As filed with the Securities and Exchange Commission on June 21, 1996
File Nos. 2-80886
811-3626
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 34
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 29
---------------------------------
CITIZENS INVESTMENT TRUST*
(Exact name of registrant as specified in charter)
One Harbour Place
Suite 525
Portsmouth, N.H. 03801
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (603) 436-5152
Sophia Collier
One Harbour Place
Suite 525
Portsmouth, N.H. 03801
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
_____________ immediately upon filing pursuant to paragraph (b)
_____________ on ______________ pursuant to paragraph (b)
_____________ 75 days after filing pursuant to paragraph (a)
X on August 20, 1996 pursuant to paragraph (a) of Rule 485
-------------
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the Registrant
has previously registered an indefinite number of securities under the
Securities Act of 1933. The Notice required by Rule 24f-2 was filed by the
Registrant for its most recent fiscal year on August 28, 1995.
- ---------------------
*This filing only relates to Citizens Index Institutional Portfolio.
<PAGE>
CITIZENS INVESTMENT TRUST
Citizens Index Institutional Portfolio
CROSS-REFERENCE INDEX
PART A INFORMATION REQUIRED IN A PROSPECTUS
ITEM REFERENCE LOCATION
Item 1. Cover Page Cover Page
Item 2. Synopsis; Fee Information Cover Page; Fee Information
Item 3. Condensed Financial Information Not Applicable
Item 4. General Description of Registrant Organization and Management of
the Trust
Item 5. Management of the Fund Organization and Management of
the Trust
Item 5A. Management's Discussion of Fund
Performance Not Applicable
Item 6. Capital Stock and other Securities How to Purchase and Redeem
Shares; Dividends, Distributions,
and Taxes
Item 7. Purchase of Securities Being How to Purchase and Redeem
Offered Shares
Item 8. Redemption or Repurchase How to Purchase and Redeem
Shares
Item 9. Legal Proceedings None
PART B INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and History The Fund
Item 13. Investment Objectives and Policies Investment Objective and
Policies; Other Investment
Techniques
Item 14. Management of the Registrant Trustees and Officers; Additional
Information Regarding Citizens
Adviser
Item 15. Control Persons and Principal
Holders of Securities Additional Information Regarding
Citizens Adviser
Item 16. Investment Advisory and Other
Services Investment Advisory and Other
Services
Item 17. Brokerage Allocation and Other
Practices Turnover and Portfolio
Transactions
Item 18. Capital Stock and Other Securities The Value of Our Shares
Item 19. Purchase, Redemption and Pricing
of Securities Being Offered Additional Redemption Information
Item 20. Tax Status Federal Taxes
Item 21. Underwriters Investment Advisory and Other
Services
Item 22. Calculation of Yield Quotations of
Money Market Funds Information About Our Yield and
Total Return
Item 23. Financial Statements Financial Statements
<PAGE>
PART C Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration
Statement
<PAGE>
_____________, 1996
Citizens Index Institutional Portfolio
This Prospectus sets forth concisely the information that a prospective
investor ought to know before investing and should be retained for future
reference.
Citizens Index Institutional Portfolio is specially designed by Citizens
Advisers to seek capital appreciation. The Portfolio's strategy is to invest in
a market weighted index of 300 of the country's top socially responsible
companies.
No Load
The Citizens Index Institutional Portfolio has no sales charges, either when
you purchase or when you redeem your shares. Distribution expenses are covered
by our 12b-1 plan.
Minimum Investment
The minimum initial investment in the Citizens Index Institutional Portfolio is
$100,000.
Statement of Additional Information.
We also have a "Statement of Additional Information," dated the same date as
this prospectus, which provides detailed information on investment and
operational policies. This booklet has been filed with the Securities and
Exchange Commission (SEC) and is incorporated into this Prospectus by
reference. We will be happy to send you a free copy if you write to us at :
Citizens Trust
1 Harbour Place
Portsmouth, NH 03801
or call us toll-free at (800) 223-7010.
Citizens Investment Trust, the Trust, is an open-ended, diversified management
company. Shares are not insured by the Federal Deposit Insurance Corporation
(FDIC), or any other agency.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
<PAGE>
Table of Contents Page
Introduction: Dear Friend........................... 1
Fee Information..................................... 2
How We Select Our Investments....................... 3
Investment Objective, Policies and Risk Factors..... 4
Organization and Management of the Trust............ 6
How to Buy Shares................................... 11
How to Redeem Shares................................ 11
Shareholder Services................................ 13
Dividends, Distributions and Taxes.................. 13
Fee Information
The following chart is set up in a standard format that has been developed by
the SEC and is used by all mutual funds. This chart will enable you to easily
compare the fees and costs of Citizens Trust with other mutual funds. No
financials are presented for the Citizens Index Institutional Portfolio as it
commenced operations as of the date of this Prospectus.
Expense Table
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) None
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering price) None
Deferred Sales Load (as a percentage of
amount redeemed) None
Redemption Fees (as a percentage of
amount redeemed) None
Exchange Fee (per exchange) None
Annual Portfolio Operating Expenses
(as a percentage of average net assets)
Management Fee 0.50%
Distribution Expense (12b-1 Fee) 0.07%
Other Expenses 0.08%*
------
Total Operating Expenses 0.65%*
*Projected
<PAGE>
Example: You would have paid the following expenses on a
$1,000 investment assuming a 5% annual return and redemption
at the end of each period:
1 Year 3 Years
Citizens Index Institutional Portfolio $7 $21
This information is intended to assist you in understanding your various direct
and indirect costs and expenses of a $1,000 investment in the Citizens Index
Institutional Portfolio. "Other Expenses" is based on estimated amounts
for the current fiscal year.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR PAST OR FUTURE RETURN. ACTUAL EXPENSES AND ACTUAL RETURN MAY BE
GREATER OR LESS THAN THOSE INCLUDED IN THE EXAMPLE ABOVE.
How We Select Our Investments
We believe there is a revolution going on in business today, and only certain
companies will be able to thrive in these new, faster-paced and environmentally
sensitive business conditions. Citizens Trust invests in these companies
businesses with the potential to produce strong financial results today, as
well as to create a world we will want to live in tomorrow.
When we evaluate any company or institution for investment, we first ask
ourselves a few basic questions: Is this a successful company, with good
financial prospects? Is it creating value for customers, shareholders, and the
community? If the answers are positive, then we apply a series of specific
screens to evaluate the company further.
Environment, Conservation, and Renewable Energy
We look for companies implementing energy-efficient manufacturing methods,
waste reduction, and recycling programs. We avoid persistent violators of EPA
regulations.
<PAGE>
Positive Workplace Policies
We believe that companies with good employee relations and training programs
will be tomorrow's economic leaders. We do not knowingly invest in any company
that has a pattern of breaking health and safety laws, or "union busting"
tactics, or discrimination against its prospective or current employees,
customers, or suppliers on the basis of race, age, gender, sexual orientation,
ancestry, religion, or disability.
Research and Development
We look for companies that emphasize research and development and are building
sustainable, profitable businesses, not just harvesting yesterday's capital.
Small and Emerging Businesses
We believe that small and emerging businesses can be attractive investments,
creating jobs and often bringing innovative ideas and practices into the
economy.
Affordable Housing
Construction and financing of affordable housing offer attractive investment
opportunities.
Investments We Avoid
We do not invest in companies that derive significant revenue from the
manufacture of weapons, tobacco, or alcohol products. We also avoid nuclear
power and companies that use animals to test personal care products or
otherwise treat animals in an inhumane manner.
We do not invest in U.S. Treasury securities, because they are general purpose
obligations and we want to know - and feel it is important for you to know -
specifically what we are investing in.
Investment Objective, Policies and Risk Factors
Citizens Index Institutional Portfolio
The objective of the Citizens Index Institutional Portfolio is capital
appreciation. Of course, there is no assurance that we will achieve this
objective.
<PAGE>
The Citizens Index Institutional Portfolio is designed to be a core holding for
investors who want to gain the twin benefits of indexing and company screening.
The Portfolio invests in the 300 stocks comprising the Citizens Social Index, a
market weighted index that consists of companies included in the S&P 500 that
have passed Citizens Trust's social screens and also consists of some companies
that are not part of the S&P 500 but which pass our social and financial
screens. Companies outside the S&P 500 are used in the Index in order to
increase the number of stocks comprising the Index, and to achieve, to the
extent practical given the social criteria applied, industry representation of
the stocks comprising the Index corresponding approximately to the industry
weightings of the S&P 500. We believe that companies that meet our social
criteria should be better prepared to meet future demands for goods and
services and may also be less likely to incur legal liabilities.
The way we run the Portfolio on a day-to-day basis is to buy and hold the
common stock of all the companies in the Index in a percentage that is
approximately equal to each security's total market value divided by the total
market value of all the companies in the Index. During periods of unusual
market conditions, as well as for liquidity purposes and pending the investment
of the proceeds of the sale of shares, we may invest all or a portion of assets
of Citizens Index Institutional Portfolio in money market instruments,
including: obligations of agencies and instrumentalities of the U.S.
Government; certificates of deposit of banks; and commercial paper or other
corporate notes of investment grade quality. In addition, the Portfolio will
hold a small amount of cash and money market instruments (under normal
circumstances no more than 5%) resulting from shareholder purchase and
redemption activity and a provision for operating expenses. Holding cash and
money market instruments, together with the costs of operations, will prevent
us from ever perfectly tracking the performance of the Index. Payment of our
operating expenses will reduce returns. Our allocation to cash and money market
instruments will improve returns when the market is heading down and hurt them
when the market is moving up.
Companies will be deleted from the Index and divested from the Portfolio if
they fail our annual social responsibility review. If a company is removed we
will try to replace it with another company from the same industry which meets
all social criteria. In addition, from time to time we may make other small
changes in the Index to delete companies which have been acquired or whose
stocks cease to be publicly traded and to reflect changes in the composition of
the S&P 500. We do not expect these changes to exceed 10% of the members of the
Index on an annual basis.
<PAGE>
We are always pleased to send interested investors a current list of the
members of our Index.
Additional Investment Policies
In addition to the specific policies and investment methods for the Citizens
Index Institutional Portfolio, we also have some general policies that we use
to manage all of the Trust's Portfolios.
For example, we consistently apply both social and financial screens to all our
investment decisions. This policy, together with Portfolio's investment
objective and fundamental investment policies described in the Statement of
Additional Information, cannot be changed without the approval of a majority of
the outstanding shares of the Portfolio.
We try not to put all our eggs in one basket. We aim for a high degree of
diversification; this means that we will manage 75% of the Portfolio's total
assets so that no more than 5% of those assets will be invested in any one
company at the time of investment. We do not invest more than 25% of the value
of the Portfolio in any one industry.
We believe Citizens Trust's role is to be a conscientious and alert investor,
not a controlling manager; therefore, we will not accumulate in the Portfolio
more than 10% of the voting securities of any one company.
Each Portfolio may temporarily borrow money from banks (and pledge its assets
to secure such borrowing) to meet redemption requests, or for other purposes.
We will keep this borrowing down to no more than 10% of the value of each
Portfolio's total assets and make no purchases while we have any outstanding
loans.
Organization and Management of the Trust
Citizens Investment Trust, or, as it is affectionately known, Citizens Trust,
began its existence as Working Assets Money Fund on November 24, 1982. The
Trust is the type of organization that is commonly known as a mutual fund or,
more technically, a Massachusetts business trust and an open-end investment
company, registered under the Investment Company Act of 1940 as a diversified
management company. Citizens Trust is a "series" company. This means that our
Trust can have several portfolios, each with its own investment objectives,
assets, and liabilities.
In order to manage the Trust on a day-to-day basis, we have signed a Management
Agreement with Citizens Advisers, which has served as the Trust's Adviser since
<PAGE>
its inception in 1982. This relationship is one of the most important of all
the Trust's contracts. Citizens Securities, a subsidiary of Citizens Advisers,
serves as the Trust's Distributor.
Sophia Collier
Sophia Collier owns a majority share of Citizens Advisers, our Investment
Adviser. She also serves as its manager. Here she explains the role of the
management company:
Our responsibility at Citizens Advisers is to translate the Trust's fundamental
policies into a workable investment program and to administer this program in a
smooth and friendly manner.
Owners
Citizens Advisers and its subsidiary, Citizens Securities, are both
California corporations. I individually own 60% of the outstanding stock of
Citizens Advisers. My fellow shareholders are three brothers, John P. Dunfey,
Robert J. Dunfey, Sr., and Gerald F. Dunfey, who own 12% each, and one of our
friends, William B. Hart, who owns 4%. Citizens Advisers owns 100% of Citizens
Securities.
Citizens Advisers and Citizens Securities have two offices. One is located at
111 Pine Street, San Francisco, CA 94111; the other is One Harbour Place,
Portsmouth, NH 03801.
The Role of Investment Adviser
In our role as Investment Adviser to the Trust we determine which companies
meet our social and financial criteria and therefore will be approved for
inclusion in the Trust's Portfolios. To assist us with actual portfolio
management we have retained several "sub-advisers" to determine which
securities should be bought and sold for the individual Portfolios. In addition
to our work as Investment Adviser, we also provide additional administrative
functions as needed.
RhumbLine Advisers
The Citizens Index Institutional Portfolio is sub-advised by
RhumbLine Advisers, a registered investment adviser
established in 1990 and with offices at 30 Rowes Wharf,
Boston, MA. RhumbLine is 97% owned by J.D. Nelson. J.D. is
also an interested trustee of the Trust.
<PAGE>
How the Trust's Finances Work
Azie Taylor Morton, chair of the Audit Committee, explains the Citizens
Advisers fee structure:
One of the Trust's most important contracts is its Management Agreement with
Citizens Advisers. This agreement specifies a fee to be paid to Citizens
Advisers. This fee is based upon average annual net assets in the Portfolio and
is 50/100 of 1% for the Citizens Index Institutional Portfolio.
Citizens Advisers provides all office space, facilities, equipment, and
personnel necessary to do its job as Investment Adviser. Citizens Advisers is
also responsible for all fees paid to sub-advisers. It pays RhumbLine Advisers
a fee of 10/100 of 1% of average annual net assets in the Portfolio.
Citizens Advisers may from time to time enter into agreements and make payments
to other third party providers of Trust-related advisory and administrative
services.
Citizens Advisers also provides administrative services to the Trust under a
separate administrative contract. This contract provides for payment to the
management company of "market price" (a price comparable to the cost to the
Trust from an unaffiliated vendor) for services contracted with the Trust and
reimbursement of out-of-pocket expenses.
Services provided by Citizens Advisers and paid for by the Trust under this
agreement include, but are not limited to, shareholder servicing and
subaccounting, telephone charges, services related to the organization of new
portfolios, and blue sky reporting services. Citizens Advisers may at times
perform services provided under this agreement directly, or may contract to
have such services provided by a third party. As of the date of this
Prospectus, no fees have been paid to the Adviser by the Citizens Index
Institutional Portfolio for its management or administrative services under
this contract as the Portfolio is commencing operations as of the date of this
Prospectus.
The Portfolio pays all of its expenses not expressly assumed by Citizens
Advisers. These include, but are not limited to, interest, taxes, audit and
legal fees, custodian and transfer agent charges, insurance premiums, cost of
registering shares under federal and state laws, dues, and any litigation costs
as well as the cost of typesetting, printing, and distributing shareholder
reports and prospectuses to shareholders. When a cost is shared by several
Portfolios, the staff, under the supervision of the Board of Trustees, at
<PAGE>
Citizens Advisers will allocate it among the Portfolios in a reasonable manner.
State Street Bank and Trust Company, 1776 Heritage Drive, North Quincy, MA
02171, is the custodian of the assets of Citizens Trust. The custodian takes no
part in determining the investment policies of the Citizens Index Institutional
Portfolio or in deciding which securities are purchased or sold by the
Portfolio. We may invest in obligations of the custodian and may purchase or
sell securities from or to the custodian.
The transfer and dividend agent for Citizens Index Institutional Portfolio is
PFPC, Inc., 400 Bellevue Avenue, Wilmington, Delaware 19809.
12b-1 Fees
Citizens Trust has a 12b-1 plan which allows us to reimburse Citizens
Securities and other dealers of the Trust's shares for sales-related costs such
as advertising or sales salaries up to a total of 7/100 of 1% of the average
annual assets of the Citizens Index Institutional Portfolio. As of the date of
this Prospectus, no fees have been paid by the Citizens Index Institutional
Portfolio as the Portfolio is commencing operations as of the date of this
Prospectus.
Sometimes Citizens Securities makes additional promotional expenditures that
are not reimbursed by the 12b-1 plan. This may include paying dealers who
employ salespeople, called "registered representatives," additional fees beyond
the 12b-1 fees or giving them non-cash incentives, such as trips or merchandise
for special promotional purposes. They may also make expense reimbursements to
non-dealers for meetings, sales contests, advertising, and other valid
promotional purposes.
Voting Rights
As shareholders, you are entitled to one vote for each full share you own and a
fractional vote for fractional shares. Shares of each Portfolio generally vote
separately on matters that only concern that Portfolio. This includes, for
example, the approval of a new or amended management contract or a change in
investment objectives. However, all shareholders of the Trust vote together on
the selection of trustees and accountants and other matters as required by the
Investment Company Act of 1940. The holders of shares have no preemptive,
conversion, or subscription rights, and voting rights are not cumulative. Due
to the expense and because we are not required to do so, we do not plan to hold
annual meetings of shareholders. However, we may hold special meetings of the
Trust or of a specific Portfolio when our trustees feel it is necessary or
<PAGE>
desirable, or at the request of 10% of the Trust shares. We will assist
shareholders in communicating with one another to arrange such a meeting.
How to Purchase and Redeem Shares
We are available Monday through Friday from 9 AM to 9 PM, Eastern Standard
Time. Our people are ready to assist you on the phone, or, if you wish, we can
refer you to a qualified broker or financial planner in your area who is not
affiliated with us.
Mailing and Wiring Instructions
Regular U.S. Mail
Please use the Business Reply Envelope provided with this Prospectus, or mail
to:
Citizens Trust
c/o PFPC, Inc.
