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EXHIBIT 99.h
INVESTMENT SUBADVISORY AGREEMENT
INVESTMENT SUBADVISORY AGREEMENT, dated as of April 1, 1999, by and
among GREEN CENTURY CAPITAL MANAGEMENT, INC., a Massachusetts corporation having
its principal place of business in Boston, Massachusetts (the "Adviser"),
XXXXXXX MANAGEMENT COMPANY, a separate operating division of Xxxxx, Xxxxxxxx &
Xxxx, Inc., 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 (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") 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 (the "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 the reinvestment of the assets of the Fund, subject to the
control and direction 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 hereinafter set forth for the
compensation herein provided. 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
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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.
(2) 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.
(3) 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
placement of orders for the execution of portfolio
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. All
records shall be the property of the Trust and shall
be available for inspection and use by the Securities
and Exchange Commission (the "SEC"), the Trust or any
person retained by the Trust. Where applicable, such
records shall be maintained by the Subadviser for the
periods and in the places required by Rule 31a-2
under the 1940 Act.
(4) The Subadviser shall not have any responsibility for
determining the manner in which voting rights shall
be exercised.
(5) 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 Trust's custodian (the "Custodian"),
the Trust's portfolio accounting agent and the
Adviser daily of all investments placed by it with
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.
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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.
4. Compensation. (a) 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 (the "Base Fee"). Such fee shall be accrued daily
and payable at the end of each quarter, and subject to the adjustment specified
in paragraph (b) immediately below.
(b) For each calendar quarter, the Base Fee shall be adjusted as
follows: (i) if the Fund's total return (calculated in accordance with Rule 482
promulgated under the Securities Act of 1933, as amended) for the immediately
prior twelve month period ("Fund Total Return") is greater than the total return
of the Lipper Directors' Analytical Data Balanced Fund Average (the "Index Total
Return") plus 1%, then the Base Fee for such quarter shall be increased by an
amount which is the product of .025% multiplied by the average daily net assets
for such year, (ii) if the Fund Total Return exceeds the Index Total Return plus
2%, then the Base Fee for such quarter shall be increased by an amount which is
the product of .05% multiplied by the average daily net assets for such year,
(iii) if the Fund Total Return is less than the Index Total Return minus 1%,
then the Base Fee for such quarter shall be decreased by an amount which is the
product of .025% multiplied by the average daily net assets for such year, or
(iv) if the Fund Total Return is less than the Index Total Return minus 2%, then
the Base Fee for such quarter shall be reduced by an amount which is the product
of .05% multiplied by the average daily net assets for such year. In the event
the Lipper Directors' Analytical Data Balanced Fund Average ceases to become
available or the Trustees determine such Average is no longer a reasonable
performance benchmark, the Trustees may substitute another performance
benchmark.
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 as 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 (currently 4:00 p.m. Eastern Time), 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.
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 one year from the date hereof and indefinitely thereafter if its
continuance after such one-year period shall be specifically approved at least
annually by vote of the holders 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 parties to the Agreement
or interested persons of the parties hereto, cast in person at a meeting called
for the purpose of voting on such approval. 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 a vote of a majority of the outstanding voting
securities of the Fund, upon 60 days' prior written notice to the Adviser and
Subadviser, (ii) by the
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Adviser upon 60 days' prior written notice to the Trust and the Subadviser, or
(iii) by the Subadviser upon 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 "interested person" and "majority of the voting
securities" shall have the meanings set forth for such terms in 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, employees or agents shall be subject to any liability for
any act or omission, error of judgment or mistake of law 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 or by reason of reckless disregard
on the part of the Subadviser of its obligations and duties under this
Agreement.
7. Use of Names. 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.
8. 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. 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 SEC regulation.
9. 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.
10. 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.
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.
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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 /s/ Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxxxx
Treasurer
XXXXXXX MANAGEMENT COMPANY, A SEPARATE
OPERATING DIVISION OF XXXXX, XXXXXXXX &
HILL, INC.
BY /s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
President
GREEN CENTURY FUNDS
BY /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
President
