Exhibit (d)(4)
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
CITIZENS ADVISERS, INC.
AND
SSGA FUNDS MANAGEMENT, INC.
This Agreement is made as of this 25th day of February, 2002, between Citizens
Advisers, Inc., a New Hampshire corporation (the "Adviser"), and SSgA Funds
Management, Inc., a Massachusetts corporation (the "Sub-Adviser").
WHEREAS, the Adviser is in the business of providing investment advisory
services; and
WHEREAS, the Sub-Adviser is in the business of providing investment advisory
services; and
WHEREAS, Citizens Funds (the "Investment Company") is a Massachusetts business
trust that is an open-end, diversified management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), currently
consisting of multiple series, each having its own investment policy; and
WHEREAS, the Citizens Global Equity Fund (the "Fund") is a series of the
Investment Company; and
WHEREAS, pursuant to the Management Agreement between the Investment Company and
the Adviser, dated June 1, 1992, amended and restated as of July 3, 2001, and as
may be further amended from time to time (the "Management Agreement"), the
Adviser is required to perform investment advisory services to the series of the
Investment Company including the Fund; and
WHEREAS, the Adviser desires to retain the Sub-Adviser to render investment
advisory services to the Investment Company with respect to the Fund, and the
Sub-Adviser is willing to render such services;
NOW, THEREFORE, in consideration of the mutual agreements contained herein, the
parties hereto agree as follows:
1. APPOINTMENT OF SUB-ADVISER. In accordance with and subject to the Management
Agreement, the Adviser hereby appoints the Sub-Adviser to act as investment
sub-adviser to the Fund for the period and on the terms set forth in this
Agreement. The Sub-Adviser accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided. Notwithstanding
any provision of this Agreement to the contrary, the Adviser shall retain all
rights and ultimate responsibilities to supervise and, in its discretion,
conduct investment activities relating to the Fund.
2. ADVISORY DUTIES. The Sub-Adviser shall manage the investment operations and
the composition of such portion of the Fund's assets as the Adviser may
designate from time to time, including the purchase, retention and disposition
thereof, in accordance with the Fund's investment objective and policies as
stated in the Investment Company's then-current Registration Statement relating
to the Fund. The Sub-Adviser's duties hereunder are subject to the following
understandings:
(a) The Sub-Adviser shall provide supervision of investments, furnish a
continuous investment program for the Fund, determine from time to time what
investments or securities will be purchased, retained or sold by the Fund, and
what portion of the assets will be invested or held uninvested as cash;
(b) The Sub-Adviser, in the performance of its duties and obligations
under this Agreement, shall act in conformity with the Declaration of Trust and
By-Laws of the Investment Company, as each may be amended from time to time, and
the then-current Registration Statement of the Investment Company and with the
instructions and directions of the Board of Trustees of the Investment Company
or the Adviser, provided, however, the Sub-Adviser shall not be responsible for
acting contrary to any of the foregoing that are changed without notice of such
change to the Sub-Adviser; and the Sub-Adviser shall conform to and comply with
the applicable requirements of the 1940 Act and all other applicable federal or
state laws and regulations;
(c) The Sub-Adviser shall promptly communicate to the officers and
Trustees of the Investment Company and the Adviser such information relating to
Fund transactions as they may reasonably request. On occasions when the
Sub-Adviser deems the purchase or sale of a security to be in the best interest
of the Fund as well as other clients, the Sub-Adviser, to the extent permitted
by applicable laws and regulations, may aggregate the securities to be sold or
purchased, provided that in the reasonable opinion of the Sub-Adviser, all
accounts are treated equitably and fairly. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transactions, shall be made by the Sub-Adviser in the manner it considers to be
the most equitable and consistent with its fiduciary obligations to the
Investment Company and to such other clients;
(d) For the purposes of compliance with the Fund's prospectus language
on "social criteria" the Adviser will furnish the Sub-Adviser with an approved
list of securities from which the Sub-Adviser will select. The Sub-Adviser may
purchase securities which it has suggested for addition to the approved list and
for which the Sub-Adviser has prescreened based upon the criteria provided by
the Adviser. The Sub-Adviser shall not purchase securities which have been
rejected by the Adviser for inclusion on the approved list;
(e) The Sub-Adviser shall maintain books and records with respect to
the Investment Company's securities transactions and shall render to the
Investment
Company's Board of Trustees and the Adviser such periodic and special reports as
the Board or the Adviser may reasonably request;
(f) The Sub-Adviser shall provide the Investment Company and the
Adviser with a list of all securities transactions as reasonably requested by
the Investment Company or the Adviser;
(g) The investment advisory services of the Sub-Adviser to the
Investment Company and the Adviser under this Agreement are not to be deemed
exclusive, and the Sub-Adviser shall be free to render similar services to
others; and
(h) Should the Trustees of the Investment Company or the Adviser at any
time make a definite determination as to investment policy and notify the
Sub-Adviser thereof, the Sub-Adviser shall be bound by such determination for
the period, if any, specified in such notice or until notified that such
determination has been revoked. Further, the Adviser or the Trustees of the
Investment Company may at any time, upon notice to the Sub-Adviser, suspend or
restrict the right of the Sub-Adviser to determine what assets shall be
purchased, sold or exchanged and what portion, if any, of the assets shall be
held uninvested.
