<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Green Century Funds
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
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<PAGE> 2
GREEN CENTURY FUNDS
29 Temple Place, Boston, Massachusetts 02111
(800) 93-GREEN
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held June 18, 1999
A special meeting of the shareholders of GREEN CENTURY BALANCED FUND
(the "Fund"), a series of GREEN CENTURY FUNDS, a Massachusetts business trust
(the "Trust"), will be held at the offices of Green Century Capital Management,
Inc., 29 Temple Place, Boston, Massachusetts 02111, on Friday, June 18, 1999, at
10:00 a.m. for the following purposes, as set forth in the accompanying Proxy
Statement.
ITEM 1. To approve a new investment subadvisory agreement between
Winslow Management Company, Green Century Capital
Management, Inc. and the Trust on behalf of the Fund; and
ITEM 2. To transact such other business as may properly come
before the meeting or any adjournment thereof.
THE TRUSTEES RECOMMEND THAT YOU VOTE IN FAVOR OF ALL ITEMS.
Only shareholders of record on May 7, 1999 will be entitled to vote at
the meeting and at any adjournments thereof.
Adrienne Mai Shishko
Secretary
May 10, 1999
YOUR VOTE IS IMPORTANT. WE WOULD APPRECIATE YOUR VOTING, SIGNING AND RETURNING
THE ENCLOSED PROXY PROMPTLY, WHICH WILL HELP IN AVOIDING THE ADDITIONAL EXPENSES
OF A SECOND SOLICITATION. A POSTAGE PAID, SELF-ADDRESSED ENVELOPE IS ENCLOSED
FOR YOUR CONVENIENCE.
<PAGE> 3
PROXY STATEMENT
This Proxy Statement is being furnished in connection with the
solicitation of proxies by and on behalf of the Board of Trustees of Green
Century Funds, a Massachusetts business trust (the "Trust"), to be used at a
special meeting of the shareholders (the "Meeting") of Green Century Balanced
Fund (the "Fund"), a series of the Trust, to be held at the offices of Green
Century Capital Management, Inc., 29 Temple Place, Boston, Massachusetts 02111,
on Friday, June 18, 1999 at 10:00 a.m. and at any adjournments thereof for the
purposes set forth in the accompanying Notice.
Any person giving a proxy may revoke it at any time prior to its use. A
shareholder may revoke a proxy by appearing at the Meeting and voting in person,
by giving written notice of revocation to the Board of Trustees of the Trust or
by returning a later dated proxy. Signed proxies received by the Board of
Trustees of the Trust in time for voting and not so revoked will be voted in
accordance with the instructions noted thereon. If no instructions are given,
the proxy will be voted in favor of Item 1.
Solicitation of proxies is being made by the mailing of this Notice and
Proxy Statement with its enclosures on or about May 10, 1999 to shareholders of
record on May 3, 1999 (the "Record Date"). It is expected that proxy
solicitations will be made primarily by mail. The Trust's officers and service
contractors may also solicit proxies by telephone or personal interview at no
cost to the Trust. Green Century Capital Management, Inc. (the "Adviser"), the
investment adviser of the Fund, and Winslow Management Company, the Fund's
investment subadviser, will bear all the expenses of this proxy statement and
all proxy solicitation costs.
The Trust is a no-load, diversified, open-end management investment
company organized as a business trust under the laws of the Commonwealth of
Massachusetts on July 1, 1991. The mailing address of the Trust is 29 Temple
Place, Boston, Massachusetts 02111.
The Fund's Annual Report, containing audited financial statements for
the year ended June 30, 1998 and the one-month period ended July 31, 1998, and
Semi-Annual Report for the period ended January 31, 1999 may be obtained free of
charge by writing the Green Century Funds, 29 Temple Place, Boston,
Massachusetts 02111 or by calling 1-800-93-GREEN.
On the Record Date there were 1,239,055.095 outstanding shares of the
Fund. Shareholders of record at the close of business on the Record Date will be
entitled to the same number of votes as the number of full and fractional shares
of beneficial interest held by such shareholder.
As of the Record Date, all Trustees and officers of the Trust as a
group owned less than 1% of the Fund. To the knowledge of the Trust, the
following shareholders beneficially owned 5% or more of the outstanding shares
of the Fund as of the same date: Glyn Mills Nominees (Lombard Street) Limited
A/C 1781 owned 22.6% of the outstanding shares of the Fund and National
Financial Services Corporation owned 7.0% of the outstanding shares of the Fund.