PO Box 8962
Wilmington, DE 19899-8962
If you wish to send an overnight delivery
package (i.e. Federal Express, UPS, Airborne Express etc.),
please mail to:
Citizens Trust
c/o PFPC, Inc.
400 Bellevue Parkway
Wilmington, DE 19809
Phone: 302-791-1691
Please send overnight delivery packages only to this address. Regular U.S. Mail
will not be accepted at this address and may be returned to you.
Our Wiring Address:
PNC Bank, N.A.
Philadelphia, PA
ABA # 031000053
Further credit A/C# 86-1030-3646
Shareholder name/account number
<PAGE>
How to Buy Shares
It is easy to buy shares through Citizens Securities or another participating
broker/dealer.
You can pay for your investment in several ways: by check, wire transfer, or
exchange from another Portfolio, or through another arrangement with your
investment dealer. If you have invested by check, you cannot withdraw your
funds for ten business days. Wired funds are available immediately. See "How to
Redeem Shares" (page 11) for further information. We accept checks drawn on
foreign banks provided they are in U.S. dollars. However, these checks take
much longer to clear and may be subject to foreign collection charges. If your
check is returned for any reason, we will charge you a service fee of $20.00.
The offering price of shares is their Net Asset Value. When you buy shares in
the Citizens Index Institutional Portfolio, you will get the Net Asset Value
next determined after we receive your check.
You can purchase both full and fractional shares, which we will round to the
nearest 1/1000 of a share. Your share balance and its value will be listed on
your Citizens Trust statement.
Investment Minimums
The minimum initial investment in the Citizens Index Institutional Portfolio is
$100,000. There is no minimum for additional investments.
How to Redeem Shares
We offer you several convenient ways to redeem your shares in any of the
Citizens Trust Portfolios:
Call Us: Telephone Exchange and Redemption
The easiest way to get access to your money is to check off the Telephone
Exchange and Redemption Option on your account application. Then, when you want
to make a redemption, you simply call us up and tell us how much you want us to
redeem. Depending upon your instructions, we will then deposit your redemption
into your account, mail you a check, or electronically transfer your redemption
to your predesignated account. We have two types of electronic transfer options
available. We can wire on the same day for $10, or transfer through the
Automated Clearing House (ACH) at no charge. This takes two days. You will earn
<PAGE>
dividends up to and including the date when we receive your redemption request.
If you do select the Telephone Exchange and Redemption option, you should be
aware that even though redemption by phone is very convenient, it may increase
the risk of error or of an unauthorized party gaining access to your account.
We take care to safeguard your account in several ways. To help us straighten
out any errors, we record all telephone calls and maintain these tapes for at
least six months. To protect against unauthorized access, we offer you the
option on your account application of establishing a personal password to use
with telephone transactions. But please remember, neither the Trust, our
Advisers, nor our Transfer Agent will be responsible if we properly act on
telephone instructions we reasonably believe to be genuine.
Normally, we will send you your money on the next business day after we receive
your request. Another thing to keep in mind is that we reserve the right to
wait up to ten business days to redeem any investments that have been made by
check or electronic funds transfer. This is because there is a ten-day "window"
when a check can be returned for insufficient funds and because it may take
five days for an electronic funds transfer to be reversed. Funds that are wired
are always good on the day they are received. Therefore, if you need to redeem
shares within ten business days of your purchase, please invest by wire.
Your instructions to us on redemptions are normally set up through your initial
account application. You can change these instructions to us at any time by
sending us a written request accompanied by a signature guarantee from an
"eligible guarantor" and a corporate resolution or trust document when
applicable.
Written Request for Redemption
If you do not want to use Telephone Exchange and Redemption, you can still
redeem your shares at any time, although the process will take longer. Send us
a written request together with your signature guarantee and a corporate
resolution or trust document when applicable. We may require further
documentation from corporations, fiduciaries, pension plans, and/or
institutional investors.
Redeem Your Shares in Person through Citizens Securities and
Other Brokers
Investors may also redeem their shares through Citizens Securities, or through
participating broker-dealers (who may charge a fee for this service). Certain
<PAGE>
broker-dealers may have arrangements with the Trust that permit them to order
redemption of shares by telephone or facsimile transmission.
We have the right to compel the redemption of shares held in an account if the
aggregate net asset value of the shares in the account is less than $1,000. If
our Adviser decides to do this, we will advise shareholders who would be
affected to increase the size of their accounts to the $1,000 minimum. Accounts
between $250 - 2,500 will be assessed a service charge of $2.00 per month. This
charge will be waived if an automatic investment plan is established for the
account.
Shareholder Services
Exchange Privilege
You may make an exchange at any time and to any Portfolio, provided the
Portfolio is legally registered for sale in your state. You should obtain and
read the Prospectus for the other Portfolio before mailing an exchange.
Making a Change in Your Account
After your account is set up, you may want to make a change in one of the
options. We are pleased to assist, but will require a signature guarantee from
all registered owners of the accounts. The occasional need for a signature
guarantee is one of the most frustrating aspects of mutual fund investing,
because, in our experience, transactions which need a signature guarantee are
frequently ones that are time pressured as well. The signature guarantee is our
only way to protect your account from access by unauthorized parties. The
following transactions are the most common that require signature guarantees:
written request for redemption, authorizing telephone transaction for the first
time, changing your predesignated wire or ACH instructions, establishing or
modifying a systematic withdrawal plan, exchanges between accounts which do not
have identical titles. The following are eligible guarantors (please note,
notaries public are not eligible guarantors): commercial banks, trust
companies, credit unions, savings associations, members of a domestic stock
exchange.
Dividends, Distributions and Taxes
Unless you give us other instructions, we will automatically reinvest your
dividends and distributions at Net Asset Value in additional shares. We can
also pay your dividends and other distributions to you by check or electronic
transfer through the Automated Clearing House to your bank account.
<PAGE>
Payments of dividends and distributions of capital gains for the Citizens Index
Institutional Portfolio, if any, are made annually.
How We Report the Portfolio's Investment Results
Our Trust's president, Sophia Collier, describes how we calculate and report
the investment results of the Portfolio and how to compare these results with
other funds or potential investments.
Total Return and Other Quotations
When you add a Portfolio's income (or yield) together with any changes in its
Net Asset Value, you get the Portfolio's "Total Return," which shows you the
pure investment results of that Portfolio. Our aggregate total return will
always be quoted in our advertisements in addition to any other figures.
To compute Total Return for the Citizens Index Institutional Portfolio, we
start with the total number of shares that you can buy for $1,000 at the
beginning of the period. We then add all the additional shares that you would
have purchased within the period with reinvested dividends and distributions
(this takes into account the Portfolio's income, if any). Finally, we multiply
the number of these shares by the Net Asset Value on the last day of the period
and divide the result by the initial $1,000 investment to see our percentage
gain or loss. For periods of more than one year, we adjust the cumulative Total
Return to get an average annual Total Return.
When we quote our investment results, we will sometimes compare them to
unmanaged market indices such as the Dow Jones Industrial Average and Standard
& Poor's 500, and other data and rankings from recognized independent
publishers or sources such as Donoghue's Money Fund Report, Bank Rate Monitor,
Money Magazine, Forbes Magazine and Lipper Analytical Services, among others.
Valuation of Shares
At the end of every day that the New York Stock Exchange is open, we calculate
the Portfolio's Net Asset Value per share. To calculate our Net Asset Value, we
add up the total assets of the Portfolio, subtract all liabilities and then
divide by the number of shares outstanding. While this is generally
straightforward, different types of securities require special valuation
methods.
In the Citizens Index Institutional Portfolio, where our Net Asset Value
fluctuates, most of our holdings are securities that trade on the open market.
<PAGE>
We value these at their most recent closing sale price or, if there is no
closing price, halfway between the bid and asked price. If no market quotation
is available for a given security, we have told our adviser to value that
security in good faith.
Tax Facts
We will send you a complete statement each January as to the federal tax status
of dividends and distributions paid by the Portfolio during the previous
calendar year.
What is Taxable?
Remember that the dividends you have earned, as well as any short term capital
gains, are taxable to you as dividends (unless, of course you are otherwise not
subject to taxes).
Long-term Capital Gains
If we make a distribution from a Portfolio's net long-term capital gains, you
will need to report it as a long-term capital gain, regardless of how long you
have held the shares of that Portfolio. However, allowed losses on sales of
certain shares of a portfolio held less than six months will be treated as
long-term capital losses to the extent of the long-term capital gain dividends
received on such shares.
If you sell shares in one Portfolio and then repurchase shares of the same
Portfolio within 30 days, you will have made what is called a "wash sale," and
losses realized, if any, will not be deductible for income tax purposes.
Another tax fact to remember is that if you sell shares within 90 days of
purchase and then reinvest in the shares of the same or a new Portfolio without
payment of a new sales charge, any gain on the sale may be increased (or any
loss reduced) by the amount of the sales charge.
Keep in mind that the exchange of shares is treated as a sale, and an
exchanging shareholder may, therefore, realize a taxable gain or loss.
<PAGE>
Other Taxes
You may also be subject to state and local taxes on dividends and distributions
from the Portfolio. Please consult your own tax adviser to determine the proper
tax treatment of these and any other tax matters related to your investment in
Citizens Trust.
For your information, we do not expect the Portfolio itself to pay any federal
income or excise taxes (so at least your earnings would not be taxed twice).
That is because each year the Trust expects to qualify each Portfolio as a
separate regulated investment company under the Internal Revenue Code. In order
to qualify, the Portfolio must meet certain income, distribution and
diversification requirements such as distributing all of the Portfolio's net
investment income and realized capital gains to shareholders in a timely
manner.
Trustees
The Trust is governed by an outside Board of Trustees who are elected by
shareholders to supervise the operations of the Trust in the interest of the
shareholders.
William D. Glenn II, chair of the Board of Trustees, is executive director of
Continuum HIV Day Services in San Francisco.
Azie Taylor Morton, audit chair, operates her own investment management firm.
She was the 36th Treasurer of the United States.
*Sophia Collier is the Trust's president and principal owner of our investment
adviser, Citizens Advisers.
Juliana Eades is the executive director of the New Hampshire Community Loan
Fund, one of the country's oldest local community economic development
institutions.
Wilma Mankiller was the principal chief of the Cherokee Nation, in Tahlequah,
Oklahoma, from 1985 to 1995. She presently serves on the board of the Ford
Foundation.
*J.D. Nelson is chief executive officer of RhumbLine Advisers, a minority-owned
investment advisory firm specializing in institutional and pension assets,
using indexed and quantitative techniques.
<PAGE>
Ada Sanchez is director of the Public Service and Social Change Program at
Hampshire College.
*Interested person (inside trustee)
(C)1996 Citizens Securities
Working Assets is a registered trademark of Working Assets
Funding Service. Used under license.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
October 31, 1995
AS AMENDED ________ __, 1996
This Statement of Additional Information is not a prospectus and
should be read in conjunction with the current Prospectuses for
the series of Citizens Investment Trust, dated May 31, 1995 and
________ __, 1996 (for Citizens Index Institutional Portfolio),
as may be amended from time to time. Copies of the current
Prospectuses can be obtained by calling (800) 223-7010, or by
writing Citizens Investment Trust (hereafter "Citizens Trust"),
One Harbour Place, Portsmouth, NH 03801. This Statement and the
Prospectuses may be supplemented from time to time.
CITIZENS INVESTMENT TRUST
Working Assets Money Market Portfolio
Citizens Income Portfolio
Citizens Emerging Growth Portfolio
Citizens Global Equity Portfolio
Citizens Index Portfolio
Citizens Index Institutional Portfolio
TABLE OF CONTENTS PAGE
The Fund 1
Investment Objective and Policies 1
Other Investment Techniques 6
Factors that Affect the Value of Our Investments 7
Turnover and Portfolio Transactions 8
The Value of Our Shares 8
Information About Our Yield and Total Return 10
Total Return and Other Quotations 11
Description of Bond Ratings 12
Dividends and Distributions 14
Federal Taxes 15
Additional Redemption Information 17
Trustees and Officers 17
Additional Information Regarding the Management Company 19
Investment Advisory and Other Services 20
Additional Information 23
Voting Rights 23
Shareholder and Trustee Liability 23
Custodian 24
Auditors 24
Legal Counsel 24
Financial Statements 24
<PAGE>
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THE FUND
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Citizens Investment Trust (the "Fund" or "Citizens Trust") presently
consists of eight separate portfolios: Working Assets Money Market Portfolio
(inception date 8/30/83), Citizens Income Portfolio (inception date 6/10/92),
Citizens Emerging Growth Portfolio (inception date 2/8/94), Citizens Global
Equity Portfolio (inception date 2/8/94), Muir California Tax-Free Income
Portfolio (inception date 6/10/91), Citizens Index Portfolio (inception date
3/3/95), E-Fund (inception date 7/1/95) and Citizens Institutional Index
Portfolio (inception date x/xx/96). On May 28, 1992 the Fund, which had
operated as a money market fund since 1983, changed its name from Working
Assets Money Fund to Working Assets Common Holdings. On October 5, 1995 the
Fund changed its name from Working Assets Common Holdings to Citizens
Investment Trust.
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INVESTMENT OBJECTIVE AND POLICIES
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The following are fundamental investment policies followed by each of the
current portfolios of the Fund (each a "Portfolio," and collectively, the
"Portfolios") which supplement those listed in the applicable Prospectus. Any
policy identified as a fundamental investment policy of a Portfolio may be
amended only with approval of the holders of a majority of the outstanding
shares of that Portfolio as defined in the Investment Company Act of 1940
(known as the "1940 Act").
1. A Portfolio may not buy the securities of any company if the Portfolio would
then own more than 10% of the total value of all of the company's outstanding
voting securities, or if the Fund as a whole would then own more than 10% of
the total value of all of the company's outstanding voting securities. A
Portfolio may not concentrate its investments by buying the securities of
companies in any one industry if more than 25% of the value of the Portfolio's
total assets would then be invested in that industry; however, obligations
issued or guaranteed by the U.S. Government, its agencies and
instrumentalities, and obligations of domestic branches of domestic banks, are
not included in this limit.
2. A Portfolio will not invest in limited partnerships, including those which
own commodities, real estate, and oil, gas and mineral leases.
3. A Portfolio may not make loans other than pursuant to repurchase agreements.
When we buy money market instruments or loan participation interests, we are
investing, not making a loan.
4. A Portfolio may not invest for the purpose of
exercising control or management of other companies.
5. A Portfolio may not buy or continue to hold securities if our Trustees or
officers or the Directors or officers of our Adviser own more than certain
limits of these securities. If all of these people who own more than 1/2 of 1%
of the shares of a company together own more than 5% of the company's shares,
we cannot buy, or continue to own, that company's shares.
6. A Portfolio may not participate with others on a joint,
or a joint and several, basis in any trading account in any
securities.
7. A Portfolio may not underwrite securities, which means
we may not sell securities for others.
8. A Portfolio can borrow only under special circumstances. We do not normally
borrow money, but for temporary purposes a Portfolio may borrow from banks up
to 10% of the Portfolio's total assets. If we borrow, we can pledge our assets
up to the amount borrowed. A Portfolio cannot borrow to purchase securities or
to increase its income, but can borrow to pay for shares being redeemed so that
we do not have to sell securities we do not want to sell. Thus, a Portfolio
<PAGE>
will not purchase any securities while the Portfolio has borrowings above 5% of
assets outstanding. The interest paid on our borrowings would reduce our net
income.
9. Subject to the provisions of our Declaration of Trust which provides that we
may issue several classes of shares in any one Portfolio, we may not issue
senior securities. We may not issue securities that have priority over others
in dividends, redemption rights, or have other privileges. We must limit our
involvement in "illiquid instruments," that is, repurchase agreements that have
a term of more than seven days, and securities that have restrictions on resale
or lack readily available market quotations, to 10% of the total value of a
Portfolio's net assets and we will buy no such securities for a Portfolio
unless the assets in the Portfolio exceed $10 million at the time of purchase.
Private Placements which may be traded under Rule 144A will not be subject to
these limitations, if our Board of Trustees finds that a liquid trading market
exists for these securities. Our Trustees will review on an ongoing basis any
determination by the Adviser to treat a restricted security as a liquid
security, including the Adviser's assessment of current trading activity and
the availability of reliable price information. In determining whether a
privately placed security is properly considered a liquid security, the Adviser
and our Trustees will take into account the following factors: (i) the nature
of the security and the nature of the marketplace trades (e.g., the time needed
to dispose of the security, the method of soliciting offers, and the mechanics
of transfer); (ii) dealer undertakings to make a market in the security; and
(iii) the number of dealers willing to purchase or sell the security and the
number of other potential purchasers. To the extent the Portfolio invests in
restricted securities that are deemed liquid, the general level of illiquidity
in the Portfolio may be increased if qualified institutional buyers become
uninterested in purchasing these securities or the market for these securities
contracts. Acquisitions of such liquid restricted securities will be made from
a list approved by our Trustees.
10. There is a limit on a Portfolio's ability to loan portfolio securities. If
a Portfolio loans securities, then it must maintain collateral at 100% of the
value of the securities and any collateral must be marketable on an exchange.
The following is a fundamental policy for Working Assets Money Market
Portfolio, Citizens Income Portfolio, Citizens Index Portfolio and Citizens
Index Institutional Portfolio and does not apply to the Citizens Emerging
Growth Portfolio:
A Portfolio may place only 5% of its total assets in companies which have
been in operation, including operations of predecessors, for less than three
years.
The following is a general (non-fundamental) policy of all Citizens Trust
Portfolios: None of the Citizens Trust Portfolios will invest in real estate
assets or interests therein, excluding readily marketable securities.
The following discussion elaborates on the description of each
Portfolio's investment objectives and policies as contained in the Prospectus,
including any fundamental investment policies of a Portfolio that supplement
the fundamental policies of the Fund listed above and in the Prospectus.
