INVESTMENT SUBADVISORY AGREEMENT
INVESTMENT SUBADVISORY AGREEMENT, dated as of November 28, 2005, by and
among GREEN CENTURY CAPITAL MANAGEMENT, INC., a Massachusetts corporation
having its principal place of business in Boston, Massachusetts (the
"Adviser"), TRILLIUM ASSET MANAGEMENT CORPORATION, a Massachusetts corporation,
(the "Subadviser"), and GREEN CENTURY FUNDS, a Massachusetts business trust
(the "Trust") on behalf of Green Century Balanced Fund.
WHEREAS, the Adviser has been organized to operate as an investment adviser
registered under the Investment Advisers Act of 1940 and has been retained by
the Trust to provide investment advisory services to the Trust, an open-end,
diversified management investment company registered under the Investment
Company Act of 1940, as amended (collectively with the rules and regulations
promulgated thereunder, in each case as in effect from time to time, the "1940
Act"); and
WHEREAS, the shares of beneficial interest (par value $0.01 per share) of
the Trust are divided into two separate series, Green Century Balanced Fund
(the "Balanced Fund" or the "Fund") and Green Century Equity Fund (the "Equity
Fund"); and
WHEREAS, the Adviser desires to retain the Subadviser to furnish it with
portfolio management services in connection with the Adviser's investment
advisory activities on behalf of the Balanced Fund, and the Subadviser is
willing to furnish such services to the Adviser and the Trust;
NOW, THEREFORE, in consideration of the terms and conditions hereinafter set
forth, it is agreed as follows:
1. Employment of the Subadviser. In accordance with and subject to the
Investment Advisory Agreement between the Trust and the Adviser, attached
hereto as Exhibit A (the "Advisory Agreement"), the Adviser hereby appoints the
Subadviser to perform the portfolio management services described herein for
the investment and reinvestment of the assets of the Fund, subject to the
direction and supervision of the Adviser and the Trust's Board of Trustees, for
the period and on the terms hereinafter set forth. The Subadviser accepts such
employment and agrees to furnish the services described herein in accordance
with the terms of this Agreement and applicable law. The Subadviser shall for
all purposes herein be deemed to be an independent contractor and shall, except
as expressly provided or authorized (whether herein or otherwise), have no
authority to act for or represent the Trust or the Adviser in any way or
otherwise be deemed an agent of the Trust or the Adviser.
2. Obligations of and Services to be Provided by the Subadviser.
(a) The Subadviser undertakes to provide the following services and to
assume the following obligations with respect to the Fund:
(1) The Subadviser, subject to and in accordance with the Fund's
investment objective, policies and restrictions as stated in the
Trust's Registration Statement(s) under the Securities Act of 1933
(the "1933 Act"), as it may be amended from time to time and as
adopted by the Trust's Board of Trustees from time to time and the
overall supervision of the Trust's Board of Trustees and the Adviser,
shall maintain a continuing investment program for the Fund, including
investment research and management with respect to the investment and
reinvestment of the assets of the Fund, and shall take such steps as
may be reasonably necessary to implement the same. The Subadviser
shall make all trades for the Fund, engage in other actions as
related to the Fund, and maintain the portfolio of the Fund at all
times in compliance with the 1933 Act, the 1940 Act, and all
applicable laws and regulations. The Subadviser shall apply the
environmental and other screening criteria developed by the Adviser
and the Trust and communicated to the Subadviser in writing in
accordance with the investment research of the Subadviser with
respect to such criteria. Should the Trust's Board of Trustees at any
time establish an investment policy with respect to the Fund and
notify the Subadviser thereof in writing, the Subadviser shall be
bound by such determination for the period, if any, specified in such
notice or until notified in writing by the Board of Trustees that
such policy has been revoked.
(2)The Subadviser may not consult with any other subadviser to the Fund
concerning transactions in securities or other assets for the Fund
except that such consultations are permitted between the current and
successor subadviser(s) to the Fund in order to effect an orderly
transition of subadvisory duties so long as such consultations are
not concerning transactions prohibited by Section 17(a) of the 1940
Act.
