<Page>
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C) OF THE SECURITIES
EXCHANGE ACT OF 1934
-----------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Information Statement
[X] Definitive Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
CITIZENS FUNDS - WITH RESPECT TO ITS SERIES CITIZENS GLOBAL EQUITY FUND
AND CITIZENS INTERNATIONAL GROWTH FUND
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of the filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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<Page>
CITIZENS GLOBAL EQUITY FUND(R)
CITIZENS INTERNATIONAL GROWTH FUND(SM)
230 Commerce Way
Portsmouth, NH 03801
May 15, 2002
Dear Shareholder:
As I wrote you last month, SSgA Funds Management, Inc. (SSgA) has been
selected as the subadviser for the Citizens Global Equity and Citizens
International Growth Funds. Enclosed is an information statement relating to the
approval of new subadvisory agreements by and among Citizens Funds, Citizens
Advisers, Inc. (the Funds' manager), and SSgA. This information statement
explains why the Board of Trustees approved subadvisory agreements with SSgA as
the new subadviser for each Fund.
Citizens Funds has obtained exemptive relief from the Securities and Exchange
Commission, which authorizes our Trustees to approve new subadvisers in lieu of
a shareholder vote under certain circumstances. The information statement
describes SSgA and the terms of our subadvisory agreements with them and is
intended to provide you with more in-depth information. It is not a proxy
statement and, therefore, you're not required to vote.
If you have any questions, please feel free to call your shareholder service
representative at 800.223.7010. The shareholder services department is open from
9am to 6pm Eastern Standard Time, Monday through Friday.
Best regards,
/s/ John L. Shields
John L. Shields
President
<Page>
CITIZENS GLOBAL EQUITY FUND(R)
CITIZENS INTERNATIONAL GROWTH FUND(SM)
230 Commerce Way
Portsmouth, NH 03801
Telephone: 800.223.7010
INFORMATION STATEMENT
This Information Statement is being provided to shareholders of Citizens Global
Equity Fund and Citizens International Growth Fund (collectively, the "Funds"),
each a series of Citizens Funds (the "Trust"), in lieu of a proxy statement
pursuant to the terms of an exemptive order that the Trust has received from the
Securities and Exchange Commission. The exemptive order permits the Funds'
investment manager, under certain circumstances, to hire new subadvisers with
the approval of the Trust's Board of Trustees, but without obtaining shareholder
approval. Pursuant to the exemptive order, the Trust has agreed to provide
certain information about any new subadvisers to the Funds' shareholders.
Accordingly, shareholders are not required to vote on the hiring of the new
subadviser, but are encouraged to review this Information Statement.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
The Trust, a Massachusetts business trust organized on November 19, 1982, is
registered as an open-end diversified management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"). The Trust
presently consists of eight separate series, each with its own investment
objective, policies, assets and liabilities: Citizens Global Equity Fund,
Citizens International Growth Fund, Citizens Money Market Fund, Citizens Income
Fund, Citizens Emerging Growth Fund, Citizens Core Growth Fund, Citizens Small
Cap Core Growth Fund and Citizens Value Fund. Citizens International Growth Fund
commenced operations on December 20, 2000. Citizens Global Equity Fund commenced
operations on February 8, 1994. The Trust's Board of Trustees has the authority
to create additional series and may do so from time to time. The mailing address
of the Funds and the Trust is 230 Commerce Way, Portsmouth, New Hampshire 03801.
THE ANNUAL REPORT FOR THE FUNDS FOR THE PERIOD ENDED JUNE 30, 2001, INCLUDING
AUDITED FINANCIAL STATEMENTS, AND THE SEMI-ANNUAL REPORT FOR THE PERIOD ENDED
DECEMBER 31, 2001, PREVIOUSLY HAVE BEEN SENT TO SHAREHOLDERS AND ARE AVAILABLE
UPON REQUEST WITHOUT CHARGE BY CONTACTING CITIZENS FUNDS, 230 COMMERCE WAY,
PORTSMOUTH, NEW HAMPSHIRE 03801 OR BY CALLING TOLL-FREE, 800.223.7010.
This Information Statement is being mailed on or about May 15, 2002.
BACKGROUND
Citizens Advisers, Inc., a New Hampshire corporation (the "Manager"), 230
Commerce Way, Portsmouth, New Hampshire 03801, manages the assets of each Fund
pursuant to a Management Agreement, dated June 1, 1992, amended and restated as
of July 3, 2001 (the "Management Agreement"). The Management Agreement was most
recently approved by the Board of Trustees of the Trust, including a majority of
the Trustees who are not "interested persons," as defined in the 1940 Act, of
any party to such Agreement (the "Independent Trustees"), on May 21, 2001. The
Management Agreement was most recently approved by shareholders of the Citizens
Global Equity Fund on July 3, 2001 and was approved by the initial shareholder
of the Citizens International Growth Fund on December 20, 2000.
1
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Subject to the terms of the Management Agreement, the Manager provides the
Funds with overall investment management services, and subject to such policies
as the Board of Trustees may determine, makes investment decisions for the
Funds. The Manager may delegate some or all of its duties under the Management
Agreement to one or more subadvisers in accordance with the provisions of the
1940 Act, the Trust's Declaration of Trust and By-Laws and any policies and
determinations of the Board of Trustees. The Manager may terminate the services
of any subadviser at any time.
MANAGEMENT AGREEMENT
As noted above, the Manager manages the assets of each Fund pursuant to the
terms of the Management Agreement. The Management Agreement continues in effect
from year to year, subject to approval annually by the Board of Trustees in
accordance with the 1940 Act. The Management Agreement may be terminated with
respect to either Fund at any time without the payment of any penalty upon not
less than 60 days' written notice by the Manager or by the Board of Trustees of
the Trust or upon the vote of the holders of a majority (as defined in the 1940
Act) of the then issued and outstanding shares of the applicable Fund. The
Management Agreement will automatically terminate in the event of its
"assignment" (as defined in the 1940 Act).
