FIRST INVESTORS EQUITY FUNDS
FIRST INVESTORS LIFE SERIES FUNDS
SUBADVISORY AGREEMENT
Agreement made as of this 19th day of January 2011, as amended May 17, 2012, by
and among FIRST INVESTORS MANAGEMENT COMPANY, INC., a New York corporation (the
"Adviser"), PARADIGM CAPITAL MANAGEMENT, INC. (the "Subadviser"), FIRST
INVESTORS EQUITY FUNDS and FIRST INVESTORS LIFE SERIES FUNDS ( each a "Fund"),
each a Delaware statutory trust and a diversified open-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), on behalf of First Investors Special Situations Fund
and First Investors Life Series Discovery Fund, respectively.
W I T N E S S E T H:
WHEREAS, the Adviser has entered into an Investment Advisory Agreement dated
January 19, 2011 (the "Advisory Agreement") with the Funds, pursuant to which
the Adviser acts as investment adviser of each series of the Funds; and
WHEREAS, the Adviser and the Funds each desire to retain the Subadviser to
provide investment advisory services to First Investors Special Situations
Fund, a series of First Investors Equity Funds, and First Investors Life Series
Discovery Fund, a series of First Investors Life Series Funds, and the
Subadviser is willing to render such investment advisory services.
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 Funds' Board of Trustees, the Subadviser shall manage
the investment operations and such portion of the assets of
First Investors Special Situations Fund and First Investors
Life Series Discovery Fund (each a "Series") that is allocated
to it by the Adviser, 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 (A) each
Fund's Declaration of Trust, as amended and restated from
time to time, its By-Laws, and the Prospectus and Statement
of Additional Information applicable to the Series, (B)
instructions and directions of the Adviser and of the
Board of Trustees of the Funds, and (C) requirements of
the 1940 Act, the Internal Revenue Code of 1986, as
amended, as applicable to each 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
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 each Series, or approved by the
Funds' Board of Trustees, (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 Funds 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 Funds' Board of Trustees such periodic
and special reports as the Board of Trustees of the Funds 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 a Series' assets and
shall provide the Adviser with such information upon the
Adviser's request.
(vi) Fund Policies. The Subadviser will comply with all policies
and procedures of the Funds, including the portfolio holdings
information policy.
(vii) Significant Events. The Subadviser will monitor the
securities owned by the Funds for potential significant events
that could affect their values and notify the Funds when, in
its opinion, a significant event has occurred that may not be
reflected in the market values of such securities.
(viii) Consultation with Other Subadvisers. The Subadviser agrees
that it will not consult with any other Subadviser for either
Trust or Series concerning any transaction by the Series in
securities or other assets.
(b) Subadviser's Directors, Officers and Employees. Services to be
furnished by the Subadviser under this Agreement may be
furnished through any of its directors, officers or employees.
The Subadviser shall notify the other parties to this Agreement
of any change in the Subadviser's management or ownership
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 each Series required by Rule 31a-1
under the 1940 Act. The Subadviser agrees that all records
that it maintains for each Series are the property of the Funds
and the Subadviser will surrender promptly to the Funds any of
such records upon the Funds' request; provided, however, that
the Subadviser may retain a copy of such records. The
Subadviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records
as are required to be maintained by it pursuant to
paragraph 1(a) hereof.
(d) Fidelity Bond, Errors & Omissions Policy, and Compliance
Program. The Subadviser will provide the Funds with reasonable
evidence that, with respect to its activities on behalf of
each Series, the Subadviser is (i) maintaining adequate
fidelity bond and errors & omissions insurance, (ii) has
adopted a compliance program that meets the requirements of
the federal securities laws, including all required codes of
ethics, and (iii) has designated a Chief Compliance Officer
in accordance with the requirements of the federal securities
laws. The Subadviser shall also make such compliance reports
and certifications as are required by the Funds' compliance
program.
2. Adviser's Duties. The Adviser shall continue to have responsibility
for all other services to be provided to the Funds and each Series
pursuant to the Advisory Agreement and shall oversee and review the
Subadviser's performance of its duties under this Agreement.
3. Documents Provided to the Subadviser. The Adviser has or will deliver
to the Subadviser current copies and supplements thereto of each of the
following documents, and will deliver to it all future amendments and
supplements, if any:
(a) the Declaration of Trust of each Fund, as filed with the Delaware
Secretary of State;
(b) the By-Laws of each Fund;
(c) certified resolutions of the Board of Trustees of each Fund
authorizing the appointment of the Adviser and the Subadviser
and approving the form of this Agreement;
(d) each Fund's Registration Statement on Form N-1A under the 1940 Act
and the Securities Act of 1933, as amended ("1933 Act"),
pertaining to the Series, as filed with the Securities and
Exchange Commission; and
(e) the Prospectus and Statement of Additional Information pertaining
to each 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 set forth in the attached Schedule A. If this Agreement
becomes effective or terminates before the end of any month, the fee
for the period from the effective date to the end of the month or from
the beginning of such month to the date of termination, as the case may
be, shall be prorated according to the proportion that such month bears
to the full month in which such effectiveness or termination occurs.
