORK DAILY NEWS may be cited.

GENERAL INFORMATION

Audits And Reports. The accounts of the Funds are
audited twice a year by Tait, Weller & Baker, independent
certified public accountants, Two Penn Center Plaza,
Philadelphia, PA, 19102-1707. Shareholders of each Fund receive
semi-annual and annual reports, including audited financial
statements, and a list of securities owned.

Transfer Agent. Administrative Data Management Corp.,
10 Woodbridge Center Drive, Woodbridge, NJ 07095-1198, an
affiliate of FIMCO and FIC, acts as transfer agent for the
Funds and as redemption agent for regular redemptions. The
fees charged to each Fund by the Transfer Agent are $5.00 to
open an account; $3.00 for each certificate issued; $.65 per
account per month; $10.00 for each legal transfer of shares;
$.45 per account per dividend declared; $5.00 for each exchange
of shares into a Fund; $5.00 for each partial withdrawal or
complete liquidation; and $1.00 per account per report required
by

44
<PAGE>

any governmental authority. Additional fees charged to the
Funds by the Transfer Agent are assumed by the Underwriter.
The Transfer Agent reserves the right to change the fees on
prior notice to the Funds. The $5 administrative fee for
exchange transactions into a Fund, which is generally to be
charged to the shareholder, is being borne on a voluntary basis
by the Fund for an indefinite period. Upon request from
shareholders, the Transfer Agent will provide an account
history. For account histories covering the most recent three
year period, there is no charge. The Transfer Agent charges a
$5.00 administrative fee for each account history covering the
period 1983 through 1990 and $10.00 per year for each account
history covering the period 1974 through 1982. Account
histories prior to 1974 will not be provided. [Transfer agency
fees to be updated] For the fiscal year ended October 31,
1994, Growth & Income Fund and Utilities Income Fund accrued
transfer agency fees and expenses of $116,401 and $253,596,
respectively. Of such amounts, $23,410 and $51,194,
respectively, were voluntarily waived by the Transfer Agent.
For the fiscal year ended October 31, 1994, Made In The U.S.A.
Fund paid $66,504 in transfer agency fees. The Transfer
Agent's telephone number is 1-800-423-4026.

Trading by Portfolio Managers and Other Access Persons.
Pursuant to Section 17(j) of the 1940 Act and Rule 17j-1
thereunder, Series Fund II and the Adviser have adopted Codes
of Ethics restricting personal securities trading by portfolio
managers and other access persons of the Fund. Among other
things, such persons: (a) must have all trades pre-cleared by
the Adviser; (b) are restricted from short-term trading; (c)
must have duplicate statements and transactions confirmations
reviewed by a compliance officer; and (d) are prohibited from
purchasing securities of initial public offerings.

APPENDIX A
DESCRIPTION OF CORPORATE BOND AND
CONVERTIBLE SECURITY RATINGS

STANDARD & POOR'S

The ratings are based on current information furnished
by the issuer or obtained by S&P from other sources it
considers reliable. S&P does not perform any audit in
connection with any rating and may, on occasion, rely on
unaudited financial information. The ratings may be changed,
suspended, or withdrawn as a result of changes in, or
unavailability of, such information, or based on other
circumstances.

The ratings are based, in varying degrees, on the
following considerations:

1. Likelihood of default-capacity and willingness
of the obligor as to the timely payment of
interest and repayment of principal in
accordance with the terms of the obligation;

2. Nature of and provisions of the obligation;

3. Protection afforded by, and relative position
of, the obligation in the event of bankruptcy,
reorganization, or other arrangement under the
laws of bankruptcy and other laws affecting
creditors' rights.

45
<PAGE>

AAA Debt rated "AAA" has the highest rating assigned
by S&P. Capacity to pay interest and repay principal is
extremely strong.

AA Debt rated "AA" has a very strong capacity to pay
interest and repay principal and differs from the higher rated
issues only in small degree.

A Debt rated "A" has a strong capacity to pay interest
and repay principal although it is somewhat more susceptible to
the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.

BBB Debt rated "BBB" is regarded as having an adequate
capacity to pay interest and repay principal. Whereas it
normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more likely
to lead to a weakened capacity to pay interest and repay
principal for debt in this category than in higher rated
categories.

BB, B, CCC, CC, C Debt rated "BB," "B," "CCC," "CC"
and "C" is regarded, on balance, as predominantly speculative
with respect to capacity to pay interest and repay principal.
"BB" indicates the least degree of speculation and "C" the
highest. While such debt will likely have some quality and
protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.

BB Debt rated "BB" has less near-term vulnerability to
default than other speculative issues. However, it faces major
ongoing uncertainties or exposure to adverse business,
financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal
payments. The "BB" rating category is also used for debt
subordinated to senior debt that is assigned an actual or
implied "BBB-" rating.

B Debt rated "B" has a greater vulnerability to
default but currently has the capacity to meet interest
payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity
or willingness to pay interest and repay principal. The "B"
rating category is also used for debt subordinated to senior
debt that is assigned an actual or implied "BB" or "BB-"
rating.

CCC Debt rated "CCC" has a currently identifiable
vulnerability to default and is dependent upon favorable
business, financial, and economic conditions to meet timely
payment of interest and repayment of principal. In the event
of adverse business, financial or economic conditions, it is
not likely to have the capacity to pay interest and repay
principal. The "CCC" rating category is also used for debt
subordinated to senior debt that is assigned an actual or
implied "B" or "B-" rating.

CC The rating "CC" typically is applied to debt
subordinated to senior debt that is assigned an actual or
implied "CCC" rating.

C The rating "C" typically is applied to debt
subordinated to senior debt which is assigned an actual or
implied "CCC-" debt rating. The "C" rating may be used to
cover a situation where a bankruptcy petition has been filed,
but debt service payments are continued.

CI The rating "CI" is reserved for income bonds on
which no interest is being paid.

46
<PAGE>

D Debt rated "D" is in payment default. The "D"
rating category is used when interest payments or principal
payments are not made on the date due even if the applicable
grace period has not expired, unless S&P believes that such
payments will be made during such grace period. The "D" rating
also will be used upon the filing of a bankruptcy petition if
debt service payments are jeopardized.

Plus (+) or Minus (-): The ratings from "AA" to "CCC"
may be modified by the addition of a plus or minus sign to show
relative standing within the major categories.

MOODY'S INVESTORS SERVICE, INC.

Aaa Bonds which are rated "Aaa" are judged to be of
the best quality. They carry the smallest degree of investment
risk and are generally referred to as "gilt edged." Interest
payments are protected by a large or exceptionally stable
margin and principal is secure. While the various protective
elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong
position of such issues.

Aa Bonds which are rated "Aa" are judged to be of high
quality by all standards. Together with the Aaa group they
comprise what are generally known as high-grade bonds. They
are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities,
fluctuation of protective elements may be of greater amplitude
or there may be other elements present which make the long-term
risk appear somewhat greater than the Aaa securities.

A Bonds which are rated "A" possess many favorable
investment attributes and are to be considered as
upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment
some time in the future.

Baa Bonds which are rated "Baa" are considered as
medium-grade obligations (i.e., they are neither highly
protected nor poorly secured). Interest payments and principal
security appear adequate for the present, but certain
protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and in fact have
speculative characteristics as well.

Ba Bonds which are rated "Ba" are judged to have
speculative elements; their future cannot be considered as
well-assured. Often the protection of interest and principal
payments may be very moderate, and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.

B Bonds which are rated "B" generally lack
characteristics of the desirable investment. Assurance of
interest and principal payments or of maintenance of other
terms of the contract over any long period of time may be
small.

Caa Bonds which are rated "Caa" are of poor standing.
Such issues may be in default or there may be present elements
of danger with respect to principal or interest.

47
<PAGE>

Ca Bonds which are rated "Ca" represent obligations
which are speculative in a high degree. Such issues are often
in default or have other marked shortcomings.

C Bonds which are rated "C" are the lowest rated class
of bonds, and issues so rated can be regarded as having
extremely poor prospects of ever attaining any real investment
standing.

Moody's applies numerical modifiers, 1, 2 and 3 in each
generic rating classification from Aa through B in its
corporate bond rating system. The modifier 1 indicates that
the security ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates that the issue ranks in the lower end of
its generic rating category.

APPENDIX B
DESCRIPTION OF COMMERCIAL PAPER RATINGS

STANDARD & POOR'S

S&P's commercial paper rating is a current assessment
of the likelihood of timely payment of debt considered
short-term in the relevant market. Ratings are graded into
several categories, ranging from "A-1" for the highest quality
obligations to "D" for the lowest.

A-1 This highest category indicates that the degree of
safety regarding timely payment is strong. Those issues
determined to possess extremely strong safety characteristics
are denoted with a plus (+) designation.

MOODY'S INVESTORS SERVICE, INC.

Moody's short-term debt ratings are opinions of the
ability of issuers to repay punctually senior debt obligations
which have an original maturity not exceeding one year.
Obligations relying upon support mechanisms such as
letters-of-credit and bonds of indemnity are excluded unless
explicitly rated.

Prime-1 Issuers (or supporting institutions) rated
Prime-1 (P-1) have a superior ability for repayment of senior
short-term debt obligations. P-1 repayment ability will often
be evidenced by many of the following characteristics:

- Leading market positions in well-established
industries.
- High rates of return on funds employed.
- Conservative capitalization structure with
moderate reliance on debt and ample
asset protection.
- Broad margins in earnings coverage of fixed
financial charges and high internal
cash generation.
- Well-established access to a range of financial
markets and assured sources of alternate liquidity.

<PAGE>

APPENDIX C

Although it does not presently intend to do engage in these
strategies in coming year, Utilities Income Fund may use some
or all of the following hedging instruments:

Options on Equity and Debt Securities - A call option is
a short-term contract pursuant to which the purchaser of the
option, in return for a premium, has the right to buy the
security underlying the option at a specified price at any time
during the term of the option. The writer of the call option,
who receives the premium, has the obligation, upon exercise of
the option during the option term, to deliver the underlying
security against payment of the exercise price. A put option
is a similar contract that gives its purchaser, in return for a
premium, the right to sell the underlying security at a
specified price during the option term. The writer of the put
option, who receives the premium, has the obligation, upon
exercise of the option during the option term, to buy the
underlying security at the exercise price.

Options on Stock Indexes - A stock index assigns relative
values to the stocks included in the index and fluctuates with
changes in the market values of those stocks. A stock index
option operates in the same way as a more traditional stock
option, except that exercise of a stock index option is
effected with cash payment and does not involve delivery of
securities. Thus, upon exercise of a stock index option, the
purchaser will realize, and the writer will pay, an amount
based on the difference between the exercise price and the
closing price of the stock index.

Stock Index Futures Contracts - A stock index futures
contract is a bilateral agreement pursuant to which one party
agrees to accept, and the other party agrees to make, delivery
of an amount of cash equal to a specified dollar amount times
the difference between the stock index value at the close of
trading of the contract and the price at which the futures
contract is originally struck. No physical delivery of the
stocks comprising the index is made. Generally, contracts are
closed out prior to the expiration date of the contract.

Interest Rate Futures Contracts - Interest rate futures
contracts are bilateral agreements pursuant to which one party
agrees to make, and the other party agrees to accept, delivery
of a specified type of debt security at a specified future
time and at a specified price. Although such futures contracts
by their terms call for actual delivery or acceptance of debt
securities, in most cases the contracts are closed out before
the settlement date without the making or taking of delivery.

Options on Futures Contracts - Options on futures
contracts are similar to options on securities, except that an
option on a futures contract gives the purchaser the right, in
return for the premium, to assume a position in a futures
contract (a long position if the option is a call and a short
position if the option is a put), rather than to purchase or
sell a security, at a specified price at any time during the
option term. Upon exercise of the option, the delivery of the
futures position to the holder of the option will be
accompanied by delivery of the accumulated balance that
represents the amount by which the market price of the futures
contract exceeds, in the case of a call, or is less than, in
the case of a put, the exercise price of the option on the
future. The writer of an option, upon exercise, will assume a
short position in the case of a call and a long position in the
case of a put.

<PAGE>

PART C

OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements: Financial Statements are set
forth in Part B, Statement of Additional Information

(b) Exhibits:

(1) a. Articles of Incorporation

b. Articles Supplementary

(2)9 By-laws

(3) Not Applicable

(4)4,5,8 Specimen Certificates

(5)a. Investment Advisory Agreement between
Registrant and First Investors
Management Company, Inc.

b. Subadvisory Agreement between Registrant
and Wellington Management Company

(6)3 Underwriting Agreement

(7) Not Applicable

(8)8 Custodian Agreement between
Registrant and The Bank of New York

(9)3 Administration Agreement between
Registrant, First Investors
Management Company, Inc., First
Investors Corporation and
Administrative Data Management Corp.

(10)7 Opinion of counsel

(11) Powers of Attorney

(12) Not Applicable

(13)a.2,3,6 Letters of investment intent

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<PAGE>

b.8 Organization Expense Reimbursement
Agreement

(14)a.2 First Investors Profit
Sharing/Money Purchase Pension
Retirement Plan for Sole
Proprietorships, Partnerships and
Corporations

b.4 First Investors Individual Retirement
Account

c.2 First Investors 403(b) Custodial Account

d.4 First Investors SEP-IRA and SARSEP-IRA

(15)a.9 Class A Distribution Plan

b.9 Class B Distribution Plan

(16)10 Performance Calculations

(17) Not Applicable

(18) Rule 18f-3 Plan

1 Incorporated by reference from Registrant's Registration
Statement (File No. 33-46924) filed on April 2, 1992.
2 Incorporated by reference from Pre-Effective Amendment No.
1 to Registrant's Registration Statement (File No. 33-46924) filed
on June 17, 1992.