(3)In connection with the purchase and sale of portfolio investments of
the Fund, the Subadviser shall arrange for the transmission to the
Adviser and the Trust's portfolio accountant, on a daily basis, of
such confirmations, trade tickets or other documentation as may be
necessary to enable the Adviser to perform its advisory and
administrative responsibilities. The Subadviser shall render such
reports to the Adviser, any subadministrator and/or to the Trust's
Board of Trustees concerning compliance, the investment activities
and portfolio composition of the Fund, in such forms and at such
intervals, as the Adviser or the Trust's Board of Trustees may from
time to time reasonably require.
(4)The Subadviser shall have the authority and discretion to select
brokers and dealers to execute the Fund's portfolio transactions and
for the selection of the markets on or in which the transaction will
be executed. In connection with the selection of such brokers or
dealers and the placing of such orders, the Subadviser is directed to
seek for the Fund, in its best judgment, prompt best available
execution in an effective manner. Subject to the primary objective of
obtaining best available execution, securities may be bought from or
sold to broker-dealers that charge commissions in excess of the
amount of commission another broker-dealer would have charged as long
as the Subadviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage
and research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934) provided to the Fund, subject to
any applicable laws, rules and regulations. Broker-dealers that sell
shares of the Fund or any other fund for which the Subadviser acts as
investment adviser or subadviser shall only receive orders for the
purchase or sale of the Fund's portfolio securities to the extent
that the placing of such orders is in compliance with applicable law
and the rules of the Securities and Exchange Commission (the "SEC")
and the National Association of Securities Dealers, Inc. In
connection with the placement of orders for the execution of portfolio
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transactions, and subject to the direction and supervision of the
Adviser and the Trust's Board of Trustees, the Subadviser shall
create and maintain all necessary brokerage records of the Trust in
accordance with all applicable laws, rules and regulations, including
but not limited to records required by Section 31(a) of the 1940 Act.
(5)All records maintained by the Subadviser on behalf of the Adviser or
the Fund (including, without limitation, records maintained and
preserved by the Subadviser pursuant to Rule 31a-1 and Rule 31a-2
adopted under the 0000 Xxx) shall be the property of the Adviser or
the Trust, as applicable, and shall be available for inspection and
use by (or surrendered to) the SEC, the Trust or any person retained
by the Trust promptly upon request. Where applicable, such records
shall be maintained by the Subadviser for the periods and in the
places required by Rule 31a-1 and Rule 31a-2 under the 1940 Act, as
applicable.
(6)The Subadviser shall not have any responsibility for determining the
manner in which voting rights shall be exercised.
(7)The assets of the Fund shall be held by one or more financial
institutions designated by the Fund in a custodial capacity (the
"Custodian") in an account which the Fund has directed the Custodian
to open. All transactions will be consummated by payment to or
delivery by the Custodian for the Fund or such depositories or agents
as may be designated by the Custodian of all cash and/or securities
due to or from the Fund, and the Subadviser shall not have possession
or custody thereof or any responsibility or liability with respect
thereto. The Subadviser shall advise the Custodian, the Trust's
portfolio accounting agent and the Adviser daily of all investments
placed by its broker/dealers pursuant to procedures agreed upon by
the Subadviser and the Adviser. The Adviser and the Trust shall issue
to the Custodian such instructions, and hereby authorize the
Subadviser to issue to the Custodian such instructions, as may be
appropriate in connection with the settlement of transactions
initiated by the Subadviser. The Adviser shall cause the Custodian to
accept instructions from the Subadviser with respect to Fund assets
and transactions by the Fund in the performance of the Subadviser's
duties hereunder. The Adviser shall use its best efforts to cause the
Custodian to provide the Subadviser with any such information and
reports concerning the Fund or its assets as the Subadviser may from
time to time reasonably request, provided that neither the Adviser
nor the Fund shall be required to provide additional compensation to
the Custodian to provide any such information or report. The
Subadviser shall have no liability or obligation to pay the cost of
such Custodian or for any of its services.
(b)The Subadviser represents to the Adviser and the Trust that it will
disclose to the Adviser and the Trust promptly after it has knowledge of
any significant change or variation in its management structure or
personnel which will affect the Fund or any significant change or
variation in its management style or investment philosophy which will
affect the Fund. In addition, the Subadviser represents to the Adviser
and the Trust that it will similarly disclose to the Trust and the
Adviser, promptly after it has knowledge, of (i) the existence of any
pending significant legal action or proceeding against it, (ii) any
threatened significant legal action of any federal or state regulatory
authority or (iii) the existence of any pending investigation by any
federal or state governmental agency related to or involving the Fund,
and, in each case, will provide to the Adviser and the Trust all such
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material information with respect to such action, proceeding or
investigation as is reasonably requested by the Adviser and the Trust,
provided that such information can be disclosed without effect on any
legal privilege and is and permitted to be disclosed by the Subadviser
pursuant to applicable law.