5. Liability of the Subadviser. The Subadviser agrees to perform
faithfully the services required to be rendered to the Funds 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 Funds or its officers, Trustees or
shareholders or any other person on account of the services which the
Subadviser may render or fail to render under this Agreement; provided,
however, that nothing herein shall protect the Subadviser against
liability to the Funds, or to any of the Series' shareholders, to
which the Subadviser would otherwise be subject, by reason of its
willful misfeasance, bad faith or gross negligence in the performance
of its duties, or by reason of its reckless disregard of its
obligations and duties under this Agreement. Nothing in this Agreement
shall protect the Subadviser from any liabilities that it may have
under the 1933 Act or the 1940 Act.
6. Duration and Termination. Unless sooner terminated as provided herein,
this Agreement shall continue in effect for a period of more than two
years from the date written above only so long as such continuance is
specifically approved at least annually in conformity with the
requirements of the 1940 Act; provided, however, that this Agreement
may be terminated at any time, without the payment of any penalty, by
the Board of Trustees of each Fund or by vote of a majority of the
outstanding voting securities (as defined in the 0000 Xxx) of the
Series, or by the Subadviser at any time, without the payment of any
penalty, on not more than 60 days' nor less than 30 days' written
notice to the other parties. This Agreement shall terminate
automatically in the event of its assignment (as defined in the 0000
Xxx) or upon the termination of the Advisory Agreement. Termination
of this Agreement with respect to a given Fund shall not affect the
continued validity of this Agreement or the performance thereunder
with respect to the other Fund.
7. Subadviser's Services are Not Exclusive. Nothing in this Agreement
shall limit or restrict the right of any of the Subadviser's partners,
officers or employees to engage in any other business or to devote his
or her time and attention in part to the management or other aspects
of any business, whether of a similar or a dissimilar nature, or limit
or restrict the Subadviser's right to engage in any other business or
to render services of any kind to any other corporation, firm,
individual or association.
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 each Series or the public, which refer to
the Subadviser or its clients in any way.
9. Exclusivity. The Subadviser agrees not to manage the assets of any
non-affiliated third party investment company that has investment
objectives and policies substantially similar to the investment
objectives and policies employed by either Series.
10. Amendments. This Agreement may be amended by mutual consent, subject
to approval by the Funds' Board of Trustees and each Series'
shareholders to the extent required by the 1940 Act.
11. Governing Law. This Agreement shall be governed by the laws of the
State of New York.
12. 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.
13. 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.
14. 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.
15. 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/ Xxxxx Xxxxxx Xxxxx By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxxx Xxxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
FIRST INVESTORS EQUITY FUNDS, on behalf of First Investors Special Situations
Fund
Attest:
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxxxxxxx X. Xxxxxxxxx
Name: Xxxx X. Xxxxx Name: Xxxxxxxxxxx X. Xxxxxxxxx
Title: Secretary Title: President
FIRST INVESTORS LIFE SERIES FUNDS, on behalf of First Investors Life Series
Discovery Fund
Attest:
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxxxxxxx X. Xxxxxxxxx
Name: Xxxx X. Xxxxx Name: Xxxxxxxxxxx X. Xxxxxxxxx
Title: Secretary Title: President
PARADIGM CAPITAL MANAGEMENT, INC.
Attest:
/s/ Xxxx X. Xxxxxx By: /s/ Xxxxxxx Xxxx Xxxx
Name: Xxxx X. Xxxxxx Name: Xxxxxxx Xxxx Xxxx
Title: Vice President and Chief Title: Chief Executive Officer
Compliance Officer
SCHEDULE A*
The fee paid to the Subadviser under this Agreement for managing that portion
of the assets of First Investors Special Situations Fund allocated to it by the
Adviser shall be computed in the following manner.
1. The daily net assets of First Investors Special Situations Fund and First
Investors Life Series Discovery Fund shall first be added together;
2. An aggregate fee shall then be computed on the sum as if the two Series were
combined using the following schedule:
a. 0.40% of the first $50 million;
b. 0.30% of the next $200 million; and
c. 0.25% on the balance over $250 million.
3. The fee payable under this Agreement with respect to the First Investors
Special Situations Fund shall then be computed by multiplying the aggregate
fee by the ratio of the net assets of First Investors Special Situations Fund
to the sum of the net assets of both Series.
The fee paid to the Subadviser under this Agreement for managing that portion
of the assets of First Investors Life Series Discovery Fund allocated to it by
the Adviser shall be computed in the following manner.
1. The daily net assets of First Investors Life Series Discovery Fund and First
Investors Special Situations Fund shall first be added together;
2. An aggregate fee shall then be computed on the sum as if the two Series were
combined using the following schedule:
a. 0.40% of the first $50 million;
b. 0.30% of the next $200 million; and
c. 0.25% on the balance over $250 million.
3. The fee payable under this Agreement with respect to the First
Investors Life Series Discovery Fund shall then be computed by multiplying the
aggregate fee by the ratio of the net assets of First Investors Life Series
Discovery Fund to the sum of the net assets of both Series.
With respect to the First Investors Special Situations Fund only, to the extent
that the Adviser collects an advisory fee in excess of 75 basis points, the
Adviser will also pay the Subadviser one third of such excess amount.
* The Subadviser is compensated based on the assets it manages. Each Series'
cash balance is managed by the Adviser and as such is excluded from the daily
net assets of a Series for purposes of calculating the subadvisory fee.