WORKING ASSETS MONEY MARKET PORTFOLIO
Working Assets Money Market Portfolio, as a fundamental investment policy
of the Portfolio, may not buy any securities other than money market
securities. Thus, the Portfolio cannot buy any commodities or commodity futures
contracts, any mineral programs or leases, any shares of other investment
companies or any warrants, puts, calls or combinations of these. The Portfolio
may not buy real estate, or real estate loans, but may buy money market
securities even though the issuer invests in real estate or interests in real
estate.
The following are also the present policies of Working Assets Money
Market Portfolio, but may be changed by our Trustees without a vote of the
shareholders of the Portfolio:
<PAGE>
1. The Portfolio may invest in variable amount master demand notes, which are
obligations that permit us to invest fluctuating amounts at varying rates of
interest pursuant to direct arrangements between us and the borrower, subject
to the 10% limitation referred to in paragraph 3 below. The interest rates and
amounts involved may change daily. We have the right to increase the amount
under the note at any time up to the full amount provided by the note
agreement, or to decrease the amount; and the borrower may repay up to the full
amount of the note without penalty. Because these types of notes are direct
lending arrangements between us and the borrower, they generally will not be
traded and there is no active secondary market for these notes. However, they
are redeemable on demand, and thus immediately repayable by the borrower, at
face value plus accrued interest at any time. Our right to redeem is dependent
on the borrower's ability to pay principal and interest on demand. Accordingly,
our Adviser will consider and continuously monitor the earning power, cash flow
and other liquidity ratios of the borrower to assess its ability to meet its
obligations on demand. We will invest in these notes only if the Board of
Trustees or its designee determines that they present minimal credit risks and
are of comparable quality to commercial paper having the highest rating of
Moody's Investors Service ("Moody's") or Standard & Poor's Corporation
("Standard & Poor's" or "S&P").
2. The Portfolio may not invest more than 10% of its assets in time deposits
maturing in more than two business days but less than seven business days.
3. The Portfolio will not enter into a repurchase agreement if it would
cause more than 10% of its assets to be subject to repurchase agreements having
a maturity of more than seven days; included in this 10% limitation would be
any illiquid securities (as described below). See "Other Investment Techniques
- - Money Market Instruments and Repurchase Agreements."
4. The Portfolio will not invest more than 10% of its net assets in illiquid
securities. Generally an illiquid security is any security that cannot be
disposed of promptly and in the ordinary course of business at approximately
the amount at which the Portfolio has valued the instrument. Subject to this
limitation, our Trustees have authorized the Portfolio to invest in restricted
securities, specifically privately placed commercial paper, where such
investment is consistent with the Portfolio's investment objective, and has
authorized such securities to be considered to be liquid to the extent the
Adviser determines that there is a liquid institutional or other daily market
for such securities. For example, restricted securities which may be freely
transferred among qualified institutional buyers pursuant to Rule 144A under
the Securities Act of 1933, as amended, and for which a liquid institutional
market has developed may be considered to be liquid securities. See the
discussion relating to the purchase of illiquid securities in the section on
the fundamental investment policies of the Portfolios under "Investment
Objective and Policies" above.
The Portfolio may not sell short or buy on margin and may not write put
or call options.
PORTFOLIO QUALITY AND REQUIRED MATURITIES
Because the Working Assets Money Market Portfolio uses the amortized cost
method of valuation (see "The Value of Our Shares"), the Portfolio will not
purchase any instruments with a remaining maturity of more than 397 days (13
months), except for certain exceptions permitted by rules under the 1940 Act.
Obligations of U.S. Government agencies and instrumentalities which have a
variable rate of interest which is adjusted no less frequently than every 762
days are considered to have a maturity equal to the period remaining until the
next adjustment date. A variable rate instrument which permits us to demand
payment of the principal amount of the instrument at any time or at specified
intervals of no more than 397 days (13 months), on no more than thirty days'
notice, is deemed to have a maturity of the longer of the period remaining
until the interest rate is adjusted or the period remaining until the principal
amount will be paid to us on demand. A variable rate instrument maturing in 397
days (13 months) or less is deemed to have a maturity equal to the period
remaining until the next interest adjustment date. A floating rate instrument
with a demand feature, and which has its interest rate pegged to an identified
<PAGE>
market interest rate, is deemed to have a maturity equal to the period of time
remaining until the principal amount will be paid to us on demand, provided
that our Trustees (or our Adviser on their behalf) determine that the floating
rate feature ensures that the market value of the instrument will always
approximate par value and that the instrument is of high quality. Our Trustees
will review our holdings of variable rate instruments quarterly to assure
themselves that these instruments continue to be of high quality. A repurchase
agreement is considered to have a maturity equal to the period remaining until
the delivery date on resale. An instrument called for redemption is considered
as maturing on the date on which the redemption payment must be made. The Money
Market Portfolio will maintain a dollar-weighted average portfolio maturity
that does not exceed 90 days.
The Money Market Portfolio intends to comply with Rule 2a-7 under the
1940 Act. Under that Rule, the Portfolio may not invest more than 5% of its
total assets in the securities of any one issuer, except for U.S. Government
agency securities. In addition, we may only invest in securities which are
rated within the top two rating categories (or, if unrated, deemed by our
Adviser to be of equivalent credit quality). We may not invest more than 5% of
the Money Market Portfolio's assets in securities which are not rated in the
highest rating category by at least two nationally recognized statistical
rating organizations (for single-rated securities, one rating organization will
suffice; for unrated securities, our Adviser may rely on its own credit
equivalency assessment based upon procedures approved by our Trustees). If we
do invest in securities which are not rated in (or, if unrated, not deemed
equivalent to) the highest rating category, we will limit such investments so
that no more than 1% of the total assets of the Money Market Portfolio is
invested in securities of any one issuer rated below the highest category. In
addition, pursuant to our own credit procedures, we will not invest in any
unrated security or in any security rated by only one rating organization
unless such security is on a list approved by our Trustees.
CITIZENS INCOME PORTFOLIO
The objective of Citizens Income Portfolio is to provide as high a level
of current income as we believe to be consistent with prudent investment risk.
We invest in bonds and other debt securities which meet our financial and
social criteria. We intend to purchase primarily intermediate and long term
securities and to maintain a weighted average maturity of 5 - 15 years.
However, at times, we may have a longer or shorter weighted average maturity if
we believe it will help us meet our investment objective.
We plan to invest at least 65% of the value of the Citizens Income
Portfolio's assets in debt securities that are rated BBB or better by a
nationally recognized rating service such as Standard & Poor's or Moody's;
unrated securities which we believe are comparable in credit quality to
securities rated BBB or better as described above; obligations issued or
guaranteed by the U.S. Government or its agencies or instrumentalities;
mortgages and other asset backed securities; other debt securities; or cash and
cash equivalents. Up to 35% of the Income Portfolio's total assets may be
invested in debt securities which do not have the investment characteristics
described above. Such debt securities could include convertible debt
securities, convertible preferred and preferred stocks, or other securities.
In pursuit of our investment objective we will sometimes purchase
securities that have warrants attached to them. These warrants are typically
held on our books at a zero value, as the value of the warrants can only be
realized upon their exercise. From time to time, we will also purchase options
to buy or sell securities in the future at values determined by the performance
of financial benchmarks or indexes. The use of options can add risk to the
Portfolio because the portfolio manager may determine that exercise of the
option will not benefit the Portfolio and therefore, the amount invested to
acquire the option will be lost. We may also purchase "structured securities,"
such as interest only strips or similar vehicles where one or more of the
rights within the underlying securities has been traded through the financial
markets for a different right or series of rights. The risk associated with
"interest-only strips" is that the security may prepay or default and our
ability to collect interest payments will end.
The Citizens Income Portfolio is authorized to purchase the securities
described above from both U.S. and non-U.S. issuers. (See "Other Investment
Techniques - Foreign Securities.")
<PAGE>
CITIZENS EMERGING GROWTH PORTFOLIO
The objective of the Citizens Emerging Growth Portfolio is aggressive
growth through investment in small and medium sized companies. Up to 100% of
this Portfolio's assets will be invested in the common and preferred stock of
companies with capitalizations ranging from $75 million to $4 billion. While
many of these companies will have already demonstrated their strength, some
will be still unseasoned, and therefore may have some speculative
characteristics.
The net asset value of this Portfolio is subject to significant
fluctuation. Smaller companies have the potential for a much higher reward, as
well as significantly more risk. To moderate this risk we plan to hold between
30-50 companies in the Portfolio under normal conditions.
At times we will also buy short term fixed income securities for the
Citizens Emerging Growth Portfolio. Since most of the companies we will
purchase are relatively new, we expect dividend income to be negligible to
accomplishing the Portfolio's objective.
CITIZENS GLOBAL EQUITY PORTFOLIO
The objective of the Citizens Global Equity Portfolio is capital
appreciation by investing in both foreign and U.S. markets. Investing in
foreign companies and on international exchanges may entail greater risk than
investing solely in the U.S. (See "Other Investment Techniques - Foreign
Securities.")
In the Citizens Global Equity Portfolio we buy primarily common stocks of
U.S. domestic and foreign companies. From time to time, we may also buy other
securities such as convertible or preferred stocks and short term debt
securities. Under most circumstances we plan to allocate over half our assets
to foreign markets in a minimum of three countries.
To moderate the risks of investing in foreign securities as well as to
gain potential benefits we use a number of investment techniques. The first of
these is country selection. We restrict our investments in emerging nations
(those not included in Morgan Stanley's World Index) to no more than 25% of the
assets of Citizens Global Equity Portfolio.
When we invest on foreign exchanges we buy securities in the currency of
the local country. Often the local currency will fluctuate vs. the U.S. dollar.
To moderate this risk we engage in currency "hedging" when we feel it is
appropriate to protect the value of our portfolio. We do this by entering into
arrangements to buy or sell a particular currency, security, or securities
index for a stated value at a given point in time. While there is a cost
involved in hedging, we believe it allows us to moderate the risk of currency
exchange.
CITIZENS INDEX PORTFOLIO AND CITIZENS INDEX INSTITUTIONAL PORTFOLIO
The objective of the Citizens Index Portfolio and the Citizens Index
Institutional Portfolio is capital appreciation.
Both the Citizens Index Portfolio and the Citizens Index Institutional
Portfolio invest primarily in the securities comprising the Citizens Social
Index, a market weighted index that consists of companies included in the S&P
500 that have passed Citizens Trust's social screens and also consists of some
companies that are not part of the S&P 500 but which pass our social and
financial screens. Companies outside the S&P 500 are used in the Citizens Index
to add industry diversity and other financial characteristics that we believe
will enable the Index to track the returns of the S&P 500 as a whole.
Securities will be purchased in a proportion equal to the weight of each
company to the total Index. At times we will also buy short-term fixed income
securities for the Citizens Index Portfolio and the Citizens Index
Institutional Portfolio. Under normal circumstances these short-term
investments will amount to no more than 5% of a Portfolio's total assets. Our
investment results will usually lag the performance of the Index due to
<PAGE>
short-term cash investments and the deduction of portfolio expenses and
transaction costs.
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OTHER INVESTMENT TECHNIQUES
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MONEY MARKET INSTRUMENTS AND REPURCHASE AGREEMENTS
During periods of unusual market conditions, for liquidity purposes or
pending the investment of the proceeds of the sale of its shares, we may
invest all or a portion of assets of the Citizens Income Portfolio, Citizens
Emerging Growth Portfolio, Citizens Global Equity Portfolio, Citizens Index
Portfolio and Citizens Index Institutional Portfolio in money market
instruments, including obligations of agencies and instrumentalities of the
U.S. Government, certificates of deposit of banks, and commercial paper or
other corporate notes of investment grade quality.
OPTIONS TRANSACTIONS
Each Portfolio may from time to time buy and write (sell) call and put
options on securities, security indices, and foreign currencies that are traded
on recognized securities exchanges and over-the-counter markets. A call option
gives the holder (buyer) the right to purchase a security or currency at a
specified price (the exercise price) at any time until or on a certain date
(the expiration date). A put option gives the purchaser of the option the right
to sell, and the writer (seller) the obligation to buy, the underlying security
or currency at the exercise price at any time until or on the expiration date.
The premium that a Portfolio receives for buying or writing a call or put
option is deemed to constitute the market value of an option. Aggregate
premiums paid for put and call options will not exceed 5% of the Portfolio's
total assets at the time of each purchase. The premium that a Portfolio will
receive from writing a call option will reflect, among other things, the
current market price of the underlying investment, the relationship of the
exercise price to such market price, the historical price volatility of the
underlying investment, and the length of the option period. These instruments
are often referred to as "derivatives" which may be defined as financial
instruments whose performance is derived, at least in part, from the
performance of another asset (such as a security, currency or an index of
securities). The Portfolios may use these techniques to hedge against changes
in interest rates, foreign currency exchange rates, changes in securities
prices or other factors affecting the value of their investments, or as part of
their overall investment strategies. Each Portfolio will maintain segregated
accounts consisting of liquid assets (or, as permitted by applicable
regulations, enter into certain offsetting positions to cover its obligations
under derivatives transactions) to avoid "leveraging" the Portfolio.
The successful use of these derivative securities depends on the
Adviser's ability to predict correctly the direction of interest rates,
securities prices or other factors. Risks include: a) the risk that interest
rates, securities prices, or other factors do not move in the directions being
hedged against, in which case the applicable Portfolio will have incurred the
cost of the derivative (either its purchase price or, by writing an option,
losing the opportunity to profit from increases in the value of the securities
covered) with no tangible benefits; b) an imperfect correlation between the
price of derivatives and the movements of the securities prices, interest rates
or currency exchange rates being hedged; c) the possible absence of a liquid
secondary market for any particular derivative at any time; d) the potential
loss if the counterparty to the transaction does not perform as promised; and
e) the possible need to defer closing out certain positions to avoid adverse
tax consequences.
FOREIGN SECURITIES
Each of the Portfolios may invest in foreign securities which meet our
social and financial criteria. As discussed in the Prospectuses for the
Portfolios, investing in foreign securities generally presents a greater degree
of risk than investing in domestic securities due to possible exchange rate
fluctuations, less publicly available information, more volatile markets, less
securities regulation, less favorable tax provisions, and the possibility of
<PAGE>
war or expropriation. As a result of its investments in foreign securities, a
Portfolio may receive interest or dividend payments, or the proceeds of the
sale or redemption of such securities, in the foreign currencies in which such
securities are denominated. Under certain circumstances, such as where we
believe that the applicable exchange rate is unfavorable at the time the
currencies are received or we anticipate, for any other reason, that the
exchange rate will improve, a Portfolio may hold such currencies for an
indefinite period of time. A Portfolio may also hold foreign currency in
anticipation of purchasing foreign securities. While the holding of currencies
will permit the Portfolio to take advantage of favorable movements in the
applicable exchange rate, such strategy also exposes the Portfolio to risk of
loss if exchange rates move in a direction adverse to the Portfolio's position.
Such losses could reduce any profits or increase any losses sustained by the
Portfolio from the sale or redemption of securities and could reduce the dollar
value of interest or dividend payments received.
WHEN-ISSUED SECURITIES
Each Portfolio, other than the Working Assets Money Market Portfolio, may
purchase securities on a "when-issued" or on a "forward delivery" basis. It is
expected that, in many cases, a Portfolio purchasing securities on a
when-issued basis, will take delivery of such securities. When a Portfolio
commits to purchase a security on a when-issued or on a forward delivery basis,
it will set up procedures consistent with current policies of the Securities
and Exchange Commission concerning such purchases. Since such policies
currently recommend that an amount of a fund's assets equal to the amount of
the purchase be held aside or segregated to be used to pay for the commitment,
we intend that a Portfolio will always have cash, short-term money market
instruments or high quality debt securities sufficient to cover any commitments
or to limit any potential risk. However, although we do not intend to make such
purchases for speculative purposes and we intend to adhere to current
regulatory policies with respect to such purchases, purchases of securities on
such bases may involve more risk than other types of purchases. For example, we
may have to sell assets which have been set aside to cover our commitments in
order to meet redemptions. Also, if we were to determine that it is necessary
to sell the when-issued or forward delivery securities before delivery to a
Portfolio, the Portfolio may incur a loss because of market fluctuations since
the time the commitment to purchase such securities was made. When the time
comes to pay for when-issued or forward delivery securities, a Portfolio will
meet its obligations from the then-available cash flow on the sale of
securities, or, although it would not normally expect to do so, from the sale
of the when-issued or forward delivery securities themselves (which may have a
value greater or less than the Portfolio's payment obligation).
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FACTORS THAT AFFECT THE VALUE OF OUR INVESTMENTS
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Money Market Instruments and Fixed Income Securities: The value of the
fixed income securities in which we invest will fluctuate depending in large
part on changes in prevailing interest rates. Fixed income securities comprise
all assets in the Working Assets Money Market Portfolio and Citizens Income
Portfolio and a portion of assets in the Citizens Emerging Growth Portfolio and
Citizens Global Equity Portfolio under normal conditions. If these rates go up
after we buy a security, the security's value may go down. On the other hand,
if the rates go down, the security's value may go up. Changes in value and
yield based on changes in interest rates may have different effects on
short-term obligations than on long-term obligations. Long-term obligations,
which often have higher yields, may fluctuate in value more than short-term
ones. We do not expect changes in interest rates to significantly affect the
value of our shares in the Working Assets Money Market Portfolio, since we use
the amortized cost method, which is described in the section "The Value of Our
Shares." However, changes in interest rates can have a significant effect on
the value of non-money market fixed income securities.
The value of equity securities held in the Citizens Emerging Growth,
Global Equity, Index and Index Institutional Portfolios will fluctuate based
upon market conditions and issues specific to the issuer. These include changes
in the management and fundamental financial condition of the issuing company,
prevailing economic and competitive conditions in the industry sectors in which
the company does business and other factors which affect individual securities
and the equity market as a whole.
<PAGE>
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TURNOVER AND PORTFOLIO TRANSACTIONS
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In Working Assets Money Market Portfolio, we generally purchase
investments and hold them until they mature. Historically, securities of U.S.