3 Incorporated by reference from Post-Effective Amendment
No. 1 to Registrant's Registration Statement (File No. 33-46924)
filed on November 20, 1992.

4 Incorporated by reference from Post-Effective Amendment No.
2 to Registrant's Registration Statement (File No. 33-46924) filed
on February 10, 1993.

5 Incorporated by reference from Post-Effective Amendment No.
3 to Registrant's Registration Statement (File No. 33-46924) filed
on June 30, 1993.

6 Incorporated by reference from Post-Effective Amendment No.
4 to Registrant's Registration Statement (File No. 33-46924) filed
on July 26, 1993.

7 Incorporated by reference from Registrant's Rule 24f-2
Notice for its fiscal year ended October 31, 1994 filed on
December 22, 1994.

8 Incorporated by reference from Post-Effective Amendment No.
5 to Registrant's Registration Statement (File No. 33-46924) filed
on February 28, 1994.

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<PAGE>
9 Incorporated by reference from Post-Effective Amendment No.
6 to Registrant's Registration Statement (File No. 33-46924) filed
on October 18, 1994.

10 Incorporated by reference from Post-Effective Amendment No.
8 to Registrant's Registration Statement (File No. 33-46924) filed
on January 11, 1995.

Item 25. Persons Controlled by or under common control with Registrant

There are no persons controlled by or under common
control with the Registrant.

Item 26. Number of Holders of Securities

Number of Record
Holders as of
Title of Class October 6, 1995

Class A Class B
Made In The U.S.A. Fund 2,335 41
Utilities Income Fund 12,956 418
Growth & Income Fund 9,280 510

Item 27. Indemnification

Article X of the By-Laws of Registrant provides as follows:

Section 10.01. Indemnification of Officers, Directors,
Employees and Agents: The Corporation shall indemnify each
person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative ("Proceeding"), by reason of the fact that he or she
is or was a director, officer, employee, or agent of the
Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee, partner, trustee or
agent of another corporation, partnership, joint venture,
trust, or other enterprise, against all reasonable expenses
(including attorneys' fees) actually incurred, and judgments,
fines, penalties and amounts paid in settlement in connection
with such Proceeding to the maximum extent permitted by law,
now existing or hereafter adopted. Notwithstanding the
foregoing, the following provisions

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<PAGE>

shall apply with respect to indemnification of the
Corporation's directors, officers, and investment adviser (as
defined in the 1940 Act):

(a) Whether or not there is an adjudication of liability
in such Proceeding, the Corporation shall not
indemnify any such person for any liability arising by
reason of such person's willful misfeasance, bad
faith, gross negligence, or reckless disregard of the
duties involved in the conduct of his or her office or
under any contract or agreement with the Corporation
("disabling conduct").

(b) The Corporation shall not indemnify any such person unless:

(1) the court or other body before which the
Proceeding was brought (a) dismisses the
Proceeding for insufficiency of evidence of any
disabling conduct, or (b) reaches a final
decision on the merits that such person was not
liable by reason of disabling conduct; or

(2) absent such a decision, a reasonable
determination is made, based upon a review of
the facts, by (a) the vote of a majority of a
quorum of the directors of the Corporation who
are neither interested persons of the
Corporation as defined in the 1940 Act, nor
parties to the Proceeding, or (b) if a
majority of a quorum of directors described
above so directs, or if such quorum is not
obtainable, based upon a written opinion by
independent legal counsel, that such person was
not liable by reason of disabling conduct.

(c) Reasonable expenses (including attorney's fees)
incurred in defending a Proceeding involving any such person
will be paid by the Corporation in advance of the final
disposition thereof upon an undertaking by such person to repay
such expenses unless it is ultimately determined that he or she is
entitled to indemnification, if:

(1) such person shall provide adequate security for
his or her undertaking;

(2) the Corporation shall be insured against
losses arising by reason of such advance; or

C-4
<PAGE>
(3) a majority of a quorum of the directors of
the Corporation who are neither interested
persons of the Corporation as defined in the
1940 Act nor parties to the Proceeding, or
independent legal counsel in a written opinion,
shall determine, based on a review of readily
available facts, that there is reason to
believe that such person will be found to be
entitled to indemnification.

Section 10.02. Insurance of Officers, Directors,
Employees and Agents: The Corporation may purchase and
maintain insurance or other sources of reimbursement to the extent
permitted by law on behalf of any person who is or was a
director, officer, employee or agent of the Corporation, or
is or was serving at the request of the Corporation as a
director, officer, employee, partner, trustee or agent of
another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him or her and
incurred by him or her in or arising out of his position.

Section 10.03. Non-exclusivity: The indemnification and
advancement of expenses provided by, or granted pursuant to,
this Article X shall not be deemed exclusive of any other rights
to which those seeking indemnification or advancement of
expenses may be entitled under the Articles of Incorporation,
these By-Laws, any agreement, vote of stockholders or directors,
or otherwise, both as to action in his or her official capacity
and as to action in another capacity while holding such office.

The Registrant's Investment Advisory Agreement provides as follows:

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.

The Registrant's Underwriting Agreement provides as follows:

C-5
<PAGE>

The Underwriter agrees to use its best efforts in
effecting the sale and public distribution of the Shares through
dealers and in performing its duties in redeeming and repurchasing
the Shares, but nothing contained in this Agreement shall
make the Underwriter or any of its officers, directors or
shareholders liable for any loss sustained by the Fund or any
of its officers, directors or shareholders, or by any other person
on account of any act done or omitted to be done by the
Underwriter under this Agreement, provided that nothing
contained herein shall protect the Underwriter against any
liability to the Fund or to any of its shareholders to which
the Underwriter would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence in the performance of
its duties as Underwriter or by reason of its reckless disregard
of its obligations or duties as Underwriter under this
Agreement. Nothing in this Agreement shall protect the
Underwriter from any liabilities which it may have under the
Securities Act of 1933, as amended ("1933 Act"), or the 1940 Act.

Reference is hereby made to the Maryland Corporations
and Associations Annotated Code, Sections 2-417, 2-418 (1986).

The general effect of this Indemnification will be to
indemnify the officers and directors of the Registrant from
costs and expenses arising from any action, suit or proceeding
to which they may be made a party by reason of their being or
having been a director or officer of the Registrant, except
where such action is determined to have arisen out of the
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the director's
or officer's office.

Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors,
officers or persons controlling the Registrant pursuant to the
foregoing provisions, the Registrant has been informed that, in
the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act
and is therefore unenforceable. See Item 32 herein. Item 28.
Business and Other Connections of Investment Adviser

First Investors Management Company, Inc., the Registrant's
Investment Adviser, also serves as Investment Adviser to:

First Investors Global Fund, Inc.
First Investors Cash Management Fund, Inc.
First Investors Series Fund
First Investors Fund For Income, Inc.
First Investors Government Fund, Inc.

C-6
<PAGE>

First Investors High Yield Fund, Inc.
First Investors Insured Tax Exempt Fund, Inc.
First Investors Life Series Fund
First Investors Multi-State Insured Tax Free Fund
First Investors New York Insured Tax Free Fund, Inc.
First Investors Special Bond Fund, Inc.
First Investors Tax-Exempt Money Market Fund, Inc.
First Investors U.S. Government Plus Fund

Affiliations of the officers and directors of the
Investment Adviser are set forth in Part B, Statement of
Additional Information, under "Directors and Officers."

Item 29. Principal Underwriters

(a) First Investors Corporation, Underwriter of the
Registrant, is also underwriter for:

First Investors Global Fund, Inc.
First Investors Cash Management Fund, Inc.
First Investors Series Fund
First Investors Fund For Income, Inc.
First Investors Government Fund, Inc.
First Investors High Yield Fund, Inc.
First Investors Insured Tax Exempt Fund, Inc.
First Investors Life Series Fund
First Investors Multi-State Insured Tax Free Fund
First Investors New York Insured Tax Free Fund, Inc.
First Investors Tax-Exempt Money Market Fund, Inc.
First Investors U.S. Government Plus Fund

(b) The following persons are the officers and directors
of the Underwriter:

Position and Position and
Name and Principal Office with First Office with
Business Address Investors Corporation Registrant

Glenn O. Head Chairman President
95 Wall Street and Director and Director
New York, NY 10005

Marvin M. Hecker President None
95 Wall Street
New York, NY 10005

C-7

<PAGE>

Position and Position and
Name and Principal Office with First Office with
Business Address Investors Corporation Registrant

John T. Sullivan Director Chairman of the
95 Wall Street Board of Directors
New York, NY 10005

Roger L. Grayson Director Director
95 Wall Street
New York, NY 10005

Joseph I. Benedek Treasurer Treasurer
518 Main Street
Woodbridge, NJ 07095

Robert Murphy Comptroller None
518 Main Street
Woodbridge, NJ 07095

Concetta Durso Assistant Vice Vice President
95 Wall Street President and and Secretary
New York, NY 10005 Assistant Secretary

Lawrence A. Fauci Senior Vice President None
95 Wall Street and Director
New York, NY 10005

Kathryn S. Head Vice President, Director
518 Main Street Chief Financial
Woodbridge, NJ 07095 Officer and Director

Louis Rinaldi Senior Vice None
518 Main Street President
Woodbridge, NJ 07095

Frederick Miller Vice President None
518 Main Street
Woodbridge, NJ 07095

Larry R. Lavoie Secretary and None
95 Wall Street General Counsel
New York, NY 10005

Carol Lerner Brown Assistant Secretary Assistant
95 Wall Street Secretary
New York, NY 10005

C-8
<PAGE>

Position and Position and
Name and Principal Office with First Office with
Business Address Investors Corporation Registrant

Matthew Smith Vice President None
518 Main Street
Woodbridge, NJ 07095

James Srygley Director None
33 Hampton Road
Chatham, NJ 07928

Jeremiah J. Lyons Director None
56 Weston Avenue
Chatham, NJ 07928

Kellen M. Carson Vice President None
95 Wall Street
New York, NY 10005

Anne Condon Vice President None
518 Main Street
Woodbridge, NJ 07095

Item 30. Location of Accounts and Records

Physical possession of the books, accounts and
records of the Registrant are held by First Investors Management
Company, Inc. and its affiliated companies, First Investors
Corporation and Administrative Data Management Corp., at
their corporate headquarters, 95 Wall Street, New York, NY
10005 and administrative offices, 518 Main Street, Woodbridge, NJ
07095, except for those maintained by the Registrant's Custodian,
The Bank of New York, 48 Wall Street, New York, NY 10286.

Item 31. Management Services

Inapplicable

Item 32. Undertakings

C-9

<PAGE>

The Registrant undertakes to carry out all
indemnification provisions of its Articles of Incorporation,
Advisory Agreement, Subadvisory Agreement and Underwriting
Agreement in accordance with Investment Company Act Release No.
11330 (September 4, 1980) and successor releases.

Insofar as indemnification for liability arising
under the Securities Act of 1933, as amended (the "1933 Act"), may
be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions under Item 27 herein, or
otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the 1933
Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection
with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

The Registrant hereby undertakes to furnish a copy of
its latest annual report to shareholders, upon request and
without charge, to each person to whom a prospectus is delivered.

C-10
<PAGE>

INDEX TO EXHIBITS

Exhibit
Number Description

99.B1.1 Articles of Incorporation
99.B1.2 Articles Supplementary
99.B.2 By-laws
99.B5.1 Advisory Agreement
99.B5.2 Subadvisory Agreement
99.B11 Powers of Attorney
99.B18 Rule 18f-3 Plan

C-11

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities
Act of 1933 and the Investment Company Act of 1940, the
Registrant has duly caused this Post-Effective Amendment to
this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the
City of New York, State of New York, on the 27th day of
October, 1995.

FIRST INVESTORS SERIES
FUND II, INC.
(Registrant)

By:/s/Glenn O. Head
Glenn O. Head
President and Director

Pursuant to the requirements of the Securities
Act of 1933 and the Investment Company Act of 1940, this
Amendment to this Registration Statement has been signed
below by the following persons in the capacities and on
the dates indicated.

/s/Glenn O. Head Principal Executive October 27, 1995
Glenn O. Head Officer and Director

/s/Joseph I. Benedek Principal Financial October 27, 1995
Joseph I. Benedek and Accounting Officer

* Director October 27, 1995
Kathryn S. Head

* Director October 27, 1995
James J. Coy

* Director October 27, 1995
Roger L. Grayson

* Director October 27, 1995
Herbert Rubinstein

<PAGE>

* Director October 27, 1995
James M. Srygley

* Director October 27, 1995
John T. Sullivan

* Director October 27, 1995
Rex R. Reed

* Director October 27, 1995
Robert F. Wentworth

*By: /s/Larry R. Lavoie
Larry R. Lavoie
Attorney-in-fact
<PAGE>

FIRST INVESTORS SERIES FUND II, INC.