For purposes of determining the presence or absence of a quorum and for
determining whether sufficient votes have been received for approval of any
matter to be acted upon at the Meeting, abstentions and broker "non-votes" will
be treated as shares that are present at the Meeting but which have not been
voted. For this reason abstentions and broker "non-votes" will assist the Trust
in obtaining a quorum but will have the practical effect of a "no" vote for
purposes of obtaining the requisite vote for approval of Item 1.
In the event that a quorum is not present at the Meeting or in the
event that a quorum is present at the Meeting but sufficient votes to approve
Item 1 are not received, the persons named as proxies may propose an adjournment
of the Meeting to permit further solicitation of proxies, provided that such
persons determine such an adjournment and additional solicitation are reasonable
and in the interest of shareholders. A shareholder vote may be taken on the
proposals in this proxy statement prior to such adjournment if sufficient votes
have been received and such vote is otherwise appropriate. Any such adjournment
will require the affirmative vote of a majority of those shares present at the
Meeting in person or by proxy. When voting on a proposed adjournment, the
persons named as proxies will vote all
<PAGE> 4
shares that they are entitled to vote with respect to Item 1 for the proposed
adjournment, unless directed to disapprove Item 1, in which case such shares
will be voted against the proposed adjournment. Under the By-Laws of the Trust,
a quorum is constituted by the presence in person or by proxy of the holders of
a majority of the outstanding shares of the Fund entitled to vote at the
Meeting.
ITEM 1 TO APPROVE A NEW INVESTMENT SUBADVISORY AGREEMENT
At the Meeting, shareholders of the Fund will be asked to approve an
Investment Subadvisory Agreement dated April 1, 1999 (the "New Subadvisory
Agreement") among the Trust, on behalf of the Fund, the Adviser, and Winslow
Management Company ("Winslow"), a separate operating division of Adams, Harkness
& Hill, Inc. ("AHH"). The Fund's investment adviser, Green Century Capital
Management, Inc., will not change.
The information in this proxy statement with respect to the New
Subadvisory Agreement is qualified in its entirety by reference to, and made
subject to, the complete text of the New Subadvisory Agreement, a copy of which
is attached to this proxy statement as Exhibit A.
APPOINTMENT OF WINSLOW MANAGEMENT COMPANY
Currently, the assets of the Fund are managed by Green Century Capital
Management, Inc., as investment adviser. Prior to April 1, 1999, Winslow, Sixty
State Street, Boston, Massachusetts 02109, served as the investment subadviser
to the Fund pursuant to an Investment Subadvisory Agreement dated July 1, 1995
(the "Prior Subadvisory Agreement"). The Prior Subadvisory Agreement was
approved by the shareholders of the Fund on June 23, 1995. Prior to April 1,
1999, Winslow was a separate operating division of Eaton Vance Management
("Eaton Vance"). Effective April 1, 1999, ownership of Winslow as a separate
operating division was transferred by Eaton Vance to AHH. The April 1, 1999
transfer of ownership of Winslow required that the Prior Subadvisory Agreement
be terminated and that the New Subadvisory Agreement be presented to the
shareholders of the Fund for approval. On March 29, 1999, the Board of Trustees
of the Trust (including a majority of the non-interested Trustees), for the
reasons stated below, ratified the change and approved the New Subadvisory
Agreement, subject to approval of the Fund's shareholders. If the shareholders
do not approve the New Subadvisory Agreement, it will terminate on July 27,
1999. The New Subadvisory Agreement is substantially the same as the Prior
Subadvisory Agreement. The Trustees' decision to approve the New Subadvisory
Agreement was based on: (i) the overall quality of Winslow's investment
management services, (ii) its expertise in environmentally responsible
investing, (iii) its strong and long-standing commitment to environmentally
responsible investing, and (iv) its ability to bring new assets to the Fund.
Winslow is a separate operating division of AHH, a registered
investment adviser located at Sixty State Street, Boston, MA 02109. Winslow
manages equity and debt investments in environmental and environmentally
responsible companies for its clients. The Fund is the only registered
investment company advised by Winslow. Currently, Winslow manages $85 million in
assets. The Adviser accrued fees of $60,011 and $5,491 to Winslow for the year
ended June 30, 1998 and the one-month period ended July 31, 1998, respectively.