Government agencies or instrumentalities have involved minimal risk when they
have been held by investors to maturity. However, we may from time to time sell
securities and purchase others to attempt to take advantage of short-term
market variations. We may also sell securities prior to maturity to meet
redemptions or as a result of a revised evaluation of the issuer by our
Adviser.
For the Citizens Income Portfolio we purchase fixed income securities,
and for Citizens Emerging Growth Portfolio, Citizens Global Equity Portfolio,
Citizens Index Portfolio and the Citizens Index Institutional Portfolio, we may
purchase both equity and fixed income securities and hold them until such time
as we believe it is advisable to sell them in order to realize a gain or loss
whereupon we reinvest these assets in other securities.
The Citizens Index Portfolio and the Citizens Index Institutional
Portfolio seek to have a turnover of less than 25% per year.
Our Adviser seeks to obtain for us the best net price and the most
favorable execution of orders. Purchases are made from issuers, underwriters,
dealers or brokers, and banks who specialize in the types of securities we buy.
Purchases from underwriters include a commission or concession paid by the
issuer to the underwriters. Purchases from dealers include the spread between
the bid and asked prices and purchases from brokers include commissions paid to
the broker based upon the transaction size. If the execution and price offered
by more than one dealer are comparable, the order may be given to a dealer who
has provided research advice, quotations on portfolio securities or other
services. Our Adviser will comply with Rule 17e-1 under the 1940 Act in regards
to brokerage transactions with affiliates, to assure that commissions will be
fair and reasonable to the shareholders.
Our Adviser may allocate transactions to broker/dealers in exchange for
services. By allocating transactions to obtain services, the Adviser is able to
supplement its own efforts. While it is not possible to place a dollar value on
these services, it is the opinion of the Adviser that the receipt of these
services does not materially reduce the Adviser's overall expenses. These
services may or may not be useful to us or to our Adviser and its affiliates
which engage in securities activities. For the fiscal years ended June 30,
1993, 1994, and 1995, all portfolio purchases, as described above, were made
directly from issuers or from dealers, and we paid commissions in aggregate as
follows: 1993-$79,300, 1994-$329,000 and 1995-$250,000.
Our Adviser also may enter into "soft dollar" arrangements with
broker/dealers. A soft dollar arrangement is one in which the brokerage
commissions generated through trading are used to purchase ancillary products
and services relating to social and investment research.
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THE VALUE OF OUR SHARES
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The value of our shares is expressed as net asset value. The net asset
value per share is computed by subtracting total liabilities from total assets
and dividing that number by the total number of our outstanding shares. All
expenses are accrued daily and taken into account in determining net asset
value.
We attempt to keep the net asset value of our Money Market Portfolio
fixed at $1.00 per share, while we expect the net asset value per share of our
other Portfolios to fluctuate.
The value of our shares is determined at 4:00 p.m. Eastern Time on each
day on which the New York Stock Exchange is open for regular trading and at
such other times as we feel may be necessary or appropriate.
<PAGE>
WORKING ASSETS MONEY MARKET PORTFOLIO
Our Trustees have determined that it is appropriate for us to value our
Money Market Portfolio using the amortized cost method and that this method
represents the fair value of the Portfolio's shares. This method values a
security at the time of its purchase at cost and thereafter assumes a constant
amortization to maturity of any discount or premium, regardless of the impact
of fluctuating interest rates on the market value of the security. This method
does not take into account unrealized gains and losses.
While the amortized cost method provides certainty in valuation, there
may be periods during which value, as determined by the amortized cost method,
is higher or lower than the price we would receive if we sold the instrument.
During periods of declining interest rates, the daily yield on our shares may
tend to be higher than a like computation made by a fund with identical
investments which uses a method of valuation based on market prices and which
reflects capital changes in its dividends. Thus, if the use of amortized cost
by us resulted in a lower aggregate portfolio value on a particular day, a
prospective investor in our shares would be able to obtain a somewhat higher
yield from us than he would from investment in the other fund, and existing
investors in our shares would receive less investment income. The converse
would apply in a period of rising interest rates.
To use the amortized cost method, our Board of Trustees must establish
procedures designed to stabilize the net asset value of the Money Market
Portfolio at $1.00 per share, to the extent reasonably possible. These
procedures must include review of the Portfolio by the Board at intervals it
deems appropriate and reasonable in the light of market conditions to determine
how much the net asset value using available market quotations deviates from
the net asset value based on amortized cost. For this purpose, when market
quotations are available, securities are valued at the bid price. If market
quotations are not available, investments are valued at their fair value as
determined in good faith under procedures established by and under the general
supervision and responsibility of our Board of Trustees, including being valued
at prices based on market quotations for investments of similar type, yield and
maturity.
Under the procedures which our Trustees have adopted in connection with
valuation of our securities at amortized cost, our dividend policy will change
under certain circumstances. If on any day there is a deviation of more than
3/10th of 1% between the net asset value of a share computed on the amortized
cost basis and that computed on an available market price basis, the amount of
the deviation in excess of $0.003 will be added to or subtracted from the
dividend for that day in order to reduce the deviation to within $0.003. If on
any day the dividend is not large enough to absorb any such reduction and the
deviation is more than $0.005, our Board will be required, under a rule of the
Securities and Exchange Commission, to consider taking other action. Such
action could include the sale of portfolio securities, reducing or eliminating
dividends or establishing a net asset value per share based on market
quotations.
To use the amortized cost method, we must also limit our portfolio
investments, including repurchase agreements, to those U.S. dollar denominated
instruments which our Board of Trustees determines present minimal credit risks
and which are of "high quality," e.g., portfolio investments rated in one of
the top two rating categories by at least two rating organizations or, if not
rated or created by only one rating agency, are of comparable quality in the
judgment of our Adviser and Trustees. A rated instrument that is subject to
some external agreement (such as a bank letter of credit), which agreement was
not considered in rating the instrument, is considered unrated and the Board of
Trustees and our Adviser will determine whether the external agreement makes
the instrument of comparable quality.
CITIZENS INCOME PORTFOLIO, CITIZENS EMERGING GROWTH PORTFOLIO, CITIZENS GLOBAL
EQUITY PORTFOLIO, CITIZENS INDEX PORTFOLIO AND THE CITIZENS INDEX INSTITUTIONAL
PORTFOLIO .
As described in the Prospectuses for the relevant Portfolios, the
Citizens Income Portfolio, Citizens Emerging Growth Portfolio, Citizens Global
Equity Portfolio, Citizens Index Portfolio and the Citizens Index Institutional
Portfolio are generally valued on the basis of market values. Equity
<PAGE>
securities, if any, in a Portfolio are valued at the last sales price on the
exchange on which they are primarily traded or on the NASDAQ system for
unlisted national market issues, or at the last quoted bid price for listed
securities in which there were no sales during the day or for unlisted
securities not reported on the NASDAQ system. Debt securities are generally
valued at their most recent closing sale prices, or, if there is no closing
sale price, at the bid price, in the principal market in which such securities
are normally traded. Fixed income securities maturing within 60 days are
normally valued at cost, plus or minus any amortized discount or premium.
Securities and other assets for which market quotations are not readily
available (including restricted securities, if any) are appraised at their fair
value as determined in good faith under consistently applied procedures under
the general supervision of the Fund's Board of Trustees.
Securities may also be valued on the basis of valuations furnished by a
pricing service that uses both dealer supplied valuations and evaluations based
upon expert analysis of market data or other factors if such valuations are
believed to reflect more accurately the fair value of such securities.
Use of a pricing service has been approved by the Fund's Board of
Trustees. There are a number of pricing services available, and the Trustees
and the officers of the Fund acting on behalf of the Trustees, may use or
discontinue the use of any pricing service employed now, or in the future.
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INFORMATION ABOUT OUR YIELD AND TOTAL RETURN
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We report the investment performance of the Fund's Portfolios in several
ways. All performance reported in advertisements is historical and not intended
to indicate future returns.
YIELD
From time to time the "yield" and "compounded effective yield" of the
Portfolios may be published in advertisements and sales material. For the
Working Assets Money Market Portfolio, the yield is usually quoted for a seven
day period. For the seven-day period ended June 30, 1995 for the Working Assets
Money Portfolio, our average seven-day yield was 5.19% and our compounded
effective yield was 5.32%. For the Citizens Income Portfolio we usually report
for a 30 day period. For the 30 days ended June 30, 1995 for the Citizens
Income Portfolio, our average 30 day yield was 5.89%.
The current yield of the Money Market Portfolio for a specific period of
time is calculated based on a hypothetical account containing exactly one share
at the beginning of the period. The net change in the value of the account
during the period is determined by subtracting this beginning value from the
value of the account at the end of the period including a hypothetical charge
reflecting deductions from shareholder accounts. Capital changes (i.e.,
realized gains and losses from the sale of securities and unrealized
appreciation and depreciation) are excluded from the calculation. Because the
change will not reflect any capital changes, the dividends used in the yield
computation may not be the same as the dividends actually declared. The
dividends used in the yield calculation will be those which would have been
declared if there had been no capital changes included in our actual dividends.
The net change in the account value is then divided by the value of the account
at the beginning of the period and the resulting figure is called the "base
period return." The base period return is then multiplied by (365/7) for a
seven day effective yield with the resulting yield figure carried to the
nearest hundredth of one percent.
The "compounded effective yield" for the Money Market Portfolio is
determined by annualizing the base period return and assuming that dividends
earned are reinvested daily. Compounded effective yield is calculated by adding
1 to the base period return (which is derived in the same manner as discussed
above), raising the sum to a power equal to 365 divided by 7 and subtracting 1
from the result.
Compounded effective yield information is useful to investors in
reviewing the performance of our Money Market Portfolio since the yield is
<PAGE>
calculated on the same basis as those of other money market funds. However, you
should take a number of factors into account in using our yield information as
a basis for comparison with other investments.
Since our Money Market Portfolio is invested in short-term money market
instruments, our yield will fluctuate with money market rates. Therefore, the
compounded effective yield is not an indication of future yields. Other
investment alternatives such as savings certificates provide a fixed yield if
held full term, but there may be penalties if redeemed before maturity, whereas
there is no penalty for withdrawal at any time in the case of our Portfolios.
The yield quotation for the Citizens Income Portfolio is based on the
annualized net investment income per share of the Portfolio over a 30 day
period. The yield is calculated by dividing the net investment income per share
of the Portfolio earned during the period by the public offering price per
share of the Portfolio on the last day of that period. The resulting figure is
then annualized. Net investment income per share is determined by dividing (i)
the dividends and interest earned by the Portfolio during the period, minus
accrued expenses for the period, by (ii) the average number of the Portfolio's
shares entitled to receive dividends during the period multiplied by the public
offering price per share on the last day of the period. Income is calculated
for the purposes of yield calculations in accordance with standardized methods
applicable to all stock and bond funds. In general, interest income is reduced
with respect to bonds trading at a premium over their par value by subtracting
a portion of the premium from income on a daily basis and is increased with
respect to bonds trading at a discount by adding a portion of the discount to
daily income. Capital gains and losses are generally excluded from the
calculation as these are reflected in the Portfolio's net asset value per
share.
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TOTAL RETURN AND OTHER QUOTATIONS
- ------------------------------------------------------------------------------
We also can express the investment results in terms of "total return." We
do this for the Citizens Income Portfolio, Citizens Emerging Growth Portfolio,
Citizens Global Equity Portfolio, Citizens Index Portfolio and the Citizens
Index Institutional Portfolio to take account of fluctuations in share value in
addition to income from interest and dividends. Total return refers to the
total change in value of an investment in the Portfolio over a specified
period, while the yield calculation only reflects the income component. We
compute total return by taking the total number of shares purchased by a
hypothetical $1,000 investment after deducting any applicable sales charge,
adding all additional shares purchased within the period with reinvested
dividends and distributions, calculating the value of these shares at the end
of the period, and dividing the result by the initial $1,000 investment. For
periods of more than one year, we adjust the cumulative total return to
calculate average annual total return during that period.
When we quote each Portfolio's yield or total return we are referring to
its past results and are not predicting our future performance. We quote total
return for the most recent one year period as well as average annual total
return for the most recent five and ten year periods, or from the time when we
first offered shares, whichever is shorter. Sometimes we advertise our actual
return quotations for annual or quarterly periods or quote cumulative return
for various periods. When we do this, we also always present the standardized
total return quotations at the same time.
When we quote our investment results we sometimes will compare them to
unmanaged market indices such as the Dow Jones Industrial Average and the S&P
500, and other data and rankings from recognized independent publishers,
sources such as Donoghue's Money Fund Report, Bank Rate Monitor, Money
Magazine, Forbes Magazine, Lipper Analytical Services and others.
<PAGE>
For the fiscal year ended 1995 the Fund's Portfolios had the following
performance:
Since
1 Year Inception
Portfolio Total Return Total Return
Citizens Income Portfolio 10.45% 9.40% (since 6/10/92)
Citizens Emerging Growth Portfolio 23.24% 22.38% (since 2/8/94)
Citizens Global Equity Portfolio 9.77% 7.58% (since 2/8/94)
Citizens Index Portfolio 9.40% 22.56% (since 3/3/95)
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DESCRIPTION OF BOND RATINGS
- ------------------------------------------------------------------------------
We use the ratings provided by national rating services as one of several
indicators of the investment quality of fixed income securities. The following
is a description of the ratings of the two services we use most frequently.
When considering any rating, it is important to remember that the ratings of
Moody's Investors Service, Inc. and Standard & Poor's Corporation represent
their opinions as to the quality of various debt instruments. It should be
emphasized, however, that ratings are not absolute standards of quality.
Consequently, debt instruments with the same maturity, coupon and rating may
have different yields while debt instruments with the same maturity and coupon
but with different ratings may have the same yield.
MOODY'S INVESTORS SERVICES, INC.
AAA: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
AA: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa granted they comprise what are generally known as high
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuations of
protective elements may be of greater amplitude or there may be other elements
present which make the long term risks appear somewhat larger than in Aaa
securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
BAA: Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
BA: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
<PAGE>
B: Bonds which are rated B generally lack characteristics of a desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
CAA: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
CA: Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
ABSENCE OF RATING
Where no rating has been assigned or where a rating has been suspended or
withdrawn, it may be for reasons unrelated to the quality of the issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities or companies that
are not rated as a matter of policy.
3. There is a lack of essential data pertaining to the issue or issuer.
4. The issue was privately placed, in which case the rating is not published
in Moody's publications. Suspension or withdrawal may occur if new and material
circumstances arise, the effects of which preclude satisfactory analysis; if
there is no longer available reasonable up-to-date data to permit a judgment to
be formed; if a bond is called for redemption; or for other reasons.
STANDARD & POOR'S CORPORATION
AAA: Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA: Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree.
A: Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB: Debt rated BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
BB, B, CCC, CC AND C: Debt rated BB, CCC, CC and C is regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and C the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures for adverse
conditions.
BB: Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major on-going uncertainties or exposure
<PAGE>
to adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The BB
rating category is also used for debt subordinated to senior debt that is
assigned as actual or implied BBB rating.
B: Debt rated B has a greater vulnerability to default but has the capacity to
meet interest payments and principal repayments. Adverse business, financial or
economic conditions will likely impair capacity or willingness to pay interest
and repay principal. The B rating category is also used for debt subordinated
to senior debt that is assigned an actual or implied BBB or BB rating.
CCC: Debt rated CCC has a currently identifiable vulnerability to default, and
is dependent upon favorable business, financial or economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The CCC rating category is also
used for debt subordinated to senior debt that it assigned an actual or implied
BB or B rating.
CC: The rating CC is typically applied to debt subordinated to senior debt
that is assigned an actual or implied CCC rating.
C: The rating C is typically applied to debt subordinated to senior debt which
is assigned an actual or implied CCC debt rating. The C rating may be used to
cover a situation where a bankruptcy petition has been filed, but debt service
payments are continued.
CI: The rating CI is reserved for income bonds on which no interest is
being paid.
D: Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if
the applicable grace period has not expired, unless Standard & Poor's believes
that such payments will be made during such grace period. The D rating also
will be used upon the filing of a bankruptcy petition if debt service payments
are jeopardized.
NR: indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that Standard & Poor's
does not rate a particular type of obligation as a matter of policy.
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DIVIDENDS AND DISTRIBUTIONS
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WORKING ASSETS MONEY MARKET PORTFOLIO
As described in the Prospectuses for the Portfolios, net income is
determined and accrued daily and paid monthly. This dividend is payable to
everyone who was a shareholder at 4:00 p.m. Eastern time on the day the
dividend is declared. Accordingly, when shares are purchased dividends begin to
accrue on the day the Transfer Agent receives payment for the shares, provided
that the payment is received by 4:00 p.m. Eastern time. When shares are
redeemed, the shares are entitled to the dividend declared on the day the
redemption request is received by the Transfer Agent, provided that the request
is received after 4:00 p.m. Eastern time. Dividends are automatically
reinvested in shares, at net asset value, unless a shareholder otherwise
instructs the Transfer Agent in writing. Shareholders so requesting will be
mailed checks in the amount of the accumulated dividends. For the purpose of
calculating dividends, our daily net investment income consists of: (a) all
interest income accrued on investments (including any discount or premium
ratably amortized to the date of maturity or determined in such other manner as
the Trustees may determine); (b) minus all liabilities accrued, including
interest, taxes and other expense items, amounts determined and declared as
dividends or distributions and reserves for contingent or undetermined
liabilities, all determined in accordance with generally accepted accounting
principles; (c) plus or minus all realized and unrealized gains or losses on
investments.
<PAGE>
CITIZENS INCOME PORTFOLIO
The Citizens Income Portfolio distributes to its shareholders monthly
dividends substantially equal to all of its net investment income. The
Portfolio's net investment income consists of non-capital gain income less
expenses. Net realized short-term capital gains, if any, and net realized
long-term capital gains, if any, will be distributed by the Portfolio at least
annually. Dividends and capital gains distributions are automatically
reinvested at net asset value in additional shares, unless a shareholder elects
cash distributions. Cash distributions will be paid at the close of the
appropriate monthly or annual period.