A Maryland Corporation

Articles of Incorporation

<PAGE>

Table of Contents

Page

ARTICLE I Sole Incorporator . . . . . . . . . . . . . . 1

ARTICLE II Corporation Name. . . . . . . . . . . . . . . 1

ARTICLE III Perpetual Duration. . . . . . . . . . . . . . 1

ARTICLE IV Purposes of Corporation . . . . . . . . . . . 1

ARTICLE V Address and Resident Agent. . . . . . . . . . 4

ARTICLE VI Stock and Stockholder Rights. . . . . . . . . 4

6.1. Capital Stock . . . . . . . . . . . . . 4
6.2. Establishment of Series . . . . . . . . 5
6.3. Dividends . . . . . . . . . . . . . . . 5
6.4. Assets and Liabilities of Series. . . . 6
6.5. Voting. . . . . . . . . . . . . . . . . 7
6.6. Redemption by Stockholders. . . . . . . 7
6.7. Net Asset Value per Share . . . . . . . 8
6.8. Redemption by the Corporation . . . . . 8

ARTICLE VII Issuance of Stock . . . . . . . . . . . . . . 9

7.1. Issuance of New Stock. . . . . . . . . 9
7.2. Fractional Shares . . . . . . . . . . . 9

ARTICLE VIII Shareholder Meetings. . . . . . . . . . . . . 9

ARTICLE IX Board of Directors. . . . . . . . . . . . . . 10

9.1. Board of Directors. . . . . . . . . . . 10
9.2. By-Laws . . . . . . . . . . . . . . . . 10

ARTICLE X Contracts . . . . . . . . . . . . . . . . . . 10

10.1. General . . . . . . . . . . . . . . . . 10
10.2. Contracts with Affiliated Persons . . . 11

ARTICLE XI Liability and Indemnification . . . . . . . . 11

11.1. Limitation on Liability . . . . . . . . 11
11.2. Indemnification . . . . . . . . . . . . 11
11.3. Repeal or Modification. . . . . . . . . 11

ARTICLE XII Amendment of Articles . . . . . . . . . . . . 12

<PAGE>

ARTICLES OF INCORPORATION

FIRST INVESTORS SERIES FUND II, INC.

FIRST: SOLE INCORPORATOR. The undersigned, Robert
J. Zutz, whose post office address is South Lobby - Ninth
Floor, 1800 M Street, N.W., Washington, D.C. 20036, being at
least eighteen years of age, under and by virtue of the

General Laws of the State of Maryland authorizing the
formation of corporations, is acting as sole incorporator
with the intention of forming a corporation.

SECOND: CORPORATION NAME. The name of the
corporation is: FIRST INVESTORS SERIES FUND II, INC.
(hereinafter called the "Corporation").

THIRD: PERPETUAL DURATION. The duration of the
Corporation shall be perpetual.

FOURTH: PURPOSES OF CORPORATION. The purposes for
which the Corporation is formed are to act as an open-end
management investment company under the Investment Company
Act of 1940, as amended ("1940 Act"), and to exercise and
enjoy all of the powers, rights and privileges granted to,
or conferred upon, corporations of a similar character by
the General Laws of the State of Maryland now or hereafter
in force, including, but not limited to, the following:

(a) To hold, invest and reinvest its funds, and in
connection therewith to hold part or all of its
funds in cash, and to purchase, subscribe for or
otherwise acquire, hold for investment or
otherwise, to trade and deal in, write, sell,
assign, negotiate, transfer, exchange, lend,
pledge or otherwise dispose of or turn to account
or realize upon, securities (which term
"securities" shall, for the purposes of these
Articles of Incorporation, without limiting the
generality thereof, be deemed to include any
stocks, shares, bonds, debentures, bills, notes,
mortgages or other obligations or evidences of
indebtedness, and any options, certificates,
receipts, warrants or other instruments
representing rights to receive, purchase,
subscribe for or sell the same, or evidencing or
representing any other rights or interests
therein, or in any property or assets; and any
negotiable or nonnegotiable instruments and money
market instruments, including bank certificates of
deposit, finance paper, commercial paper, bankers'
acceptances and all kinds of repurchase or reverse
repurchase agreements) created or issued by any
United States or foreign issuer (which

<PAGE>

term "issuer" shall, for the purpose of these Articles of
Incorporation, without limiting the generality thereof,
be deemed to include any persons, firms, associations,
partnerships, corporations, syndicates, combinations,
organizations, governments or subdivisions, agencies or
instrumentalities of any government); and to exercise, as
owner or holder of any securities, all rights, powers and
privileges in respect thereof, including the right to
vote thereon; to aid by further investment any issuer,
any obligation of or interest in which is held by the
Corporation or in the affairs of which the Corporation
has any direct or indirect interest; to guarantee or
become surety on any or all of the contracts, stocks,
bonds, notes, debentures and other obligations of any
corporation, company, trust, association or firm; and to
do any and all acts and things for the preservation,
protection, improvement and enhancement in value of any and
all such securities.

(b) To acquire all or any part of the goodwill,
rights, property and business of any person, firm,
association or corporation heretofore or hereafter
engaged in any business similar to any business
which the Corporation has the power to conduct,
and to hold, utilize, enjoy and in any manner
dispose of the whole or any part of the rights,
property and business so acquired, and to assume
in connection therewith any liabilities of any
such person, firm, association or corporation.

(c) To apply for, obtain, purchase or otherwise
acquire, any patents, copyrights, licenses,
trademarks, trade names and the like, which may be
capable of being used for any of the purposes of
the Corporation; and to use, exercise, develop,
grant licenses in respect of, sell and otherwise
turn to account, the same.

(d) To issue and sell shares of its own capital stock
and securities convertible into such capital stock
in such amounts and on such terms and conditions,
for such purposes and for such amount or kind of
consideration (including without limitation
thereto, securities) now or hereafter permitted by
the laws of the State of Maryland, by the 1940 Act
and by these Articles of Incorporation, as its
Board of Directors may determine.

(e) To purchase or otherwise acquire, hold, dispose
of, resell, transfer, reissue or cancel (all
without the vote or consent of the stockholders of
the Corporation) shares of its capital stock in
any manner and to the extent now or hereafter
permitted by the laws of the

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<PAGE>

State of Maryland, by the 1940 Act and by these Articles
of Incorporation.

(f) To conduct its business in all branches at one or
more offices in any part of the world, without
restriction or limit as to extent.

(g) To exercise and enjoy, in any states, territories,
districts and United States dependencies and in
foreign countries, all of the powers, rights and
privileges granted to, or conferred upon,
corporations by the General Laws of the State of
Maryland now or hereafter in force.

(h) In general to carry on any other business in
connection with or incidental to its corporate
purposes, to do everything necessary, suitable or
proper for the accomplishment of such purposes or
for the attainment of any object or the
furtherance of any power hereinbefore set forth,
either alone or in association with others, to do
every other act or thing incidental or appurtenant
to or growing out of or connected with its
business or purposes, objects or powers, and,
subject to the foregoing, to have and exercise all
the powers, rights and privileges conferred upon
corporations by the laws of the State of Maryland
as in force from time to time.

The foregoing objects and purposes shall, except as
otherwise expressly provided, be in no way limited or
restricted by reference to, or inference from, the terms of
any other clause of this or any other Article of these
Articles of Incorporation, and shall each be regarded as
independent and construed as a power as well as an object
and a purpose, and the enumeration of specific purposes,
objects and powers shall not be construed to limit or
restrict in any manner the meaning of general terms or the
general powers of the Corporation now or hereafter conferred
by the laws of Maryland, nor shall the expression of one
thing be deemed to exclude another though it be of like
nature, not expressed; provided however, that the
Corporation shall not have power to carry on within the
State of Maryland any business whatsoever the carrying on of
which would preclude it from being classified as an ordinary
business corporation under the laws of said State; nor shall
it carry on any business, or exercise any powers, in any
other state, territory, district or country except to the
extent that the same may lawfully be carried on or exercised
under the laws thereof.

Incident to meeting the purposes specified above, the
Corporation also shall have the power:

-3-

<PAGE>

(a) To acquire (by purchase, lease or otherwise) and
to hold, use, maintain, develop and dispose of (by
sale or otherwise) any property, real or personal,
and any interest therein.

(b) To borrow money and, in this connection, issue
notes or other evidence of indebtedness.

(c) To buy, hold, sell, and otherwise deal in and with
commodities, indices of commodities or securities,
and foreign exchange, including the purchase and
sale of futures contracts, options on futures
contracts related thereto and forward contracts,
subject to any applicable provisions of law.

FIFTH: ADDRESS AND RESIDENT AGENT. The post office
address of the principal office of the Corporation in this
State is The Prentice-Hall Corporation System, Maryland,
1123 North Eutaw Street, Baltimore, Maryland 21201. The
name of the resident agent of the Corporation in this State
is Prentice-Hall Corporation System, Maryland, a corporation
of the State of Maryland, and the post office address of the
resident agent is 1123 North Eutaw Street, Baltimore,
Maryland 21201.

SIXTH: STOCK AND STOCKHOLDER RIGHTS.

Section 6.1. Capital Stock. The total number of
shares of capital stock which the Corporation shall have
authority to issue is four hundred million (400,000,000)
shares, one tenth of one cent ($.001) par value per share
("Shares"), having an aggregate par value of $400,000. The
Shares may be issued by the Board of Directors in such
separate and distinct series ("Series") and classes of
Series ("Classes") as the Board of Directors shall from time
to time create and establish. The Board of Directors shall
have full power and authority, in its sole discretion, to
create and establish Series and Classes having such
preferences, rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and
conditions of redemption as shall be fixed and determined
from time to time by resolution or resolutions providing for
the issuance of such Shares adopted by the Board of
Directors. In the event of establishment of Classes, each
Class of a Series shall represent interests in the assets of
that Series and have identical voting, dividend, liquidation
and other rights and the same terms and conditions as any
other Class of that Series, except as provided in these
Articles of Incorporation, and except that expenses
allocated to the Class of a Series may be borne solely by
such Class as shall be determined by the Board of Directors
and a Class of a Series may have exclusive voting rights
with respect to matters affecting only that Class. Expenses
related to the distribution of, and other identified
expenses that should properly be allocated to, the Shares of
a particular Class or Series may be

-4-

<PAGE>

charged to and borne solely by such Class or Series and the bearing
of expenses solely by a Class or Series may be appropriately
reflected (in a manner determined by the Board of Directors) and
cause differences in the net asset value attributable to, and the
dividend, redemption and liquidation rights of, the Shares of each
Class or Series. In addition, the Board of Directors is hereby
expressly granted authority to increase or decrease the number of
Shares of any Series or Class, but the number of Shares of any
Series or Class shall not be decreased by the Board of Directors
below the number of Shares thereof then outstanding.

The Board of Directors is authorized, from time to
time, to classify or to reclassify, as the case may be, any
unissued Shares of the Corporation in separate Series or
Classes. The shares of said Series or Classes shall have
such preferences, rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and
conditions of redemption as shall be fixed and determined
from time to time by the Board of Directors. The
Corporation may hold as treasury shares, reissue for such
consideration and on such terms as the Board of Directors
may determine, or cancel, at its discretion from time to
time, any Shares reacquired by the Corporation. No holder
of any of the Shares shall be entitled as of right to
subscribe for, purchase, or otherwise acquire any Shares of
the Corporation that the Corporation proposes to issue or
reissue.

Without limiting the authority of the Board of
Directors set forth herein to establish and designate any
further Series, and to classify and reclassify any unissued
Shares, there are hereby established and classified, one
Series of stock comprising seventy-five million (75,000,000)
Shares.

The Corporation shall have authority to issue any
additional shares hereafter authorized and any Shares
redeemed or repurchased by the Corporation. All Shares of
any Series or Class when properly issued in accordance with
these Articles of Incorporation shall be fully paid and
nonassessable.

Section 6.2. Establishment of Series or Class. The
establishment of any Series or Class, in addition to those
established in Section 6.1 hereof, shall be effective upon
the adoption of a resolution by a majority of the then
Directors setting forth such establishment and designation
and the relative rights and preferences of the Shares of
such Series or Class. At any time that there are no Shares
outstanding of any particular Series or Class previously
established and designated, the Directors may by a majority
vote abolish that Series or Class and the establishment and
designation thereof.

Section 6.3. Dividends. Dividends and distributions
on Shares with respect to each Series or Class may be
declared and

-5-
<PAGE>

paid with such frequency, in such form and in such amount as the
Board of Directors may from time to time determine. Dividends may
be declared daily or otherwise pursuant to a standing resolution or
resolutions adopted only once or with such frequency as the Board
of Directors may determine.

All dividends and distributions on Shares of each
Series shall be distributed pro rata to the holders of that
Series in proportion to the number of Shares of that Series
held by such holders at the date and time of record
established for the payment of such dividends or
distributions, except that such dividends and distributions
shall appropriately reflect expenses allocated to a
particular Class of such Series.

The Board of Directors shall have the power, in its
sole discretion, to distribute in any fiscal year as
dividends (including dividends designated in whole or in
part as capital gain distributions) amounts sufficient, in
the opinion of the Board of Directors, to enable the
Corporation, or where applicable each Series of the
Corporation, to qualify as a regulated investment company
under the Internal Revenue Code of 1986, as amended, or any
successor or comparable statute thereto, and regulations
promulgated thereunder, and to avoid liability of the
Corporation, or each Series of the Corporation, for Federal
income tax in respect of that year. However, nothing in the
foregoing shall limit the authority of the Board of
Directors to make distributions greater than or less than
the amount necessary to qualify as a regulated investment
company and to avoid liability of the Corporation, or any
Series of the Corporation, for such tax.