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If the New Subadvisory Agreement is approved, the Fund will continue to
be managed by Jackson W. Robinson, the President of Winslow Management. Mr.
Robinson has served as the founder and President of Winslow before and after its
acquisition by AHH.
Winslow's Investment Philosophy. Winslow's investment philosophy is
consistent with the Fund's investment philosophy, goals and guidelines set by
the Fund's Trustees and the Fund's Adviser. The underlying principle of
Winslow's investment philosophy is that well managed, environmental and
environmentally responsible companies minimize their environmental risks,
allowing them to enjoy competitive advantages from cost reductions, quality
improvements, profitability enhancements and access to expanding and new growth
markets. Winslow, like the Adviser, also believes these companies may provide
favorable financial returns to those who hold their securities.
In addition to the above environmental considerations set out by the
Adviser, decisions regarding the purchase and sale of equity securities are the
result of certain other investment disciplines. First, Winslow uses a
fundamental security analysis of each investment. This qualitative approach is
complemented with a proprietary computer model that mixes a variety of
statistical data to rank a large group of securities on an ongoing basis
pursuant to several factors. Finally, Winslow will attempt to take advantage of
market inefficiencies through timely execution of trades.
Information about AHH. AHH and its predecessor companies have been
providing broker/dealer services since 1937 and investment advisory services
since 1975. AHH maintains a large staff of experienced investment professionals
to service the needs of its institutional and corporate clients. While it has
traditionally focused on providing research to institutional clients, AHH has
expanded its services to capitalize on the inter-relationships between research,
trading, sales, corporate finance and investment management. AHH's areas of
specialization include healthcare, health food, vitamins and other supplements,
specialty consumer, electronics, semiconductors, software, networking, and
information technology services.
AHH is an employee-owned Massachusetts corporation registered as a
broker/dealer and investment adviser with the Securities and Exchange
Commission. It is a member of the New York Stock Exchange, National Association
of Securities Dealers, Inc. and Boston Stock Exchange and is an associate member
of the American Stock Exchange. John W. Adams is the CEO and Chairman of the
Board. Other principal directors include Allyn C. Woodward, President; Stephen
P. Zak, CFO; Joseph S. Vita, Head of Sales Trading; T. L. Stebbins and Timothy
J. McMahon, Co-Heads of Corporate Finance; Harry E. Wells, Secretary; Benjamin
A. Marsh, Head of OTC Trading; Joseph W. Hammer, Director of Syndicate;
Frederick L. Wolf, Director of Research; and Cynthia A. Cycon, Director of
Institutional Sales. Other directors include Mark D'Annolfo and Steven B.
Frankel in Research and Francis J. Dailey in Sales Trading. All are employees of
AHH and maintain a business address of Sixty State Street, Boston, Massachusetts
02109. John W. Adams owns greater than 10% of the stock of AHH.
The Trustees of the Trust further considered that AHH is expected to
help Winslow attract new investors to the Fund, which will have the effect of
increasing the assets in the Fund and thus the revenues earned by Green Century
Capital Management and Winslow. In this connection, Winslow has agreed to
provide marketing assistance for the Fund. The Trustees also noted in their
discussions that when the net assets of the Fund increase above $30 million, the
total operating expenses of the Fund will decrease.
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DESCRIPTION OF THE NEW SUBADVISORY AGREEMENT
Except for the parties, the terms and conditions of the New Subadvisory
Agreement are substantially similar to the terms and conditions of the Prior
Subadvisory Agreement.
Pursuant to the New Subadvisory Agreement (as it was in the Prior
Subadvisory Agreement), Winslow makes the day-to-day investment selections for
the Fund consistent with the guidelines set out for the Fund by the Adviser (see
"The Green Century Funds' Environmental Standards" and "The Green Century
Balanced Fund Environmental Criteria" in the Fund's prospectus). Subject to such
policies as the Board of Trustees of the Trust and the Adviser may determine,
Winslow maintains a continuous investment program for the Fund, including
investment research and management with respect to the investment and
reinvestment of the Fund's securities, and takes such steps as may be reasonably
necessary to implement the same. Winslow applies the environmental and other
screening criteria developed by itself, the Adviser and the Trust. Winslow
furnishes at its own expense all services, facilities and personnel necessary in
connection with its activities under the New Subadvisory Agreement. If it is
initially approved by the shareholders, the New Subadvisory Agreement will
continue in effect if such continuance is specifically approved at least
annually by vote of the holders of a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940, as amended (the
"1940 Act") of the Fund or by vote of a majority of the Trust's Board of
Trustees, and in either case by the vote of a majority of the Trustees who are
not "interested persons" (as defined in the 1940 Act) of the Trust or Winslow at
a meeting called for the purpose of voting on the New Subadvisory Agreement.