Under the terms of the Management Agreement, the Manager is responsible for
determining which securities are to be bought and sold for each Fund, the timing
of such purchases and sales, and the placement of orders to effect purchases and
sales, subject to the provisions of the 1940 Act, the Trust's Declaration of
Trust and the investment objectives, policies, procedures and restrictions in
each Fund's current registration statement under the 1940 Act. The Manager is
required to use its best efforts in rendering these services.
The Management Agreement also provides that the Manager may delegate some or all
of its duties under the Management Agreement to one or more subadvisers, subject
to the provisions of the 1940 Act, and that neither the Manager nor any
subadvisers will be liable for any loss to the Funds sustained by reason of the
purchase, sale or retention of any security so long as the purchase, sale or
retention was made in good faith. However, the Manager and any subadvisers will
not be protected against liability to the Funds or their shareholders by reason
of willful misfeasance, bad faith or gross negligence in the performance of
their duties or by reason of their reckless disregard of their obligations and
duties under the Management Agreement or the applicable subadvisory agreement.
The Management Agreement states that the Manager or any affiliate of the Manager
may act as investment adviser or principal underwriter for any other entity, and
that the Manager or any affiliate shall not be restricted from buying, selling
or trading securities for its or their own accounts or for the accounts of
others for whom it or they may be acting, provided the Manager represents that
it will not undertake any activities which, in its sole judgment, will adversely
affect the performance of its obligations to the Trust under the Management
Agreement.
The Management Agreement also provides that the Manager and any subadviser will
have no responsibility or liability for the accuracy or completeness of each
Fund's current registration statement under the 1940 Act, except for information
supplied by the Manager. Under the terms of the Management Agreement, the Trust
agrees to indemnify the Manager and any subadviser to the full extent permitted
by the Trust's Declaration of Trust.
The Manager also performs a wide variety of administrative duties for the Trust
under a separate administrative and shareholder services contract. The Manager
sometimes will perform services under this administrative contract directly, or
may contract to have specialized services provided by third parties. Fees under
this contract (based on average annual net assets) and expenses are payable
twice monthly, but in no event less frequently than semi-annually, and may be up
to 0.10% for each Fund.
2
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MANAGEMENT FEES
Under the Management Agreement, each Fund pays the Manager a management fee at
the following annual rate:
<Table>
<Caption>
FUND MANAGEMENT FEE
Citizens Global Equity Fund 1.00%
Citizens International Growth Fund 1.05%
</Table>
The management fees are payable twice monthly, but in no event less frequently
than semi-annually, and are computed as of the close of business on each
business day at the annual rates indicated above.
The fees paid to the Manager for services provided to the Global Equity Fund,
net of expense waivers and reimbursements, for the period from July 1, 2000
through June 30, 2001, were $3,184,963. For the period from December 20, 2000
(commencement of operations) through June 30, 2001, after waivers and
reimbursements, the Manager did not receive any fees for services provided to
the International Growth Fund.
FORMER AND INTERIM SUBADVISORY AGREEMENTS
Clemente Capital, Inc. ("Clemente"), served as subadviser of the Global Equity
Fund from February 8, 1994 to October 16, 2001, and as subadviser of the
International Growth Fund from December 20, 2000 to October 16, 2001. Since
October 17, 2001, SSgA Funds Management, Inc. ("SSgA") has managed the assets of
each Fund that were previously managed by Clemente.
SSgA, a registered investment adviser and Massachusetts corporation, maintains
its principal office at Two International Place, Boston, Massachusetts. From
October 17, 2001 to February 24, 2002, SSgA managed the assets of the Funds on
an interim basis, with the approval of the Board of Trustees. Since February 25,
2002, SSgA has served as the subadviser for the Funds under the new subadvisory
agreements described below.
The Board of Trustees terminated the Funds' subadvisory agreements with Clemente
based upon information provided to them regarding Clemente's performance as
subadviser, its financial statements and its personnel, and upon the Manager's
recommendations. These recommendations were based on the Manager's evaluation of
the services provided by Clemente, and of its performance as subadviser, its
financial statements and the experience, qualifications and integrity of its
personnel.
NEW SUBADVISORY AGREEMENTS
The Board of Trustees has approved subadvisory agreements with SSgA which allow
SSgA to continue to serve as subadviser to each Fund (the "New Subadvisory
Agreements"). Each New Subadvisory Agreement will continue in effect for
successive annual periods after each Agreement's effectiveness so long as such
effectiveness is approved at least annually by a vote of a majority of the
Trustees of the Funds who are not interested persons of the Funds, or of the
Manager or of SSgA, at a meeting specifically called for the purpose of voting
on such approval, and by the Trustees of the Funds or by a vote of a majority of
the outstanding voting securities (as defined in the 1940 Act) of the applicable
Fund.
Each New Subadvisory Agreement may be terminated at any time without the payment
of any penalty by the Trustees of the applicable Fund, by vote of a majority of
the outstanding voting securities of the applicable Fund, or by the Manager, on
not more than 60 days' nor less than 30 days' written notice to SSgA.
Each New Subadvisory Agreement may be terminated by SSgA on not less than 90
3
<Page>
days' notice to the Trustees of the Funds and the Manager. Each New Subadvisory
Agreement will automatically terminate in the event of its "assignment" (as
defined in the 1940 Act).
