Exhibit (e)(1)
AMENDED AND RESTATED
DISTRIBUTION AGREEMENT
AMENDMENT #3
THIS AMENDED AND RESTATED AGREEMENT is made and entered into this 30th day
of November, 2006, by and between MEMBERS MUTUAL FUNDS, a statutory trust
organized and existing under the laws of the state of Delaware (the "Trust"),
and CUNA BROKERAGE SERVICES, INC. a corporation organized and existing under the
laws of the State of Wisconsin (the "Distributor").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 ACT"),
consisting of several investment portfolios (the "FUNDS");
WHEREAS, the Trust is registering its shares of beneficial interest for
offer and sale to the public under the Securities Act of 1933, as amended (the
"1933 ACT"), and in accordance with the provisions of all applicable state
securities laws (the "BLUE SKY LAWS");
WHEREAS, each Fund is authorized to issue multiple classes of shares: Class
A Shares, Class B Shares, Class D Shares, Class Y Shares and such other classes
of shares as may hereafter be approved by the Trust (collectively, the
"SHARES"), each of which represents interests in the same portfolio of
investment securities;
WHEREAS, the Distributor is a broker-dealer registered with the Securities
and Exchange Commission (the "COMMISSION") under the Securities Exchange Act of
1934, as amended (the "1934 ACT") and is a member of the National Association of
Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Trust has adopted two distribution plans pursuant to Section
12(b) of the 1940 Act, and Rule 12b-1 thereunder (the "12B-1 PLANS"), pursuant
to which the Trust may pay the expenses for certain Distribution Activities and
Service Activities (as defined in the 12b-1 Plans) incurred or paid by the
Distributor.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, the parties hereto agree as follows:
I. APPOINTMENT AND OBLIGATIONS OF THE DISTRIBUTOR
The Trust hereby appoints the Distributor as its principle underwriter and
exclusive agent to sell and distribute, as set forth below in Section II,
the Shares of each Fund and of such other Funds as may hereafter be
registered with the Commission and under the Blue Sky Laws, subject to the
terms of this Agreement and the policies and control of the Trust's Board
of Trustees (the "Board"). The Distributor hereby accepts such appointment.
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II. DUTIES OF THE DISTRIBUTOR AND THE TRUST
A. The Trust employs the Distributor:
1. to promote the Funds;
2. to sell the Shares of each Fund on a best efforts basis from time to
time during the term of this Agreement as agent for the Trust and upon
the terms described in the currently effective registration statement
of the Trust, and supplements thereto, under the 1933 Act and the 1940
Act (the "Registration Statement"). The Distributor shall sell, as
agent for the Funds, the Shares needed, but not more than the Shares
needed (except for clerical errors or errors of transmission), to fill
unconditional orders placed with the Distributor;
3. to enter into agreements, at the Distributor's discretion, to sell
Shares to registered and qualified retail broker-dealers. All such
brokers and dealers shall act in accordance with the Registration
Statement and shall comply with all applicable laws, rules and
regulations;
4. in connection with the sales and offers of sale of Shares, to give
only such information and make such representations as are permitted
by applicable law. All sales literature and advertisements used by the
Distributor in connection with the sale of the Shares shall be filed
with the appropriate authorities, including the NASD, the states,
and/or the Commission, as may be required from time to time.
5. to offer the Shares of each Fund at the public offering price which
shall be the net asset value per Share as next determined by the
Trust, plus applicable distribution charges, following receipt and
acceptance by the Trust of a proper offer to purchase, determined in
accordance with the Declaration of Trust and Registration Statement of
the Funds. The Trust shall promptly furnish (or arrange for another
person to furnish) the Distributor with a quotation of the public
offering price on each business day; and
B. The Distributor shall not be obligated to sell any certain number of
Shares.
C. The Trust agrees:
1. that it will not, without the Distributor's consent, sell or agree to
sell any Shares of the Trust other than through the Distributor,
except that the Trust may:
a. issue or sell Shares in connection with its merger or
consolidation with any other investment company or the Trust's
acquisition by purchase or otherwise of all or substantially all
of the assets of any investment company or substantially all of
the outstanding shares of any such company;
b. issue Shares to its shareholders for reinvestment of cash
distribution from capital gains or net investment income of the
Trust;
c. issue Shares to shareholders of a Fund who exercise any exchange
privilege set forth in the Registration Statement;
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d. issue Shares directly to registered shareholders pursuant to the
authority of the Board; or
e. sell Shares in any jurisdiction in which the Distributor is not
registered as a broker-dealer.