Dividends and distributions may be paid in cash,
property or Shares, or a combination thereof, as determined
by the Board of Directors or pursuant to any program that
the Board of Directors may have in effect at the time. Any
such dividend or distribution paid in Shares will be paid at
the current net asset value thereof as defined in Section
6.7.

Section 6.4. Assets and Liabilities of Series. All
consideration received by the Corporation for the issue or
sale of Shares of a particular Series, together with all
assets in which such consideration is invested or
reinvested, all income, earnings, profits, and proceeds
thereof, including any proceeds derived from the sale,
exchange or liquidation of such assets, and any funds or
payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall be referred to as
"assets belonging to" that Series. In addition, any assets,
income, earnings, profits, and proceeds thereof, funds, or
payments which are not readily identifiable as belonging to
any particular Series shall be allocated by the Board of
Directors between and among one or more of the Series in
such manner as the Board of Directors, in its sole
discretion, deems fair and

-6-
<PAGE>

equitable. Each such allocation shall be conclusive and binding
upon the stockholders of all Series for all purposes, and shall be
referred to as assets belonging to that Series. The assets
belonging to a particular Series shall be so recorded upon the
books of the Corporation. The assets belonging to each particular
Series shall be charged with the liabilities of that Series and all
expenses, costs, charges and reserves attributable to that Series
or Class thereof shall be borne by that Series or Class. Any
general liabilities, expenses, costs, charges or reserves of the
Corporation which are not readily identifiable as belonging to any
particular Series or Class shall be allocated and charged by the
Board of Directors between or among any one or more of the Series
or Classes in such a manner as the Board of Directors in its sole
discretion deems fair and equitable. Each such allocation shall be
conclusive and binding upon the stockholders of all Series or
Classes for all purposes.

Section 6.5. Voting. On each matter submitted to a
vote of the stockholders, each holder of a Share shall be
entitled to one vote for each Share and fractional votes for
fractional Shares standing in his name on the books of the
Corporation; provided, however, that when required by the
1940 Act or rules thereunder or when the Board of Directors
has determined that the matter affects only the interests of
one Series or Class, matters may be submitted to a vote of
the stockholders of a particular Series or Class, and each
holder of Shares thereof shall be entitled to votes equal to
the number of full and fractional Shares of the Series or
Class standing in his name on the books of the Corporation.
The presence in person or by proxy of the holders of one-
third of the Shares of capital stock of the Corporation
outstanding and entitled to vote thereat shall constitute a
quorum for the transaction of business at a stockholders'
meeting, except that where any provision of law or of these
Articles of Incorporation permit or require that holders of
any Series or Class shall vote as a Series or Class, then
one-third of the aggregate number of Shares of capital stock
of that Series or Class outstanding and entitled to vote
shall constitute a quorum for the transaction of business by
that Series or Class.

Section 6.6. Redemption by Stockholders. Each holder
of Shares shall have the right at such times as may be
permitted by the Corporation to require the Corporation to
redeem all or any part of his Shares at a redemption price
per Share equal to the net asset value per Share as of such
time as the Board of Directors shall have prescribed by
resolution. In the absence of such resolution, the
redemption price per Share shall be the net asset value next
determined (in accordance with Section 6.7) after receipt by
the Corporation of a request for redemption in proper form
less such charges as are determined by the Board of
Directors and described in the Corporation's registration
statement under the Securities Act of 1933. The Board of
Directors may specify conditions, prices, and places of

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<PAGE>

redemption, and may specify binding requirements for the
proper form or forms of requests for redemption. Payment of
the redemption price may be wholly or partly in securities
or other assets at the value of such securities or assets
used in such determination of net asset value, or may be in
cash. Notwithstanding the foregoing, the Board of Directors
may postpone payment of the redemption price and may suspend
the right of the holders of Shares to require the
Corporation to redeem Shares during any period or at any
time when and to the extent permissible under the 1940 Act.
The Corporation reserves the right, upon 60 days' notice, to
reduce the redemption price in certain circumstances by an
amount not in excess of 1% of net asset value of the shares
to be redeemed.

Section 6.7. Net Asset Value per Share. The net
asset value of each Share of the Corporation, or each Series
or Class, shall be the quotient obtained by dividing the
value of the net assets of the Corporation, or if applicable
of the Series (being the value of the assets of the
Corporation or of the particular Series less its actual and
accrued liabilities exclusive of capital stock and surplus),
by the total number of Shares of the Corporation, or of the
Series. Such determination may be made on a Series-by-
Series basis or made or adjusted on a Class-by-Class basis,
as appropriate and shall include any expenses allocated to a
specific Series or Class thereof. The Board of Directors
shall have the power and duty to determine the net asset
value per Share at such times and by such methods as it
shall determine subject to any restrictions or requirements
under the 1940 Act and the rules, regulations and
interpretations thereof promulgated or issued by the
Securities and Exchange Commission or insofar as permitted
by any order of the Securities and Exchange Commission
applicable to the Corporation. The Board of Directors may
delegate such power and duty to any one or more of the
directors and officers of the Corporation, to the
Corporation's investment adviser, to the custodian or
depository of the Corporation's assets, or to another agent
of the Corporation.

Section 6.8. Redemption by the Corporation. The
Board of Directors may cause the Corporation to redeem at
current net asset value all Shares owned or held by any one
stockholder having an aggregate current net asset value of
less than one thousand dollars ($1,000). No such redemption
shall be effected unless the Corporation has given the
stockholder at least sixty (60) days' notice of its
intention to redeem the Shares and an opportunity to
purchase a sufficient number of additional Shares to bring
the aggregate current net asset value of his Shares to one
thousand dollars ($1,000). Upon redemption of Shares
pursuant to this Section, the Corporation shall promptly
cause payment of the full redemption price, in any
permissible form, to be made to the holder of Shares so
redeemed. The Board of Directors may by a majority vote
establish from time to time

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<PAGE>

amounts less than one thousand dollars ($1,000) at which the
Corporation will redeem Shares pursuant to this Section.

SEVENTH: ISSUANCE OF STOCK.

Section 7.1. Issuance of New Stock. The Board of
Directors is authorized to issue and sell or cause to be
issued and sold from time to time (without the necessity of
offering the same or any part thereof to existing
stockholders) all or any portion or portions of the entire
authorized but unissued Shares of the Corporation, and all
or any portion or portions of the Shares of the Corporation
from time to time in its treasury, for cash or for any other
lawful consideration or considerations and on or for any
terms, conditions, or prices consistent with the provisions
of law and of the Articles of Incorporation at the time in
force; provided, however, that in no event shall Shares of
the Corporation having a par value be issued or sold for a
consideration or considerations less in amount or value than
the par value of the Shares so issued or sold, and provided
further that in no event shall any Shares of the Corporation
be issued or sold, except as a stock dividend distributed to
stockholders, for a consideration (which shall be net to the
Corporation after underwriting discounts or commissions)
less in amount or value than the net asset value of the
Shares so issued or sold determined as of such time as the
Board of Directors shall have by resolution prescribed. In
the absence of such a resolution, such net asset value shall
be that next determined after an unconditional order in
proper form to purchase such Shares is accepted, except that
Shares may be sold to an underwriter at (a) the net asset
value next determined after such orders are received by a
dealer with whom such underwriter has a sales agreement or
(b) the net asset value determined at a later time.

Section 7.2. Fractional Shares. The Corporation may
issue and sell fractions of Shares having pro rata all the
rights of full Shares, including, without limitation, the
right to vote and to receive dividends, and wherever the
words "Share" or "Shares" are used in these Articles or in
the By-Laws they shall be deemed to include fractions of
Shares, where the context does not clearly indicate that
only full Shares are intended.

EIGHTH: SHAREHOLDER MEETINGS. Except as otherwise
required by law, a majority of all the votes cast at a
stockholders' meeting at which a quorum is present is
sufficient to approve any matter that properly comes before
the meeting. Notwithstanding any provision of law requiring
a greater proportion than a majority of the votes of all
Series or Classes (or of any Series or Class entitled to
vote thereon as a separate Series or Class) to take or
authorize any action, in accordance with the authority
granted by Section 2-104(b)(5) of the Maryland General
Corporation Law, the Corporation is hereby authorized to
take such action upon the concurrence of a majority of the
aggregate

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<PAGE>

number of Shares entitled to vote thereon (or of a
majority of the aggregate number of Shares of a Series or
Class entitled to vote thereon as a separate Series or
Class). The right to cumulate votes in the election of
directors is expressly prohibited.

NINTH: BOARD OF DIRECTORS.

Section 9.1. Board of Directors. All corporate powers
and authority of the Corporation (except as otherwise
provided by statute, by these Articles of Incorporation, or
by the By-Laws of the Corporation) shall be vested in and
exercised by the Board of Directors. The number of
directors constituting the Board of Directors shall be such
number as may from time to time be fixed in or in accordance
with the By-Laws of the Corporation, provided that after
stock is issued to more than one stockholder, such number
shall not be less than three. Except as provided in the By-
Laws, the election of directors may be conducted in any way
approved at the meeting (whether of stockholders or
directors) at which the election is held, provided that such
election shall be by ballot whenever requested by any person
entitled to vote. The names of the persons who shall act as
initial directors until stock is issued to more than one
stockholder or the first meeting of stockholders, whichever
shall occur earlier, and until their successors have been
duly chosen and qualified are David D. Grayson and Glenn O.
Head.

Section 9.2. By-Laws. Except as may otherwise be
provided in the By-Laws, the Board of Directors of the
Corporation is expressly authorized to make, alter, amend
and repeal By-Laws or to adopt new By-Laws of the
Corporation, without any action on the part of the
stockholders; but the By-Laws made by the Board of Directors
and the power so conferred may be altered or repealed by the
stockholders.

TENTH: CONTRACTS.

Section 10.1. General. The Board of Directors may in
its discretion from time to time enter into an exclusive or
nonexclusive distribution contract or contracts providing
for the sale of Shares whereby the Corporation may either
agree to sell Shares to the other party to the contract or
appoint such other party its sales agent for such shares
(such other party being herein sometimes called the
"underwriter"), and in either case on such terms and
conditions as may be prescribed in the By-Laws, if any, and
such further terms and conditions as the Board of Directors
may in its discretion determine not inconsistent with the
provisions of these Articles of Incorporation and such
contract may also provide for the repurchase of Shares of
the Corporation by such other party or parties as agent of
the Corporation. The Board of Directors may also in its
discretion from time to time enter into an investment
advisory or management

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<PAGE>

contract or contracts whereby the other party to such contract
shall undertake to furnish to the Board of Directors such
management, investment advisory, statistical and research
facilities and services and such other facilities and services, if
any, and all upon such terms and conditions, as the Board of
Directors may in its discretion determine.

Section 10.2. Contracts with Affiliated Persons. Any
contract of the character described in Section 10.1 or for
services as administrator, custodian, transfer agent or
disbursing agent or related services may be entered into
with any corporation, firm, trust or association, although
any one or more of the directors or officers of the
Corporation may be an officer, director, trustee,
stockholder or member of such other party to the contract,
and no such contract shall be invalidated or rendered
voidable by reason of the existence of any such
relationship, nor shall any person holding such relationship
be liable merely by reason of such relationship for any loss
or expense to the Corporation under or by reason of said
contract or accountable for any profit realized directly or
indirectly therefrom, provided that the contract when
entered into was reasonable and fair and not inconsistent
with the provisions of this Article TENTH. The same person
(including a firm, corporation, trust, or association) may
be the other party to contracts entered into pursuant to
Section 10.1 above, and any individual may be financially
interested or otherwise affiliated with persons who are
parties to any or all of the contracts mentioned in this
Section 10.2.

ELEVENTH: LIABILITY AND INDEMNIFICATION.

Section 11.1. Limitation on Liability. To the maximum
extent permitted by applicable law (including Maryland law
and the 1940 Act) as currently in effect or as it may
hereafter be amended, no director or officer of the
Corporation shall be liable to the Corporation or its
stockholders for money damages.

Section 11.2. Indemnification. To the maximum extent
permitted by applicable law (including Maryland law and the
1940 Act) currently in effect or as it may hereafter be
amended, the Corporation shall indemnify and advance
expenses as provided in the By-Laws to its present and past
directors, officers, employees and agents, and persons who
are serving or have served at the request of the Corporation
as a director, officer, employee, partner, trustee or agent
or in similar capacities for other entities.

Section 11.3. Repeal or Modification. No repeal or
modification of this Article ELEVENTH by the stockholders of
the Corporation, or adoption or modification of any other
provision of the Articles of Incorporation or By-Laws
inconsistent with this Article ELEVENTH, shall repeal or
narrow any limitation on

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<PAGE>

the liability of any director or officer of the Corporation or
right of indemnification available to any person covered by these
provisions with respect to any act or omission which occurred prior
to such repeal, modification or adoption.