The New Subadvisory Agreement (like it was in the Prior Subadvisory
Agreement) provides that Winslow may render services to others. The New
Subadvisory Agreement is terminable without penalty (i) by the Trust's Board of
Trustees or by a vote of a majority of the outstanding voting securities of the
Fund on 60 days' prior written notice to Winslow, (ii) by the 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. The
New Subadvisory Agreement will automatically terminate in the event of its
assignment. If the New Subadvisory Agreement is not approved by the shareholders
of the Fund, it will terminate on July 27, 1999. The New Subadvisory Agreement
provides that Winslow is not liable for any error of judgement or for any act or
omission in the execution of securities transactions for the Fund, except for
willful misfeasance, bad faith, gross negligence or reckless disregard of its
obligations and duties under the New Subadvisory Agreement.
Under the New Subadvisory Agreement (as it was in the Prior Subadvisory
Agreement), the Adviser pays Winslow as full compensation for the services to be
rendered and expenses to be borne by Winslow 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 will be accrued daily and payable at the end of each quarter, and is
subject to the following adjustment: for each calendar quarter, the Base Fee
will be adjusted as follows: (i) if the Fund's total return (calculated in
accordance with Rule 482 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 will be
increased by an amount which
4
<PAGE> 7
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 will 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 will 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 will 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 Index Total Return is no longer a
reasonable performance benchmark, the Trustees may substitute another
performance benchmark.
For example:
If, on an annual basis, the Green Century
Balanced Fund's Total Return differs from Then the Adviser calculates
the Index Total Return by: and pays quarterly Winslow
a fee which on an annual
basis is equal to:
positive 2.00% or more 0.60%
positive 1.00% to positive 1.99% 0.50%
negative 0.99% to positive 0.99% 0.40%
negative 1.00% to negative 1.99% 0.30%
negative 2.00% or more 0.20%
CONSIDERATION OF THE BOARD OF TRUSTEES
At a meeting of the Board of Trustees of the Trust held on March 29,
1999, the Trustees of the Trust considered information with respect to whether
the New Subadvisory Agreement was in the best interests of the Fund and its
shareholders. The Trustees considered, among other factors, the experience and
reputation of Winslow and AHH, Winslow's and AHH's capabilities with respect to
compliance and control, the fees payable under the New Subadvisory Agreement in
relation to fees payable by other similar investment companies, information
regarding expense ratios and performance, Winslow's commitment to and extensive
experience in environmentally responsible investing, AHH's research capabilities
and trading expertise and Winslow's and AHH's Year 2000 compliance readiness.
The Trustees also considered the recent performance of the Fund and noted that
the Fund had underperformed relative to its benchmark. The Trustees considered
whether the research capabilities of AHH and its financial resources and
personnel would bolster Winslow's capabilities. The Trustees also discussed
Winslow's investment strategy for the Fund with Mr. Robinson at length.
The Board of Trustees of the Trust also considered that under
circumstances in which best price and execution may be obtained from more than
one broker or dealer, Winslow may, in its discretion, purchase and sell
securities through brokers or dealers who provide research, statistical and
other information to Winslow. Although certain research, market and statistical
information from brokers and dealers can be useful to the Fund and Winslow,
Winslow has advised that such information is, in its opinion, only supplementary
to its own research activities and that the information must still be analyzed,
weighed and reviewed by Winslow. It was noted that such information may be
useful to Winslow in providing services to clients other than the Fund.
Conversely, it was noted such information provided to Winslow by brokers and
dealers through whom other clients of Winslow effect securities transactions may
be useful to Winslow in providing services to the Fund.