The Adviser and the Trust each represents to the Subadviser that any
information received by it pursuant to this clause (b) will be kept
confidential.
(c)The Subadviser agrees that it will not deal with itself, or with the
Trustees of the Trust or with the Adviser, or the principal underwriter
or distributor as principals in making purchases or sales of securities
or other property for the account of the Fund, except as permitted by
the 1940 Act, will not take a long or short position in the shares of
the Fund except as permitted by the Trust's Declaration of Trust, and
will comply with all other applicable provisions of the Trust's
Declaration of Trust and By-Laws and any current Prospectus or Statement
of Additional Information of the Fund, in each case to the extent that
it has received a copy of the same.
(d)The Subadviser may manage other portfolios and expects that the Fund and
other portfolios it manages will, from time to time, purchase or sell
the same securities. Consistent with the Subadviser's fiduciary duties
to the Fund and applicable law, the Subadviser may aggregate orders for
the purchase or sale of securities on behalf of the Fund with orders on
behalf of other portfolios the Subadviser manages. Securities purchased
or proceeds of securities sold through aggregated orders are allocated
to the account of each portfolio managed by the Subadviser that bought
or sold such securities at the average execution price. If less than the
total of the aggregated orders is executed, purchased securities or
proceeds will generally be allocated pro rata among the participating
portfolios in proportion to their planned participation in the
aggregated orders.
(e)The Adviser understands and agrees that the Subadviser and its officers,
affiliates and employees perform investment advisory and investment
management services for various clients other than the Adviser and the
Fund. Subject to the terms of a letter agreement entered into by the
Adviser and the Subadviser on the date hereof (as amended and in effect
from time to time, the "Letter"), nothing in this Agreement shall
prohibit the Subadviser or any of its officers, affiliates or employees
from providing any services for any other person or entity or limit the
service which the Subadviser or any such officer, affiliate or employee
can provide to any person or entity. Subject to the terms of the Letter,
the Subadviser and its officers and employees may act and continue to
provide investment management services for others, and nothing in this
Agreement shall in any way be deemed to restrict the right of the
Subadviser to provide investment management services for any other
person or entity, and the performance of such services for others shall
not be deemed to violate or give rise to any duty or obligation on the
part of the Subadviser. Subject to applicable law, nothing in this
Agreement shall limit or restrict the Subadviser or any of its officers,
affiliates or employees from buying, selling or trading in any
securities for its or their own accounts. The Adviser understands and
acknowledges that the Subadviser and its officers, affiliates, employees
and other clients may, at any time, have, acquire, increase, decrease,
or dispose of positions in investments which are at the same time being
acquired or disposed of for the Fund and that the Subadviser and its
officers, affiliates and employees may give advice and take action in
the performance of duties with respect to any other client which may
differ from advice given, or the timing or nature of action taken, with
respect to the Fund. The Subadviser
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shall not have any obligation to purchase or sell for the Fund any
security which the Subadviser, its officers, affiliates or employees may
acquire for its or their own accounts or for the account of another
client, so long as it continues to be the policy and practice of the
Subadviser not to favor or disfavor consistently or consciously any
client or class of clients in the allocation of investment opportunities.
3. Expenses. During the terms of this Agreement, the Subadviser will pay all
expenses incurred by it in connection with its activities under this Agreement.
The Subadviser shall not be obligated to pay any expenses of or for the Trust,
the Fund or the Adviser that are not expressly assumed by the Subadviser.
4. Compensation. The Adviser agrees to pay the Subadviser as full
compensation for the services to be rendered and expenses to be borne by the
Subadviser a fee equal on an annual basis to 0.40% of the value of the average
daily net assets of the Fund up to $30 million and 0.35% of the value of the
average daily net assets of the Fund in excess of $30 million. Such fee shall
be accrued daily and payable following the end of each quarter.