Under each New Subadvisory Agreement, SSgA will manage the investment operations
and the composition of such portion of each Fund's assets as the Manager may
designate from time to time, including the purchase, retention and disposition
thereof, in accordance with each Fund's investment objective and policies as
stated in each Fund's current registration statement, subject to the provisions
of the 1940 Act. In addition, SSgA will furnish a continuous investment program
for each Fund, and determine from time to time what investments or securities
will be purchased, retained or sold by each Fund, and what portion of the assets
will be invested or held uninvested as cash.
Each New Subadvisory Agreement provides that the Manager will furnish SSgA with
an approved list of securities from which SSgA will select. SSgA may purchase
securities which it has suggested for addition to the approved list and for
which SSgA has prescreened based upon criteria provided by the Manager. Each New
Subadvisory Agreement also provides that SSgA will maintain the books and
records with respect to each Fund's securities transactions, will render
periodic and special reports to the Board of Trustees and the Manager as each
may reasonably request, and will provide each Fund and the Manager with a list
of all securities transactions as reasonably requested by the Fund or the
Manager.
Each New Subadvisory Agreement provides that the investment advisory services of
SSgA provided to the Fund and Manager are not to be deemed exclusive, and SSgA
is free to render similar services to others.
In the absence of willful misfeasance, bad faith or gross negligence on the part
of SSgA in the performance of its duties under each New Subadvisory Agreement,
reckless disregard of its duties under each New Subadvisory Agreement or loss
resulting from breach of SSgA's fiduciary duty, SSgA will not be subject to any
liability to the Manager, either Fund, or any of the Funds' shareholders for any
error of judgment, mistake of law or any other act or omission in the course of,
or connected with, rendering services under each New Subadvisory Agreement for
any losses that may be sustained in connection with the purchase, holding,
redemption or sale of any security on behalf of the applicable Fund.
The description of the New Subadvisory Agreements set forth herein is qualified
in its entirety by the provisions in the New Subadvisory Agreements included
herewith as Appendix A.
SUBADVISORY FEES
The Manager, not the Funds, pays all subadvisory fees. The fees payable under
the Subadvisory Agreements with Clemente were computed and paid monthly in U.S.
dollars based on an annual rate of the applicable Fund's average net assets. The
fees payable under the interim Subadvisory Agreements with SSgA (the "Interim
Subadvisory Agreements") and the New Subadvisory Agreements with SSgA accrue
daily at the rate of 1/365th of the advisory fee rate for each Fund, and are
payable monthly on the third business day of each month based on the annual
percentages of the Fund's average daily net assets during each month.
CITIZENS GLOBAL EQUITY FUND. The fees payable by the Manager under the Clemente,
Interim and New Subadvisory Agreements for the Global Equity Fund are set forth
below:
<Table>
<Caption>
FUND FEES PAYABLE UNDER THE CLEMENTE, INTERIM AND
NEW SUBADVISORY AGREEMENTS
Citizens Global Equity Fund 0.35% on the first $500 million of net assets managed
0.25% on net assets managed over $500 million
</Table>
4
<Page>
As you can see, fees payable under the New Subadvisory Agreement with respect to
the Global Equity Fund are the same as those that were payable under the terms
of the Clemente and Interim Subadvisory Agreements.
Fees paid to Clemente for services provided to the Global Equity Fund pursuant
to the Clemente Subadvisory Agreement for the period from July 1, 2000 to June
30, 2001 were $1,127,950.00. The same amount of fees would have been payable to
SSgA for services provided during the same period, had the New Subadvisory
Agreement been in effect for such period.
Fees paid to SSgA for services provided to the Global Equity Fund pursuant to
the Interim Subadvisory Agreement for the period from October 17, 2001 through
February 24, 2002 were $248,374.00. The same amount of fees would have been
payable to SSgA for services provided during the same period, had the New
Subadvisory Agreement been in effect for such period.
As of June 30, 2001, the Global Equity Fund had net assets of $254,303,222.
CITIZENS INTERNATIONAL GROWTH FUND. The fees payable by the Manager under the
Clemente, Interim and New Subadvisory Agreements for the International Growth
Fund are set forth below:
<Table>
<Caption>
FUND FEES PAYABLE UNDER THE CLEMENTE, INTERIM AND
NEW SUBADVISORY AGREEMENTS
Citizens International Growth Fund 0.40% on the first $500 million of net assets managed
0.30% on net assets managed over $500 million
</Table>
As you can see, fees payable under the New Subadvisory Agreement with respect to
the International Growth Fund are the same as those that were payable under the
terms of the Clemente and Interim Subadvisory Agreements.
Fees paid to Clemente for services provided to the International Growth Fund
pursuant to the Clemente Subadvisory Agreement for the period from December 20,
2000 (commencement of operations) to June 30, 2001 were $1,878.00. The same
amount of fees would have been payable to SSgA for services provided during the
same period, had the New Subadvisory Agreement been in effect for such period.
Fees paid to SSgA for services provided to the International Growth Fund
pursuant to the Interim Subadvisory Agreement for the period from October 17,
2001 through February 24, 2002 were $ 4,372.00. The same amount of fees would
have been payable to SSgA for services provided during the same period, had the
New Subadvisory Agreement been in effect for such period.
As of June 30, 2001, the International Growth Fund had net assets of $1,637,272.