CITIZENS EMERGING GROWTH PORTFOLIO, CITIZENS GLOBAL EQUITY PORTFOLIO,
CITIZENS INDEX PORTFOLIO AND THE CITIZENS INDEX INSTITUTIONAL PORTFOLIO
The Citizens Emerging Growth Portfolio, Citizens Global Equity Portfolio,
Citizens Index Portfolio and the Citizens Index Institutional Portfolio
normally declare and pay dividends substantially equal to all net investment
income annually. Net investment income consists of non-capital gain income less
expenses. Net realized short-term capital gains, if any, and net realized
long-term capital gains, if any, will be distributed by the Portfolios at least
annually. Dividends and capital gains distributions are automatically
reinvested at net asset value in additional shares, unless a shareholder elects
cash distributions. Cash distributions will be paid annually.
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FEDERAL TAXES
- ------------------------------------------------------------------------------
Status as a "Regulated Investment Company." Each of the Portfolios
intends to qualify as a "Regulated Investment Company" under Subchapter M of
the Internal Revenue Code (the "Code"). We plan to continue this election in
the future for all Portfolios of the Fund.
To qualify for the tax treatment afforded a "Regulated Investment
Company" under the Internal Revenue Code, a Portfolio must annually distribute
at least 90% of its net investment income and net short-term capital gains and
meet certain requirements with respect to sources of income, diversification of
assets, and distributions to shareholders. If a Portfolio elects and qualifies
for such tax treatment, the Portfolio will not be subject to federal income tax
with respect to amounts distributed. Under current law, in order to qualify, a
Portfolio must (a) derive at least 90% of its gross income from dividends,
interest, payments with respect to securities loans, gains from the sale or
other disposition of stock or securities, and income from certain other
sources; (b) derive less than 30% of its gross income from the sale or other
disposition of stock, or securities and certain other investments held less
than three months; and (c) diversify its holdings so that, at the end of each
fiscal quarter, (i) at least 50% of the market value of the Portfolio's assets
is represented by cash, U.S. Government securities, and other securities,
limited, in respect of any one issuer, to an amount not greater than 5% of the
Portfolio's assets and 10% of the outstanding voting securities of such issuer,
and (ii) not more than 25% of the value of its assets is invested in the
securities of any one issuer (other than U.S. Government securities). Options
that are held by a Portfolio at the end of its taxable year are subject to
Section 1256 of the Code and will be deemed to have been sold at market value
for federal income tax purposes. 60% of any net gain or loss recognized on
these deemed sales, and 60% of any net gain or loss realized from any actual
sales of Section 1256 Contracts, will be treated as long-term capital gain or
loss, and the balance will be treated as short-term capital gain or loss.
A Portfolio that qualifies as a "qualified investment company," may
nonetheless be subject to certain federal excise taxes unless the Portfolio
meets certain additional distribution requirements. Under the Internal Revenue
Code, a nondeductible excise tax of 4% is imposed on the excess of a regulated
investment company's "required distribution" for the calendar year ending
within the regulated investment company's taxable year over the "distributed
amount" for such calendar year. The term "required distribution" means the sum
of (i) 98% of ordinary income (generally net investment income) for the
<PAGE>
calendar year, (ii) 98% of capital gain net income (both long-term and
short-term) for the one year period ending on October 31 (as though the one
year period ending on October 31 was the regulated investment company's taxable
year), and (iii) the excess, if any, of the sum of the taxable income of the
regulated investment company for the previous calendar year plus all amounts
from previous years that were not distributed over the amount actually
distributed for such preceding calendar year. The term "distributed amount"
generally means the sum of (i) amounts actually distributed by a Portfolio from
the Portfolio's current year's ordinary income and capital gain net income, and
(ii) any amount on which the Portfolio pays income tax for the year. We intend
to meet these distribution requirements, to avoid the excise tax liability,
with respect to each of the Portfolios. As long as a Portfolio maintains its
status as a Regulated Investment Company and distributes all of its income, the
Portfolio will not be subject to any Massachusetts or California income or
excise tax.
DISTRIBUTIONS OF NET INVESTMENT INCOME
Dividends derived from net investment income and any excess of net
short-term capital gains over net long-term capital losses will be taxable to
shareholders as ordinary income. For each of the Portfolios other than the
Working Assets Money Market Portfolio and the Citizens Income Portfolio, a
portion of these ordinary income dividends is normally eligible for the
dividends received deduction for corporations if the recipient otherwise
qualified for that deduction with respect to its holding of a Portfolio's
shares. Availability of the deduction to particular corporate shareholders is
subject to certain limitations and deductible amounts may be subject to the
alternative minimum tax and result in certain basis adjustments. Since the
investment income of the Working Assets Money Market Portfolio and the Citizens
Income Portfolio is derived from interest rather than dividends, no portion of
the dividends received from these Portfolios will be eligible for the dividends
received deduction. Moreover, to the extent that a Portfolio derives investment
income from sources within foreign countries, such Portfolio's dividends and
distributions will not qualify for such deduction.
Shareholders will be taxed for federal income tax purposes on dividends
in the same manner whether such dividends are received as shares or in cash.
Distributions from the Portfolios will also be included in individual and
corporate shareholders' income on which the alternative minimum tax may be
imposed.
Any dividend or distribution (except for dividends of net investment
income declared by the Money Market Portfolio) will have the effect of reducing
the per share net asset value of shares in a Portfolio by the amount of the
dividend or distribution. Shareholders purchasing shares in any of the
Portfolios shortly before the record date of any taxable dividend or other
distribution may thus pay the full price for the shares and then effectively
receive a portion of the purchase price back as a taxable distribution.
Any loss realized upon a redemption of the shares in a Portfolio held for
six months or less will be treated as a long-term capital loss to the extent of
any distributions of net capital gain made with respect to those shares. Any
loss realized upon redemption of shares may also be disallowed under the rules
relating to wash sales.
Special tax considerations apply with respect to foreign investments of
those Portfolios which permit such investments. For example, foreign exchange
gains and losses realized by a Portfolio generally will be treated as ordinary
income or losses. In addition, investment income received by a Portfolio from
sources within foreign countries may be subject to foreign income taxes
withheld at the source. The U.S. has entered into tax treaties with many
foreign countries which entitle a Portfolio to a reduced rate of tax or an
exemption from tax on such income.
NON-U.S. SHAREHOLDERS
Distributions of net investment income to non-resident aliens and foreign
corporations will be subject to U.S. tax. For shareholders who are not engaged
in a trade or business in the U.S. to which the distribution is effectively
connected, this tax is withheld at the rate of 30% upon the gross amount of the
distribution in the absence of a Tax Treaty providing for a reduced rate or
exemption from U.S. taxation. However, if the distribution is effectively
<PAGE>
connected with the conduct of the shareholder's trade or business within the
U.S., the distribution will be included in the net income of the shareholder
and subject to U.S. income tax at the applicable marginal rate.
The foregoing is limited to a discussion of federal taxation. It should
not be viewed as a comprehensive discussion of the items referred to or as
covering all provisions relevant to investors. Dividends and distributions may
also be subject to state or local taxes. Shareholders should consult their own
tax advisers for additional details on their particular tax status.
After the end of each calendar year, each shareholder receives
information for tax purposes on the dividends and distributions for that year,
including any portion taxable as ordinary income, any portion taxable as
capital gains, any portion representing a return of capital, and any amount of
dividends eligible for the dividends-received deduction for corporations.
- ------------------------------------------------------------------------------
ADDITIONAL REDEMPTION INFORMATION
- ------------------------------------------------------------------------------
The redemption information below supplements the information contained in
the Prospectuses for Portfolios. We pay redemption proceeds within five
business days after we receive a proper redemption request. Our obligation to
pay for redemptions can be suspended when the New York Stock Exchange is closed
other than for weekends or holidays or under certain emergency conditions
determined by the Securities and Exchange Commission. The holidays on which the
New York Stock Exchange is closed currently are: New Year's Day, President's
Day (observed), Good Friday, Memorial Day (observed), Independence Day, Labor
Day, Thanksgiving Day and Christmas. We pay redemption proceeds in cash, except
that our Board of Trustees has the power to decide that conditions exist which
would make cash payments undesirable. In that case, we could send redemption
payments in securities from our portfolio, valued in the same method as we used
to determine our net asset value. There might then be brokerage or other costs
to the shareholder in selling these securities. We have elected to be governed
by Rule 18f-1 under the Investment Company Act, which requires us to redeem
shares solely in cash up to the lesser of $250,000 or 1% of our total net
assets during any 90 day period for any one shareholder. Your redemption
proceeds may be more or less than your cost, depending on the value of your
shares.
If any of the shares being redeemed were recently purchased by check or
electronic funds transfer, we may delay sending the redemption proceeds for up
to ten business days while we determine whether the check or electronic funds
transfer used to purchase the shares has been honored by the bank on which it
was drawn or made. You can eliminate any possible delay by making your
investment by wire.
We have the right to compel the redemption of shares held in an account
if the aggregate net asset value of the shares in the account is less than
$1,000. If our Adviser decides to do this, we will advise shareholders who
would be affected to increase the size of their accounts to the $1,000 minimum.
Accounts between $250 - 2,500 will be accessed a service charge of $2.00 per
month. This charge will be waived if an automatic investment plan is
established for the account.
- ------------------------------------------------------------------------------
TRUSTEES AND OFFICERS
- ------------------------------------------------------------------------------
We have a Board of Trustees which provides broad supervision over our
affairs. Our officers are elected by the Board and are responsible for day to
day operations. The Trustees and officers are listed below, together with their
principal occupations during at least the past five years. (Their titles may
have varied during that period.) The address of each, except where an address
is indicated, is 111 Pine Street, San Francisco, California 94111.
The Trustees who are "interested persons'" as defined in the 1940 Act,
are indicated by an asterisk.
<PAGE>
William D. Glenn, II (born 9/9/48), Chair of the Board and Trustee, has been
a shareholder of Citizens Trust since 1983. He is a psychotherapist and the
executive director of Continuum HIV Day Services in San Francisco. He is a past
President of the San Francisco AIDS Foundation and former member of the Board
of Directors of the Gay Rights Chapter of the Northern California American
Civil Liberties Union. From 1981 to 1988, Mr. Glenn was the Assistant Principal
and Dean of Students at Mercy High School in San Francisco. He currently serves
on the boards of San Francisco's KQED and the 18th St. Services Chemical
Dependency Recovery Center. Address: 915 Las Ovejas, San Rafael, CA 94903.
Sophia Collier* (born 3/13/56), Trustee, is President and Principal owner
of Citizens Advisers and also serves in an advisory capacity to RhumbLine
Advisers. Ms. Collier is the President and a Director of Citizens Securities,
Inc., the principal underwriter for the Fund. Please see the section entitled
"Additional Information Regarding The Management Company" for more information
regarding Ms. Collier.
Juliana Eades (born 2/2/53), Trustee, has served as Executive Director of
the $4 million New Hampshire Community Loan Fund since its inception in 1984.
In this capacity she has been a leading force in the creation of jobs and
affordable housing in New Hampshire. Prior to accepting her position at the
Loan Fund, Ms. Eades was Program Manager at the N.H. Governor's Council on
Energy. In other community activities, Ms. Eades is a member of the Campaign
for Rate Payers' Rights and the Society for the Protection of New Hampshire
Forests. Address: 79 South State Street, Concord, New Hampshire 03301.
Wilma Mankiller (born 11/18/45), Trustee, served as the Principal Chief of
the Cherokee nation, in Tahlequah, Oklahoma, from 1985 to 1995. She presently
serves on the board of the Ford Foundation. Address: P.O. Box 300, Park Hill,
OK 74451.
Azie Taylor Morton (born 2/1/36), Trustee, was Treasurer of the United
States during the Carter Administration. From 1984 - 1989, she owned and
operated the Stami Corporation, a franchisee of Wendy's Old Fashioned
Hamburgers. Her thirty year career began as a teacher at the State School for
Girls in Crockett, Texas. She went on to work at the AFL-CIO, the White House
Conference on Civil Rights and the U.S. Equal Employment Opportunity
Commission. She has served as the Commissioner of the Virginia Department of
Labor and Industry as well as the Executive Director of the Human Rights
Project, Inc. In 1990-92 she was Director of Resource Coordination at Reading
is Fundamental, Inc. She is currently an investment adviser. Address: 2801 Park
Center Drive, Suite A-912, Alexandria, Virginia 22302.
J.D. Nelson* (born 3/28/38), Trustee, is the founder and C.E.O. of
RhumbLine Advisers, a minority-owned investment firm specializing in the
management of institutional pension assets using indexed and quantitative
techniques. Mr. Nelson was formerly Senior Vice President and Director of
Public Funds Services at State Street Bank and Trust Company in Boston. Prior
to his twelve years at State Street, he was the Administrator of the Democratic
National Committee. He currently serves on the Board of the City of Boston's
Economic Development Industrial Corporation. He is a former Chairman of the
Roxbury MultiService Center (Mass.), a past Director of the United Way and has
taught at the School of Banking at Williams College. Address: RhumbLine
Advisers, 30 Rowes Wharf, Boston, Massachusetts 02110.
Ada Sanchez (born 8/17/52), Trustee, is Director of the Public Service
and Social Change Program at Hampshire College. This program is a
multi-disciplinary program designed to engage students and faculty in community
service learning research and volunteer projects, primarily in low income
Latino and African-American communities. From 1985-87 she was the National
Toxic Waste Campaign Coordinator for Greenpeace USA. Prior to that Ms. Sanchez
was involved with a number of activist organizations including; Western States
Field Consultant for the Disarmament Program for the National Fellowship of
Reconciliation, co-director and founder of Viewpoint Syndicate, lecturer for
Progressive Foundation Speakers Bureau, national coordinator for Supporters of
Silkwood and outreach coordinator for Coalition for Non-Nuclear World. Address:
177 Bridge Street, Northhampton, MA 01060.
<PAGE>
Our Board of Trustees functions with a Nominating Committee comprised of
the whole board, but pursuant to our Distribution Plan (see "Our Distributor")
below, we have agreed that Trustees who are not "interested persons" of the
Fund, as defined in the 1940 Act, and who have no direct or indirect financial
interest in the operation of the Distribution Plan or any agreement relating to
the Plan ("Qualified Trustees") shall have primary responsibility for the
selection and nomination of other Qualified Trustees. This agreement will
continue for so long as our Distribution Plan is in effect.
The following compensation table discloses the aggregate compensation
from the Registrant for services provided through June 30, 1995. Our Trustees,
officers and members of the Board of Advisors as a group owned less than 1% of
our outstanding shares as of May 30, 1996.
<TABLE>
<CAPTION>
CITIZENS INVESTMENT TRUST - COMPENSATION TABLE
=============================================================================================
(1) (2) (3) (4) (5)
Pension or Total
Aggregate Retirement Estimated Compensation
Name of Compensa- Benefits Accrued Annual From Registrant
Person, tion From As Part of Fund Benefits Upon and Fund Complex
Position* Registrant Expenses Retirement Paid to Directors
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aileen Hernandez $ 6,500 $0 $0 $ 6,500
Azie Taylor Morton 3,500 0 0 3,500
Elizabeth (Jing) Lyman 2,000 0 0 2,000
J.D. Nelson** 4,000 0 0 4,000
Juliana Eades 3,500 0 0 3,500
William D. Glenn, II 4,000 0 0 4,000
Yori Wada 1,500 0 0 1,500
Ada Sanchez 2,000 0 0 2,000
Jeffery Mori 1,500 0 0 1,500
Lokelani Devone 1,000 0 0 1,000
Sophia Collier** 0 0 0 0
Wilma Mankiller 0 0 0 0
- ---------------------------------------------------------------------------------------------
</TABLE>
* Each of the above-named persons served on the Board of Citizens Trust, which
consists of eight separate portfolios.
** Sophia Collier is an interested Trustee and received no compensation from
Citizens Trust. J.D. Nelson did not become an interested Trustee until March
1995 and received compensation from Citizens Trust prior to his change in
status to an interested Trustee.
The Trustees who are not "interested persons" received aggregate fees
from us of $38,957 for services provided through June 30, 1995 and were also
reimbursed for out of pocket expenses. Our Trustees, officers and members of
the Board of Advisors as a group owned less than 1% of our outstanding shares
as of May 30, 1996.
- ------------------------------------------------------------------------------
ADDITIONAL INFORMATION REGARDING CITIZENS ADVISERS
- ------------------------------------------------------------------------------
Sophia Collier individually owns 60% of the outstanding stock of Citizens
Advisers, Inc. Ms. Collier is the founder of American Natural Beverage Corp.,
the maker of Soho Natural Soda, a company which Ms. Collier co-founded in her
Brooklyn kitchen when she was 21 years old and built up over the next 12 years
to an enterprise with 52 employees and retail sales of $25 million. Soho Soda
was the first natural soda in America and was created as an alternative to
unhealthful mass market sodas. Sophia and her partners sold American Natural
Beverage Corp. in 1989.
Four other individuals own the remaining 40% of the outstanding stock of
Citizens Advisers, Inc., as follows: John F. Dunfey (12%); Robert J. Dunfey,
<PAGE>
Sr. (12%); Gerald F. Dunfey (12%); and William B. Hart, Jr. (4%). John, Robert
and Gerald Dunfey, brothers, now serve as Directors of the Dunfey Group, a
venture capital and investment company. The Dunfey family has been associated,
over a number of years, with progressive social and political causes and has
actively participated in organizations dedicated to world peace, human and
civil rights, and economic justice. The family founded and continues to sponsor
New England Circle, a forum for the "discussion of social, political, literary
and educational topics that can lead to constructive change in our lives, our
nation and our world."
- ------------------------------------------------------------------------------
INVESTMENT ADVISORY AND OTHER SERVICES
- ------------------------------------------------------------------------------
We are advised by Citizens Advisers, Inc. (the "Adviser") under a
contract known as the Management Agreement. The Adviser has offices at 111 Pine
Street, San Francisco, California 94111 and One Harbour Place, Portsmouth, New
Hampshire 03801. The Adviser is a California corporation. Citizens Securities,
Inc., a wholly-owned subsidiary and a California corporation, serves as the
Fund's distributor.