The "average daily net assets" of the Fund shall mean the average of the
values placed on the Fund's net assets as of the close of regular trading on
the New York Stock Exchange (currently, 4:00 p.m. Eastern Time) on each day on
which the net asset value of the Trust is determined consistent with the
provisions of Rule 22c-1 under the 1940 Act. The value of the net assets of the
Fund shall always be determined pursuant to the applicable provisions of the
Declaration of Trust and the Fund's then current prospectus and statement of
additional information. If the determination of net asset value does not take
place for any particular day, then for the purposes of this Section 4, the
value of the net assets of the Fund last determined shall be deemed to be the
value of its net assets as of the close of regular trading on the New York
Stock Exchange, or as of such other time as the value of the net assets of the
Fund's portfolio may be lawfully determined on that day. If the Trust
determines the value of the net assets of the Fund more than once on any day,
then the last such determination thereof on that day shall be deemed to be the
sole determination thereof on that day for the purposes of this Section 4.
Notwithstanding the foregoing provisions of this Section 4, the compensation
to be received by the Subadviser under this Agreement for the period from the
date hereof to but not including April 27, 2006, or, if earlier, the date on
which this Agreement is approved by the shareholders of the Fund in accordance
with the 1940 Act, shall not exceed the compensation that would have been
received by Xxxxx Xxxxxxxx Asset Management, Inc. ("AHAM") during such period
under that certain Investment Subadvisory Agreement, dated as of April 1, 1999,
by and among the Adviser, AHAM and the Trust on behalf of the Fund.
5. Renewal and Termination. This Agreement shall continue in effect with
respect to the Fund, unless sooner terminated as hereinafter provided, for a
period of two years from the date hereof and indefinitely thereafter if its
continuance after such two year period shall be "specifically approved at least
annually" by "vote of a majority of the outstanding voting securities" of the
Fund or by vote of a majority of the Trust's Board of Trustees; and further
provided that such continuance is also approved annually by the vote of a
majority of the Trustees who are not "interested persons" of the Adviser, the
Subadviser or the Trust, cast at a meeting called for the purpose of voting on
such approval as provided under the 1940 Act.
Notwithstanding the immediately preceding sentence of this Section 5, this
Agreement shall terminate on April 27, 2006 unless on or before such date this
Agreement is approved by the shareholders of the Fund in accordance with the
1940 Act.
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This Agreement may be terminated at any time, with respect to the Fund,
without payment of any penalty, (i) by the Trust's Board of Trustees or by the
"vote of a majority of the outstanding voting securities" of the Fund, upon not
more than 60 days' nor less than 30 days' prior written notice to the Adviser
and Subadviser, (ii) by the Adviser upon not more than 60 days' nor less than
30 days' prior written notice to the Trust and the Subadviser, or (iii) by the
Subadviser upon not less than 180 days' prior written notice to the Trust and
the Adviser. This Agreement will terminate automatically upon any termination
of the Advisory Agreement between the Trust and the Adviser or in the event of
its "assignment".
The terms "specifically approved at least annually", "interested persons",
"vote of a majority of the voting securities", and "assignment" when used in
this Agreement shall have the respective meanings specified in, and shall be
construed in a manner consistent with, the 1940 Act, subject, however, to such
exemptions as may be granted by the SEC under the 1940 Act.
6. Standard of Care. The Subadviser may rely on information reasonably
believed by it to be accurate and reliable. Neither the Subadviser nor its
officers, directors, or employees shall be subject to any liability for any act
or omission, or error of judgment or for any loss suffered by the Trust, the
Fund or the Adviser in the course of, connected with, or arising out of any
services to be rendered hereunder or for any losses that may be sustained in
the purchase, holding or sale of any security, except by reason of willful
misfeasance, bad faith or gross negligence on the part of the Subadviser in the
performance of its duties, violation of law, or by reason of reckless disregard
on the part of the Subadviser of its obligations and duties under this
Agreement.
7. Representations and Warranties. Each of the Adviser and the Subadviser
represents and warrants that: (a) the person(s) executing this Agreement on
behalf of such party has full power and authority to execute this Agreement on
behalf of such party and (b) such party's execution, delivery and performance
of this Agreement will be binding upon such party in accordance with the terms
hereof, and will not violate in any material respect any obligation by which
such party is bound, whether arising by contract, operation of law, or
otherwise. The Adviser acknowledges that it has received a copy of the
Subadviser's disclosure document under Rule 204-3 of the Investment Advisers
Act of 1940 at least 48 hours prior to executing this Agreement. In addition,
the Adviser represents and warrants that true and complete copies of the
Agreement and Declaration of Trust and By-Laws of the Trust and the prospectus
and statement of additional information of the Fund have been delivered to the
Subadviser. The Adviser will deliver to the Subadviser all future amendments
and supplements to such documents.