Except for certain payments made to State Street Bank and Trust Company, an
affiliate of SSgA, as discussed below, neither SSgA nor any affiliated person of
SSgA, nor any affiliated person of any such affiliated person, received any
other fees from the Manager or from the Funds for services provided to the Funds
during the fiscal year ended June 30, 2001. There were no other material
payments by the Manager or the Funds to SSgA, any affiliated person of SSgA, or
any affiliated person of any such affiliated person, during the fiscal year
ended June 30, 2001. In addition, for the fiscal year ended June 30, 2001, no
commissions were paid to any broker (i) that is an affiliated person of the
Funds, (ii) that is an affiliated person of any affiliated person of the Funds,
or (iii) an affiliated person of which is an affiliated person of the Funds, the
Manager, SSgA, or the distributor of the Funds. For the period from July 1, 2000
to September 30, 2000 (October 13, 2000 for the Global Equity Fund), State
Street Bank and Trust Company served as custodian for the series of the Trust.
For the period
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from July 1, 2000 to October 13, 2000, State Street Bank and Trust Company
received $194,669.34 from the Trust for its services as custodian.
INFORMATION REGARDING SSGA
SSgA is a Massachusetts corporation and has been a registered investment adviser
since April, 2001. SSgA is the successor to the mutual fund investment
operations of State Street Global Advisors, which was established in 1978 as a
division of State Street Bank and Trust Company. SSgA is a wholly-owned
subsidiary of State Street Corporation ("State Street"), SSgA's ultimate parent.
State Street is a financial holding company organized under the laws of the
Commonwealth of Massachusetts. The principal offices of State Street are located
at 225 Franklin Street, Boston, Massachusetts 02110, and the principal offices
of SSgA are located at Two International Place, Boston, Massachusetts 02110. As
of December 31, 2001, State Street and its subsidiaries had over $785 billion in
assets under management worldwide.
MANAGEMENT AND GOVERNANCE. Listed below are the names, positions and principal
occupations of the principal executive officers and directors of SSgA as of
March 31, 2002. The principal business address of each individual, as it relates
to his or her duties at SSgA, is the same as that of SSgA.
<Table>
<Caption>
NAME PRINCIPAL OCCUPATION
Agustin S. Fleites President and Director
Thomas P. Kelly Treasurer
Mark J. Duggan Chief Legal Officer
Peter A. Ambrosini Chief Compliance Officer
Timothy Harbert Director
Mitchell H. Shames Director
</Table>
No officer or Trustee of either Fund currently is an officer or employee of
SSgA. No officer or Trustee of either Fund owns the securities of or has any
other material direct or indirect interest in SSgA or any other person
controlling, controlled by or under common control with SSgA. As of December 31,
2001, none of the Trustees of the Funds has had any material interest, direct or
in direct, in any material transactions, or in any material proposed
transactions, to which SSgA, State Street or any subsidiary of SSgA or any
subsidiary of State Street was or is to be a party.
MANAGEMENT ACTIVITIES. As of December 31, 2001, SSgA had approximately $57
billion in assets under management.
SSgA acts as subadviser for a registered investment company with an investment
objective similar to that of the International Growth Fund. The name of such
fund, together with information concerning the fund's net assets and the fees
paid to SSgA for its services, are set forth in Appendix B.
EVALUATION BY THE BOARD OF TRUSTEES
At a meeting held on February 25, 2002, the Trustees of the Funds, including all
of the Independent Trustees, considered information with respect to whether the
proposed New Subadvisory Agreements were in the best interests of the Funds and
their respective shareholders. The Board of Trustees considered, among other
factors, representations by SSgA regarding the nature and quality of services
provided by SSgA and information regarding fees, expense ratios and performance.
In evaluating SSgA's ability to provide services to the Funds, the Trustees also
considered information as to SSgA's business organization and personnel, and
State Street's financial resources.
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<Page>
The Manager noted that SSgA had a well defined and well-established investment
process, and an investment style compatible with the Funds' investment
objectives. The Manager further noted SSgA's and its predecessor's track record
for competitive performance. In evaluating SSgA's ability to provide services to
each Fund, the Trustees considered information as to its management style and
process, risks and other matters. The Trustees compared the investment
performance of certain equity accounts advised by SSgA having an investment
objective similar to the Funds against various benchmarks.
Based upon their review, the Trustees concluded that (a) the terms of the New
Subadvisory Agreements were reasonable, fair and in the best interests of the
Funds and their shareholders, and (b) the fees provided in the New Subadvisory
Agreements were fair and reasonable in light of the usual and customary charges
made for services of the same nature and quality. Accordingly, after
consideration of the above factors, and such other factors and information as it
deemed relevant, the Board of Trustees, including all of the Independent
Trustees, unanimously approved each of the New Subadvisory Agreements.
ADDITIONAL INFORMATION
As of March 31, 2002, the following number of shares of each class of each Fund
was outstanding:
<Table>
<Caption>
FUND STANDARD INSTITUTIONAL ADMINISTRATIVE TOTAL SHARES
CLASS SHARES CLASS SHARES CLASS SHARES OUTSTANDING
- ----------------------------------------------------------------------------------------------------------------------
Citizens Global
Equity Fund 10,272,440 872,787 137,964 11,283,191
- ----------------------------------------------------------------------------------------------------------------------
Citizens International
Growth Fund 414,429 N/A N/A 414,429
</Table>
The Trust's distributor is Citizens Securities, Inc., 230 Commerce Way,
Portsmouth, New Hampshire 03801. The Trust's transfer agent and dividend-paying
agent and accounting agent is BISYS Fund Services, 3435 Stelzer Road, Columbus,
Ohio 43219.
As of December 31, 2001, the Trustees and officers of the Trust, individually
and as a group, owned beneficially or had the right to vote less than 1% of the
outstanding shares of each Fund.
As of March 31, 2002, the following persons owned of record or had the right to
vote 5% or more of the outstanding shares of each Fund
<Table>
<Caption>
NAME AND ADDRESS AMOUNT OF PERCENT OF
FUND - CLASS OF SHAREHOLDER BENEFICIAL OWNERSHIP BENEFICIAL
INTEREST
- -------------------------------------------------------------------------------------------------------------------
Global Equity Fund - Charles Schwab & Co., Inc. $75,599,287.50 46.44%
Standard Class Shares 101 Montgomery Street
San Francisco, CA 94104
National Financial $13,797,642.41 8.48%
Servicing Corp.
