Exhibit d(3)
SUB-INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT made this 15th day of September, 1998, by and among CITIZENS
ADVISERS, INC., a California corporation (the "Adviser"), SENECA CAPITAL
MANAGEMENT, LLC, a California limited liability company (the "Sub-Adviser"),
and CITIZENS FUNDS, an open-end investment company organized and existing under
the laws of the Commonwealth of Massachusetts (the "Fund").
WITNESSETH:
WHEREAS, the Fund is engaged in business as an open-end investment company
registered under the Investment Company Act of 1940; and the Fund and the
Adviser have entered into an Investment Advisory Agreement dated June 1, 1992
whereby the Adviser shall provide, inter alia, the Citizens Income Fund (the
"Income Fund") and the Citizen's Emerging Growth Fund (the "Emerging Growth
Fund"), two series of the Fund, collectively, the "Funds" and each, a "fund",
with investment advice and supervision on the terms and conditions provided
therein; and
WHEREAS, the Sub-Adviser is willing to provide the Adviser and the Fund
with services on the terms and conditions set forth herein:
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
and between the parties as set forth herein, the parties do hereby covenant and
agree as follows:
ARTICLE 1: Duties of the Sub-Adviser. The Sub-Adviser will furnish the
Adviser economic, statistical and research information and advice, relating to
the Income Fund and the Emerging Growth Fund, and to such other portions of the
Fund's assets as the Adviser shall from time to time designate (collectively,
the "Designated Assets"). The Sub-Adviser will also make recommendations to the
Adviser as to the manner in which voting rights, rights of consent to corporate
action and any other rights pertaining to the Fund's portfolio securities
included in the Designated Assets shall be exercised. From time to time the
Adviser will notify the Sub-Adviser of the aggregate US Dollar amount of the
Designated Assets.
The Sub-Adviser will furnish continuously an investment program with
respect to the Designated Assets and will determine from time to time what
securities shall be purchased, sold or exchanged with the Designated Assets,
and what portion, if any, of the Designated Assets shall be held uninvested;
subject, always, to compliance with provisions of the Fund's Declaration of
Trust and By-Laws as then in effect, the provisions of the Investment Company
Act of 1940 and the provisions of the Fund's then current Prospectus and
Statement of Additional Information (copies of all which, as amended from time
to time, will be furnished to the Sub-Adviser by the Adviser). For the purposes
of compliance with the 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 suggest additions to this list but
agrees not to purchase any suggested securities until such security has been
approved by the Adviser as meeting the Fund's social criteria. The Adviser
agrees that it will promptly and thoroughly research the suitability, under its
social criteria, of any suggested security.
Should the Trustees of the Fund 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 Fund 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 from the Designated
Assets and what portion, if any, of the Designated Assets shall be held
uninvested.
The Sub-Adviser shall take, on behalf of the Fund, all actions which it
deems necessary to implement policies determined as provided above, and in
particular, consistent with the provisions of Article 3 of this Agreement, to
place all orders for the purchase, sale, or exchange of securities of the
Fund's account with brokers, dealers, or bankers selected by it, and to that
end the Sub-Adviser is authorized as the agent of the Fund to give instructions
to the Custodian and any Sub-Custodian of the Fund as to deliveries of
securities and gold, transfers of currencies and payments of cash for the
account of the Fund. The Sub-Adviser will advise the Adviser on the same day it
gives any such instructions. In connection with the selection of such brokers,
dealers or bankers and the placing of such orders, the Sub-Adviser is directed
to seek for the Fund execution at the most favorable price by responsible
brokerage firms at reasonably competitive commission rates. In fulfilling this
requirement the Sub-Adviser shall not be deemed to have acted unlawfully or to
have breached any duty, created by this Agreement or otherwise, solely by
reason of effecting a securities transaction in excess of the amount of
Commission another broker or dealer would have charged for effecting that
transaction, if the Sub-Adviser determined in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of either
that particular transaction or the Sub-Adviser's overall responsibilities with
respect to the Fund. The Sub-Adviser further agrees that it shall at all times
make a reasonable and good faith determination that such brokerage or research
services provided by such broker or dealer are of benefit to the Fund.
