EXHIBIT (h)(1)
ADMINISTRATIVE AND
SHAREHOLDER SERVICES AGREEMENT
Agreement made as of May 29, 2002, and amended and restated as of May 10,
2004, by and between the undersigned, CITIZENS FUNDS (the "Fund"), a
Massachusetts business trust, and CITIZENS ADVISERS, INC. (the "Adviser"), a New
Hampshire Corporation and Investment Adviser to the Fund, wherein the Adviser
agrees to provide certain general administrative and shareholder services on
behalf of the Fund and its series (collectively, the "funds").
1. Description of Administrative Services. The Adviser agrees to provide the
Fund with the following facilities and services:
(a) Administration of certain daily fund expense accounting duties, including
but not limited to payment and budgeting of operating expenses of all
funds, and calculation of expense accruals.
(b) Administration of annual Fund audit with Fund auditors.
(c) Preparation and filing of shareholder reports and communications,
registration statement, annual and semi-annual reports and all other
required regulatory filings.
(d) Administrative services in connection with Custody and Transfer Agents,
including daily monitoring of net asset value and dividend factors,
contract and fee negotiations, and quality control.
(e) Administration of funds' compliance systems with federal and state
regulatory requirements.
(f) Organizational services for any new series of the Fund, including but not
limited to drafting the prospectus and statement of additional
information, filing of all required documents, soliciting proxies, and
clerical duties associated with the filing of any such documents.
(g) Blue Sky reporting services as required for the issuer of securities in
the states and territories.
(h) Vendor relations.
(i) Facilities and equipment to perform all such duties.
(j) Other similar services.
Determinations as to who shall provide certain of these services may be
established from time to time by written agreement between the Fund and the
Adviser to be attached as an addendum to this Agreement. The Adviser may at
times perform only a portion of these services and the Fund may choose to have
these services provided by others on the Fund's behalf.
EXHIBIT (h)(1)
The foregoing list of services does not list all possible administrative
services which may be provided by the Adviser. The foregoing list may be
supplemented from time to time by written agreement between the Fund and the
Adviser to be attached as an addendum to this Agreement.
2. Description of Shareholder Services. The Adviser also agrees to provide
the Fund with the following facilities and services:
(a) Receipt of calls from existing shareholders in a timely manner.
(b) Maintenance of a toll-free number.
(c) Response to shareholder inquiries.
(d) Maintenance of a computer interface with the Fund's transfer agent.
(e) Execution of appropriate shareholder requests.
(f) Retention, maintenance and research of shareholder records.
(g) Printing and mailing of prospectuses and annual reports to shareholders,
as well as shareholder statement production, shareholder tax filings and
other shareholder communications.
(h) Facilities and equipment to perform all such duties.
(i) Other similar services.
3. Fees and Expenses. For performance of administrative and shareholder
services pursuant to this Agreement, the Fund agrees on behalf of each of the
individual funds to pay the Adviser on the basis of the Fee Schedule annexed as
Addendum A hereto.
In addition, the Fund agrees on behalf of each of the individual funds to
reimburse the Adviser for out-of-pocket expenses, including but not limited to
costs associated with the contractual delegation of administrative duties with
respect to voting proxies and posting proxy votes on the Fund website, postage,
forms and materials, telephone charges and records storage. In addition, any
other expenses incurred by the Adviser at the request or with the consent of the
Fund shall be reimbursed by the Fund on behalf of the applicable fund(s).
The Fund agrees on behalf of each of the funds to pay all fees and
reimbursable expenses within five days following the mailing of the respective
billing notice.
4. Indemnification. The Adviser shall not be responsible for, and the Fund
shall on behalf of the applicable fund(s), indemnify and hold the Adviser
harmless from and against, any and all losses, damages, costs, charges, counsel
fees, payments, expenses and liabilities arising out of or attributable to:
EXHIBIT (h)(1)
(a) All actions of the Adviser or its agents or subcontractors required to be
taken pursuant to this Agreement, provided that such actions are taken in
good faith and without negligence or willful misconduct.
(b) The Fund's lack of good faith, negligence or willful misconduct which may
arise out of the breach of this Agreement or any representation or
warranty of the Fund hereunder.
(c) The reliance on or use by the Adviser or its agents or subcontractors of
information, records, documents or services which (i) are received by the
Adviser or its agents or subcontractors, and (ii) have been prepared
maintained or performed by the Fund or any other person or firm on behalf
of the Fund including but not limited to any previous transfer agent or
registrar.