1 World Financial Center
200 Liberty Street
New York, NY 10281
</Table>
7
<Page>
<Table>
<Caption>
NAME AND ADDRESS AMOUNT OF PERCENT OF
FUND - CLASS OF SHAREHOLDER BENEFICIAL OWNERSHIP BENEFICIAL
INTEREST
- -------------------------------------------------------------------------------------------------------------------
Global Equity Fund - Charles Schwab & Co., Inc. $1,407,529.87 10.06%
Institutional Class Shares 101 Montgomery Street
San Francisco, CA 94104
Northern Trust $3,098,377.30 22.15%
FBO Gaylord & Dorothy
Donnelley Foundation
P.O. Box 92956
Chicago, IL 60675
Dr. Phillips, Inc. $1,506,494.43 10.77%
60 West Robinson Street
P.O. Box 3753
Orlando, FL 32801
WEA Tax Sheltered $925,133.84 6.61%
Annuity Trust
45 Nob Hill Road
Madison, WI 53713
Caroline and $2,417,904.97 17.28%
Sigmund Schott Foundation
678 Massachusetts Avenue
Cambridge, MA 02139
Atlantic Trust Company NA, $832,727.27 5.95%
100 Federal Street
Boston, MA 02110
National Financial $885,667.29 6.33%
Servicing Corp.
1 World Financial Center
200 Liberty Street
New York, NY 10281
Global Equity Fund - Chase Manhattan Bank $269,876.88 12.28%
Administrative Class Shares One Chase Square
Rochester, NY 14643
ING National Trust $1,424,869.80 64.83%
151 Farmington Avenue
Hartford, CT 06156
</Table>
8
<Page>
<Table>
<Caption>
NAME AND ADDRESS AMOUNT OF PERCENT OF
FUND - CLASS OF SHAREHOLDER BENEFICIAL OWNERSHIP BENEFICIAL
INTEREST
- -------------------------------------------------------------------------------------------------------------------
International Charles Schwab & Co., Inc. $1,287,560.02 42.85%
Growth Fund 101 Montgomery Street
San Francisco, CA 94104
Citizens Advisers, Inc. $362,500.00 12.06%
230 Commerce Way
Portsmouth, NH 03801
Jane B. Dunaway $438,861.98 14.61%
Revocable Living Trust,
P.O. Box S, PMB NO3563
Carmel, CA 93921
</Table>
The Trust is a Massachusetts business trust and as such is not required to hold
annual meetings of shareholders, although special meetings may be called for a
Fund for purposes such as electing Trustees or removing Trustees, changing
fundamental policies, or approving an advisory contract. Shareholder proposals
to be presented at any subsequent meeting of shareholders must be received by
the Trust at the Trust's office within a reasonable time before the proxy
solicitation is made.
By Order of the Board of Trustees,
/s/ John L. Shields
John L. Shields
President
May 15, 2002
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<Page>
APPENDIX A
THE FOLLOWING SUBADVISORY AGREEMENT IS A CONFORMED COPY OF THE INVESTMENT
SUB-ADVISORY AGREEMENTS OF CITIZENS GLOBAL EQUITY FUND AND CITIZENS
INTERNATIONAL GROWTH FUND.
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
CITIZENS ADVISERS, INC.
AND
SSGA FUNDS MANAGEMENT, INC.
This Agreement is made as of this 25th day of February 2002, between Citizens
Advisers, Inc., a New Hampshire corporation (the "Adviser"), and SSgA Funds
Management, Inc., a Massachusetts corporation (the "Sub-Adviser").
WHEREAS, the Adviser is in the business of providing investment advisory
services; and
WHEREAS, the Sub-Adviser is in the business of providing investment advisory
services; and
WHEREAS, Citizens Funds (the "Investment Company") is a Massachusetts business
trust that is an open-end, diversified management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), currently
consisting of multiple series, each having its own investment policy; and
WHEREAS, the [CITIZENS GLOBAL EQUITY FUND] [CITIZENS INTERNATIONAL GROWTH
FUND](the "Fund") is a series of the Investment Company; and
WHEREAS, pursuant to the Management Agreement between the Investment Company and
the Adviser, dated June 1, 1992, amended and restated as of July 3, 2001, and as
may be further amended from time to time (the "Management Agreement"), the
Adviser is required to perform investment advisory services to the series of the
Investment Company including the Fund; and
WHEREAS, the Adviser desires to retain the Sub-Adviser to render investment
advisory services to the Investment Company with respect to the Fund, and the
Sub-Adviser is willing to render such services;
NOW, THEREFORE, in consideration of the mutual agreements contained herein, the
parties hereto agree as follows:
1. APPOINTMENT OF SUB-ADVISER. In accordance with and subject to the Management
Agreement, the Adviser hereby appoints the Sub-Adviser to act as investment
sub-adviser to the Fund for the period and on the terms set forth in this
Agreement. The Sub-Adviser accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided. Notwithstanding
any provision of this Agreement to the contrary, the Adviser shall retain all
rights and ultimate responsibilities to supervise and, in its discretion,
conduct investment activities relating to the Fund.