TWELFTH: AMENDMENT OF ARTICLES. The Corporation
reserves the right from time to time to make any amendment
of these Articles of Incorporation, now or hereafter
authorized by law, including any amendment which alters
contract rights, as expressly set forth in these Articles of
Incorporation, of any outstanding Shares. Any amendment to
these Articles of Incorporation may be adopted at either an
annual or special meeting of the stockholders upon receiving
an affirmative vote of a majority of all votes entitled to
be cast thereon. The Board of Directors may, without a
shareholder vote, order the filing of Articles supplementary
increasing or decreasing the aggregate number of Shares or
the number of Shares of any class that the Corporation has
authority to issue, establishing new classes and describing
the Shares thereof.

IN WITNESS WHEREOF, the undersigned incorporator of
FIRST INVESTORS SERIES FUND II, INC. has executed the
foregoing Articles of Incorporation and hereby acknowledges
the same to be his act and further acknowledges that, to the
best of his knowledge, information, and belief, the matters
and facts set forth therein are true in all material
respects under the penalties of perjury.

On the 31st day of March, 1992.

WITNESS:

/s/ Michael S. Smith /s/ Robert J. Zutz
______________________________ ______________________________
Michael S. Smith Robert J. Zutz

-12-

ARTICLES SUPPLEMENTARY
TO
ARTICLES OF INCORPORATION
OF
FIRST INVESTORS SERIES FUND II, INC.

First Investors Series Fund II, Inc. ("Company"), a Maryland
corporation, having its principal office in Baltimore, Maryland,
organized on April 1, 1992 hereby certifies to the State Department of
Assessments and Taxation of Maryland that:

FIRST: The Company is authorized to issue four hundred
million (400,000,000) shares of capital stock in such separate and
distinct classes or series of shares as shall be determined from time to
time by the Board of Directors of the Company.

SECOND: Three hundred million (300,000,000) shares have
previously been classified as shares of the following three series, each
with one hundred million (100,000,000) shares: First Investors Made In
The U.S.A. Fund; First Investors Utilities Income Fund and First
Investors Growth & Income Fund. By action of the Board of Directors of
the Company in accordance with the Company's charter, fifty million
(50,000,000) shares of capital stock of each such series, including all
currently issued and outstanding shares of capital stock of each such
series, are hereby classified as Class A capital stock of each such
series, respectively, and fifty million (50,000,000) shares of capital
stock of each such series are hereby classified as Class B capital stock
of each such series, respectively, representing a total of three hundred
million (300,000,000) shares of the Company's capital stock.

THIRD: The Class A capital stock and Class B capital stock
of the Company represents interests in the same investment portfolio of
the Company. All shares of each particular class of the Company shall
represent an equal proportionate interest in that class and each share
of any particular class of the Company shall be equal to each other
share of that class. Class A shares and Class B shares of the Company
shall be subject to all provisions of Article V in the Company's
Articles of Incorporation relating to stock of the Company generally and
shall have the same preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications, and
terms and conditions of redemption, except as follows:

(1) The Class B capital stock of the Company may convert
into Class A capital stock of the Company in the manner as determined by
the Board of Directors;

(2) Each class of the Company shall have separate exchange
privileges as determined by the Board of Directors from time to time;

(3) The Class A capital stock of the Company shall be
subject to a front-end sales load and a Rule 12b-1 service and
distribution fee as determined by the Board of Directors from time to
time;

-1-
<PAGE>

(4) The Class B capital stock of the Company shall be
subject to a contingent deferred sales charge and a Rule 12b-1 service
and distribution fee as determined by the Board of Directors from time
to time; and
(5) Unless otherwise expressly provided in the Articles of
Incorporation, including any Articles Supplementary creating any class
or series of capital stock, on each matter submitted to a vote of
stockholders of the Company, each holder of a share of capital stock of
the Company shall be entitled to one vote for each share standing in
such holders's name on the books of the Company, irrespective of the
class or series thereof, and all shares of all classes and series shall
vote together as a single class; provided, however, that

(a) as to any matter with respect to which a separate vote
of any class or series is required by the Investment Company Act of
1940, as amended ("1940 Act"), or any rules, regulations or orders
issued thereunder, or by the Maryland General Corporation Law, such
requirement as to a separate vote by that class or series shall apply
in lieu of a general vote of all classes and series as described above;
and

(b) as to any matter which in the judgment of the Board of
Directors (which shall be conclusive) does not affect the interest of a
particular class or series, such class or series shall not be entitled
to any vote and only the holders of shares of the one or more affected
classes and series shall be entitled to vote.

FOURTH: The Company is registered with the Securities and
Exchange Commission as an open-end investment company under the 1940
Act.

IN WITNESS WHEREOF, First Investors Series Fund II, Inc.,
has caused these presents to be signed in its name and on its behalf by
its Vice President and attested by its Assistant Secretary on October
20, 1994.

FIRST INVESTORS SERIES FUND II, INC.

ATTEST:
/s/ Concetta Durso
Concetta Durso, Vice President

/s/ Carol R. Lerner
Carol R. Lerner,
Assistant Secretary

STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )

-2-
<PAGE>

I HEREBY CERTIFY that on the 20th day of October, 1994,
before me the subscriber, a Notary Public of the State of New York,
personally appeared CONCETTA DURSO, Vice President of First Investors
Series Fund II, Inc., a Maryland corporation, and in the name and on
behalf of said corporation acknowledged the foregoing Articles
Supplementary to be the corporate act of said corporation and further
made oath in due form of law that the matters and facts set forth in the
said Articles Supplementary with respect to the approval thereof are
true to the best of his knowledge, information and belief.

WITNESS, my hand and notarial seal, the day and year above
written.

Notary Public

(SEAL)

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<PAGE>

FIRST INVESTORS SERIES FUND II, INC.

A Maryland Corporation

BY-LAWS

April 1, 1992

<PAGE>

Table of Contents

Page
<S> <C> <C>

ARTICLE I NAME OF CORPORATION, LOCATION OF OFFICES AND SEAL . . . 1
1.01. Name . . . . . . . . . . . . . . . . . . . . . . 1
1.02. Principal Offices . . . . . . . . . . . . . . . 1
1.03. Seal . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . 1
2.01. Annual Meetings . . . . . . . . . . . . . . . . 1
2.02. Special Meetings . . . . . . . . . . . . . . . . 1
2.03. Place of Meetings . . . . . . . . . . . . . . . 2
2.04. Notice of Meetings . . . . . . . . . . . . . . . 2
2.05. Voting - In General . . . . . . . . . . . . . . 2
2.06. Stockholders Entitled to Vote . . . . . . . . . 3
2.07. Voting - Proxies . . . . . . . . . . . . . . . . 3
2.08. Quorum . . . . . . . . . . . . . . . . . . . . . 3
2.09. Absence of Quorum . . . . . . . . . . . . . . . 3
2.10. Stock Ledger and List of Stockholders . . . . . 4
2.11. Action Without Meeting . . . . . . . . . . . . . 5

ARTICLE III BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . 5
3.01. Number of Directors; Term of Office . . . . . . 5
3.02. Qualifications of Directors . . . . . . . . . . 5
3.03. Election of Directors . . . . . . . . . . . . . 5
3.04. Removal of Directors . . . . . . . . . . . . . . 5
3.05. Vacancies and Newly Created
Directorships . . . . . . . . . . . . . . . . . 5
3.06. General Powers . . . . . . . . . . . . . . . . . 6
3.07. Power to Issue and Sell Stock . . . . . . . . . 6
3.08. Power to Declare Dividends . . . . . . . . . . . 6
3.09. Annual and Regular Meetings . . . . . . . . . . 7
3.10. Special Meetings . . . . . . . . . . . . . . . . 7
3.11. Notice . . . . . . . . . . . . . . . . . . . . . 7
3.12. Waiver of Notice . . . . . . . . . . . . . . . . 8
3.13. Quorum and Voting . . . . . . . . . . . . . . . 8
3.14. Compensation . . . . . . . . . . . . . . . . . . 8
3.15. Action Without a Meeting . . . . . . . . . . . . 8
3.16. Chairman of the Board . . . . . . . . . . . . . 8

ARTICLE IV EXECUTIVE COMMITTEE AND OTHER COMMITTEES . . . . . . . . . . 9
4.01. How Constituted . . . . . . . . . . . . . . . . 9
4.02. Powers of the Executive Committee . . . . . . . 9
4.03. Proceedings, Quorum and Manner of
Acting . . . . . . . . . . . . . . . . . . . . 9
4.04. Other Committees . . . . . . . . . . . . . . . . 9

ARTICLE V OFFICERS . . . . . . . . . . . . . . . . . . . . . . . 9
5.01. General . . . . . . . . . . . . . . . . . . . . 9
5.02. Election, Term of Office and
Qualifications . . . . . . . . . . . . . . . . 10
5.03. Resignation . . . . . . . . . . . . . . . . . . 10

<PAGE>

5.04. Removal . . . . . . . . . . . . . . . . . . . . 10
5.05. Vacancies and Newly Created Offices . . . . . . 10
5.06. President . . . . . . . . . . . . . . . . . . . 10
5.07. Vice President . . . . . . . . . . . . . . . . . 11
5.08. Treasurer and Assistant Treasurers . . . . . . . 11
5.09. Secretary and Assistant Secretaries . . . . . . 11
5.10. Subordinate Officers . . . . . . . . . . . . . . 12
5.11. Remuneration . . . . . . . . . . . . . . . . . . 12
5.12. Surety Bonds . . . . . . . . . . . . . . . . . . 12

ARTICLE VI CUSTODY OF SECURITIES . . . . . . . . . . . . . . . . . . . . 12
6.01. Employment of a Custodian . . . . . . . . . . . 12
6.02. Action Upon Termination of Custodian
Agreement . . . . . . . . . . . . . . . . . . . 13
6.03. Other Arrangements . . . . . . . . . . . . . . . 13

ARTICLES VII EXECUTION OF INSTRUMENTS, VOTING OF SECURITIES . . . . 13
7.01. General . . . . . . . . . . . . . . . . . . . . 13
7.02. Checks, Notes, Drafts, Etc. . . . . . . . . . . 13
7.03. Voting of Securities . . . . . . . . . . . . . . 13

ARTICLE VIII CAPITAL STOCK . . . . . . . . . . . . . . . . . . . . . 14
8.01. Certificates of Stock . . . . . . . . . . . . . 14
8.02. Transfer of Capital Stock . . . . . . . . . . . 14
8.03. Transfer Agents and Registrars . . . . . . . . . 15
8.04. Transfer Regulations . . . . . . . . . . . . . . 15
8.05. Fixing of Record Date . . . . . . . . . . . . . 15
8.06. Lost, Stolen or Destroyed
Certificates . . . . . . . . . . . . . . . . . 15

ARTICLE IX FISCAL YEAR, ACCOUNTANT . . . . . . . . . . . . . . . . . . . 16
9.01. Fiscal Year . . . . . . . . . . . . . . . . . . 16
9.02. Accountant . . . . . . . . . . . . . . . . . . . 16

ARTICLE X INDEMNIFICATION AND INSURANCE . . . . . . . . . . . . . 16
10.01. Indemnification of Officers,
Directors, Employees and Agents . . . . . . . 16
10.02. Insurance of Officers, Directors,
Employees and Agents . . . . . . . . . . . . . 18
10.03. Non-exclusivity . . . . . . . . . . . . . . . . 18

ARTICLE XI AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 18
11.01. General . . . . . . . . . . . . . . . . . . . . 18
11.02. By Stockholders Only . . . . . . . . . . . . . 19
11.03. Limitation on Amendment . . . . . . . . . . . . 19
</TABLE>
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<PAGE>

ARTICLE I

NAME OF CORPORATION, LOCATION OF OFFICES AND SEAL

Section 1.01. Name: The name of the Corporation is
First Investors Series Fund II, Inc.

Section 1.02. Principal Offices: The principal
office of the Corporation in the State of Maryland shall be
located in the City of Baltimore. The Corporation may
establish and maintain such other offices and places of
business as the board of directors may, from time to time,
determine. The board of directors may keep the books of the
Corporation at any office of the Corporation or at any other
place within the United States as the board may from time to
time determine.

Section 1.03. Seal: The corporate seal of the
Corporation shall be circular in form and shall bear the
name of the Corporation, the year of the incorporation, and
the words "Corporate Seal, Maryland." The form of the seal
shall be subject to alteration by the board of directors and
the seal may be used by causing it or a facsimile to be
impressed or affixed or printed or otherwise reproduced.
Any officer or director of the Corporation shall have
authority to affix the corporate seal of the Corporation to
any document requiring the same.

ARTICLE II
STOCKHOLDERS

Section 2.01. Annual Meetings: There shall be no
stockholders' meetings for the election of directors and the
transaction of other business except as required by law or
as hereinafter provided.

Section 2.02. Special Meetings: Special meetings of
the stockholders may be called at any time by the chairman
of the board, the president, any vice president, or a
majority of the board of directors. Special meetings of the
stockholders shall be called by the secretary upon the
written request of the holders of shares entitled to vote
not less than 25% of all the shares entitled to be voted at
such meeting, provided that (a) such request shall state the
purposes of such meeting and the matters proposed to be
acted on, and (b) the stockholders requesting such meeting
shall have paid to the Corporation the reasonably estimated
cost of preparing and mailing the notice thereof, which the
secretary shall determine and specify to such stockholders.
No special meeting need be called upon the request of the
holders of shares entitled to vote less than a majority of
all the shares entitled to be voted at such meeting to
consider any matter which is substantially the same as a
matter voted upon at any special meeting of the stockholders
held during the preceding 12 months. Notwithstanding the
foregoing, a special meeting of the stockholders for the
purpose of voting upon the

<PAGE>

removal of any director or directors shall be called by the
secretary upon the written request of the holders of shares
entitled to vote not less than 10% of all the outstanding
shares.