MANAGEMENT AGREEMENT
The Management Agreement provides for the Adviser, which is subject to
the control of our Board of Trustees, to decide what securities will be bought
and sold, and when, and requires the Adviser to place purchase and sale orders.
At the Adviser's discretion and sole expense, these duties may be delegated to
a subadviser.
GMG/Seneca serves as subadviser to the Working Assets Money Market
Portfolio, the Citizens Income Portfolio, and the Citizens Emerging Growth
Portfolio. GMG/Seneca is a registered investment adviser, established in 1990.
Its offices are located at 909 Montgomery Street, San Francisco, California. It
is organized as a limited partnership with two general partners, Gail Seneca
and Genesis Merchant Group. Genesis Merchant Group in turn has four general
partners: William K. Weinstein, Gail Seneca, Paul Jones and Philip C.
Stapleton. Prior to starting GMG/Seneca, Gail was employed by Wells Fargo Bank.
Rick Little, a partner in the firm of GMG/Seneca Capital Management, is the
primary manager of the Citizens Emerging Growth Portfolio.
Clemente Capital, Inc. serves as subadviser to the Citizens Global Equity
Portfolio. Clemente Capital, Inc. is a registered investment adviser organized
in 1979 by Lilia Clemente. In 1986 it developed its current focus on global
investing. It performs active global and international investment management
for institutional and individual clients, including public and private tax
exempt funds invested in both equities and fixed income securities. Clemente
also manages the First Philippine and Clemente Global Growth Fund, two
closed-end funds traded on the New York Stock Exchange, the Clemente Korea
Emerging Growth Fund, listed on the London Stock Exchange and the Cathay
Clemente (Holding) Limited Fund, listed on the Hong Kong Stock Exchange. Its
headquarters are located at Carnegie Hall Tower, 152 West 57th Street New York,
New York, from which it directs a professional staff representing 15 countries
and with fluency in 20 languages. 100% of the stock of Clemente Capital, Inc.
is owned by Lilia Clemente.
RhumbLine Advisers serves as subadviser for the Citizens Index Portfolio
and the Citizens Index Institutional Portfolio. RhumbLine Advisers is a
registered investment adviser established in 1990 and with offices at 30 Rowes
Wharf, Boston, Massachusetts. RhumbLine is 97% owned by J.D. Nelson, a Trustee
of the Fund whose profile appears earlier in this document.
The Adviser (or a subadviser) provides us, at the Adviser's expense, with
all office space and facilities and equipment and clerical personnel necessary
to carry out its duties under the Management Agreement. Some of our Trustees
and our officers are employees of our Adviser and receive their compensation
from the Adviser. Our custodian bank maintains, as part of its services for
which we pay a fee, many of the books and records that we are required to have
and computes our net assets value and dividends per share.
<PAGE>
We pay the Adviser a fee for its services at annual rates as follows:
Working Assets Money Market Portfolio, 35/100 of 1% of the Portfolio's
net assets, Citizens Income Portfolio, 65/100 of 1% of the Portfolio's net
assets; Citizens Emerging Growth Portfolio, 1% of the Portfolio's average
annual net assets; Citizens Global Equity Portfolio, 1% of the Portfolio's
average annual net assets; Citizens Index Portfolio, 70/100 of 1% of the
Portfolio's average annual net assets; and the Citizens Index Institutional
Portfolio, 50/100 of 1% of the Portfolio's average annual net assets. The fee
is accrued daily and paid at least monthly. The Adviser has agreed to limit our
expenses each year. If expenses exceed this limit, the Adviser will reduce its
fee by, or refund, the amount of the excess. The limit on our expenses,
pursuant to the Management Agreement, is as follows: Working Assets Money
Market Portfolio: 1 1/2% of the first $40 million of our average annual net
assets and 1% thereafter; and Citizens Income Portfolio: 1 and 75/100 of 1% of
the first $75 million of average net assets and 1 and 1/4% thereafter. There is
no limit on expenses for the Citizens Emerging Growth Portfolio, Citizens
Global Equity Portfolio, Citizens Index Portfolio or the Citizens Index
Institutional Portfolio. Not all our expenses are subject to this limit.
Interest expenses, taxes, brokerage commissions, and extraordinary expenses,
such as litigation, that do not usually occur in the operations of a mutual
fund are not included. We are also subject to a statutory expense limitation
imposed by the State of California. This expense limitation requires the
Adviser to reduce its fee to the extent the aggregate annual expenses of a
Portfolio exceed 2 1/2% of the first $30 million of average net assets in the
Portfolio, 2% of the next $70 million of average net assets, and 1 1/2% of the
remaining average net assets in a Portfolio in any fiscal year.
For the fiscal years ended June 30, 1993, 1994 and 1995, the Adviser
received the following fees: Working Assets Money Market Portfolio,
1993-$925,100, 1994-$619,206, 1995-$509,816 ($526,422 before reimbursements);
Citizens Income Portfolio, 1993-no fee paid after reimbursements ($48,316
before reimbursements), 1994-no fee paid after reimbursements ($125,495 before
reimbursements), 1995-$134,479 ($167,280 before reimbursements); Citizens
Emerging Growth Portfolio, 1993-$0, 1994-no fee paid after reimbursements
($7,696 before reimbursements), 1995-no fee paid after reimbursements ($67,908
before reimbursements); Citizens Global Equity Portfolio, 1993-$0, 1994-$4,175
($12,569 before reimbursements), 1995-$39,071 ($78,349 before reimbursements);
Citizens Index Portfolio, 1993-$0, 1994-$0, 1995-$68,210; and $0 for the
Citizens Index Institutional Portfolio as it commenced operations as of the
date of this Statement of Additional Information.
The Management Agreement provides that in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations, thereunder, the Adviser is not liable for any loss sustained by
the purchase, sale or retention of any security and permits the Adviser to act
as investment adviser and/or principal underwriter for any other person, firm
or corporation. The Management Agreement provides that we will indemnify the
Adviser to the full extent permitted under the Declaration of Trust. The
Management Agreement also states that the Adviser shall have no responsibility
or liability for the accuracy or completeness of our Registration Statement
under the Securities Act of 1933 and the 1940 Act except for information
supplied by the Adviser for inclusion therein.
There are similar provisions with respect to the liability of a
subadviser, and the obligation of the Fund to indemnify a subadviser.
ADMINISTRATIVE SERVICES AGREEMENT
The Adviser has also entered into an Administrative Services Agreement
with Citizens Trust, whereby the Adviser provides the Trust with the following
facilities and services: (1) receipt of calls from existing shareholders in a
timely manner; (2) maintenance of a toll-free number; (3) response to
shareholder questions; (4) maintenance of computer interface with the Trust's
transfer agent; (5) execution of appropriate shareholder requests; (6)
organizational services for any new series, including, but not limited to the
drafting of the prospectus and statement of additional information, the filing
of all required documents, soliciting proxies, and clerical duties associated
with the filing of any such documents; (7) blue sky reporting services as
required for the issuer of securities in the states and territories. In
addition to the fees paid pursuant to the foregoing, Citizens Trust has agreed
<PAGE>
to reimburse Citizens Advisers for out-of-pocket expenses, including but not
limited to postage, forms, telephone, and records storage and any other
expenses incurred by Citizens Advisers at the request or with the consent of
Citizens Trust. Citizens Trust also pays to the Adviser shareholder servicing
fees at the following fixed rates: Citizens Income Portfolio, Citizens Emerging
Growth Portfolio, Citizens Global Equity Portfolio and Muir California Tax Free
Income Portfolio, 10/100 of 1% of average assets; and Citizens Index Portfolio,
45/100 of 1% of average assets.
For the fiscal years ended June 30, 1993, 1994 and 1995, the following
fees were paid for administrative services: Working Assets Money Market
Portfolio, 1993-$0, 1994-$61,382, 1995-$28,499; Citizens Income Portfolio,
1993-$0, 1994-$36,725, 1995-$25,295; Citizens Emerging Growth Portfolio,
1993-$0, 1994-$4,463, 1995-$24,120; Citizens Global Equity Portfolio, 1993-$0,
1994-$4,673, 1995-$22,815; Citizens Index Portfolio, 1993-$0, 1994-$0,
1995-$28,607; and $0 for the Citizens Index Institutional Portfolio as it
commenced operations as of the date of this Statement of Additional
Information.
DISTRIBUTION PLAN
Citizens Securities, Inc. (the "Distributor"), a wholly owned subsidiary
of Citizens Advisers, acts as the distributor of our shares. There is no sales
charge imposed on any of the Portfolios of the Trust, either when you purchase
or redeem shares.
Broker-dealer and other organizations, known as Service Organizations,
which assist in the distribution of our shares may receive fees from us or our
Distributor. Our Board of Trustees has adopted a Distribution Plan under
Section 12(b) of the 1940 Act and Rule 12b-1 thereunder. In approving the Plan,
the Trustees determined, in the exercise of their business judgment and in
light of their fiduciary duties, that there is a reasonable likelihood that the
Plan will benefit us and our shareholders. Pursuant to this Plan, Service
Organizations that enter into written agreements with us and our Distributor
may receive, for administration, shareholder service and distribution
assistance, fees at rates determined by our Trustees. In addition, our
Distributor is authorized to purchase advertising, sales literature and other
promotional material and to pay its own salespeople. We will reimburse the
Distributor for these expenditures and for fees paid to Service Organizations,
up to a limit of 0.25% on an annual basis of each Portfolio's average daily net
assets. In addition, if and to the extent that the fee we pay our Distributor
as well as other payments we make are considered as indirectly financing any
activity which is primarily intended to result in the sale of our shares, such
payments are authorized under the Plan.
The Plan was approved on July 5, 1983, by our Trustees, including a
majority of the Trustees who are not "interested persons" (as defined in the
1940 Act) and who have no financial interest in the operation of the Plan or in
any agreement related to the Plan. These Trustees are known as Qualified
Trustees. The Plan was approved by a majority of our shareholders at our annual
meeting on April 24, 1984, and has been continued from year to year thereafter
subject to annual approval by a majority vote of our Trustees, including a
majority of the Qualified Trustees, cast in person at a meeting called for the
purpose of voting on the Plan. The Plan was approved by the shareholders of the
Citizens Income Portfolio, on June 11, 1992. Agreements related to the Plan
must also be approved in the same manner by a vote of the Trustees and the
Qualified Trustees. These agreements will terminate automatically if assigned,
and may be terminated at any time, without payment of any penalty, by a vote of
the majority of the Qualified Trustees or a vote of our outstanding voting
securities on not more than 60 days' notice.
Each Portfolio is responsible for the cost of preparing and setting in
type prospectuses and reports to shareholders and distributing copies of the
prospectuses and reports to shareholders. The Distributor pays the cost of
printing and distributing all other copies of prospectuses and reports, as well
as the costs of supplemental sales literature and advertising. The Fund pays
all of our other expenses not expressly assumed by the Adviser such as
interest, taxes, audit and legal fees and expenses, charges of our custodian,
our shareholder servicing, transfer and record-keeping agent costs, insurance
premiums, stock issuance and redemption costs, certain printing costs, costs of
registering our shares under federal and state laws, and dues and assessments
of the Investment Company Institute, as well as any non-recurring expenses,
including litigation.
<PAGE>
The Plan provides that the Distributor shall provide and the Trustees
shall review quarterly reports setting forth the amounts, payments and the
purpose for which the amounts were expended. The Plan further provides that
while it is in effect the selection and nomination of the Trustees who are not
interested persons shall be committed to the discretion of the Qualified
Trustees. The Plan may not be amended to increase materially the amounts to be
spent without shareholder approval, as set forth above, and all amendments must
be approved by the Trustees, as described above. The Plan only permits
reimbursement of actual expenses and does not permit expenses to be carried
forward from one fiscal period to another. For the years ended June 30, the
following fees were approved and paid under this Plan, 1991-$474,900,
1992-$508,374, 1993-$606,018, 1994-$713,847 and 1995-$783,111. The major
categories of expenses for 1995 were as follows: advertising, printing and
mailing prospectuses to other than current shareholders, compensation to
broker/dealers, and compensation to sales personnel.
- ------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- ------------------------------------------------------------------------------
Our Declaration of Trust permits our Trustees to issue an unlimited number
of full and fractional shares of beneficial interest and to divide or combine
the shares into a greater or lesser number of shares without thereby changing
the proportionate beneficial interests in the Fund. Each share represents an
interest in the Fund. Certificates representing our shares are not issued. In
the event of our liquidation, all shareholders would share pro rata in our net
assets available for distribution to shareholders. The Trustees also have the
power to designate "series" of the Fund which will function as separate
Portfolios, each having it's own assets and liabilities. They may also create
additional classes of shares which may differ from each other as to dividends.
Shares of each class are entitled to vote as a class or series only to the
extent required by the 1940 Act, as provided in our Declaration of Trust or as
permitted by our Trustees. Income and operating expenses are allocated fairly
among the series and classes by our Trustees. We intend to manage our
Portfolios in such a way as to be a "diversified" investment company, as
defined in the 1940 Act. As of May 30, 1996, there were 119,550,192 outstanding
shares of our Common Stock, representing all the shares of all of the Citizens
Trust Portfolios. The following are the shareholders who owned beneficially or
of record 5% or more of the outstanding shares: Working Assets Money Market
Portfolio, Citizens Income Portfolio and Citizens Index Portfolio - no holders
of 5% or more; Citizens Emerging Growth Portfolio - Charles Schwab & Co, Inc.
(101 Montgomery St., San Francisco, CA 94104), 9.0%; and Citizens Global Equity
Portfolio - Charles Schwab & Co, Inc., 17.9%.
- ------------------------------------------------------------------------------
VOTING RIGHTS
- ------------------------------------------------------------------------------
Shareholders are entitled to one vote for each full shares held (and
fractional votes for fractional shares) and may vote in the election of
Trustees and on other matters submitted to meetings of shareholders. Voting is
generally by class and series except as otherwise provided by the provisions of
the 1940 Act. The Trustees will call a meeting of shareholders to vote on the
removal of a Trustee upon the written request of the record holders of 10% of
our shares. No amendment may be made to the Declaration of Trust without the
affirmative vote of the holders of more than 50% of our outstanding shares. The
holders of shares have no preemptive or conversion rights. Shares when issued
are fully paid and non-assessable, except as set forth under "Shareholder and
Trustee Liability" below. The Fund may be terminated upon the sale of its
assets to another issuer, if such sale is approved by the vote of the holders
or more than 50% of our outstanding shares, or upon liquidation and
distribution of our assets, if approved by the vote of the holders of more than
50% of our outstanding shares. If not so terminated, the Fund will continue
indefinitely.
- ------------------------------------------------------------------------------
SHAREHOLDER AND TRUSTEE LIABILITY
- ------------------------------------------------------------------------------
We are an entity of the type commonly known as a "Massachusetts business
trust." Under Massachusetts law, shareholders of such a trust may, under
certain circumstances, be held personally liable as partners for the
obligations of the trust. Our Declaration of Trust contains an express
disclaimer of shareholder liability for our acts or obligations and requires
<PAGE>
that notice of such disclaimer be given in each agreement, obligation or
instrument entered into or executed by us or our Trustees. The Declaration of
Trust provides for indemnification and reimbursement of expenses by the
relevant Portfolio out of the Portfolio's property for any shareholder held
personally liable for the Portfolio's obligations. The Declaration of Trust
also provides that we shall, upon request, assume the defense of any claim made
against any shareholder for any act or obligation of ours and satisfy the
judgment thereon. Thus, the risk of a shareholder incurring financial loss on
account of shareholders liability is highly unlikely and is limited to the
relatively remote circumstances in which we would be unable to meet our
obligations.
The Declaration of Trust further provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law, but nothing in the
Declaration of Trust protects a Trustee against any liability to which he or
she would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct
of his or her office.
- ------------------------------------------------------------------------------
CUSTODIAN
- ------------------------------------------------------------------------------
State Street Bank and Trust Company, 1776 Heritage Drive, North Quincy,
MA 02171, is the custodian of the assets of the Fund. The custodian takes no
part in determining the investment policies of the Fund or in deciding which
securities are purchased or sold by the Fund. We, however, may invest in
obligations of the custodian and may purchase or sell securities from or to the
custodian.
- ------------------------------------------------------------------------------
AUDITORS
- ------------------------------------------------------------------------------
Tait, Weller & Baker of Philadelphia, Pennsylvania, 210 Center Plaza,
Suite 700, Philadelphia, Pennsylvania 19102-1707, serves as our Fund's
independent auditors, providing audit services including: (1) examination of
the annual financial statements and limited review of unaudited semi-annual
financial statements; (2) assistance and consultation in connection with
Securities and Exchange Commission filings; and (3) review of the federal and
state income tax returns filed on our behalf.
The financial statements of the Fund incorporated herein by reference, have
been examined by Tait, Weller & Baker, independent auditors, as stated in their
report which is incorporated by reference, and have been so incorporated in
reliance upon such report given upon their authority as experts in accounting
and auditing.
- ------------------------------------------------------------------------------
LEGAL COUNSEL
Morrison and Foerster of San Francisco, California serves as our legal counsel.
- ------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
The following financial statements of the Fund and the opinion of its
independent auditors, included in the Annual Report to the shareholders for the
year ended June 30, 1995, are incorporated herein by reference:
Statement of Investments - June 30, 1995
Statement of Assets and Liabilities - June 30,1995
Statement of Operations for the year ended June 30, 1995
Statement of Changes in Net Assets for the year ended June 30, 1993, the year
ended June 30, 1994 and the year ended June 30, 1995.
A list of securities held by the Citizens Index Portfolio as of May 24, 1996 is
attached as Schedule A.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
The above referenced financial statements and the report of the
independent auditors are included in the 1995 Annual Report which is provided
to each person to whom the Statement of Additional Information is sent or
given.
MANAGEMENT DISCUSSION
It is the policy of the Fund to provide a management discussion of the
strategy and performance of each portfolio in the Annual Report.