2. to permit the Distributor to use any list of shareholders of the Trust
or an Fund or any other list of investors which it obtains in
connection with its provision of services under this Agreement;
3. to keep the Distributor fully informed of its affairs and to make
available to the Distributor copies of all information, financial
statements, and other papers which the Distributor may reasonably
request for use in connection with the distribution of Shares,
including, without limitation, certified copies of any financial
statements for the Trust by its independent public accountant and such
reasonable number of copies of the most current prospectus, statement
of additional information, and annual and interim reports of a Fund as
the Distributor may request;
4. to cooperate fully in the efforts of the Distributor to sell and
arrange for the sale of the Shares and in the performance of the
Distributor under this Agreement; and
5. to register or cause to be registered all Shares sold by the
Distributor pursuant to the provisions of this Agreement in such name
or names and amounts as the Distributor may request from time to time.
D. The Trust reserves the right at any time to withdraw all offerings of the
Shares of any or all Funds by written notice to the Distributor at its
principal office.
III. REPRESENTATIONS AND WARRANTIES
A. REPRESENTATIONS AND WARRANTIES OF THE DISTRIBUTOR. The Distributor hereby
represents and warrants to the Trust as follows:
1. Organization. The Distributor is duly organized and is in good
standing under the laws of the State of Wisconsin and is fully
authorized to enter into this Agreement and carry out its terms.
2. Registration. The Distributor is a broker-dealer registered with the
Commission under the 1934 Act, is a member of the NASD, and is
registered or licensed under the laws of all jurisdictions in which
its activities require it to be so registered or licensed. The
Distributor shall maintain such registration or license in effect at
all times during the term of this Agreement and will immediately
notify the Trust of the occurrence of any event that would disqualify
the Distributor from serving as a Distributor by operation of Section
9(a) of the 1940 Act or otherwise.
3. Best Efforts. The Distributor at all times shall provide its best
judgment and effort to the Trust in carrying out its obligations
hereunder.
4. Code of Ethics. The Distributor has adopted a written code of ethics
that complies with the requirements of Rule 17j-1 under the 1940 Act
and will provide the Trust with a copy
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of such code of ethics and all subsequent modifications, together with
evidence of its adoption. At least annually the Distributor will
provide the Trust with a report describing the implementation of the
code of ethics during the immediately preceding twelve (12) month
period.
B. REPRESENTATIONS AND WARRANTIES OF THE TRUST. The Trust, on behalf of the
Funds, hereby represents and warrants to the Distributor as follows:
1. Organization. The Trust is duly organized under the laws of the State
of Delaware and is fully authorized to enter into this Agreement and
carry out its terms.
2. Registration. The Trust is registered as an investment company with
the Commission under the 1940 Act and Shares of the Trust will be
registered for offer and sale to the public under the 1933 Act and
under the Blue Sky Laws. Such registrations shall be kept in effect
during the term of this Agreement.
IV. COMPLIANCE WITH APPLICABLE REQUIREMENTS
A. In carrying out its obligations under this Agreement, the Distributor shall
at all times conform to:
1. all applicable provisions of the 1934 Act and the 1940 Act and the
rules and regulations thereunder and the rules of the NASD;
2. the provisions of the Registration Statement of the Trust as the same
may be amended from time to time, under the 1933 Act and the 1940 Act;
3. the provisions of the Trust's Declaration of Trust, as amended; and
4. any other applicable provisions of state and federal law.
B. In carrying out its obligations under this Agreement, the Distributor
agrees that:
1. The Distributor agrees to comply with the requirements of Section 326
of the USA PATRIOT Act of 2001 (the "PATRIOT Act") on behalf of the
Trust using the Distributor's customer identification program for the
customers of the Distributor for which it sells shares of the Trust.
2. The Distributor shall provide to the Trust a copy of its anti-money
laundering compliance program, and maintain and enforce such program
that includes policies, procedures and controls reasonably designed to
ensure the Distributor's compliance with its responsibilities under
all applicable laws, rules, requirements and regulations. The
Distributor shall perform periodic audits to verify compliance with
its anti-money laundering compliance program. Further, the Distributor
will conduct anti-money laundering compliance training programs.
