EXHIBIT (H)(7)
EXPENSE LIMITATION AGREEMENT
CITIZENS FUNDS
EXPENSE LIMITATION AGREEMENT, effective as of May 30, 2007, by and between
Citizens Advisers, Inc. (the "Manager") and Citizens Funds (the "Trust"), on
behalf of each its series listed on Schedule A hereto (each, a "Fund" and
collectively, the "Funds").
WHEREAS, the Trust is a Massachusetts business trust, and is registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end management company; and
WHEREAS, the Trust and Manager have entered into a Management Agreement
dated June 1, 1992, amended and restated as of May 16, 2005 ("Management
Agreement"), pursuant to which the Manager provides investment management
services to the Funds for compensation based on the value of the average net
assets of each Fund; and
NOW THEREFORE, the parties hereto agree as follows:
1. Expense Limitation.
Applicable Expense Limit. To the extent that the ordinary operating
expenses incurred by a class of a Fund listed in Schedule A in any fiscal year,
including but not limited to investment management fees payable to the Manager,
but excluding interest, taxes, brokerage commissions, other investment-related
costs, extraordinary expenses such as litigation and other expenses not incurred
in the ordinary course of the Fund's business ("Fund Operating Expenses"),
exceed the Operating Expense Limit, as defined in Section 1.2 below, such excess
amount (the "Excess Amount") shall be the liability of the Manager.
Operating Expense Limit. The Operating Expense Limit in any fiscal
year with respect to each class of a Fund listed in Schedule A shall be the
amount specified in Schedule A hereto based on a percentage of the average daily
net assets of such class.
2. Recoupment of Fee Waivers and Expense Reimbursements.
If the annualized Fund Operating Expenses of a class of a Fund listed in
Schedule A are less than the Operating Expense Limit on any day during which the
Management Agreement is in effect, the Manager shall be entitled to recoup from
the Fund any expense reimbursements and other payments remitted by the Manager
to such class pursuant to Section 1 hereof (for such class, the "Recoupment
Amount") during any of the previous thirty-six (36) months, to the extent that
such class' annualized Fund Operating Expenses plus the amount so recouped
equals, for such day, the Operating Expense Limit provided in Schedule A,
provided that such amount paid to the Manager
from such class will in no event exceed the total Recoupment Amount and the
Recoupment Amount will not include any amounts previously recouped. Payment of
such Recoupment Amount may be made twice monthly but in no event less frequently
than semi-annually.
3. Term and Termination of Agreement.
This Agreement shall begin on July 1, 2007 and shall continue in effect
with respect to each class of a Fund listed in Schedule A until June 30, 2008 or
such later date to which the parties agree in writing. Termination shall not
affect the Manager's rights under Section 2 unless the parties otherwise agree
in writing. In addition, this Agreement shall terminate with respect to each
class of a Fund listed in Schedule A upon termination of the Management
Agreement for that Fund. If this Agreement is in effect with respect to any
class of a Fund for less than a full fiscal year, the Fund Operating Expenses
and the Operating Expense Limit for such class shall be calculated with respect
to the portion of the applicable fiscal year during which this Agreement is in
effect.
4. Miscellaneous.
4.1 Interpretation. Nothing herein contained shall be deemed to require a
Fund or the Trust to take any action contrary to the Trust's Amended and
Restated Declaration of Trust, or any applicable statutory or regulatory
requirement to which it is subject or by which it is bound, or to relieve or
deprive the Trust's Board of Trustees of its responsibility for and control of
the conduct of the affairs of the Fund.
4.2 Definitions. Any question of interpretation of any term or provision of
this Agreement, including but not limited to the investment management fee and
the computations of net asset values, having a counterpart in or otherwise
derived from the terms and provisions of the Management Agreement or the 1940
Act, shall have the same meaning as and be resolved by reference to such
Management Agreement or the 1940 Act.
4.3 Amendments. This Agreement may be amended only by a written agreement
signed by each of the parties hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized as of the day and year first
above written.
CITIZENS FUNDS CITIZENS ADVISERS, INC.
On behalf of each of
its series listed on Schedule A
By: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx Xxxxxxx Xxxxxx X. Xxxxxxx
Title: President Title: Senior Vice President
SCHEDULE A
Per Annum
Fund and Class Operating Expense Limit
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Citizens Value Fund, Standard shares 1.29%
Citizens Value Fund, Institutional shares 0.90%