2. ADVISORY DUTIES. The Sub-Adviser shall manage the investment operations and
the composition of such portion of the Fund's assets as the Adviser may
designate from time to time, including the purchase, retention and disposition
thereof, in accordance with the Fund's investment objective and policies as
stated in the Investment Company's then-current Registration Statement relating
to the Fund. The Sub-Adviser's duties hereunder are subject to the following
understandings:
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(a) The Sub-Adviser shall provide supervision of investments, furnish a
continuous investment program for the Fund, determine from time to time what
investments or securities will be purchased, retained or sold by the Fund, and
what portion of the assets will be invested or held uninvested as cash;
(b) The Sub-Adviser, in the performance of its duties and obligations
under this Agreement, shall act in conformity with the Declaration of Trust and
By-Laws of the Investment Company, as each may be amended from time to time, and
the then-current Registration Statement of the Investment Company and with the
instructions and directions of the Board of Trustees of the Investment Company
or the Adviser, provided, however, the Sub-Adviser shall not be responsible for
acting contrary to any of the foregoing that are changed without notice of such
change to the Sub-Adviser; and the Sub-Adviser shall conform to and comply with
the applicable requirements of the 1940 Act and all other applicable federal or
state laws and regulations;
(c) The Sub-Adviser shall promptly communicate to the officers and
Trustees of the Investment Company and the Adviser such information relating to
Fund transactions as they may reasonably request. On occasions when the
Sub-Adviser deems the purchase or sale of a security to be in the best interest
of the Fund as well as other clients, the Sub-Adviser, to the extent permitted
by applicable laws and regulations, may aggregate the securities to be sold or
purchased, provided that in the reasonable opinion of the Sub-Adviser, all
accounts are treated equitably and fairly. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transactions, shall be made by the Sub-Adviser in the manner it considers to be
the most equitable and consistent with its fiduciary obligations to the
Investment Company and to such other clients;
(d) For the purposes of compliance with the Fund's prospectus language on
"social criteria" the Adviser will furnish the Sub-Adviser with an approved list
of securities from which the Sub-Adviser will select. The Sub-Adviser may
purchase securities which it has suggested for addition to the approved list and
for which the Sub-Adviser has prescreened based upon the criteria provided by
the Adviser. The Sub-Adviser shall not purchase securities which have been
rejected by the Adviser for inclusion on the approved list;
(e) The Sub-Adviser shall maintain books and records with respect to the
Investment Company's securities transactions and shall render to the Investment
Company's Board of Trustees and the Adviser such periodic and special reports as
the Board or the Adviser may reasonably request;
(f) The Sub-Adviser shall provide the Investment Company and the Adviser
with a list of all securities transactions as reasonably requested by the
Investment Company or the Adviser;
(g) The investment advisory services of the Sub-Adviser to the Investment
Company and the Adviser under this Agreement are not to be deemed exclusive, and
the Sub-Adviser shall be free to render similar services to others; and
(h) Should the Trustees of the Investment Company or the Adviser at any
time make a definite determination as to investment policy and notify the
Sub-Adviser thereof, the Sub-Adviser shall be bound by such determination for
the period, if any, specified in such notice or until notified that such
determination has been revoked. Further, the Adviser or the Trustees of the
Investment Company may at any time, upon notice to the Sub-Adviser, suspend or
restrict the right of the Sub-Adviser to determine what assets shall be
purchased, sold or exchanged and what portion, if any, of the assets shall be
held uninvested.
3. EXECUTION AND ALLOCATION OF PORTFOLIO BROKERAGE TRANSACTION. The Sub-Adviser,
subject to and in accordance with any directions which the Investment Company's
Board of Trustees may issue from time to time, shall place, in the name of the
Investment Company,
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<Page>
on behalf of the Fund, orders for the execution of the securities transactions
in which the Fund is authorized to invest. When placing such orders, the primary
objective of the Sub-Adviser shall be to obtain the best net price and execution
for the Fund but this requirement shall not be deemed to obligate the
Sub-Adviser to place any order solely on the basis of obtaining the lowest
commission rate if the other standards set forth in this section have been
satisfied. The Investment Company recognizes that there are likely to be many
cases in which different brokers are equally able to provide such best price and
execution and that, in selection among such brokers with respect to particular
trades, it is desirable to choose those brokers who furnish "brokerage and
research services" (as defined in Section 29(e)(3) of the Securities and
Exchange Act of 1934) or statistical quotations and other information to the
Investment Company, the Adviser and/or the Sub-Adviser in accordance with the
standards set forth below. Moreover, to the extent that it continues to be
lawful to do so and subject to any direction to the contrary by the Board of
Trustees of the Investment Company, the Sub-Adviser may place orders with a
broker who charges a commission higher than another broker would have charged
for effecting that transaction, provided that the excess commission is
reasonable in relation to the value of brokerage and research services provided
by that broker. Accordingly, the Investment Company and the Sub-Adviser agree
that the Sub-Adviser may select brokers for the execution of the Fund's
securities transactions from among:
(a) Those brokers and dealers who provide brokerage and research
services, or statistical quotations and other information to the Investment
Company, specifically including the quotations necessary to determine the Fund's
net assets, in such amount of total brokerage as may reasonably be required in
light of such services.
(b) Those brokers and dealers who provide brokerage and research services
to the Adviser, the Sub-Adviser and/or their respective affiliated persons which
relate directly to portfolio securities, actual or potential, of the Fund, or
which place the Sub-Adviser in a better position to make decisions in connection
with the management of the Fund's assets, whether or not such data may also be
useful to the Adviser, the Sub-Adviser or their respective affiliated persons in
managing other portfolios or advising other clients, in such amount of total
brokerage as may reasonably be required.
(c) If the Fund adopts procedures pursuant to Rule 17e-1 of the 1940 Act,
affiliated brokers of Adviser or Sub-Adviser, when the Sub-Adviser has
determined that the Fund will receive competitive execution, price and
commissions and in accordance with such 17e-1 procedures. The Sub-Adviser shall
render regular reports to the Investment Company, not more frequently than
quarterly, of how much total brokerage business has been placed with affiliated
brokers of Adviser, and the manner in which the allocation has been
accomplished.