Section 2.03. Place of Meetings: All stockholders'
meetings shall be held at the principal office of the
Corporation, except that the board of directors may fix a
different place of meeting, which shall be specified in each
notice or waiver of notice of the meeting.

Section 2.04. Notice of Meetings: The secretary
shall cause notice of the place, date and hour, and, in the
case of a special meeting or as otherwise required by law,
the purpose or purposes for which the meeting is called, to
be mailed, not less than 10 nor more than 90 days before the
date of the meeting, to each stockholder entitled to vote at
such meeting, at his address as it appears on the records of
the Corporation at the time of such mailing. Notice of any
stockholders' meeting need not be given to any stockholder
who shall sign a written waiver of such notice whether
before or after the time of such meeting, which waiver shall
be filed with the record of such meeting, or to any
stockholder who shall attend such meeting in person or by
proxy. Notice of adjournment of a stockholders' meeting to
another time or place need not be given, if such time and
place are announced at the meeting.

Section 2.05. Voting - In General: At every
stockholders' meeting each stockholder shall be entitled to
one vote for each share and a fractional vote for each
fraction of a share of stock of the Corporation validly
issued and outstanding and held by such stockholder, except
that no shares held by the Corporation shall be entitled to
a vote. Except as otherwise specifically provided in the
Articles of Incorporation or these By-Laws or as required by
provisions of the Investment Company Act of 1940, as amended
from time to time ("1940 Act"), all matters shall be decided
by a vote of the majority of the votes validly cast at a
meeting at which a quorum is present. The vote upon any
question shall be by ballot whenever requested by any person
entitled to vote, but, unless such a request is made, voting
may be conducted in any way approved by the meeting.

At any meeting at which there is an election of
directors, the chairman of the meeting may, and upon the
request of the holders of 10% of the stock entitled to vote
at such election shall, appoint two inspectors of election
who shall first subscribe an oath or affirmation to execute
faithfully the duties of inspectors at such election with
strict impartiality and according to the best of their
ability, and shall, after the election, make a certificate
of the result of the vote taken. No candidate for the
office of director shall be appointed as an inspector.

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<PAGE>

Section 2.06. Stockholders Entitled to Vote: If,
pursuant to Section 8.05 hereof, a record date has been
fixed for the determination of stockholders entitled to
notice of or to vote at any stockholders' meeting, each
stockholder of the Corporation shall be entitled to vote, in
person or by proxy, each share of stock and fraction of a
share of stock standing in his name on the books of the
Corporation on such record date and outstanding at the time
of the meeting. If no record date has been fixed for the
determination of stockholders, the record date for the
determination of stockholders entitled to notice of or to
vote at a meeting of stockholders shall be (a) at the close
of business (i) on the day ten days before the day on which
notice of the meeting is mailed or (ii) on the day 90 days
before the meeting, whichever is the closer date to the
meeting; or (b) if notice is waived by all stockholders, at
the close of business on the tenth day next preceding the
day on which the meeting is held.

Section 2.07. Voting - Proxies: A stockholder may
vote the stock he owns of record by written proxy executed
by the stockholder himself or by his duly authorized
attorney in fact. No proxy shall be voted after eleven
months from its date unless it provides for a longer period.
Each proxy shall be dated, but need not be sealed, witnessed
or acknowledged. Proxies shall be delivered to an inspector
of election or, if no inspector has been appointed, then to
the secretary of the Corporation, or person acting as
secretary of the meeting, before being voted. A proxy with
respect to stock held in the name of two or more persons
shall be valid if executed by one of them unless at or prior
to exercise of such proxy the Corporation receives from any
one of them written notice to the contrary and a copy of the
instrument or order which so provides. A proxy purporting
to be executed by or on behalf of a stockholder shall be
deemed valid unless challenged at or prior to its exercise.
A proxy in the form of a telegram, datagram or telex shall
not be valid; however, a mechanical or electronic facsimile
of an otherwise valid proxy shall be valid.

Section 2.08. Quorum: Except as otherwise provided
in the Articles of Incorporation, the presence at any
stockholders' meeting, in person or by proxy, of
stockholders entitled to cast one-third of all the votes
entitled to be cast thereat shall be necessary and
sufficient to constitute a quorum for the transaction of
business.

Section 2.09. Absence of Quorum: In the absence of a
quorum, the holders or proxies of a majority of the shares
present at the meeting in person or by proxy and entitled to
vote thereat, or, if no stockholder entitled to vote in
present thereat in person or by proxy, any officer present
thereat entitled to preside or act as secretary of such
meeting, may adjourn the meeting without determining the
date of the new meeting or, from time to time, without
further notice to a date

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<PAGE>

not more than 120 days after the original record date. Any
business that might have been transacted at the meeting
originally called may be transacted at any such adjourned
meeting at which a quorum is present.

Section 2.10. Stock Ledger and List of Stockholders:
It shall be the duty of the secretary or assistant secretary
of the Corporation to cause an original or duplicate stock
ledger to be maintained at the office of the Corporation's
transfer agent. Such stock ledger may be in written form or
any other form capable of being converted into written form
within a reasonable time for visual inspection. Any one or
more persons, each of whom has been a stockholder of record
of the Corporation for at least six months next preceding
such request, and who own in the aggregate 5% or more of the
outstanding capital stock of the Corporation, may, in person
or by agent, upon written request, inspect and copy during
usual business hours the Corporation's stock ledger at its
principal office in Maryland; and may submit (if the
Corporation at the time of the request does not maintain a
duplicate stock ledger at its principal office in Maryland)
a written request to any officer of the Corporation or its
resident agent in Maryland for a list of the stockholders of
the Corporation. Within 20 days after such a request, there
shall be prepared and filed at the Corporation's principal
office in Maryland a list containing the names and addresses
of all stockholders of the Corporation and the number of
shares of each class held by each stockholder, certified as
correct by an officer of the Corporation, by its stock
transfer agent, or by its registrar. Notwithstanding the
foregoing, whenever ten or more shareholders of record who
have been such for at least six months preceding such
request, and who own in the aggregate either shares having a
net asset value of at least $25,000 or at least one percent
of the outstanding shares, whichever is less, shall apply to
the secretary in writing, stating that they wish to
communicate with other shareholders with a view to obtaining
signatures to a request for a special meeting of
shareholders to vote upon the removal of one or more
directors, and including with the application a form of
communication and request which they wish to transmit, the
Fund shall, within five business days after receipt of such
application, either: (1) afford to such applicants access
to a list of the names and addresses of all shareholders as
recorded on the books of the Fund; or (2) inform the
applicants as to the approximate cost of mailing to them the
proposed communication and form of request, and, upon the
written request of the applicants, accompanied by a tender
of the material to be mailed and of reasonable expenses of
mailing, shall, with reasonable promptness, mail such
material to all shareholders of record; provided, however,
that the Fund may avail itself of any of the rights afforded
to a common law trust pursuant to Section 16(c) of the 1940
Act.

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<PAGE>

Section 2.11. Action Without Meeting: Any action to
be taken by stockholders may be taken without a meeting if
all stockholders entitled to vote on the matter consent to
the action in writing and the written consents are filed
with the records of the meetings of stockholders. Such
consent shall be treated for all purposes as a vote at a
meeting.

ARTICLE III
BOARD OF DIRECTORS

Section 3.01. Number of Directors; Term of Office:
The board of directors shall consist of seven directors,
which number may be increased or decreased by a resolution
of a majority of the entire board of directors; provided
that the number of directors shall not be less than three
nor more than twenty; and further provided that if there is
no stock outstanding the number of directors may be less
than three but not less than one, and if there is stock
outstanding and so long as there are less than three
stockholders, the number of directors may be less than three
but not less than the number of stockholders. In addition,
the board of directors may, from time to time, elect one or
more persons to the position of director emeritus, which
election need not be submitted for stockholder approval.
Such person(s) shall be non- voting honorary director(s) who
shall not be considered in determining whether a quorum
exists, shall have no right to vote and shall not be
responsible for the actions of the board. Each director
(whenever selected) shall hold office until his successor is
elected and qualified or until his earlier death,
resignation or removal.

Section 3.02. Qualifications of Directors: Except
for the initial board of directors, at least one of the
members of the board of directors shall be a person who is
not an interested person of the Corporation, as defined in
the 1940 Act.

Section 3.03. Election of Directors: The initial
director or directors of the Corporation shall be that
person or those persons named as such in the Articles of
Incorporation. Thereafter, except as otherwise provided in
Section 3.04 and 3.05 hereof, the directors shall be elected
by the stockholders on a date fixed by the Board of
Directors. A plurality of all the votes validly cast at a
meeting at which a quorum is present in person or by proxy
is sufficient to elect a director.

Section 3.04. Removal of Directors: At any
stockholders' meeting duly called, provided a quorum is
present, any director may be removed (either with or without
cause) by the affirmative vote of a majority of all the
votes entitled to be cast for the election of directors, and
at the same meeting a duly qualified person may be elected
in his stead by a plurality of the votes validly cast.

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<PAGE>

Section 3.05. Vacancies and Newly Created
Directorships: If any vacancies shall occur in the board of
directors by reason of death, resignation, removal or
otherwise, or if the authorized number of directors shall be
increased, the directors then in office shall continue to
act, and such vacancies (if not previously filled by the
stockholders) may be filled by a majority of the directors
then in office, although less than a quorum, except that a
newly created directorship may be filled only by a majority
vote of the entire board of directors, provided that in
either case immediately after filling such vacancy, at least
two-thirds of the directors then holding office shall have
been elected to such office by the stockholders of the
Corporation. In the event that at any time, other than the
time preceding the first stockholders' meeting, less than a
majority of the directors of the Corporation holding office
at that time were so elected by the stockholders, a meeting
of the stockholders shall be held promptly and in any event
within 60 days for the purpose of electing directors to fill
any existing vacancies in the board of directors, unless the
Securities and Exchange Commission shall by order extend
such period.

Section 3.06. General Powers:

(a) The property, affairs and business of the
Corporation shall be managed by or under the direction of
the board of directors, which may exercise all the powers of
the Corporation except those powers vested solely in the
stockholders of the Corporation by statute, by the Articles
of Incorporation, or by these By-Laws.

(b) All acts done by any meeting of the directors or
by any person acting as a director, so long as his successor
shall not have been duly elected or appointed, shall,
notwithstanding that it be afterwards discovered that there
was some defect in the election of the directors or of such
person acting as aforesaid or that they or any of them were
disqualified, be as valid as if the directors or such other
person, as the case may be, had been duly elected and were
or was qualified to be directors or a director of the
Corporation.

Section 3.07. Power to Issue and Sell Stock: The
board of directors may from time to time issue and sell or
cause to be issued and sold any of the Corporation's
authorized shares to such persons and for such consideration
as the board of directors shall deem advisable, subject to
the provisions of Article Seventh of the Articles of
Incorporation.

Section 3.08. Power to Declare Dividends:

(a) The board of directors, from time to time as they
may deem advisable, may declare and pay dividends in stock,
cash or other property of the Corporation, out of any source
available

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<PAGE>

for dividends, to the stockholders according to their
respective rights and interests in accordance with the
provisions of the Articles of Incorporation.

(b) The board of directors shall cause to be
accompanied by a written statement any dividend payment
wholly or partly from any source other than:

(i) the Corporation's accumulated undistributed net
income (determined in accordance with good accounting
practice and the rules and regulations of the
Securities and Exchange Commission then in effect) and
not including profits or losses realized upon the sale
of securities or other properties; or

(ii) the Corporation's net income so determined for
the current or preceding fiscal year.

Such statement shall adequately disclose the source or
sources of such payment and the basis of calculation, and
shall be in such form as the Securities and Exchange
Commission may prescribe.

Section 3.09. Annual and Regular Meetings: The
annual meeting of the board of directors for choosing
officers and transacting other proper business shall be held
at such time and place as the Board may determine. The
board of directors from time to time may provide by
resolution for the holding of regular meetings and fix their
time and place, which need not be in the State of Maryland.
Except as otherwise provided under the 1940 Act, notice of
such annual and regular meetings need not be given, provided
that notice of any change in the time or place of such
meetings shall be sent promptly, in the manner provided for
notice of special meetings, to each director not present at
the meeting at which such change was made. Except as
otherwise provided under the 1940 Act, members of the board
of directors or any committee designated thereby may
participate in a meeting of such board or committee by means
of a conference telephone or similar communications
equipment by means of which all persons participating in the
meeting can hear each other at the same time; and
participation by such means shall constitute presence in
person at a meeting.

Section 3.10. Special Meetings: Special meetings of
the board of directors shall be held whenever called by the
chairman of the board, the president (or, in the absence or
disability of the president, by any vice president), the
treasurer, or two or more directors, at the time and place
(which need not be in the State of Maryland) specified in
the respective notices or waivers of notice of such
meetings.