ARTICLE 2: Compensation of the Sub-Adviser. For the services rendered by
the Sub-Adviser under this Agreement, the Adviser shall pay to the Sub-Adviser
compensation, computed and paid monthly in US dollars on average daily net
assets at the annual rate of: Emerging Growth Fund - 35 basis points up to and
including $100 million and 25 basis points should the fund's assets exceed $100
million; Income Fund - 17.5 basis points. The Sub-Adviser will pay its expenses
incurred in performing its duties under this Agreement. The Fund shall not be
liable to the Sub-Adviser for the compensation of the Sub-Adviser.
ARTICLE 3: Covenants of the Sub-Adviser. The Sub-Adviser agrees that it
will not deal with itself or any of its affiliates, or with the Trustees of the
Fund or the Fund'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 Fund except as permitted by the Investment Company Act of 1940
and all rules, regulations and orders thereunder, will comply with all other
provisions of the Fund's Declaration of Trust and By-Laws then in effect and
its current prospectus relative to the Sub-Adviser, its directors, officers,
employees and affiliates, and will comply with all other laws, rules,
regulations and orders applicable to the activities contemplated herein.
ARTICLE 4: Liability of the Sub-Adviser. The Sub-Adviser shall not be
liable for any error of judgment or mistake of law or for any loss arising out
of any investment or for any act or omission in carrying out its duties under
this Agreement, except for violation of law, willful malfeasance, bad faith,
gross negligence, or by reason of reckless disregard of its obligations and
duties hereunder. As used in this Article 4 the term "Sub-Adviser" shall
include shareholders, direct officers and employees of the Sub-Adviser, as well
as the Sub-Adviser itself. 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.
ARTICLE 5: Activities of the Sub-Adviser. The services of the Sub-Adviser
to the Fund are not to be deemed to be exclusive, the Sub-Adviser and its
affiliates being free to render services to others. It is understood that
Trustees, officers, partners and shareholders of the Fund or the Adviser are or
may become interested in the Sub-Adviser as directors, officers, shareholders
or otherwise and that shareholders, directors, officers and employees of the
Sub-Adviser may become similarly interested in the Fund or the Adviser as a
shareholder, Trustee, officer, partner, or otherwise.
ARTICLE 6: Duration, Termination and Amendment of this Agreement. 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 November 17, 1999 on which date it will terminate with respect to a fund,
unless its continuance after that date 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 Investment
Company Act of 1940 and all rules, regulations and orders thereunder.
This Agreement may be terminated at any time without the payment of any
penalty by the Trustees of the Fund, by vote of a majority of the outstanding
voting securities of the Fund, by the Adviser or by the Sub-Adviser, on not
more than sixty (60) days nor less than thirty (30) days written notice to
other parties. This Agreement shall automatically terminate in the event of its
assignment.
This Agreement may be amended with respect to a fund only if such
amendment is approved by vote of a majority of the outstanding voting
securities of that fund, by the Adviser and by the Sub-Adviser.
The terms "assignment," "affiliated person," "interested person," and
"majority of the outstanding voting securities" when used in this Agreement
shall have the respective meanings specified in the Investment Company Act of
1940 and the rules, regulations and orders thereunder, subject, however, to
such exemptions as may be granted by the Securities and Exchange Commission
under said Act.
ARTICLE 7: Miscellaneous. This Agreement shall be construed in accordance
with the laws of the Commonwealth of Massachusetts, contains the entire
understanding between the parties and may be executed in several counterparts,
each of which shall be deemed to be an original and one and the same
instrument.
Each party acknowledges and agrees that all obligations of the Fund under
this agreement are binding only with respect to the funds; that any liability
of the Fund under this Agreement, or in connection with the transactions
contemplated herein, shall be discharged only out of the assets of the
appropriate fund; and that no other series of the Fund shall be liable with
respect to this Agreement or in connection with the transactions contemplated
herein.
IN WITNESS THEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
duly authorized, as of this 15th day of September, 1998.
The undersigned Trustee of the Fund has executed this Agreement not
individually, but as Trustee under the Fund's Declaration of Trust dated
November 19, 1982, as amended, and the obligations of this Agreement are not
binding upon any of the Trustees or shareholders of the Fund individually, but
bind only the trust estate.
CITIZENS ADVISERS, INC.