The Board of Trustees of the Investment Company, in its discretion, may instruct
the Sub-Adviser to effect all or a portion of its securities transactions with
brokers/dealers selected by the Board if the Board determines that use of such
brokers/dealers is in the best interests of the Fund. The Sub-Adviser agrees
that no investment decision will be made or influenced by a desire to provide
brokerage for allocation in accordance with the foregoing, and that the right to
make such allocation of brokerage shall not interfere with the Sub-Adviser's
primary duty to obtain the best net price and execution for the Fund.
4. BOOKS AND RECORDS. The Sub-Adviser shall keep the Fund's books and records
required to be maintained by it pursuant to paragraph 2(e) hereof. The
Sub-Adviser agrees that all records which it maintains for the Fund are the
property of the Investment Company and it shall surrender promptly to the
Investment Company any of such records upon the Investment Company's request.
The Sub-Adviser further agrees to preserve for the periods prescribed by
Rule 31a-2 of the Commission under the 1940 Act any such records as are required
to be maintained by Rule 31a-1(f) under the 1940 Act. Nothing herein shall
prevent the Sub-Adviser from maintaining its own records as required by law,
which may be a duplication of the Investment Company's records.
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5. REPORTS TO SUB-ADVISER. The Investment Company agrees to furnish the
Sub-Adviser at its principal office all prospectuses, proxy statements, reports
to shareholders, sales literature or other material prepared for distribution to
shareholders of the Fund or the public, which refer in any way to the
Sub-Adviser. The Investment Company shall furnish or otherwise make available to
the Sub-Adviser such other information relating to the business affairs of the
Investment Company as the Sub-Adviser at any time, or from time to time,
reasonably requests in order to discharge its obligations hereunder.
6. PROXIES. Unless otherwise directed by the Board of Trustees of the Investment
Company or the Adviser, the Sub-Adviser shall not exercise any right to vote,
appurtenant to any securities or other property held in the Fund's investment
portfolio, but shall have the authority to oppose or to consent to the
reorganization, consolidation, merger, or readjustment of the finances of any
corporation, company or association, or to the sale, mortgage, pledge or lease
of the property of any corporation, company or association any of the securities
of which are held in the Fund's investment portfolio and to do any act which may
be necessary or advisable in connection therewith.
7. EXPENSES. During the term of this Agreement, the Sub-Adviser shall pay all of
its own expenses incurred by it in connection with its activities under this
Agreement and the Adviser and/or Fund, as they may agree from time to time,
shall bear all expenses that are incurred in their operations not specifically
assumed by the Sub-Adviser.
Expenses borne by the Fund will include but not be limited to the following (or
the Fund's proportionate share of the following): (a) brokerage commissions
relating to securities purchased or sold by the Fund or any losses incurred in
connection therewith; (b) fees payable to and expenses incurred on behalf of the
Fund by the Investment Company's administrator; (c) expenses of organizing the
Investment Company and the Fund; (d) filing fees and expenses relating to the
registration and qualification of the Fund's shares and the Investment Company
under federal or state securities laws and maintaining such registrations and
qualifications; (e) fees and salaries payable to the Investment Company's
Trustees and officers who are not officers or employees of the Investment
Company's administrator, any investment adviser or underwriter of the Investment
Company; (f) taxes (including any income or franchise taxes) and governmental
fees; (g) costs of any liability, uncollectible items of deposit and other
insurance or fidelity bonds; (h) any costs, expenses or losses arising out of
any liability of or claim for damage or other relief asserted against the
Investment Company or the Fund for violation of any law; (i) legal, accounting
and auditing expenses, including legal fees of any special counsel for the
independent Trustees; (j) charges of custodians, transfer agents and other
agents; (k) costs of preparing share certificates (if any); (l) expenses of
setting in type and printing Prospectuses and Statements of Additional
Information and supplements thereto for existing shareholders, reports and
statements to shareholders and proxy material; (m) any extraordinary expenses
(including fees and disbursements of counsel) incurred by the Investment Company
or the Fund; and (n) fees and other expenses incurred in connection with
membership in investment company organizations.
8. COMPENSATION OF THE SUB-ADVISER. For the services to be rendered by the
Sub-Adviser as provided in this Agreement the Adviser shall pay to the
Sub-Adviser such compensation as is designated in Exhibit A to this Agreement.
The Investment Company and the Fund shall not be liable to the Sub-Adviser for
the compensation of the Sub-Adviser. If the Sub-Adviser serves for less than the
whole period of this Agreement, the Sub-Adviser's compensation shall be pro
rated in accordance with the time served under the Agreement.
9. LIMITATION OF SUB-ADVISER'S LIABILITY. In the absence of (a) willful
misfeasance, bad faith or gross negligence on the part of the Sub-Adviser in
performance of its obligations and duties hereunder, (b) reckless disregard by
the Sub-Adviser of its obligations and duties hereunder, or (c) a loss resulting
from a beach of fiduciary duty with respect to the receipt of compensation for
services
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(in which case, any award of damages shall be limited to the period and the
amount set forth in Section 36(b)(3) of the 1940 Act), the Sub-Adviser shall not
be subject to any liability whatsoever to the Adviser or the Investment Company,
or to any shareholder of the Investment Company, for any error of judgment,
mistake of law or any other act or omission in the course of, or connected with,
rendering services hereunder including, without limitation, for any losses that
may be sustained in connection with the purchase, holding, redemption or sale of
any security on behalf of the Investment Company. The parties agree that any
stated limitations on liability shall not relieve the Sub-Adviser from any
responsibility or liability under state or federal statutes. 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.