3. EXECUTION AND ALLOCATION OF PORTFOLIO BROKERAGE TRANSACTION. The Sub-Adviser,
subject to and in accordance with any directions which the Investment Company's
Board of Trustees may issue from time to time, shall place, in the name of the
Investment Company, on behalf of the Fund, orders for the execution of the
securities transactions in which the Fund is authorized to invest. When placing
such orders, the primary objective of the Sub-Adviser shall be to obtain the
best net price and execution for the Fund but this requirement shall not be
deemed to obligate the Sub-Adviser to place any order solely on the basis of
obtaining the lowest commission rate if the other standards set forth in this
section have been satisfied. The Investment Company recognizes that there are
likely to be many cases in which different brokers are equally able to provide
such best price and execution and that, in selection among such brokers with
respect to particular trades, it is desirable to choose those brokers who
furnish "brokerage and research services" (as defined in Section 29(e)(3) of the
Securities and Exchange Act of 1934) or statistical quotations and other
information to the Investment Company, the Adviser and/or the Sub-Adviser in
accordance with the standards set forth below. Moreover, to the extent that it
continues to be lawful to do so and subject to any direction to the contrary by
the Board of Trustees of the Investment Company, the Sub-Adviser may place
orders with a broker who charges a commission higher than another broker would
have charged for effecting that transaction, provided that the excess commission
is reasonable in relation to the value of brokerage and research services
provided by that broker. Accordingly, the Investment Company and the Sub-Adviser
agree that the Sub-Adviser may select brokers for the execution of the Fund's
securities transactions from among:
(a) Those brokers and dealers who provide brokerage and research
services, or statistical quotations and other information to the Investment
Company, specifically
including the quotations necessary to determine the Fund's net assets, in such
amount of total brokerage as may reasonably be required in light of such
services.
(b) Those brokers and dealers who provide brokerage and research
services to the Adviser, the Sub-Adviser and/or their respective affiliated
persons which relate directly to portfolio securities, actual or potential, of
the Fund, or which place the Sub-Adviser in a better position to make decisions
in connection with the management of the Fund's assets, whether or not such data
may also be useful to the Adviser, the Sub-Adviser or their respective
affiliated persons in managing other portfolios or advising other clients, in
such amount of total brokerage as may reasonably be required.
(c) If the Fund adopts procedures pursuant to Rule 17e-1 of the 1940
Act, affiliated brokers of Adviser or Sub-Adviser, when the Sub-Adviser has
determined that the Fund will receive competitive execution, price and
commissions and in accordance with such 17e-1 procedures. The Sub-Adviser shall
render regular reports to the Investment Company, not more frequently than
quarterly, of how much total brokerage business has been placed with affiliated
brokers of Adviser, and the manner in which the allocation has been
accomplished.
The Board of Trustees of the Investment Company, in its discretion, may instruct
the Sub-Adviser to effect all or a portion of its securities transactions with
brokers/dealers selected by the Board if the Board determines that use of such
brokers/dealers is in the best interests of the Fund. The Sub-Adviser agrees
that no investment decision will be made or influenced by a desire to provide
brokerage for allocation in accordance with the foregoing, and that the right to
make such allocation of brokerage shall not interfere with the Sub-Adviser's
primary duty to obtain the best net price and execution for the Fund.
4. BOOKS AND RECORDS. The Sub-Adviser shall keep the Fund's books and records
required to be maintained by it pursuant to paragraph 2(e) hereof. The
Sub-Adviser agrees that all records which it maintains for the Fund are the
property of the Investment Company and it shall surrender promptly to the
Investment Company any of such records upon the Investment Company's request.
The Sub-Adviser further agrees to preserve for the periods prescribed by Rule
31a-2 of the Commission under the 1940 Act any such records as are required to
be maintained by Rule 31a-1(f) under the 1940 Act. Nothing herein shall prevent
the Sub-Adviser from maintaining its own records as required by law, which may
be a duplication of the Investment Company's records.