Based upon its review and its discussions with personnel from Winslow
and AHH, the Trustees of the Trust concluded that the new Subadvisory Agreement
is reasonable, fair and in the best interests of
5
<PAGE> 8
the Fund and its shareholders, and that the fees provided in the New Subadvisory
Agreement are fair and reasonable in light of the usual and customary charges
made by others for services of the same nature and quality. Accordingly, after
consideration of the above factors, and such other factors and information as it
deemed relevant, the Trustees of the Trust, including all of the independent
Trustees present at the meeting, unanimously approved the New Subadvisory
Agreement and voted to recommend its approval by the shareholders of the Fund.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS OF THE FUND VOTE FOR THE APPROVAL OF THE NEW SUBADVISORY AGREEMENT.
REQUIRED VOTE
A vote of a majority of the outstanding voting securities of the Fund
(within the meaning of the 1940 Act) will be required to approve the New
Subadvisory Agreement. Under the 1940 Act, a "vote of a majority of the
outstanding voting securities" of the Fund means the affirmative vote by holders
of the lesser of (a) 67% or more of the Fund's outstanding voting securities
present at a meeting if holders of more than 50% of the Fund's outstanding
voting securities are present in person or by proxy or (b) more than 50% of the
Fund's outstanding voting securities.
If the proposal does not receive the requisite shareholder approval,
then the Trustees of the Trust will consider possible alternatives, which might
include resubmission of the New Subadvisory Agreement for shareholder approval.
ITEM 2 OTHER BUSINESS
Neither the Trustees of the Trust nor the persons appointed as proxies
are aware of any matters other than those set forth in the accompanying Notice
of Special Meeting which may be presented by others, nor do they have any
intention of bringing before the Meeting for action any matters other than those
specified in such Notice. If any other business shall properly come before the
Meeting, the persons appointed as proxies shall vote thereon in accordance with
their best judgment.
MANNER OF VOTING PROXIES
All proxies received by management, if not limited to the contrary,
will be voted FOR Item 1 and in the discretion of the named proxies on any other
matters presented at the Meeting.
SUBMISSION OF CERTAIN PROPOSALS
Proposals of shareholders which are intended to be presented at a
future shareholder meeting must be received by the Trust a reasonable time prior
to the Trust's solicitation of proxies relating to such future meeting. The
Trust is the type of entity commonly referred to as a "Massachusetts business
trust". As such, it is not required to hold, and has no intention of holding,
annual meetings, although the Trust may hold special shareholder meetings.
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<PAGE> 9
ADDITIONAL INFORMATION
THE DISTRIBUTOR
Sunstone Distribution Services, LLC. ("Sunstone Distribution") is the
distributor (the "Distributor") of shares of the Fund. Sunstone Financial Group,
Inc., ("Sunstone Financial") an affiliate of Sunstone Distribution, serves as
subadministrator of the Trust. Sunstone Financial and Sunstone Distribution
directly and indirectly through its subsidiaries act as principal underwriters
and serve as administrators to other mutual funds unrelated to the Trust. The
address of Sunstone Financial and Sunstone Distribution is: 207 East Buffalo
Street, Suite 400, Milwaukee, WI 53202.
THE ADMINISTRATOR
Green Century Capital Management, Inc. is the administrator (the
"Administrator") of the Fund.
THE INVESTMENT ADVISER
Green Century Capital Management, Inc. (the "Adviser") manages the
assets of the Fund pursuant to an investment advisory agreement between the
Trust and the Adviser dated as of November 15, 1991 (the "Advisory Agreement").
The Advisory Agreement was approved by the initial shareholder of the Fund on
February 4, 1992. Subject to such policies as the Board of Trustees of the Trust
may determine, the Adviser provides general investment advice to the Fund. The
Adviser also helps the Trust design, and instructs the Subadviser as to how to
implement, the Trust's environmental criteria. For its services under the
Advisory Agreement, the Adviser receives from the Fund a fee accrued daily and
paid monthly at an annual rate equal to 0.75% of the Fund's average daily net
assets.
For the year ended June 30, 1998 and the one-month period ended July
31, 1998, the Fund accrued advisory fees aggregating $104,833 and $10,301,
respectively.
The principal officers of the Adviser are Douglas H. Phelps, President,
Kristina A. Curtis, Senior Vice President and Treasurer and Adrienne Mai
Shishko, Secretary. The Directors of the Adviser are the three officers
previously named as well as Joshua R. Kratka, Staff Attorney, National
Environmental Law Center, and Lawrence W. Eason, National Director for
Partnership Programs, Fund for Public Interest Research. Paradigm Partners is
the sole stockholder of the Adviser. Paradigm Partners, the partners of which
are all not-for-profit environmental advocacy organizations, is a California
general partnership.