10. DURATION AND TERMINATION.
(a) 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 one year after initial approval by the Board of Trustees
of the Fund. This Agreement shall continue in effect with respect to the Fund
for successive annual periods after its effectiveness so long as such
continuance 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 of 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 1940 Act and all rules, regulations and orders
thereunder.
(b) This Agreement may be terminated at any time without the payment of
any penalty by the Trustees of the Investment Company, by vote of a majority of
the outstanding voting securities of the Fund, or by the Adviser, on not more
than sixty (60) days nor less than thirty (30) days written notice to the
Sub-Adviser. This Agreement may be terminated by the Sub-Adviser on not less
than ninety (90) days notice to the Trustees of the Investment Company and the
Adviser. This Agreement shall automatically terminate in the event of its
assignment.
(c) This Agreement may be amended by the Adviser and the Sub-Adviser only
if such amendment is approved by the vote of a majority of the outstanding
voting securities of the Fund (except for any such amendment as may be effected
in the absence of such approval without violating the 1940 Act).
(d) The terms "specifically approved at least annually," "vote of a
majority of the outstanding voting securities," "assignment," "affiliated
persons" and "interested persons," when used in this Agreement, shall have the
respective meanings specified in, and shall be construed in a manner consistent
with, the 1940 Act, subject, however, to such exemptions as may be granted by
the Securities and Exchange Commission under the 1940 Act.
11. CHOICE OF LAW. This Agreement shall be construed in accordance with the laws
of the Commonwealth of Massachusetts and any applicable federal law.
12. REPRESENTATIONS OF THE ADVISER. The Adviser represents and warrants that:
(a) it has received a copy of Part II of the Sub-Adviser's Form ADV;
(b) it has full corporate power and authority to enter into this
Agreement and to carry out its terms; and
(c) in the event that the Adviser, Sub-Adviser and Trustees of the
Investment Company agree to the use of futures in the Fund, the Adviser agrees
that at that time the Fund will be either (i)
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<Page>
excluded from the definition of the term "pool" under Section 4.5 of the
General Regulations under the Commodity Exchange Act ("Rule 4.5"), or (ii) a
qualifying entity under Rule 4.5(b) for which a notice of eligibility has been
filed.
13. COVENANTS OF THE SUBADVISER. The Sub-Adviser agrees that it (i) will not
deal with itself or any of its affiliates, or with the Trustees of the
Investment Company or the Investment Company's principal underwriter, if any, as
principal, broker or dealer in making purchases or sales of securities or other
property for the account of the Investment Company except as permitted by the
1940 Act and all rules, regulations and orders thereunder, (ii) will comply with
all other provisions of the Investment Company's Declaration of Trust and
By-Laws then in effect and the Fund's current prospectus relative to the
Sub-Adviser, its directors, officers, employees and affiliates, and (iii) will
comply with all other laws, rules, regulations and orders applicable to the
activities contemplated herein.
14. LIMITATION OF LIABILITY. It is expressly acknowledged and agreed that the
obligations of the Investment Company hereunder shall not be binding upon any of
the Shareholders, Trustees, officers, employees or agents of the Investment
Company, personally, but shall bind only the trust property of the Investment
Company allocated to the Fund, as provided in its Declaration of Trust dated as
of July 3, 2001, as amended from time to time (the "Declaration"). The execution
and delivery of this Agreement have been authorized by the Trustees of the
Investment Company and signed by an officer of the Investment Company, acting as
such, and neither such authorization by such Trustees nor such execution and
delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Investment Company allocated to the Fund as
provided in its Declaration.
IN WITNESS WHEREOF, the due execution hereof as of the date first above written.
Attest: CITIZENS ADVISERS, INC.
By: Kelley Marggraf By: /s/ John L. Shields
------------------------- -------------------------
Name: John L. Shields
Title: President and CEO
Attest: SSGA FUNDS MANAGEMENT, INC.
By: Gregory J. Mulready By: /s/ Agustin S. Fleites
------------------------- -------------------------
Name: Agustin S. Fleites
Title: President
Acknowledged as of the date first set forth above.
CITIZENS FUNDS
On behalf of the [CITIZENS GLOBAL EQUITY FUND] [CITIZENS INTERNATIONAL
GROWTH FUND]
By: /s/ John L. Shields
-------------------------
Name: John L. Shields
Title: President
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EXHIBIT A
TO APPENDIX A
As consideration for the Sub-Adviser's services to the Fund, the Sub-Adviser
shall receive from the Adviser an annual advisory fee, accrued daily at the rate
of 1/365th of the applicable advisory fee rate and payable monthly on the third
business day of each month, of the following annual percentages of the Fund's
average daily net assets during the month:
<Table>
[CITIZENS GLOBAL EQUITY FUND 0.35% ON THE FIRST $500 MILLION OF NET ASSETS MANAGED
0.25% ON NET ASSETS MANAGED OVER $500 MILLION]
[CITIZENS INTERNATIONAL GROWTH FUND 0.40% ON THE FIRST $500 MILLION OF NET ASSETS MANAGED
0.35% ON NET ASSETS MANAGED OVER $500 MILLION]
</Table>
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APPENDIX B
SSgA acts as investment subadviser for the following registered investment
company with an investment objective similar to that of the Citizens
International Growth Fund:
<Table>
<Caption>
FUND NET ASSETS FEES PAID TO SSgA
- --------------------------------------------------------------------------------------------------------------------
CitiStreet International Stock Fund $123 million 0.55% on the first $50 million of
net assets managed;
0.50% on the next $50 million of
net assets managed;
0.45% thereafter.
</Table>
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