5. REPORTS TO SUB-ADVISER. The Investment Company agrees to furnish the
Sub-Adviser at its principal office all prospectuses, proxy statements, reports
to shareholders, sales literature or other material prepared for distribution to
shareholders of the Fund or the public, which refer in any way to the
Sub-Adviser. The Investment Company shall furnish or otherwise make available to
the Sub-Adviser such other information relating to the business affairs of the
Investment Company as the Sub-Adviser at any time, or from time to time,
reasonably requests in order to discharge its obligations hereunder.
6. PROXIES. Unless otherwise directed by the Board of Trustees of the Investment
Company or the Adviser, the Sub-Adviser shall not exercise any right to vote,
appurtenant to any securities or other property held in the Fund's investment
portfolio, but shall have the authority to oppose or to consent to the
reorganization, consolidation, merger, or readjustment of the finances of any
corporation, company or association, or to the sale, mortgage, pledge or lease
of the property of any corporation, company or association any of the securities
of which are held in the Fund's investment portfolio and to do any act which may
be necessary or advisable in connection therewith.
7. EXPENSES. During the term of this Agreement, the Sub-Adviser shall pay all of
its own expenses incurred by it in connection with its activities under this
Agreement and the Adviser and/or Fund, as they may agree from time to time,
shall bear all expenses that are incurred in their operations not specifically
assumed by the Sub-Adviser.
Expenses borne by the Fund will include but not be limited to the following (or
the Fund's proportionate share of the following): (a) brokerage commissions
relating to securities purchased or sold by the Fund or any losses incurred in
connection therewith; (b) fees payable to and expenses incurred on behalf of the
Fund by the Investment Company's administrator; (c) expenses of organizing the
Investment Company and the Fund; (d) filing fees and expenses relating to the
registration and qualification of the Fund's shares and the Investment Company
under federal or state securities laws and maintaining such registrations and
qualifications; (e) fees and salaries payable to the Investment Company's
Trustees and officers who are not officers or employees of the Investment
Company's administrator, any investment adviser or underwriter of the Investment
Company; (f) taxes (including any income or franchise taxes) and governmental
fees; (g) costs of any liability, uncollectible items of deposit and other
insurance or fidelity bonds; (h) any costs, expenses or losses arising out of
any liability of or claim for damage or other relief asserted against the
Investment Company or the Fund for violation of any law; (i) legal, accounting
and auditing expenses, including legal fees of any special counsel for the
independent Trustees; (j) charges of custodians, transfer agents and other
agents; (k) costs of preparing share certificates (if any); (l) expenses of
setting in type and printing Prospectuses and Statements of Additional
Information and supplements thereto for existing shareholders, reports and
statements to shareholders and proxy material; (m) any extraordinary expenses
(including fees and disbursements of counsel) incurred by the Investment Company
or the Fund; and (n) fees and other expenses incurred in connection with
membership in investment company organizations.
8. COMPENSATION OF THE SUB-ADVISER. For the services to be rendered by the
Sub-Adviser as provided in this Agreement the Adviser shall pay to the
Sub-Adviser such compensation as is designated in Exhibit A to this Agreement.
The Investment Company and the Fund shall not be liable to the Sub-Adviser for
the compensation of the Sub-Adviser. If the Sub-Adviser serves for less than the
whole period of this Agreement, the Sub-Adviser's compensation shall be pro
rated in accordance with the time served under the Agreement.
9. LIMITATION OF SUB-ADVISER'S LIABILITY. In the absence of (a) willful
misfeasance, bad faith or gross negligence on the part of the Sub-Adviser in
performance of its obligations and duties hereunder, (b) reckless disregard by
the Sub-Adviser of its obligations and duties hereunder, or (c) a loss resulting
from a beach of fiduciary duty with respect to the receipt of compensation for
services (in which case, any award of damages shall be limited to the period and
the amount set forth in Section 36(b)(3) of the 1940 Act), the Sub-Adviser shall
not be subject to any liability whatsoever to the Adviser or the Investment
Company, or to any shareholder of the Investment Company, for any error of
judgment, mistake of law or any other act or omission in the course of, or
connected with, rendering services hereunder including, without limitation, for
any losses that may be sustained in connection with the purchase, holding,
redemption or sale of any security on behalf of the Investment Company. The
parties agree that any stated limitations on liability shall not relieve the
Sub-Adviser from any responsibility or liability under state or federal
statutes. The Fund may enforce any obligations of the Sub-Adviser under this
Agreement, and may recover directly from the Sub-Adviser for any liability it
may have to the Fund.