3. The Distributor agrees that it will abide by the applicable anti-money
laundering procedures of the Trust.
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4. The Distributor will provide an annual certification to the Board that
the Distributor is operating in compliance with its anti-money
laundering program, including its customer identification program, and
the Trust's program, and all applicable laws, rules, requirements and
regulations.
5. Upon request by the Trust's Anti-Money Laundering Compliance Officer
("AMLCO"), the Distributor will make available information relating to
the identity and business of each broker-dealer firm that engages in
the sales of shares of the Trust's mutual funds. The Distributor shall
immediately notify the Board if it receives information that any
broker-dealer firm is not in compliance with the PATRIOT Act.
6. In accordance with applicable law, rule or regulation, the Distributor
hereby consents to permit examiners from the Commission to obtain
information and records from the Distributor related to the Trust's
anti-money laundering compliance program, and to inspect the
Distributor for the purpose of examining the Trust's compliance with
the PATRIOT Act, Bank Secrecy Act ("BSA") and applicable laws, rules,
requirements and regulations.
7. Selling agreements between the Distributor and broker-dealer firms
shall include provisions requiring each broker-dealer firm to: 1)
comply with the PATRIOT Act and have an anti-money laundering
compliance program; 2) confirm a customer's identity and the source of
the funds involved in the purchase of shares of the mutual funds to
the extent required by the PATRIOT Act and any laws, rules,
requirements, regulations or regulatory guidance thereunder; and 3)
report to the Trust's AMLCO, to the extent permitted by applicable
law, including Section 314(b) of the PATRIOT Act, any suspicious
activity involving the purchase of shares of the Trust.
8. Selling agreements between the Distributor and broker-dealer firms, as
defined by Rule 22c-2, shall include: 1) A Shareholder Information
Sharing Agreement to provide the Fund the taxpayer identification
number ("TIN"), if known, of any or all Shareholder(s) of the account
and the amount, date, name or other identifier of any investment
professional(s) associated with the Shareholder(s) or account (if
known), and transaction type (purchase, redemption, transfer, or
exchange) of every purchase, redemption, transfer, or exchange of
Shares held through an account maintained by the Intermediary; 2) an
Agreement to Assess Redemption Fees on Shareholder transactions in
accordance with the terms and conditions of the then-current
Prospectus of the fund(s); 3) an Agreement to Restrict Trading or
further purchases or exchanges of Shares or take such other action as
requested by the Fund for a Shareholder that has been identified by
the Fund as having engaged in transactions of the Fund's Shares.
C. In carrying out its obligations under this Agreement, the Distributor
further agrees that:
1. The Distributor shall adopt and implement written policies and
procedures reasonably designed to prevent violations of the Federal
Securities Laws, as such term is defined in Rule 38a-1 under the 1940
Act.
V. COMPENSATION
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As compensation for providing services under this Agreement, the Distributor
shall receive from each class for which a 12b-1 Plan is in effect, of each Fund,
a distribution and/or service fee at the rate and under the terms and conditions
of the 12b-1 Plans, as such 12b-1 Plans are in effect from time to time, and
subject to any further limitations on such fee as the Board of Trustees of the
Trust may impose.
Additional payments to the Distributor from the Trust's investment adviser,
MEMBERS Capital Advisors, Inc., or the Trust's administrator may be authorized
in accordance with applicable law.
VI. EXPENSES
The expenses in connection with the distribution of the Funds shall be allocable
as follows:
A. EXPENSES OF THE DISTRIBUTOR. The Distributor shall bear or pay:
1. the costs of printing and distributing prospectuses and statements of
additional information for prospective investors and the costs of
preparing, printing and distributing such other sales literature,
reports, forms and advertisements in connection with the sale of the
Shares as comply with the applicable provisions of federal and state
law;
2. the costs of any additional copies of the Trust's financial and other
reports and not other literature supplied to the Distributor for sales
promotion purposes;
3. all advertising expenses incurred by the Distributor in connection
with the offering and sales of the Shares;
4. all compensation to the employees of the Distributor and others for
selling shares, and all expenses of the Distributor and others who
engage in or support the sale of shares as may be incurred in
connection with their sales efforts;
5. expenses relating to the formulation and implementation of marketing
strategies and promotional activities such as direct mail promotions
and television, radio, newspaper, magazine and other mass media
advertising; and
6. the costs of building and maintaining a database of prospective
shareholders and of obtaining such analyses, reports and other
information with respect to marketing and promotional activities and
investor accounts as the Trust may deem advisable.