The Subadviser agrees to review written communications to Fund shareholders
and prospective investors relating to the Fund and the Subadviser's services
hereunder, including shareholder reports and proxy statements, as reasonably
requested by the Adviser. The Subadviser agrees to review the Fund's Prospectus
and the Statement of Additional Information as reasonably requested by the
Adviser to assure that the description therein of the investment policies and
strategies followed by the Subadviser in providing services hereunder for the
Fund is consistent with the policies and strategies the Subadviser uses or
intends to use and that the information therein concerning the Subadviser and
the services provided hereunder is accurate and complete. The Adviser agrees to
provide a reasonable time period for the Subadviser's review of such written
materials. The Subadviser shall not be liable for any actual or alleged
material misstatement or omission in the Prospectus, the Statement of
Additional Information, proxy statements or other communications to Fund
shareholders or prospective investors, unless the misstatement or omission
relates to the Subadviser or services to be provided by the Subadviser,
including the investment strategies and policies to be followed by the
Subadviser, and is based on information furnished by the Subadviser.
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8. Use of Names; References to the Subadviser. The Trustees of the Trust and
the Subadviser acknowledge that, in consideration of the Adviser's assumption
of organization expenses of the Trust and of the Fund, the Adviser has reserved
for itself the right to the names "Green Century Funds", "Green Century
Balanced Fund", and "Green Century Equity Fund" (or any similar names) and that
use by the Trust of such names shall continue only with the continuing consent
of the Adviser, which consent may be withdrawn at any time, effective
immediately, upon written notice thereof to the Trust. The Subadviser hereby
agrees that the Adviser may use the Subadviser's name in the Fund's marketing
or advertising materials with the prior written consent of the Subadviser,
which consent will not be unreasonably withheld or delayed
9. Assignment, Amendment of this Agreement. This Agreement may not be
transferred, assigned, sold or in any manner hypothecated or pledged by any
party hereto, except as permitted under the 1940 Act (including any exemptions
as may be granted by the SEC under the 1940 Act). 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 amendment of this
Agreement shall be effective, with respect to the Fund, until approved by vote
of the holders of a majority of the outstanding voting securities of the Fund,
if such shareholder approval is required by the 1940 Act subject, however, to
such exemptions as may be granted by the SEC under the 1940 Act.
10. Severability. If any provision of this Agreement shall be held or made
invalid by a decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
11. Notices. Notices should be provided to the Subadviser at: Xx. Xxxx
Xxxxxxxx, Trillium Asset Management Corporation, 000 Xxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000. Notices to the Adviser should be provided to Ms. Xxx Xxxxx
Basseches, Green Century Capital Management, Inc., 00 Xxxxxx Xxxxx, Xxxxx 000,
Xxxxxx, XX 00000. Notices to the Trust should be provided to Xx. Xxxxxxxx
Xxxxxx, Green Century Funds, 00 Xxxxxx Xxxxx, Xxxxx 000, Xxxxxx, XX 00000.
12. Miscellaneous. Each party agrees to perform such further acts and to
execute further documents as are necessary to effectuate the acts and execute
such purposes hereof. The Agreement shall be construed and enforced in
accordance with and governed by the laws of the Commonwealth of Massachusetts,
provided, however, that nothing herein will be construed in a manner
inconsistent with the 1940 Act, the Investment Advisers Act of 1940, or any
rules and regulations of the SEC promulgated thereunder 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 SEC, whether of special or
general application, such provision shall be deemed to incorporate the effect
of such rule, regulation or order. The captions in this Agreement are included
for convenience only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
[Signature page follows.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
Pursuant to the Trust's Declaration of Trust, dated as of July 1, 1991, the
obligations of this Agreement are not binding upon any of the Trustees or
shareholders of the Trust individually, but bind only the Trust estate.
GREEN CENTURY CAPITAL MANAGEMENT,
INC.
BY
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Xxx Xxxxx Basseches
President
TRILLIUM ASSET MANAGEMENT
CORPORATION
BY
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Xxxx Xxxxxxxx
Vice President
GREEN CENTURY FUNDS
BY
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Xxxxxxxx Xxxxxx
President
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