(d) The reliance on, or the carrying out by the Adviser or its agents or
subcontractors of, any instructions or requests of the Fund on behalf of
the applicable fund(s).
(e) The offer or sale of Shares in violation of any requirement under federal
securities laws or regulations or the securities laws or regulations of
any state that such Shares be registered in such state or in violation of
any stop order or other determination or ruling by any federal agency or
any state with respect to the offer or sale of any such shares in such
state.
At any time, the Adviser may consult with legal counsel with respect to
any matter arising in connection with the services to be performed by the
Adviser under this Agreement, and the Adviser and its agent or subcontractors
shall not be liable and shall be indemnified by the Fund on behalf of the
applicable fund(s) for any action taken or omitted by it in reliance upon such
instructions or upon the opinion of such counsel. The Adviser, its agents and
subcontractors shall be protected and indemnified in acting upon any paper or
document furnished by or on behalf of the Fund, reasonably believed to be
genuine and to have been signed by the proper person or persons, or upon any
instruction, information, data, records, or documents, provided the Adviser or
its agents or subcontractors by machine readable input, telex, CRT data entry or
other similar means authorized by the Fund, and shall not be held to have notice
of any change of authority of any person, until receipt of written notice
thereof from the Fund.
In order that the indemnification provisions contained in this Article
shall apply, upon the assertion of a claim for which the Fund may be required to
indemnify the Adviser, the Adviser shall promptly notify the Fund of such
assertion, and shall keep the Fund advised with respect to all developments
concerning such claim. The Fund shall have the option to participate with the
Adviser in the defense of such claim or to defend against such claim in its own
name or in the name of the Adviser. The Adviser shall in no case confess any
claim or make any compromise in any case in which the Fund may be required to
indemnify the Adviser except with the Fund's prior written consent.
This Agreement may be terminated by either party upon one hundred twenty
(120) days written notice to the other. Should the Fund exercise its right to
terminate, all out of pocket expenses associated with the movement or transfer
of records and material
EXHIBIT (h)(1)
will be borne by the Fund on behalf of the applicable fund(s). Additionally, the
Adviser reserves the right to charge for any other reasonable expenses
associated with such termination and/or a charge equivalent to the average of
three (3) months' fees.
5. Additional Funds. In the event that the Fund establishes one or more
series of Shares in addition to Working Assets Money Market Fund, Citizens
Income Fund, Citizens Emerging Growth Fund, Citizens Global Equity Fund,
Citizens Index Fund and Citizens Small Cap Index Fund, with respect to which it
desires to have the Adviser render services under the terms of this Agreement,
it shall so notify the Adviser in writing, and if the Adviser agrees in writing
to provide such services, such series of Shares shall be subject to this
Agreement.
6. Assignment of the Agreement. Unless this Agreement is amended as described
below, neither the Agreement nor any rights or obligations hereunder may be
assigned by either party without the prior written consent of the other party.
This Agreement shall inure to the benefit and bind the parties and their
respective heirs, successors and assigns.
7. Amendment. This Agreement may be amended or modified by a writing,
executed by both parties and authorized or approved by a resolution of the
Trustees of the Fund.
8. Applicable Law. This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of the State of New
Hampshire.
9. Acts of God. In the event either party is unable to perform its
obligations under the terms of this Agreement because of acts of God, strikes,
equipment or transmission failure or damage reasonably beyond its control, such
party shall not be liable for damages to the other for any damages resulting
from such failure to perform or otherwise from such causes.
10. Consequential Damages. Neither party to this Agreement shall be liable to
the other party for consequential damages under any provision of this Agreement
or for any consequential damages arising out of any act or failure to act
hereunder.
11. Termination or Registration. The Fund will assume all duties, expenditures
and arrangements of a continuing nature under this Agreement in the event of its
termination or the resignation of the Adviser.
EXHIBIT (h)(1)
A copy of the Declaration of Trust of the Fund is on file with the
Secretary of the Commonwealth of Massachusetts, and notice is hereby given that
this instrument is executed on behalf of the Trustees of the Fund as Trustees
and not individually and that the obligations of this instrument are not binding
upon any of the Trustees or Shareholders individually but are binding only upon
the assets and property of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
CITIZENS FUNDS
By: /s/ Xxxxxx Xxxxxxx
--------------------------------------
Xxxxxx Xxxxxxx
President
CITIZENS ADVISERS, INC
By: /s/Xxxx Xxxxxxxx
--------------------------------------
Xxxx Xxxxxxxx
Senior Vice President
EXHIBIT (h)(1)
ADMINISTRATIVE AND SHAREHOLDER SERVICES AGREEMENT
FEE SCHEDULE
ADMINISTRATIVE SERVICES
Citizens Advisers, Inc. ("the Adviser") assumes a number of general
administrative services for each individual series and class of Citizens Funds
("xxx Xxxx") for which services the Administrator is paid a monthly fee based on
an annual rate of each class's average net assets. This payment may be made
twice monthly but in no event less frequently than semi-annually.