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Its: Executive Vice President
---------------------------
SENECA CAPITAL MANAGEMENT LLC
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------
Its: Chief Operating Officer
---------------------------
CITIZENS FUNDS
By: Xxxxxx Xxxxxxx
---------------------------
TRUSTEE
FORM OF SUB-INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT made this 16th day of August, 1999, by and among CITIZENS
ADVISERS, INC., a California corporation (the "Adviser"), CLEMENTE CAPITAL,
INC, a New York Corporation (the "Sub-Adviser"), and CITIZENS FUNDS, an
open-end investment company organized and existing under the laws of the
Commonwealth of Massachusetts (the "Fund").
WITNESSETH:
WHEREAS, the Fund is engaged in business as an open-end investment company
registered under the Investment Company Act of 1940; and the Fund and the
Adviser have entered into an Investment Management Agreement dated June 1, 1992
whereby the Adviser shall provide, inter alia, the Citizens Global Equity Fund
(the "Global Equity Fund"), a series of the Fund, with investment advice and
supervision on the terms and conditions provided therein; and
WHEREAS, the Sub-Adviser is willing to provide the Adviser and the Fund
with services on the terms and conditions set forth herein:
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
and between the parties as set forth herein, the parties do hereby covenant and
agree as follows:
ARTICLE 1: Duties of the Sub-Adviser. The Sub-Adviser will furnish the
Adviser economic, statistical and research information and advice, relating to
the Global Equity Fund, and to such other portions of the Fund's assets as the
Adviser shall from time to time designate (collectively, the "Designated
Assets"). The Sub-Adviser will also make recommendations to the Adviser as to
the manner in which voting rights, rights of consent to corporate action and
any other rights pertaining to the Fund's portfolio securities included in the
Designated Assets shall be exercised. From time to time the Adviser will notify
the Sub-Adviser of the aggregate US Dollar amount of the Designated Assets.
The Sub-Adviser will furnish continuously an investment program with
respect to the Designated Assets and will determine from time to time what
securities shall be purchased, sold or exchanged with the Designated Assets,
and what portion, if any, of the Designated Assets shall be held uninvested;
subject, always, to compliance with provisions of the Fund's Declaration of
Trust and By-Laws as then in effect, the provisions of the Investment Company
Act of 1940 and the provisions of the Fund's then current Prospectus and
Statement of Additional Information (copies of all which, as amended from time
to time, will be furnished to the Sub-Adviser by the Adviser). For the purposes
of compliance with the 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 suggest additions to this list but
agrees not to purchase any suggested securities until such security has been
approved by the Adviser as meeting the Fund's social criteria. The Adviser
agrees that it will promptly and thoroughly research the suitability, under its
social criteria, of any suggested security.
Should the Trustees of the Fund 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 Fund 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 from the Designated
Assets and what portion, if any, of the Designated Assets shall be held
uninvested.
The Sub-Adviser shall take, on behalf of the Fund, all actions which it
deems necessary to implement policies determined as provided above, and in
particular, consistent with the provisions of Article 3 of this Agreement, to
place all orders for the purchase, sale, or exchange of securities of the
Fund's account with brokers, dealers, or bankers selected by it, and to that
end the Sub-Adviser is authorized as the agent of the Fund to give instructions
to the Custodian and any Sub-Custodian of the Fund as to deliveries of
securities and gold, transfers of currencies and payments of cash for the
account of the Fund. The Sub-Adviser will advise the Adviser on the same day it
gives any such instructions. In connection with the selection of such brokers,
dealers or bankers and the placing of such orders, the Sub-Adviser is directed
to seek for the Fund execution at the most favorable price by responsible
brokerage firms at reasonably competitive commission rates. In fulfilling this
requirement the Sub-Adviser shall not be deemed to have acted unlawfully or to
have breached any duty, created by this Agreement or otherwise, solely by
reason of effecting a securities transaction in excess of the amount of
Commission another broker or dealer would have charged for effecting that
transaction, if the Sub-Adviser determined in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of either
that particular transaction or the Sub-Adviser's overall responsibilities with
respect to the Fund and to other clients of the Sub-Adviser as to which the
Sub-Adviser exercises investment discretion.
