FIRST INVESTORS SERIES FUND II, INC.
SUBADVISORY AGREEMENT
Agreement made as of this ____ day of ____, by and among FIRST INVESTORS
MANAGEMENT COMPANY, INC., a New York corporation (the "Adviser"), WELLINGTON
MANAGEMENT COMPANY LLP, a Massachusetts limited liability 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 the First Investors All-Cap Growth Fund,
a 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 the 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 Board of
Directors of the Fund, and (C) requirements of the 1940 Act, the Internal
A-1
<PAGE>
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 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
2
<PAGE>
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 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
3
<PAGE>
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 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.
4
<PAGE>
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.
By:
------------------------------------
Carol R. Lerner, Secretary Kathryn S. Head, President
WELLINGTON MANAGEMENT
Attest: COMPANY, LLP
By:
------------------------------------
FIRST INVESTORS SERIES FUND II, INC.
Attest:
By:
------------------------------------
C. Durso, Secretary Glenn O. Head, President
5
<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 All-Cap Growth Fund
Advisory Fee as %
Average Daily of Average Daily
Net Assets* Net Assets
------------------- ------------------
Up to $50 million 0.40%
In excess of $50 million to $150 million 0.275%
In excess of $150 million to $500 million 0.225%
Over $500 million 0.20%
Dated:
------------------
* Applies to average daily net assets that are subject to the Subadviser's
investment discretion.
6