Section 3.11. Notice: Except as otherwise provided,
notice of any special meeting shall be given by the
secretary to each

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<PAGE>

director, by mailing to him, postage prepaid, addressed to
him at his address as registered on the books of the
Corporation or, if not so registered, at his last known
address, a written or printed notification of such meeting
at least three days before the meeting or by delivering such
notice to him at least two days before the meeting, or by
sending to him at least 24 hours before the meeting, by
prepaid telegram, addressed to him at his said registered
address, if any, or if he has no such registered address, at
his last known address, notice of such meeting.

Section 3.12. Waiver of Notice: No notice of any
meeting need be given to any director who attends such
meeting in person or to any director who waives notice of
such meeting in writing (which waiver shall be filed with
the records of such meeting), whether before or after the
time of the meeting.

Section 3.13. Quorum and Voting: At all meetings of
the board of directors the presence of one-half or more of
the number of directors then in office shall constitute a
quorum for the transaction of business, provided that there
shall be present no fewer than two directors (unless the
Corporation, at the time, has only one director). In the
absence of a quorum, a majority of the directors present may
adjourn the meeting, from time to time, until a quorum shall
be present. The action of a majority of the directors
present at a meeting at which a quorum is present shall be
the action of the board of directors unless the concurrence
of a greater proportion is required for such action by law,
by the Articles of Incorporation or by these By-Laws.

Section 3.14. Compensation: Each director may
receive such remuneration for his services as shall be fixed
from time to time by resolution of the board of directors.

Section 3.15. Action Without a Meeting: Except as
otherwise provided under the 1940 Act, any action required
or permitted to be taken at any meeting of the board of
directors may be taken without a meeting if written consents
thereto are signed by all members of the board and such
written consents are filed with the records of the meetings
of the board.

Section 3.16. Chairman of the Board: The board of
directors, at its first meeting and thereafter at its annual
meeting, shall elect from among the directors a chairman of
the board, who shall serve at the pleasure of the board of
directors. If the board of directors does not elect a
chairman at any annual meeting, it may do so at any
subsequent regular or special meeting. The chairman of the
board shall hold office until the next annual meeting of the
board of directors and until his successor shall have been
chosen and qualified. If the office of chairman of the
board shall become vacant for any reason, the board of
directors may fill such vacancy at any regular or special
meeting. The chairman of the board shall preside at all

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<PAGE>

stockholders' meetings and at all meetings of the board of
directors and shall have such powers and perform such duties
as may be assigned to him from time to time by the board of
directors. The chairman of the board shall not be
considered an officer of the Corporation by reason of
holding said position.

ARTICLE IV
EXECUTIVE COMMITTEE AND OTHER COMMITTEES

Section 4.01. How Constituted: By resolution adopted
by the board of directors, the board may designate an
executive committee, consisting of not less than three nor
more than five directors. The board may also designate
additional committees consisting of at least two directors.
Each member of a committee shall be a director and shall
hold office during the pleasure of the board. The chairman
of the board, if any, and the president shall be members of
the executive committee.

Section 4.02. Powers of the Executive Committee:
Unless otherwise provided by resolution of the board of
directors, when the board of directors is not in session the
executive committee shall have and may exercise all powers
of the board of directors in the management of the business
and affairs of the Corporation that may lawfully be
exercised by the full board of directors, except the power
to declare a dividend, to authorize the issuance of stock,
to recommend to stockholders any matter requiring
stockholders' approval, to amend the By-Laws, or to approve
any merger or share exchange which does not require
shareholder approval.

Section 4.03. Proceedings, Quorum and Manner of
Acting: In the absence of an appropriate resolution of the
board of directors, each committee may adopt such rules and
regulations governing its proceedings, quorum and manner of
acting as it shall deem proper and desirable, provided that
the quorum shall not be less than two directors. In the
absence of any member of any such committee, the members
thereof present at any meeting, whether or not they
constitute a quorum, may appoint a member of the board of
directors to act in the place of such absent member.

Section 4.04. Other Committees: The board of
directors may appoint other committees, each consisting of
one or more persons, who need not be directors. Each such
committee shall have such powers and perform such duties as
may be assigned to it from time to time by the board of
directors, but shall not exercise any power which may
lawfully be exercised only by the board of directors or a
committee thereof.

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<PAGE>

ARTICLE V
OFFICERS

Section 5.01. General: The officers of the
Corporation shall be a president, a secretary and a
treasurer, and may include one or more vice presidents,
assistant secretaries or assistant treasurers, and such
other officers as may be appointed in accordance with the
provisions of Section 5.10 hereof.

Section 5.02. Election, Term of Office and
Qualifications: The officers of the Corporation (except
those appointed pursuant to Section 5.10 hereof) shall be
elected by the board of directors at its first meeting or
such subsequent meetings as shall be held prior to its first
annual meeting, and thereafter annually at its annual
meeting. If any officers are not elected at any annual
meeting, such officers may be elected at any subsequent
regular or special meeting of the board. Except as provided
in Section 5.03, 5.04 and 5.05 hereof, each officer chosen
by the board of directors shall hold office until the next
annual meeting of the board of directors and until his
successor shall have been chosen and qualified. Any person
may hold one or more offices of the Corporation except that
the president may not hold the office of vice president, and
provided further that a person who holds more than one
office may not act in more than one capacity to execute,
acknowledge or verify an instrument required by law to be
executed, verified or acknowledged by more than one officer.
No officer need be a director.

Section 5.03. Resignation: Any officer may resign
his office at any time by delivering a written resignation
to the board of directors, the president, the secretary, or
any assistant secretary. Unless otherwise specified
therein, such resignation shall take effect upon delivery.

Section 5.04. Removal: Any officer may be removed
from office whenever in the board's judgment the best
interest of the Corporation will be served thereby, by the
vote of a majority of the board of directors given at a
regular meeting or any special meeting called for such
purpose. In addition, any officer or agent appointed in
accordance with the provisions of Section 5.10 hereof may be
removed, either with or without cause, by any officer upon
whom such power of removal shall have been conferred by the
board of directors.

Section 5.05. Vacancies and Newly Created Offices:
If any vacancy shall occur in any office by reason of death,
resignation, removal, disqualification or other cause, or if
any new office shall be created, such vacancies or newly
created offices may be filled by the board of directors at
any regular or special meeting or, in the case of any office
created pursuant to Section 5.10 hereof, by any officer upon
whom such power shall have been conferred by the board of
directors.

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<PAGE>

Section 5.06. President: The president shall be the
chief executive officer of the Corporation and, in the
absence of the chairman of the board, shall preside at all
stockholders' meetings and at all meetings of the board of
directors. Subject to the supervision of the board of
directors, he shall have general charge of the business,
affairs and property of the Corporation and general
supervision over its officers, employees and agents.
Subject to the provisions of Section 7.01 and except as the
board of directors may otherwise order, he may sign in the
name and on behalf of the Corporation all deeds, bonds,
contracts or agreements. He shall exercise such other
powers and perform such other duties as from time to time
may be assigned to him by the board of directors.

Section 5.07. Vice President: The board of directors
may from time to time designate and elect one or more vice
presidents who shall have such powers and perform such
duties as from time to time may be assigned to them by the
board of directors or the president. At the request or in
the absence or disability of the president, the vice
president (or, if there are two or more vice presidents,
then the senior of the vice presidents present and able to
act) may perform all the duties of the president and, when
so acting, shall have all the powers of and be subject to
all the restrictions upon the president.

Section 5.08. Treasurer and Assistant Treasurers:
The treasurer shall be the principal financial and
accounting officer of the Corporation. He shall deliver all
funds and securities of the Corporation which may come into
his hands to such bank or trust company as the board of
directors shall employ as Custodian. He shall prepare
annually a full and correct statement of the affairs of the
Corporation, including a balance sheet and a financial
statement of operations for the preceding fiscal year, which
shall be submitted at the annual stockholder meeting and
filed at the Corporation's principal office within 20 days
of the meeting, or when no annual meeting is held, filed at
the Corporation's principal office within 120 days after the
end of the fiscal year. The treasurer shall furnish such
other reports regarding the business and condition as the
board of directors may from time to time require and perform
such duties additional to the foregoing as the board of
directors may from time to time designate. Any assistant
treasurer may perform such duties of the treasurer as the
treasurer or the board of directors may assign, and, in the
absence of the treasurer, may perform all the duties of the
treasurer.

Section 5.09. Secretary and Assistant Secretaries:
The secretary shall attend to the giving and serving of all
notices of the Corporation and shall act as secretary at,
and record all proceedings of, the meetings of the
stockholders and directors in the books to be kept for that
purpose. He shall keep in safe custody the seal of the
Corporation, and shall have charge of the

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records of the Corporation, including the stock books and
such other books and papers as the board of directors may
direct and such books, reports, certificates and other
documents required by law to be kept, all of which shall at
all reasonable times be open to inspection by any director.
At every meeting of the stockholders, he shall receive and
take charge of and/or canvass all proxies and/or ballots,
and shall decide all questions touching the qualification of
voters, the validity of proxies and the acceptance or
rejection of votes, except that the chairman may assign such
duties to inspectors of election pursuant to Section 2.05
hereof. He shall perform such other duties as appertain to
his office or as may be required by the board of directors.
Any assistant secretary may perform such duties of the
secretary as the secretary or the board of directors may
assign, and, in the absence of the secretary, may perform
all the duties of the secretary.

Section 5.10. Subordinate Officers: The board of
directors from time to time may appoint such other officers
or agents as it may deem advisable, each of whom shall have
such title, hold office for such period, have such authority
and perform such duties as the board of directors may
determine. The board of directors from time to time may
delegate to one or more officers or agents the power to
appoint any such subordinate officers or agents and to
prescribe their respective rights, terms of office,
authorities and duties.

Section 5.11. Remuneration: The salaries or other
compensation of the officers of the Corporation shall be
fixed from time to time by resolution of the board of
directors, except that the board of directors may by
resolution delegate to any person or group of persons the
power to fix the salaries or other compensation of any
subordinate officers or agents appointed in accordance with
the provisions of Section 5.10 hereof.

Section 5.12. Surety Bonds: The board of directors
may require any officer or agent of the Corporation to
execute a bond (including, without limitation, any bond
required by the 1940 Act, and the rules and regulations of
the Securities and Exchange Commission) to the Corporation
in such sum and with such surety or sureties as the board of
directors may determine, conditioned upon the faithful
performance of his duties to the Corporation, including
responsibility for negligence and for the accounting of any
of the Corporation's property, funds or securities that may
come into his hands.

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<PAGE>

ARTICLE VI
CUSTODY OF SECURITIES

Section 6.01. Employment of a Custodian: The
Corporation shall place and at all times maintain in the
custody of a custodian (including any sub- custodian for the
custodian) all funds, securities and similar investments
owned by the Corporation. The custodian (and any
sub-custodian) shall be a bank or similar financial
institution having not less than $2,000,000 aggregate
capital, surplus and undivided profits and shall be
appointed from time to time by the board of directors, which
shall fix its remuneration.

Section 6.02. Action Upon Termination of Custodian
Agreement: Upon termination of a custodian agreement or
inability of the custodian to continue to serve, the board
of directors shall promptly appoint a successor custodian,
but in the event that no successor custodian can be found
who has the required qualifications and is willing to serve,
the board of directors shall call as promptly as possible a
special meeting of the stockholders to determine whether the
Corporation shall function without a custodian or shall be
liquidated. If so directed by vote of the holders of a
majority of the outstanding shares of stock of the
Corporation, the custodian shall deliver and pay over all
property of the Corporation held by it as specified in such
vote.

Section 6.03. Other Arrangements: The Corporation
may make such other arrangements for the custody of its
assets (including deposit arrangements) as may be required
by any applicable law, rule or regulation.

ARTICLES VII
EXECUTION OF INSTRUMENTS, VOTING OF SECURITIES

Section 7.01. General: Subject to the provisions of
Sections 5.07, 7.02 and 8.03 hereof, all deeds, documents,
transfers, contracts, agreements and other instruments
requiring execution by the Corporation shall be signed by
the president or a vice president and by the treasurer or
secretary or an assistant treasurer or an assistant
secretary, or as the board of directors may otherwise, from
time to time, authorize. Any such authorization may be
general or confined to specific instances.

Section 7.02. Checks, Notes, Drafts, Etc.: So long
as the Corporation shall employ a custodian to keep custody
of the cash and securities of the Corporation, all checks
and drafts for the payment of money by the Corporation may
be signed in the name of the Corporation by the custodian.
Except as otherwise authorized by the board of directors,
all requisitions or orders for the assignment of securities
standing in the name of the custodian or its nominee, or for
the execution of powers to transfer the same,

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<PAGE>

shall be signed in the name of the Corporation by the
president or a vice president and by the treasurer or an
assistant treasurer. Promissory notes, checks or drafts
payable to the Corporation may be endorsed only to the order
of the custodian or this nominee and only by the treasurer
or president or a vice president or by such other person or
persons as shall be authorized by the board of directors.

Section 7.03. Voting of Securities: Unless otherwise
ordered by the board of directors, the president or any vice
president shall have full power and authority on behalf of
the Corporation to attend and to act and to vote, or in the
name of the Corporation to execute proxies to vote, at any
meeting of stockholders of any company in which the
Corporation may hold stock. At any such meeting such
officer shall possess and may exercise (in person or by
proxy) any and all rights, powers and privileges incident to
the ownership of such stock. The board of directors may by
resolution from time to time confer like powers upon any
other person or persons.