ARTICLE 2: Compensation of the Sub-Adviser. For the services rendered by
the Sub-Adviser under this Agreement, the Adviser shall pay to the Sub-Adviser
compensation, computed and paid monthly in US dollars on average daily net
assets at the annual rate of: Global Equity Fund - 35 basis points. The
Sub-Adviser will pay its expenses incurred in performing its duties under this
Agreement. The Fund shall not be liable to the Sub-Adviser for the compensation
of the Sub-Adviser.
ARTICLE 3: Covenants of the Sub-Adviser. The Sub-Adviser agrees that it
will not deal with itself or any of its affiliates, or with the Trustees of the
Fund or the Fund'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 Fund except as permitted by the Investment Company Act of 1940
and all rules, regulations and orders thereunder, will comply with all other
provisions of the Fund's Declaration of Trust and By-Laws then in effect and
its current prospectus relative to the Sub-Adviser, its directors, officers,
employees and affiliates, and will comply with all other laws, rules,
regulations and orders applicable to the activities contemplated herein.
ARTICLE 4: Liability of the Sub-Adviser. The Sub-Adviser shall not be
liable for any error of judgment or mistake of law or for any loss arising out
of any investment or for any act or omission in carrying out its duties under
this Agreement, except for violation of law, willful malfeasance, bad faith,
gross negligence, or by reason of reckless disregard of its obligations and
duties hereunder. As used in this Article 4 the term "Sub-Adviser" shall
include shareholders, direct officers and employees of the Sub-Adviser, as well
as the Sub-Adviser itself. 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.
ARTICLE 5: Activities of the Sub-Adviser. The services of the Sub-Adviser
to the Fund are not to be deemed to be exclusive, the Sub-Adviser and its
affiliates being free to render services to others. It is understood that
Trustees, officers, partners and shareholders of the Fund or the Adviser are or
may become interested in the Sub-Adviser as directors, officers, shareholders
or otherwise and that shareholders, directors, officers and employees of the
Sub-Adviser may become similarly interested in the Fund or the Adviser as a
shareholder, Trustee, officer, partner, or otherwise.
ARTICLE 6: Duration, Termination and Amendment of this Agreement. 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 September 15, 2000 on which date it will terminate with respect to a
fund, unless its continuance after that date 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 Investment
Company Act of 1940 and all rules, regulations and orders thereunder.
This Agreement may be terminated at any time without the payment of any
penalty by the Trustees of the Fund, by vote of a majority of the outstanding
voting securities of the Fund, by the Adviser or by the Sub-Adviser, on not
more than sixty (60) days nor less than thirty (30) days written notice to
other parties. This Agreement shall automatically terminate in the event of its
assignment.
This Agreement may be amended with respect to a fund only if such
amendment is approved by vote of a majority of the outstanding voting
securities of that fund, by the Adviser and by the Sub-Adviser.
The terms "assignment," "affiliated person," "interested person," and
"majority of the outstanding voting securities" when used in this Agreement
shall have the respective meanings specified in the Investment Company Act of
1940 and the rules, regulations and orders thereunder, subject, however, to
such exemptions as may be granted by the Securities and Exchange Commission
under said Act.
ARTICLE 7: Miscellaneous. This Agreement shall be construed in accordance
with the laws of the Commonwealth of Massachusetts, contains the entire
understanding between the parties and may be executed in several counterparts,
each of which shall be deemed to be an original and one and the same
instrument.
Each party acknowledges and agrees that all obligations of the Fund under
this agreement are binding only with respect to the funds; that any liability
of the Fund under this Agreement, or in connection with the transactions
contemplated herein, shall be discharged only out of the assets of the
appropriate fund; and that no other series of the Fund shall be liable with
respect to this Agreement or in connection with the transactions contemplated
herein.
IN WITNESS THEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
duly authorized, as of this 16th day of August, 1999.
The undersigned Trustee of the Fund has executed this Agreement not
individually, but as Trustee under the Fund's Declaration of Trust dated
November 19, 1982, as amended, and the obligations of this Agreement are not
binding upon any of the Trustees or shareholders of the Fund individually, but
bind only the trust estate.
CITIZENS ADVISERS, INC.
By:____________________________
Its:___________________________
CLEMENTE CAPITAL, INC.
By:____________________________
Its:___________________________
CITIZENS FUNDS
By: ____________________________
Its: ___________________________