<PAGE>
SCHEDULE A
CITIZENS INDEX LIST
The 300 Companies that make up the Citizens Index
As of 5/24/96
ADC Telecommunications, Inc. ADCT
Adobe Systems, Inc. ADBE
Advanced Micro Devices, Inc. AMD
Ahmanson & Co., H.F. AHM
Air Products and Chemicals, Inc. APD
Airtouch Communications ATI
Alco Standard Corporation ASN
Alltel Corp. AT
Altera Corporation ALTR
ALZA Corporation AZA
Amdahl Corporation AMH
America On-Line AMER
American Express Company AXP
American General Corporation AGC
American Greetings Corporation AGRE.A
American Medical Response EMT
American Power Conversion APCC
Ameritech AIT
AMP, Inc. AMP
Antec Corporation ANTC
Apogee Enterprises, Inc. APOG
Apple Computer, Inc. AAPL
Armstrong World Industries, Inc. ACK
Autodesk, Inc. ADSK
Automatic Data Processing, Inc. AUD
Avery Dennison Corp. AVY
Avnet AVT
Avon Products, Inc. AVP
Bandag, Inc. BDG
Bank of Boston Corp. BKB
Bankers Trust New York Corporation BT
Barnes & Noble Inc. BKS
Barnett Banks, Inc. BBI
Belden Inc. BWC
Bell Atlantic Corporation BEL
Bell Sports Corp. BSPT
BellSouth Corporation BLS
Ben & Jerry's Homemade, Inc. BJIC.A
<PAGE>
Beneficial Corp. BNL
Bergen Brunswig Corporation BBC
Betz Laboratories, Inc. BTL
Biomet, Inc. BMET
Block, H& R HRB
Boatmen's Bancshares, Inc. BOAT
Broderbund Software BROD
Brown Group, Inc. BG
Bruno's Inc. BRNO
C-Cube Microsystems Inc. CUBE
Caliber Systems CBB
California Energy Company, Inc. CE
Callaway Golf Company ELY
Campbell Soup Company CPB
Caraustar Industries, Inc. CSAR
CasTech Aluminum Group Inc. CTA
Celestial Seasonings CTEA
Centex Corporation CTX
Charming Shoppes, Inc. CHRS
Chubb Corporation CB
Church & Dwight Co., Inc. CHD
Cincinnati Milacron CMZ
Circuit City Stores, Inc. CC
Cisco Systems, Inc. CSCO
Coca-Cola Company KO
Coleman Company CLN
Comcast Corporation CMCS.K
Community Psychiatric CMY
Compaq Computer Corporation CPQ
Computer Associates International, Inc. CA
Consolidated Natural Gas Company CNG
Consolidated Papers, Inc. CDP
Cooper Tire & Rubber Company CTB
CoreStates Financial Corp. CFL
CPC International CPC
CUC International CU
Cummins Engine CUM
Davidson & Associates, Inc. DAVD
Dean Witter, Discover & Co. DWD
Deere & Company DE
Dell Computer Corporation DELL
Deluxe Corporation DLX
<PAGE>
Dial Corp., The DL
Dialogic Corporation DLGC
Digital Equipment Corp. DEC
Dow Jones & Company DJ
Dun & Bradstreet Corporation, The DNB
Duriron Company Inc., The DURI
Edwards, Inc., A.G. AGE
Emerson Electric Co. EMR
Engelhard Corporation EC
Enron Corporation ENE
Envirotest Systems Corp. ENVI
Fedders Corporation FJC
Federal Express Company FDX
Federal Home Loan Mortgage Corp. (Freddie Mac) FRE
Federal National Mortgage Assoc. FNM
Federal-Mogul Corporation FMO
Federated Department Store FD
First Chicago NBD Corp. FCN
First Union Corp. FTU
Fleetwood Enterprises FLE
Fort Howard Corporation FORT
Fresh Choice, Inc. SALD
Gap, Inc., The GPS
Gateway 2000, Inc. GATE
General Instrument GIC
General Mills GIS
General Re Corporation GRN
Genuine Parts Company GPC
Giant Food Inc. GFS.A
Global Village Communication, Inc. GVIL
Golden West Financial Corp. GDW
Great Atlantic & Pacific Tea GAP
Great Western Financial Corp. GWF
Gymboree Corp. GYMB
Handleman Co. HDL
Hannaford Brothers Company HRD
Harcourt General H
Harland Company, John H. JH
Harley-Davidson, Inc. HDI
Harman International Industries, Inc. HAR
Hartmarx HMX
Hasbro, Inc. HAS
<PAGE>
Heinz Company, H.J. HNZ
Hershey Foods Corporation HSY
Hewlett-Packard Company HWP
Huffy Corporation HUF
ICC Technologies Inc. ICGN
Idex Corporation IEX
Idexx Laboratories, Inc. IDXX
Illinois Central Corporation IC
Illinois Tool Works Inc. ITW
IMCO Recycling IMR
Inland Steel IAD
Intel Corporation INTC
Invacare Corporation IVCR
Ionics, Inc ION
Jefferson-Pilot Corporation JP
Jostens Inc. JOS
Kellogg Company K
Kenetech Corporation KWND
KeyCorp KEY
Keystone International Inc. KII
King World Productions Inc. KWP
Knight-Ridder, Inc. KRI
Kroger Company KR
Landmark Graphics Corp. LMRK
Limited, Inc., The LTD
Liz Claiborne, Inc. LIZ
Longs Drug Stores Corporation LDG
Lowe's Companies, Inc. LOW
Luby's Cafeteria LUB
Manor Care, Inc. MNR
Masco Corporation MAS
Mattel, Inc. MAT
May Department Stores MA
Maytag Corporation MYG
MBNA Corporation KRB
McGraw-Hill, Inc. MHP
Medtronic, Inc. MDT
Mellon Bank Corporation MEL
Melville Corporation MES
Merck & Co., Inc. MRK
Meredith Corporation MDP
Micron Technology Inc. MU
<PAGE>
Microsoft Corporation MSFT
Miller, Inc., Herman MLHR
Millipore Corporation MIL
Minnesota Mining & Manufacturing MMM
Mobile Telecommunication Technologies Corp. MTEL
Molex Incorporated MOLX
Moore Corporation Limited MCL
Nalco Chemical Company NLC
National City Corporation NCC
National Service Industries, Inc. NSI
NationsBank Corporation NB
Nature's Sunshine Products NATR
Network General Corporation NETG
New York Times Company NYT.A
NICOR, Inc. GAS
NorAm Energy NAE
Nordson Corporation NDSN
Nordstrom, Inc. NOBE
Norwest Corp. NOB
Novell, Inc. NOVL
Nucor Corporation NUE
Odwalla Inc. ODWA
Oneok Inc. OKE
OshKosh B'Gosh, Inc. GOSH.A
Owens & Minor Inc. OMI
Pacific Enterprises PET
Pacific Telesis Group PAC
Parametric Technology Corp. PMTC
Penney Co., Inc., J.C. JCP
Peoples Energy Corporation PGL
Perkin Elmer Corporation PKN
Physician Corporation of America PCAM
Pitney Bowes, Inc. PBI
PNC Bank Corp. PNC
Polaroid Corporation PRD
Praxair Inc PX
Price/Costco Inc. PCCW
Providian Corporation PVN
Pulte Corporation PHM
Quaker Oats Company OAT
Qualcomm Inc. QCOM
Raychem RYC
<PAGE>
Real Goods Trading Corporation RGT
Recovery Engineering Inc. REIN
Reebok International Ltd. RBK
Ringer Corp. RING
Rite Aid Corp. RAD
Roadway Express, Inc. ROAD
Rouse Company RSE
Rubbermaid, Inc. RBD
Ryder System, Inc. R
Safeco Corp. SAFC
SBC Communications Inc. SBC
Scherer Corp., R.P. SHR
Schering-Plough Corp. SGP
Scholastic Corporation SCHL
Schwab, Charles Corporation SCH
Sealed Air Corporation SEE
Sears Roebuck & Company S
Shared Medical Systems SMED
Sigma Aldrich SIAL
Silicon Graphics Inc. SGI
Smucker (J.M.) Company SJM.A
Snap-On Tools Corp. SNA
Sofamor Danek Group, Inc. SDG
SONAT Inc. SNT
Sonoco Products Company SON
Southwest Airlines Co. LUV
Springs Industries, Inc. SMI
SPX Corporation SPW
St. Jude Medical Inc. STJM
St. Paul Companies SPC
Standard Products Company SPD
Stanley Works SWK
Stratus Computer, Inc. SRA
Stride Rite Corporation SRR
Sun Healthcare Group Inc. SHG
Sun Microsystems, Inc. SUNW
Sunrise Medical SMD
SunTrust Bank, Inc. STI
Supervalu SVU
Sybase, Inc. SYBS
Symantec Corporation SYMC
Sysco Corporation SYY
<PAGE>
Tandem Computers TDM
Tandy TAN
Target Therapeutics, Inc. TGET
Tecumseh Products Company TECU.A
Tektronix, Inc. TEK
Tellabs, Inc. TLAB
Tennant Company TANT
Thomas & Betts Corporation TNB
Time Warner TWX
Times Mirror Company TMC
Timken Company, The TKR
TJ International, Inc. TJCO
TJX Companies Inc., The TJX
Tootsie Roll Industries, Inc. TR
Toro Company TTC
Toys 'R' Us TOY
Trinity Industries Inc. TRN
Turner Broadcast Sys. TBS.B
U.S. Bancorp USBC
U.S. Healthcare Inc. USHC
U.S. Robotics, Inc. USRX
U.S. West Communications Group USW
U.S. West Media Group UMG
UNUM Corporation UNM
USF& G FG
USLIFE USH
V.F. Corporation VFC
Ventritex Inc. VNTX
Viacom, Inc. VIA.B
Vivra, Inc. V
VLSI Technology Inc. VLSI
Wachovia Corporation WB
Walgreen Company WAG
Warnaco Group Inc., The WAC
Wellman, Inc. WLM
Wells Fargo Bank, N.A. WFC
Western Atlas, Inc. WAI
Whirlpool Corp. WHR
Whitman Corporation WH
Whole Foods Market WFMI
Wholesome & Hearty Foods Inc. WHFI
Williams Companies, Inc., The WMB
<PAGE>
Woolworth Corporation Z
Worldcom Inc. Ga WCOM
Worthington Foods Inc. WFDS
Worthington Industries, Inc. WTHG
Wrigley, William WWY
Xerox XRX
Yankee Energy System Inc. YES
<PAGE>
CITIZENS INVESTMENT TRUST
PART C
OTHER INFORMATION
ITEM 24: Financial Statements and Exhibits.
(A) Audited Financial Statements:
Not applicable
(B) Exhibits:
(1) Declaration of Trust
*(a) Declaration of Trust, as amended
(b) Amendment to Declaration of Trust
*(2) By-laws
(3) Not applicable
(4) Not applicable
(5) Management agreements
*(a) Management agreement
(b) Renewal of management agreement
(c) Amendment to management agreement dated
May 30, 1996
(d) Form of sub-investment advisory agreement
(6) Distribution agreement
*(a) Distribution agreement, as amended
(b) Renewal of distribution agreement
(c) Amendment to distribution agreement dated
May 6, 1996
(d) Amendment to distribution agreement dated
May 30, 1996
(7) Not applicable
** (8) Custodian agreement
(9) Other material contracts
*(a) Administrative agreement, as amended
(b) Amendment to administrative agreement
*(10) Opinion and consent of counsel as to the legality of the
securities being registered
(11) Consent of independent certified public accountants
(12) Not applicable
*(13) Copies of written assurance from initial stockholders
*(14) Copies of model plan used in establishment of retirement
plan
*(15) Rule 12b-1 distribution plan
(16) Schedule for computation of each performance quotation
provided in the registration statement (in response to
Item 22): provided in Statement of Additional
Information
***(25) Power of Attorney
and filed
herewith
----------------------------------------
<PAGE>
* Incorporated by reference to Amendment No. 27 to the
Registrant's Registration Statement (File No. 2-80886), as
filed with the Securities and Exchange Commission.
** To be filed by amendment.
*** Incorporated by reference to Amendment Nos. 12 and 14 to the
Registrant's Registration Statement (File No. 2-80886), as
filed with the Securities and Exchange Commission.
ITEM 25: Persons Controlled by or under Common Control with Registrant.
None
ITEM 26: Number of Holders of Securities.
Number of
Record Holders
Title: As of April 29,1996:
Working Assets Money Market Portfolio-Retail 9,338
Working Assets Money Market Portfolio-Retail 60
Citizens Income Portfolio 2,370
Citizens Emerging Growth Portfolio 4,527
Citizens Global Equity Portfolio 2,215
Muir California Tax-Free Income Portfolio 950
Citizens Index Portfolio-Retail 11,936
Citizens Index Portfolio-Institutional 29
E-Fund 1,124
ITEM 27: Indemnification.
Article VII, Section 12 of the Agreement and Declaration of
Trust of the Registrant provides that the Trust shall indemnify any
person who was or is a party or is threatened to be made a party to
any proceeding by reason of the fact that such person is or was an
agent of the Trust, against expenses, judgments, fines, settlements,
and other amounts actually and reasonably incurred in connection
with such proceeding if that person acted in good faith and
reasonably believed her/his conduct to be in the best interest of
the Trust. Indemnification will not be provided in certain
circumstances, however, including instances of willful misfeasance,
bad faith, gross negligence, and reckless disregard of the duties
involved in the conduct of the particular office involved.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to the Trustees,
officers, and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable in the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a Trustee, officer or
controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such Trustee, officer
or controlling person in connection with the securities being
<PAGE>
registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
The Trustees and officers of the Registrant and the personnel
of the Registrant's administrator are insured under an errors and
omissions liability insurance policy. The Registrant and its
officers are also insured under the fidelity bond required by Rule
17g-1 under the Investment Company Act of 1940.
ITEM 28: Business and Other Connections of Investment Adviser.
Citizens Securities, Inc., 111 Pine Street, San Francisco,
California 94111, and One Harbour Place, Portsmouth, New Hampshire
03801, a registered broker/dealer, is the principal underwriter for
the Registrant and is a wholly owned subsidiary of Citizens
Advisers, Inc., the Investment Adviser, a California corporation.
The officers and directors of Citizens Advisers, Inc. having other
business of a substantial nature are as follows:
Name and Principal Business Address: Nature of Other Business:
Sophia Collier President and Director of
One Harbour Place, Suite 525 the Registrant
Portsmouth, N.H. 03801
RhumbLine Advisers, a registered investment adviser established
in 1990 and with offices at 30 Rowes Wharf, Boston, Massachusetts
02110-3326, serves as the subadviser with respect to the Citizens
Index Institutional Portfolio. RhumbLine is 97% owned by J.D.
Nelson, who controls substantially all of the company. The officers
and directors of RhumbLine Advisers having other business of a
substantial nature are as follows:
Name and Principal Business Address: Nature of Other Business:
J.D. Nelson Interested Trustee of
30 Rowes Wharf the Registrant
Boston, Massachusetts 02110-3326
ITEM 29: Principal Underwriters.
(A) Not Applicable
<PAGE>
<TABLE>
<CAPTION>
(B) Name and Principal Positions and Offices Positions and Offices
Business Address: with Underwriter: with Registrant:
<S> <C> <C> <C>
Sophia Collier President and Director President and
See Item 28 of Underwriter Director
</TABLE>
(C) Not Applicable
ITEM 30: Location of Accounts and Records.
The accounts, books, and other documents required to be
maintained by Section 31(a) of the Investment Company Act of 1940
and the rules thereunder are kept by the Registrant's Transfer and
Dividend Distributing Agent, PFPC, Inc., 400 Bellevue Parkway,
Wilmington, DE 19809, and by the Registrant's Custodian Bank, State
Street Bank and Trust, One Heritage Drive, Quincy, MA 02171.
ITEM 31: Management Services.
Not applicable
ITEM 32: Undertakings.
(A) The Registrant undertakes to file a post-effective amendment,
using reasonably current financial statements which need not be
certified, within four to six months from the effective date of
Registrant's Registration Statement under the Securities Act of
1933.
(B) If the information called for by Item 5A of the Form N-1A is
contained in the latest Annual Report to shareholders, the
Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Portsmouth, and State of New Hampshire, on the 20th
day of June, 1996.
CITIZENS INVESTMENT TRUST
By Sophia Collier
Sophia Collier, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Sophia Collier * , Trustee June 20, 1996
- ------------------------------
Sophia Collier President and
Principal Executive
Principal Accounting Officer
Principal Financial Officer
William D. Glenn * , Trustee June 20, 1996
- ------------------------------
(William D. Glenn)
Juliana Eades * , Trustee June 20, 1996
- ------------------------------
(Juliana Eades)
Ada Sanchez * , Trustee June 20, 1996
- ------------------------------
(Ada Sanchez)
J.D. Nelson * , Trustee June 20, 1996
- ------------------------------
(J.D. Nelson)
Azie Taylor Morton * , Trustee June 20, 1996
- ------------------------------
(Azie Taylor Morton)
<PAGE>
* By Sophia Collier Attorney in Fact Sophia Collier
See Power of Attorney dated May 15, 1992, filed with the commission on May
15, 1992 as part of Working Assets Common Holdings Post Effective
Amendment #12.
See Power of Attorney dated November 12, 1992, filed with the commission
on November 12, 1992 as part of Working Assets Common Holdings Post
Effective Amendment #14.