ARTICLE VIII
CAPITAL STOCK

Section 8.01. Certificates of Stock:

(a) The Board of Directors of the Corporation may
authorize the issuance of some or all of the shares of any
or all of its series of shares ("Series") or class ("Class")
of a Series without certificates. In the event a
certificate shall be issued, such certificate shall be in
the form approved by the board of directors, signed in the
name of the Corporation by the president or any vice
president and by the treasurer or any assistant treasurer or
the secretary or any assistant secretary, sealed with the
seal of the Corporation and certifying the number and kind
of shares owned by the stockholder in the Corporation. Such
signatures and seal may be a facsimile and may be
mechanically reproduced thereon. The certificates
containing such facsimiles shall be valid for all intents
and purposes.

(b) In case any officer who shall have signed any
such certificate, or whose facsimile signature has been
placed thereon, shall cease to be such an officer (because
of death, resignation or otherwise) before such certificate
is issued, such certificate may be issued and delivered by
the Corporation with the same effect as if he were such
officer at the date of issue.

(c) The number of each certificate issued, the name
of the person owning the shares represented thereby, the
number of such shares and the date of issuance shall be
entered upon the stock books of the Corporation at the time
of issuance.

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<PAGE>

(d) Every certificate exchanged, surrendered for
redemption or otherwise returned to the Corporation shall be
marked "Canceled" with the date of cancellation.

Section 8.02. Transfer of Capital Stock:

(a) Transfers of shares of any Series of the
Corporation shall be made on the books of the Corporation by
the holder of record thereof (in person or by his attorney
thereunto duly authorized by a power of attorney duly
executed in writing and filed with the secretary of the
Corporation) (i) if a certificate or certificates have been
issued, upon the surrender of the certificate or
certificates, properly endorsed or accompanied by proper
instruments of transfer, representing such shares, or (ii)
as otherwise prescribed by the board of directors.

(b) The Corporation shall be entitled to treat the
holder of record of any share of stock as the absolute owner
thereof for all purposes, and accordingly shall not be bound
to recognize any legal, equitable or other claim or interest
in such share on the part of any other person, whether or
not it shall have express or other notice thereof, except as
otherwise expressly provided by the statutes of the State of
Maryland.

Section 8.03. Transfer Agents and Registrars: The
board of directors may, from time to time, appoint or remove
transfer agents or registrars of shares of any Series of the
Corporation. Upon any such appointment being made, all
certificates representing shares of any Series or Class of
the Corporation thereafter issued shall be countersigned by
one of such transfer agents or registrars or by both and
shall not be valid unless so countersigned.

Section 8.04. Transfer Regulations: Except as
provided in the Articles of Incorporation, the shares of any
Series or Class of the Corporation may be freely
transferred, subject to the charging of customary transfer
fees, and the board of directors may, from time to time,
adopt rules and regulations with reference to the method of
transfer of the shares of any Series of the Corporation.

Section 8.05. Fixing of Record Date: The board of
direc-tors may fix in advance a date as a record date for
the determi-nation of the stockholders entitled to notice of
or to vote at any stockholders' meeting or any adjournment
thereof, or the ex-press consent to corporate action in
writing without a meeting, or to receive payment of any
dividend or other distribution or allotment of any rights,
or to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any
other lawful action; provided that such record date shall be
a date not more than 90 nor less than 10 days prior to the
date on which the particular action requiring such
determination

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<PAGE>

of stockholders of record will be taken, except as otherwise
provided by law.

Section 8.06. Lost, Stolen or Destroyed Certificates:
Before issuing a new certificate for stock of the
Corporation alleged to have been lost, stolen or destroyed,
the board of directors or any officer authorized by the
board may, in its or his discretion, require the owner of
the lost, stolen or destroyed certificate (or his legal
representative) to give the Corporation a bond or other
indemnity, in such form and in such amount as the board or
any such officer may direct and with such surety or sureties
as may be satisfactory to the board or any such officer,
sufficient to indemnify the Corporation against any claim
that may be made against it on account of the alleged loss,
theft or destruction of any such certificate or the issuance
of such new certificate.

ARTICLE IX
FISCAL YEAR, ACCOUNTANT

Section 9.01. Fiscal Year: The fiscal year of the
Corporation shall be fixed by resolution of the board of
directors.

Section 9.02. Accountant:

(a) The Corporation shall employ an independent
accountant or firm of independent accountants as its
accountant to examine the accounts of the Corporation and to
sign and certify financial statements filed by the
Corporation. The accountant's certificates and reports
shall be addressed both to the board of directors and to the
stockholders.

(b) A majority of the members of the board of
directors who are not interested persons (as such term is
defined in the 1940 Act), of the Corporation shall select
the accountant at any meeting held within 90 days before or
after the beginning of the fiscal year of the Corporation or
before the annual stockholders' meeting (if any) in that
year. Such selection shall be submitted for ratification or
rejection at the next succeeding stockholders' meeting, when
and if such meeting is held. If such meeting shall reject
such selection, the accountant shall be selected by majority
vote of the Corporation's outstanding voting securities,
either at the meeting at which the rejection occurred or at
a subsequent meeting of stockholders called for the purpose.

(c) Any vacancy occurring between meetings, due to
the death or resignation of the accountant, may be filled by
a majority of the members of the board of directors who are
not such interested persons.

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<PAGE>

ARTICLE X
INDEMNIFICATION AND INSURANCE

Section 10.01. Indemnification of Officers,
Directors, Employees and Agents: The Corporation shall
indemnify each person who was or is a party or is threatened
to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal,
administrative or investigative ("Proceeding"), by reason of
the fact that he or she is or was a director, officer,
employee, or agent of the Corporation, or is or was serving
at the request of the Corporation as a director, officer,
employee, partner, trustee or agent of another corporation,
partnership, joint venture, trust, or other enterprise,
against all reasonable expenses (including attorneys' fees)
actually incurred, and judgments, fines, penalties and
amounts paid in settlement in connection with such
Proceeding to the maximum extent permitted by law, now
existing or hereafter adopted. Notwithstanding the
foregoing, the following provisions shall apply with respect
to indemnification of the Corporation's directors, officers,
and investment adviser (as defined in the 1940 Act):

(a) Whether or not there is an adjudication of
liability in such Proceeding, the Corporation
shall not indemnify any such person for any
liability arising by reason of such person's
willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties
involved in the conduct of his or her office or
under any contract or agreement with the
Corporation ("disabling conduct").

(b) The Corporation shall not indemnify any such
person unless:

(1) the court or other body before which the
Proceeding was brought (a) dismisses the
Proceeding for insufficiency of evidence
of any disabling conduct, or (b) reaches a
final decision on the merits that such
person was not liable by reason of
disabling conduct; or

(2) absent such a decision, a reasonable
determination is made, based upon a review
of the facts, by (a) the vote of a
majority of a quorum of the directors of
the Corporation who are neither interested
persons of the Corporation as defined in
the 1940 Act, nor parties to the
Proceeding, or (b) if a majority of a
quorum of directors described above so
directs, or if such quorum is not
obtainable, based upon a written opinion
by independent legal counsel, that such
person was not liable by reason of
disabling conduct.

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<PAGE>

(c) Reasonable expenses (including attorney's fees)
incurred in defending a Proceeding involving any such person
will be paid by the Corporation in advance of the final
disposition thereof upon un undertaking by such person to
repay such expenses unless it is ultimately determined that
he or she is entitled to indemnification, if:

(1) such person shall provide adequate
security for his or her undertaking;

(2) the Corporation shall be insured against
losses arising by reason of such advance;
or

(3) a majority of a quorum of the directors of
the Corporation who are neither interested
persons of the Corporation as defined in
the 1940 Act nor parties to the
Proceeding, or independent legal counsel
in a written opinion, shall determine,
based on a review of readily available
facts, that there is reason to believe
that such person will be found to be
entitled to indemnification.

Section 10.02. Insurance of Officers, Directors,
Employees and Agents: The Corporation may purchase and
maintain insurance or other sources of reimbursement to the
extent permitted by law on behalf of any person who is or
was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee, partner,
trustee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability
asserted against him or her and incurred by him or her in or
arising out of his position.

Section 10.03. Non-exclusivity: The indemnification
and advancement of expenses provided by, or granted pursuant
to, this Article X shall not be deemed exclusive of any
other rights to which those seeking indemnification or
advancement of expenses may be entitled under the Articles
of Incorporation, these By-Laws, any agreement, vote of
stockholders or directors, or otherwise, both as to action
in his or her official capacity and as to action in another
capacity while holding such office.

ARTICLE XI
AMENDMENTS

Section 11.01. General: Except as provided in
Section 11.02 hereof, all By-Laws of the Corporation,
whether adopted by the board of directors or the
stockholders, shall be subject to amendment, alteration or
repeal, and new By-Laws may be made, by the affirmative vote
of a majority of either:

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<PAGE>

(a) the holders of record of the outstanding shares
of stock of the Corporation entitled to vote, at any
meeting, the notice or waiver of notice of which shall have
specified or summarized the proposed amendment, alteration,
repeal or new By-Law; or

(b) the directors, at any regular or special meeting
the notice or waiver of notice of which shall have specified
or summarized the proposed amendment, alteration, repeal or
new By-Law.

Section 11.02. By Stockholders Only:

(a) No amendment of any section of these By-Laws
shall be made except by the stockholders of the Corporation
if the By-Laws provide that such section may not be amended,
altered or repealed except by the stockholders.

(b) From and after the issuance of any shares of the
capital stock of the Corporation, no amendment of this
Article XI shall be made except by the stockholders of the
Corporation.

Section 11.03. Limitation on Amendment: No
amendment to Article X of these By-Laws shall narrow or
eliminate any right to indemnification or insurance for any
claim or proceeding arising out of conduct occurring prior
to said amendment.

END OF BY-LAWS

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<PAGE>

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.

<PAGE>

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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<PAGE>

(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

3
<PAGE>

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

4
<PAGE>

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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<PAGE>

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/ Carol R. Lerner By: /s/ Glenn O. Head
C. Durso, Secretary Glenn O. Head, President

FIRST INVESTORS MANAGEMENT
Attest: COMPANY, INC.

By: /s/ Carol R. Lerner By: /s/ Kathryn S. Head
Carol R. Lerner, Kathryn S. Head, President
Secretary

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<PAGE>

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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<PAGE>

FIRST INVESTORS SERIES FUND II, INC.
SUBADVISORY AGREEMENT

Agreement made as of this 13th day of June, 1994, by and among FIRST
INVESTORS MANAGEMENT COMPANY, INC., a New York corporation (the
"Adviser"), WELLINGTON MANAGEMENT COMPANY, a Massachusetts general
partnership (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").
W I T N E S S E T H:

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 and the Fund shall agree upon 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

1
<PAGE>

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)
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.

(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 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 Partners, Officers and Employees. The
Subadviser shall authorize and permit any of its partners, officers and
employees who may be 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 partners, officers or employees. In addition, the
Subadviser shall notify the other parties to this

2
<PAGE>

Agreement of any change in the Subadviser's partnership membership
within a reasonable time 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 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;

(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

3
<PAGE>

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. Liability of the Subadviser. The Subadviser agrees to perform
faithfully the services required to be rendered to the Fund and each
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 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; provided, however, that
nothing herein shall protect the Subadviser against liability to the
Fund, 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 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 1940 Act) 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 1940 Act) 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.

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 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

4
<PAGE>

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.

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 MANAGEMENT
Attest: COMPANY, INC.

/s/ Carol R. Lerner By: /s/ Kathryn S. Head
Carol R. Lerner, Secretary Kathryn S. Head, President

5
<PAGE>

WELLINGTON MANAGEMENT
Attest: COMPANY

/s/ Dana Watkins By: /s/ Duncan M. McFarland

FIRST INVESTORS SERIES FUND II, INC.

Attest:

/s/ C. Durso By: /s/ Glenn O. Head
C. Durso, Secretary Glenn O. Head, President

<PAGE>

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 Growth & Income Fund

Advisory Fee as %
Average Daily of Average Daily
Net Asset* Net Assets
Up to $50 million 0.325%
In excess of $50 million to $150 million 0.275%
In excess of $150 million to $500 million 0.225%
Over $500 million 0.200%

Dated: June 13, 1994

* Applies to average daily net assets that are subject to the
Subadvisor's investment discretion.

<PAGE>

First Investors Series Fund II, Inc.

Power of Attorney

KNOW ALL MEN BY THESE PRESENTS that the undersigned officer
and/or director of First Investors Series Fund II, Inc. hereby
appoints Larry R. Lavoie or Glenn O. Head, and each of them, his
true and lawful attorney to execute in his name, place and stead
and on his behalf a Registration Statement on Form N-1A for the
registration pursuant to the Securities Act of 1933 and the
Investment Company Act of 1940 of shares of common stock of said
M a ryland corporation and any and all amendments to said
Registration Statement (including post-effective amendments), and
all instruments necessary or incidental in connection therewith
and to file the same with the Securities and Exchange Commission.
Said attorney shall have full power and authority to do and
perform in the name and on behalf of the undersigned every act
whatsoever requisite or desirable to be done in the premises, as
fully and to all intents and purposes as the undersigned might or
could do, the undersigned hereby ratifying and approving all such
acts of said attorney.