The Adviser furnishes at its own expense all services, facilities and
personnel necessary in connection with providing investment advice and
supervising the Fund's investment assets. The Advisory Agreement will continue
in effect if such continuance is specifically approved at least annually by vote
of a majority of the Trust's Board of Trustees or by vote of a majority of the
outstanding voting securities of the Fund, and, in either case, by the vote of a
majority of the Trustees who are not parties to the Advisory Agreement or
"interested persons" (within the meaning of the 1940 Act) of the Adviser, cast
in person at a meeting called for the purpose of voting on the Advisory
Agreement.
The Advisory Agreement provides that the Adviser may render services to
others. The Advisory Agreement is terminable by the Trust's Board of Trustees or
by vote of a majority of the outstanding voting securities of the Fund without
penalty upon 60 days' prior written notice to the Adviser and by the
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<PAGE> 10
Adviser upon 60 days' prior written notice to the Trust and will automatically
terminate in the event of its assignment. The Advisory Agreement provides that
neither the Adviser nor its personnel will be liable for any error in judgment
or mistake of law or for any loss arising out of any investment or for any act
of omission in the execution of security transactions for the Fund, except for
willful misfeasance, bad faith, gross negligence or reckless disregard of the
Adviser or its personnel with respect to its obligations and duties under the
Advisory Agreement.
The address of the Adviser and each of the principal executive officers
and directors of the Adviser is 29 Temple Place, Boston, Massachusetts 02111.
SOLICITATIONS
The expense of the preparation, printing and mailing of the enclosed
Proxy Ballot, this Proxy Statement and the accompanying Notice of Special
Meeting, will be borne by Green Century Capital Management, Inc. and Winslow.
To obtain the necessary representation at the Meeting, supplementary
solicitations may be made by mail, telephone, or interview by officers or
employees of the Trust, its transfer agent, or administrator. It is anticipated
that the cost of such supplementary expense, if any, would be nominal.
By Order of the Board of Trustees
Adrienne Mai Shishko, Secretary
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<PAGE> 11
PROXY BALLOT
PROXY GREEN CENTURY FUNDS
GREEN CENTURY BALANCED FUND PROXY
The undersigned hereby appoints Kristina A. Curtis and Adrienne Mai Shishko, or
any of them individually, as proxies, with full powers of substitution, to vote
for the undersigned at the Special Meeting of Shareholders of the Green Century
Balanced Fund (the "Fund"), a series of the Green Century Funds (the "Trust"),
to be held at 29 Temple Place, Boston Massachusetts 02111, on Friday, June 18,
1999, at 10:00 a.m., or at any adjournment thereof, notice of which meeting and
the Proxy Statement accompanying the same have been received by the undersigned,
upon the following matters as described in the Notice of Special Meeting and
accompanying Proxy Statement:
1) TO APPROVE A NEW INVESTMENT SUBADVISORY AGREEMENT BETWEEN WINSLOW
MANAGEMENT COMPANY, GREEN CENTURY CAPITAL MANAGEMENT, INC. AND THE
TRUST ON BEHALF OF THE FUND.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES
SAID PROXIES WILL VOTE THIS PROXY AS DIRECTED, OR IF NO DIRECTION IS
INDICATED, FOR ITEM 1 AND IN THEIR DISCRETION WITH RESPECT TO SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENT THEREOF.
Dated , 1999
------------------------
(Please date this proxy)
-----------------------------------
-----------------------------------
Please sign exactly as your name or
names appear at left. Corporate
proxies should be signed by an
authorized officer.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY
BALLOT PROMPTLY, USING THE ENCLOSED ENVELOPE.
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<PAGE> 12
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"),
WINSLOW MANAGEMENT COMPANY, a separate operating division of Adams, Harkness &
Hill, 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
<PAGE> 13
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.
<PAGE> 14
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
<PAGE> 15
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.
<PAGE> 16
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/ Kristina Curtis
------------------------
Kristina Curtis
Treasurer
WINSLOW MANAGEMENT COMPANY, A SEPARATE
OPERATING DIVISION OF ADAMS, HARKNESS &
HILL, INC.
BY /s/ Jackson W. Robinson
------------------------
Jackson W. Robinson
President
GREEN CENTURY FUNDS
BY /s/ Douglas M. Husid
------------------------
Douglas M. Husid
President