<PAGE>
EXHIBIT INDEX
Exhibit No.: Description:
1(b) Amendment to Declaration of Trust
5(b) Renewal of management agreement
5(c) Amendment to management agreement dated May 30, 1996
5(d) Form of sub-investment advisory agreement
6(b) Renewal of distribution agreement
6(c) Amendment to distribution agreement dated May 6, 1996
6(d) Amendment to distribution agreement dated May 30, 1996
9(b) Amendment to administrative agreement
11 Consent of independent certified public accountants
25 Power of Attorney
Exhibit 1(b)
WORKING ASSETS COMMON HOLDINGS
ESTABLISHMENT AND DESIGNATION
OF
SERIES OF SHARES OF BENEFICIAL TRUST
Pursuant to paragraph (f) of article Fourth of the Declaration of Trust
dated November 19, 1982, as amended to the date hereof, of Working Assets
Common Holdings (the "Trust"), the Trustees of the Trust hereby establish and
designate Shares (as defined in the Declaration of Trust) to have the following
special and relative rights:
1. The Series shall be designated as follows: Citizens Index Institutional
Portfolio
2. This Series shall be authorized to hold cash, invest in securities,
instruments and other property and use investment techniques as from time to
time described in the Trust's then currently effective registration statement
under the Securities Act of 1933 to the extent pertaining to the offering as
shares of this Series. Each share of this Series shall be redeemable, shall be
entitled to one vote (or a fraction thereof in respect of a fractional share)
on matters on which Shares of this Series shall be entitled to vote, shall
represent a pro rata beneficial interest in the assets allocated or belonging
to this Series, and shall be entitled to receive its pro rata share of the net
assets of each Series upon liquidation of this Series, all as provided in
Article Fourth of the Declaration of Trust.
3. All consideration received by the Trust for the issuance or sale of
Shares of a particular Series, together with all assets in which such
consideration is invested or reinvested, all income thereon, profits there
from or proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation of such assets, and any funds or payments derived from
any reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to this Series for all purposes, subject only to the rights
of creditors of this Series and shall be so recorded on the books of account of
the Trust, except that all existing assets of the Trust as of the date of this
Designation of Series shall be deemed to be the assets and liabilities of the
pre-existing series in the proportion of such series on the book of the Trust.
<PAGE>
In the event there are assets, income, earnings, profits, proceeds, funds or
payments which are not readily identifiable as belonging to any particular
Series, the Trustees shall allocate them among any one or more of the Series
established and designated from time to time and in such manner as the Trustees
in their sole discretion deem fair and equitable. Each such allocation by the
Trustees shall be conclusive for all purposes. No Shareholder of any particular
Series shall have any claim on or right to any assets allocated to any other
Series.
4. The assets belonging to each particular Series shall be charged with
the liabilities of the Trust with respect to that Series and all expenses,
costs, charges and reserves attributable to that Series, except that all
existing liabilities of the Trust as of the date of this Designation of Series
shall be deemed to be the liabilities of Working Assets Money Market Portfolio,
Citizens Income Portfolio, Citizens Emerging Growth Portfolio, Citizens Global
Equity Portfolio, Muir California Tax Free Income Portfolio, Citizens Index
Portfolio and Efund any general liabilities, expenses, charges or reserves of
the Trust which are not readily identifiable as belonging to a particular
Series shall be allocated and charged by the Trustees to and among one or more
of the series established and designated from time to time in such manner and
on such basis the Trustees in their sole discretion deem fair and equitable.
Each such allocation by the Trustees shall have full discretion, to the extent
not inconsistent with the 1940 Act to determine which items will be treated as
income and which items as capital; and such determination shall be conclusive
and binding upon Shareholders. Under no circumstances shall the assets
allocated or belonging to a particular Series be charged with the liabilities,
expenses, costs, charges or reserves attributable to any other Series. All
persons who have been extended credit which has been allocated to a particular
Series shall look only to the assets of that particular Series for payment of
such credit claim or contract.
5. Each Share of this Series will represent a beneficial ownership in the
net assets allocated or belonging to this Series only and such interest shall
not extend to the assets of the Trust generally. All Shares of the Trust
outstanding as of the date of this Designation of Series shall be deemed to be
outstanding shares of the preexisting series. Dividends and Distributions on
<PAGE>
Shares of a particular Series may be paid with such frequency as the Trustees
determine, which may be monthly or otherwise, pursuant to a standing vote or
votes adopted only once or with such frequency as the Trustees may determine,
to the Shareholders of that Series only, from such of the income and capital
gains, accrued and realized, from the assets belonging to that Series, as the
Trustees determine after providing for actual and accrued liabilities belonging
to that Series. All dividends and distributions on Shares of any particular
Series shall be distributed pro rata by such Shareholders at the date and time
of record established for payment of such dividends and distributions. Shares
of any particular Series of the Trust, Shareholders of such Series shall be
entitled to a pro rata share of the net assets of such Series only.
6. Shareholders of each Series shall vote separately as a class on any
matter to the extent required by, and any matter shall have deemed effectively
acted upon with respect to such Series as provided in, Rule 18f-2, as from time
to time in effect, under the Investment Company Act of 1940, as amended, or any
successor rule, and the Declaration of Trust.
7. The Trustees may, in their discretion, authorize the division of
Shares of any series into one or more Classes or sub-series. All Shares of a
Class of sub-series shall be identical with each other and with the Shares of
each other Class or subseries of the same Series, except for such variations
between Classes or sub-series as may be approved by the Board of Trustees and
permitted by the 1940 Act or pursuant to any exemptive order issued by the
Commission.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this instrument as of
the 29th day of May, 1996.
Sophia Collier Juliana Eades
Sophia Collier Juliana Eades
William D. Glenn II J.D. Nelson
William D. Glenn II J.D. Nelson
Azie Taylor Morton
Azie Taylor Morton
Ada Sanchez
Ada Sanchez
Exhibit 5(b)
RENEWAL OF MANAGEMENT AGREEMENT
THIS AGREEMENT, made this 6th day of May, 1996, between Citizens
Investment Trust, a Massachusetts Business Trust (hereinafter called the
"Fund") and Citizens Advisers, Inc., a California corporation (hereinafter
called the "Investment Advisor").
WITNESSETH:
WHEREAS, there is now in effect a Management Agreement dated May 30,
1995, to be in effect through May 31, 1996, between the Fund and the Investment
Adviser, providing the research, portfolio management services, and
administrative services, to be furnished to the Fund by the Investment Adviser
on certain terms and conditions and subject to certain provisions set forth
therein; and
WHEREAS, said Agreement was reapproved by the vote of the holders of a
majority of the outstanding shares of the capital stock of the Fund at the
Special Meeting of Stockholders held May 18, 1992, and said Agreement provides
for year to year renewals by mutual consent, upon certain specified conditions,
and the renewal of such Agreement has been approved by the Board of Directors
of the Fund on May 6, 1996; and
NOW, THEREFORE, such parties agree as follows:
1. The Management Agreement dated May 30, 1995, is hereby renewed for
the additional period of 12 months, beginning June 1, 1996 and
ending at the close of business on May 31, 1997.
2. In all other respects said Management Agreement, as now amended and
in effect, is reaffirmed and shall continue in effect for the period
provided by such Agreement as renewed by this Agreement.
3. This Agreement shall be executed in several counterparts,
each of which shall be original.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their corporate names by their duly authorized officers as of the
day and year first above written.
Citizens Investment Trust Citizens Advisers, Inc.
By William D. Glenn II By Sophia Collier
William D. Glenn II Sophia Collier
Chair of the Board President
Exhibit 5(c)
AMENDMENT TO MANAGEMENT AGREEMENT
DATED MAY 30, 1996
AMENDMENT TO ITEM 4 (A)
New text shall be added at the bottom of section 4(a) as follows:
Citizens Index Institutional Portfolio: 50/100 of 1% of
average annual net assets
AMENDMENT TO ITEM 4 (B)
New text shall be added at the bottom of section 4(b) as follows:
Citizens Index Institutional Portfolio: No contractual
limit
Agreed & Accepted:
CITIZENS INVESTMENT TRUST CITIZENS ADVISERS
By: William D. Glenn II By: Sophia Collier
--------------------------- -----------------
William D. Glenn II Sophia Collier
Chair President
Dated: May 29, 1996
Exhibit 5(d)
FORM OF SUB-INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT made this 29 day of May 1996, by and between CITIZENS
ADVISERS, INC., a California Corporation (the "Adviser"), RHUMBLINE ADVISERS, a
Massachusetts General Partnership (the "Sub-Adviser") and CITIZENS INVESTMENT
TRUST, 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 Advisor Agreement dated the same
date as this Agreement whereby the Adviser shall provide the Citizens Index
Institutional Portfolio of the Fund (the "Portfolio") 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
Portfolio with services on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties hereto as herein set forth, the parties covenant and agree as
follows:
ARTICLE 1: Duties of the Sub-Adviser, The Sub-Adviser will furnish
continuously an investment program with respect to the Portfolio's Assets in
accordance with the Citizens Index as defined in the current Prospectus, and
will determine from time to time what securities shall be purchased, sold or
exchanged with the Portfolio's Assets, and what portion, if any, of the
Portfolio's Assets shall be held uninvested; subject, always, to compliance
with the 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 Portfolio's then current Prospectus (copies of all of which, as amended
from time to time, will be furnished to the Sub-Adviser by the Adviser).
Investment Transactions. The Sub-Adviser shall take, on behalf of the
Portfolio, all actions which it deems necessary to implement the investment
policies determined as provided above, and in particular, consistent with the
provisions of Article 3 of this Agreement, to place all orders for the
<PAGE>
purchase, sale or exchange of securities for the Portfolio's account with
brokers, dealers, or bankers selected by it, and to that end the Sub-Adviser is
authorized as the agent of the Portfolio to give instructions to the Custodian
of the Portfolio as to deliveries of securities, 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. The Sub-Adviser will
provide to the Custodian by 12:00 p.m. (Eastern Standard Time) each day a
summary of all daily trade activity.
Best Execution. 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 Portfolio execution at the most favorable price by responsible
brokerage firms at reasonably competitive commission rates. In fulfilling this
requirement of 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 its having caused the Portfolio to pay a broker or dealer an amount
of commission for 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 Portfolio and to other clients of the Sub-Adviser as to which
the Sub-Adviser exercises investment discretion.
Compliance. The Sub-Adviser is required to provide to the Adviser the
following documentation: A quarterly report of all personal securities
transactions by the principal Portfolio Manager, defined as an "access person",
within 10 days of each quarter end. A monthly compliance questionnaire,
provided by the Adviser, to be returned by the fifth business day of each
month. In addition, the principal Portfolio Manager will annually read and
agree to the terms of the Working Assets Code of Ethics.
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 U.S. dollars at the rate of 10/100
of 1% of average annual net assets of the Portfolio. The Sub-Adviser will pay
its expenses incurred in performing its duties under this Agreement. The
Portfolio 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 as principal, broker or dealer in
making purchases or sales of securities or other property for the account of
<PAGE>
the Portfolio except as permitted by the Investment Company Act of 1940 and the
Rules, Regulations or orders thereunder, and will comply with all other
provisions of the Fund's Declaration of Trust and By-Laws as then in effect and
its current Prospectus relative to the Sub-Adviser, its directors, officers,
employees and affiliates, and will comply with all other governmental
regulations as they may apply 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 willful misfeasance, bad faith or negligence in the
performance of its duties, or by reason of 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. Neither the Adviser nor the
Sub-Adviser shall have any responsibility or liability for any act or omission
of any broker or custodian hereunder, or any other third party, unless such
third party is acting under explicit direction of the Sub-Adviser.
ARTICLE 5: Activities of the Sub-Adviser, The services of the Sub-Adviser
to the Portfolio 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 May 31, 1998 on which date it will terminate 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 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 the Rules and
Regulations thereunder.
<PAGE>
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 days' nor less that thirty days' written notice to other
parties. This Agreement shall automatically terminate in the event of its
assignment. If the Sub-Adviser has any significant change in membership of the
partnership, it will notify the Adviser of such change within a reasonable time
after such change. This Agreement may be amended only if such amendment is
approved by vote of a majority of the outstanding voting securities of the
Fund, by the Adviser and by the Sub-Adviser. The terms "vote of a majority of
the outstanding voting securities", "assignment", "affiliated person", and
"interested person", when used in this Agreement, shall have respective
meanings specified in the Investment Company Act of 1940 and the Rules and
Regulations 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.
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, and their respective seals to be hereto affixed, all
as of the day and year first above written.
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 the Agreement are not
binding upon any of the Trustees or shareholders of the Fund individually, but
bind only the Fund estate.
CITIZENS ADVISERS, INC.
By:
Its: President
<PAGE>
RHUMBLINE ADVISERS, A MASSACHUSETTS GENERAL
PARTNERSHIP
By: Rhumbline Advisers Corporation
Its: Managing General Partner
By:
Its: CEO
CITIZENS INVESTMENT TRUST
By:
Its: Trustee
Exhibit 6(b)
RENEWAL OF DISTRIBUTION AGREEMENT
THIS AGREEMENT, made this 6th day of May, 1996, between Citizens
Investment Trust, a Massachusetts Business Trust (hereinafter called the
"Fund") and Citizens Securities, a California corporation (hereinafter called
the "Distributor").
WITNESSETH:
WHEREAS, there is now in effect a Distribution Agreement dated May 30,
1995, to be in effect through May 31, 1996, between the Fund and the
Distributor, to act as distributor for the shares of the Fund, to solicit
orders for the sale of shares and to sell the Fund's Shares, to be furnished to
the Fund by the Distributor on certain terms and conditions and subject to
certain provisions set forth therein; and
WHEREAS, said Agreement was reapproved by the vote of the holders of a
majority of the outstanding shares of the capital stock of the Fund at the
Special Meeting of Stockholders held May 18, 1992, and said Agreement provides
for year to year renewals by mutual consent, upon certain specified conditions,
and the renewal of such Agreement has been approved by the Board of Directors
of the Fund on May 6, 1996; and
NOW, THEREFORE, such parties agree as follows:
1. The Distribution Agreement dated May 30, 1995, is hereby renewed for
the additional period of 12 months, beginning June 1, 1996 and
ending at the close of business on May 31, 1997.
2. In all other respects said Distribution Agreement, as now amended
and in effect, is reaffirmed and shall continue in effect for the
period provided by such Agreement as renewed by this Agreement.
3. This Agreement shall be executed in several counterparts,
each of which shall be original.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their corporate names by their duly authorized officers as of the
day and year first above written.
Citizens Investment Trust Citizens Securities, Inc.
By. William D. Glenn II By Sophia Collier
William D. Glenn II Sophia Collier
Chair of the Board President
Exhibit 6(c)
AMENDMENT TO DISTRIBUTION AGREEMENT
DATED MAY 6, 1996
The text in Section 4(a) shall be amended as follows:
Working Assets Money Market Portfolio-Retail Shares:
0.20% of average net assets
Citizens Income Portfolio
0.25% of average net assets
Citizens Emerging Growth Portfolio
0.25% of average net assets
Citizens Global Equity Portfolio
0.25% of average net assets
Muir California Tax-Free Income Portfolio
0.25% of average net assets
Citizens Index Portfolio-Retail Shares:
0.25% of average net assets
Agreed and Accepted:
CITIZENS TRUST CITIZENS SECURITIES
By: William D. Glenn II By: Sophia Collier
----------------------- -----------------
William D. Glenn II Sophia Collier
Chair President
Exhibit 6(d)
AMENDMENT TO DISTRIBUTION AGREEMENT
DATED MAY 30, 1996
The text in Section 4(a) shall be amended as follows:
Citizens Index Institutional Portfolio:
0.07% of average net assets
Agreed and Accepted:
CITIZENS TRUST CITIZENS SECURITIES
By: William D. Glenn II By: Sophia Collier
----------------------- -----------------
William D. Glenn II Sophia Collier
Chair President
Exhibit 9(b)
NOTICE
TO: Citizens Advisers
FROM: Citizens Investment Trust
- -------------------------------------------------------------------------------
Pursuant to our Administrative Services Agreement, we give you notice
that we would like to retain Citizens Advisers to provide Administrative
services to the new series of Citizens Investment Trust: Citizens Index
Institutional Portfolio under the Administrative Services Agreement.
We would also like to amend the Administrative Services Agreement to read
as follows: Shareholder servicing will be paid at the following fixed rates:
Income Portfolio, Emerging Growth Portfolio and Global Equity Portfolio -
10/100 of 1% and Citizens Index Portfolio - Retail Class - 45/100 of 1%.
Agreed and Accepted:
CITIZENS TRUST CITIZENS ADVISERS
BY: William D. Glenn II BY: Sophia Collier
William D. Glenn II Sophia Collier
Chair President
Dated: May 29, 1996
Exhibit 11
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated July 28, 1995, accompanying the financial
statements and financial highlights of Working Assets Money Market Portfolio,
Citizens Income Portfolio, Citizens Index Portfolio, Citizens Emerging Growth
Portfolio, and Citizens Global Equity Portfolio, each a series of shares of
beneficial interest of Citizens Trust (formerly Working Assets Common
Holdings), appearing in the Annual Report to Shareholders for the year ended
June 30, 1995 which is incorporated by reference in the Post-Effective
Amendment No. 34 to the Registration Statement on Form N-1A and related
Prospectus of Citizens Trust. We consent to the use of the aforementioned
report and to the references to our Firm in the Registration Statement and
Prospectus.
Tait, Weller & Baker
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
June 18, 1996
Exhibit 25
Working Assets Common Holdings: Power of Attorney
The undersigned hereby constitutes and appoints Sophia Collier with full powers
of substitution as his or her true and lawful attorney and agent to execute in
his or her name or on his or her behalf in any and all capacities the
Registration Statement on Form N-1A, and any and all amendments thereto, filed
by Working Assets Common Holdings (the "registrant") with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, and under the
Investment Company Act of 1940, as amended, and any all other instruments with
such attorneys and agents, or any of them deem necessary and advisable to
enable the Registrant to comply with the Securities Act of 1933, as amended,
the Investment Company Act of 1940, as amended, the rules, regulations and
requirements of the Securities and Exchange Commission and the securities or
Blue Sky laws of any state or other jurisdiction; and the undersigned hereby
ratifies and confirms as his own act and deed any and all that such attorneys
and agents, or any of them, shall do or cause to be done by virtue hereof. Any
one of such attorneys and agents shall have, and may exercise, all of the
powers hereby conferred.
In Witness Whereof, the undersigned has hereunto set his hand this 14th day of
November 1994.
Ada Sanchez
Signature
Ada Sanchez
Print Name