10. DURATION AND TERMINATION.
(a) This Agreement shall become effective on the date of its execution
and shall govern the relations between the parties hereto thereafter, and shall
remain in force until one year after initial approval by the Board of Trustees
of the Fund. This Agreement shall continue in effect with respect to the Fund
for successive annual periods after its effectiveness so long as such
continuance is specifically approved at least annually (i) by the vote of a
majority of the Board of Trustees of the Fund who are not interested persons of
the Fund, or of the Adviser, or of the Sub-Adviser at a meeting specifically
called for the purpose of voting on such approval, and (ii) by the Board of
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Fund. The aforesaid requirement that continuance of this
Agreement be "specifically approved at least annually" shall be construed in a
manner consistent with the 1940 Act and all rules, regulations and orders
thereunder.
(b) This Agreement may be terminated at any time without the payment of
any penalty by the Trustees of the Investment Company, by vote of a majority of
the outstanding voting securities of the Fund, or by the Adviser, on not more
than sixty (60) days nor less than thirty (30) days written notice to the
Sub-Adviser. This Agreement may be terminated by the Sub-Adviser on not less
than ninety (90) days notice to the Trustees of the Investment Company and the
Adviser. This Agreement shall automatically terminate in the event of its
assignment.
(c) This Agreement may be amended by the Adviser and the Sub-Adviser
only if such amendment is approved by the vote of a majority of the outstanding
voting securities of the Fund (except for any such amendment as may be effected
in the absence of such approval without violating the 1940 Act).
(d) The terms "specifically approved at least annually," "vote of a
majority of the outstanding voting securities," "assignment," "affiliated
persons" and "interested persons," 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 Securities and Exchange Commission under the 1940 Act.
11. CHOICE OF LAW. This Agreement shall be construed in accordance with the laws
of the Commonwealth of Massachusetts and any applicable federal law.
12. REPRESENTATIONS OF THE ADVISER. The Adviser represents and warrants that:
(a) it has received a copy of Part II of the Sub-Adviser's Form ADV;
(b) it has full corporate power and authority to enter into this
Agreement and to carry out its terms; and
(c) in the event that the Adviser, Sub-Adviser and Trustees of the
Investment Company agree to the use of futures in the Fund, the
Adviser agrees that at that time the Fund will be either (i)
excluded from the definition of the term "pool" under Section 4.5
of the General Regulations under the Commodity Exchange Act
("Rule 4.5"), or (ii) a qualifying entity under Rule 4.5(b) for
which a notice of eligibility has been filed.
13. COVENANTS OF THE SUBADVISER. The Sub-Adviser agrees that it (i) will not
deal with itself or any of its affiliates, or with the Trustees of the
Investment Company or the Investment Company's principal underwriter, if any, as
principal, broker or dealer in making purchases or sales of securities or other
property for the account of the Investment Company except as permitted by the
1940 Act and all rules, regulations and orders thereunder, (ii) will comply with
all other provisions of the Investment Company's Declaration of Trust and
By-Laws then in effect and the Fund's current prospectus relative to the
Sub-Adviser, its directors, officers, employees and affiliates, and (iii) will
comply with all other laws, rules, regulations and orders applicable to the
activities contemplated herein.
14. LIMITATION OF LIABILITY. It is expressly acknowledged and agreed that the
obligations of the Investment Company hereunder shall not be binding upon any of
the Shareholders, Trustees, officers, employees or agents of the Investment
Company, personally, but shall bind only the trust property of the Investment
Company allocated to the Fund, as provided in its Declaration of Trust dated as
of July 3, 2001, as amended from time to time (the "Declaration"). The execution
and delivery of this Agreement have been authorized by the Trustees of the
Investment Company and signed by an officer of the Investment Company, acting as
such, and neither such authorization by such Trustees nor such execution and
delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them
personally, but shall bind only the trust property of the Investment Company
allocated to the Fund as provided in its Declaration.
IN WITNESS WHEREOF, the due execution hereof as of the date first above
written.
Attest: CITIZENS ADVISERS, INC.
By: /s/ Xxxxx Xxxxxxxx By: /s/ Xxxx X. Xxxxxxx
------------------------------- -------------------------
Name: Xxxx X. Xxxxxxx
Title: President and CEO
Attest: SSGA FUNDS MANAGEMENT, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
---------------------- -------------------------
Name: Xxxxxxx X. Xxxxxxx
-------------------------
Title: President
-------------------------
Acknowledged as of the date first set forth above.
CITIZENS FUNDS
On behalf of the Citizens Global Equity Fund
By: /s/ Xxxx X. Xxxxxxx
------------------------
Name: Xxxx X. Xxxxxxx
Title: President
EXHIBIT A
As consideration for the Sub-Adviser's services to the Fund, the Sub-Adviser
shall receive from the Adviser an annual advisory fee, accrued daily at the rate
of 1/365th of the applicable advisory fee rate and payable monthly on the third
business day of each month, of the following annual percentages of the Fund's
average daily net assets during the month:
Citizens Global Equity Fund 0.35% on the first $500 million
of net assets managed
0.25% on net assets managed over
$500 million
