Exhibit (h)(1)
ADMINISTRATIVE AND
SHAREHOLDER SERVICES AGREEMENT
Agreement made this Seventeenth day of May, 1999, by and between the
undersigned, CITIZENS FUNDS (the "Fund"), a Massachusetts business trust, and
CITIZENS ADVISERS, INC. (the "Adviser"), a California 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 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 Fund 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.
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 and its affiliate, Citizens Securities,
Inc. (the "Distributor") on the basis of the Fee Schedule annexed as Addendum A
hereto.
In addition to any fees paid pursuant to the foregoing, 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 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:
(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 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.
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: Xxxx Xxxxxx Xxxxxx
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Xxxx Xxxxxx Xxxxxx
Chair
CITIZENS ADVISERS, INC.
By: Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
President and Chief Executive Officer
Attest:
Xxxxxx X. Xxxxx
--------------------------
Secretary
Date: May 17, 1999
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ADMINISTRATIVE AND SHAREHOLDER SERVICES AGREEMENT
FEE SCHEDULE
ADMINISTRATIVE SERVICES
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Citizens Advisers, Inc. ("the Administrator") 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.
The administrative service fees are as follows:
Fund Fee Effective
Working Assets Money Market Fund - Standard shares 10/100 of 1% 7/1/99
Working Assets Money Market Fund - Institutional Class shares 10/100 of 1% 7/1/99
Citizens Income Fund - Standard shares 10/100 of 1% 7/1/95
Citizens Income Fund - Institutional Class
and Administrative Class shares 10/100 of 1% 7/1/95
Citizens Emerging Growth Fund - Standard shares 10/100 of 1% 7/1/95
Citizens Emerging Growth Fund- Institutional Class
and Administrative Class shares 10/100 of 1% 7/1/95
Citizens Global Equity Fund - Standard shares 10/100 of 1% 7/1/95
Citizens Global Equity Fund- Institutional Class
and Administrative Class shares 10/100 of 1% 7/1/95
Citizens Index Fund - Standard shares 20/100 of 1% 1/25/96
Citizens Index Fund - Institutional Class
and Administrative Class shares 20/100 of 1% 7/1/99
Citizens Small Cap Index Fund - Standard shares 10/100 of 1% 7/1/95
Citizens Small Cap Index Fund - Institutional Class
and Administrative Class shares 10/100 of 1% 7/1/95
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.
Administration of funds' compliance systems with federal and state
regulatory requirements.
5. Blue Sky reporting services as required for the issuer of securities
in the states and territories.
6. Vendor relations.
7. Facilities and equipment to perform all such services.
8. Other similar services.
In addition to fees for the above services, the Administrator may provide other
day to day services. Out of pocket expenses incurred by the Administrator in
relation to such services will be reimbursed to the Administrator by the Fund
at cost.
SHAREHOLDER SERVICES
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Citizens Securities, 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.
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.
The Administrator is reimbursed the cost of providing the above shareholder
services and communications for each of the individual funds with the exception
of the Citizens Index Fund Standard shares. With respect to the Citizens Index
Fund, Standard shares, the Fund pays to the Administrator a monthly shareholder
service fee based on an annual rate of 40/100 of 1% of average net assets of
the fund's Standard shares.
Agreed and Accepted:
CITIZENS FUNDS CITIZENS ADVISERS, INC.
By: /s/ Xxxx Xxxxxx Xxxxxx By: /s/ Xxxx X. Xxxxxxx
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Xxxx Xxxxxx Xxxxxx Xxxx X. Xxxxxxx
Chair President and Chief Executive Officer
Dated: May 17, 1999