The administrative service fees may be less than but shall not be greater than
the following:
FEE
FUND EFFECTIVE
---- ---------
Citizens Money Market Fund - All Classes 15/100 of 1%
7/1/2003
Citizens Income Fund - All Classes 15/100 of 1%
7/1/2003
Citizens Emerging Growth Fund - All Classes 15/100 of 1%
7/1/2003
Citizens Global Equity Fund - All Classes 15/100 of 1%
7/1/2003
Citizens Core Growth Fund - All Classes 15/100 of 1%
7/1/2003
Citizens Small Cap Core Growth Fund - All Classes 15/100 of 1%
7/1/2003
Citizens Value Fund - All Classes 15/100 of 1%
7/1/2003
Citizens Balanced Fund - All Classes 15/100 of 1%
7/1/2003
Citizens Ultra Short Bond Fund - All Classes 15/100 of 1%
7/1/2003
Prime Money Market Fund - All Classes 15/100 of 1%
7/1/2003
EXHIBIT (h)(1)
Government Obligations Fund - All Classes 15/100 of 1%
7/1/2003
Citizens 300 Fund - All Classes 15/100 of 1%
7/1/2003
Citizens Investment Grade Bond Fund-All Classes 15/100 of 1%
7/1/2003
Citizens Small Cap Value Fund 15/100 of 1%
11/17/2003
The Administrative services provided to the Fund include but are not limited to
the following:
1. Administration of certain daily fund expense accounting duties,
including but not limited to payment and budgeting of operating
expenses of all funds, and calculation of expense accruals.
2. Administration of annual Fund audit with Fund auditors.
3. Preparation and filing of registration statement, annual and
semi-annual reports and all other required regulatory filings.
4. Administrative services in connection with Custody and Transfer
Agents, including daily monitoring of net asset value and dividend
factors, contract and fee negotiations, and quality control.
5. Administration of funds' compliance systems with federal and state
regulatory requirements.
6. Blue Sky reporting services as required for the issuer of
securities in the states and territories.
7. Vendor relations.
8. Facilities and equipment to perform all such services. 9. Other
similar services.
In addition to fees for the above services, the Adviser may provide other day to
day services. Out of pocket expenses incurred by the Adviser in relation to such
services will be reimbursed to the Adviser by the Fund at cost.
SHAREHOLDER SERVICES
Citizens Securities, Inc. ("the Distributor") an affiliate of Citizens Advisers,
Inc. also provides a number of services to the Fund relating primarily to
shareholder services and communications, including but not limited to the
following services:
1. Receipt of calls from existing shareholders in a timely manner.
EXHIBIT (h)(1)
2. Maintenance of a toll-free number.
3. Response to shareholder inquiries.
4. Maintenance of a computer interface with the Fund's transfer agent.
5. Execution of appropriate shareholder requests.
6. Retention, maintenance, and research of shareholder records.
7. Printing and mailing of prospectuses and annual reports to
shareholders, shareholder statement production, shareholder tax filings
and other shareholder communications.
8. Facilities and equipment to perform all such duties.
9. Other similar services.
For all funds and classes, with the exception of the Citizens Core Growth Fund,
Standard Class shares, the Distributor shall be paid a monthly account-based fee
for the above shareholder services and communications, based on the following
schedule:
All Funds - All Classes $ 8.35 per account per year
With respect to the Citizens Core Growth Fund, Standard Class shares, the Fund
pays to the Distributor a monthly shareholder service fee which may be less but
shall not be greater than an annual rate of 35/100 of 1% of average net assets
of the fund's Standard shares.
In addition to the fees for the above services, the Distributor will be
reimbursed by the Fund at cost for out-of-pocket expenses incurred by the
Distributor in relation to shareholder services.
These payments may be made twice monthly but in no event less frequently than
semi-annually.
Agreed and Accepted:
CITIZENS FUNDS
By: /s/ Xxxxxx Xxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxx
Title: President
CITIZENS ADVISERS, INC.
By: /s/ Xxxx Xxxxxxxx
-------------------------------
Name: Xxxx Xxxxxxxx
Title: Senior Vice President
Dated: 5/10/04