B. EXPENSES OF THE TRUST
Each Fund, or class thereof, shall bear all expenses in connection with
preparing and typesetting the Trust's prospectuses, statements of additional
information, reports to shareholders, and other materials, related to
communications of such class or Fund with existing shareholders.
VII. REPORTS
The Distributor shall prepare reports for the Board on a quarterly basis showing
such information concerning services provided and expenses incurred related to
this Agreement, and such other information, as from time to time may be
reasonably requested by the Board.
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VIII. INDEMNIFICATION BY THE TRUST
The Trust agrees to indemnify, defend and hold the Distributor, each person who
has been, is, or may hereafter be an officer, director, employee or agent of the
Distributor, and any person who controls the Distributor within the meaning of
Section 15 of the 1933 Act, free and harmless against any loss, damage or
expense reasonably incurred by any of them in connection with any claim or in
connection with any action, suit, or proceeding to which any of them may be a
party, which arises out of or is alleged to arise out of or is based upon a
violation of any of its covenants herein contained, or any alleged untrue
statement of a material fact, or the alleged omission to state a material fact
necessary to make the statements made not misleading, in the Registration
Statement or prospectus of the Trust, or any amendment or supplement thereto,
unless such statement or omission was made in reliance upon written information
furnished by the Distributor. The foregoing rights of indemnification shall be
in addition to any other rights to which any of the foregoing indemnified
parties may be entitled as a matter of law. Nothing contained herein shall
relieve the Distributor of any liability to the Trust or its shareholders to
which the Distributor would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of its duties or
reckless disregard of its obligations and duties under this Agreement.
IX. INDEMNIFICATION BY THE DISTRIBUTOR
The Distributor agrees to indemnify, defend and hold the Trust, each person who
has been, is, or may hereafter be an officer, director, employee or agent of the
Trust, and any person who controls the Trust within the meaning of Section 15 of
the 1933 Act, free and harmless against any loss, damage or expense reasonably
incurred by any of them in connection with any claim or in connection with any
action, suit, or proceeding to which any of them may be a party, which arises
out of or is alleged to arise out of or is based upon a violation of any of its
covenants herein contained, or any alleged untrue statement of a material fact,
or the alleged omission to state a material fact necessary to make the
statements made not misleading, on the part of the Distributor or any agent or
employee of the Distributor or any other person for whose acts the Distributor
is responsible or is alleged to be responsible (such as any selected dealer or
person through whom sales are made pursuant to an agreement with the
Distributor), whether made orally or in writing, unless such statement or
omission was made in reliance upon written information furnished by the Trust.
The foregoing rights of indemnification shall be in addition to any other rights
to which any of the foregoing indemnified parties may be entitled as a matter of
law.
X. REPURCHASE OF SHARES
The Trust appoints and designates the Distributor as agent of the Trust, and the
Distributor accepts such appointment as such agent, to repurchase shares of the
Trust in accordance with the provisions of the Declaration of Trust.
In connection with such redemptions or repurchases, the Trust authorizes and
designates the Distributor to take any action, to make any adjustments in net
asset value, and to make any arrangements for the payment of the redemption or
repurchase price authorized or permitted to be taken or made in accordance with
the 1940 Act and as set forth in the current prospectus of the Trust.
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The authority of the Distributor under this section may, with the consent of the
Trust, be re-delegated in whole or in part to another person or firm.
The authority granted in this section may be suspended by the Trust at any time,
or from time to time, until further notice to the Distributor. After any such
suspension the authority granted to the Distributor by this section will be
reinstated only by a written instrument executed by an officer of the Trust.
XI. DISTRIBUTOR IS INDEPENDENT CONTRACTOR
The Distributor is an independent contractor and shall be the agent for the
Trust only with respect to the sale and redemption of Shares. The Distributor is
responsible for its own conduct, for the employment, control and conduct of its
agent and employees and for injury to such agents or employees or to others
through its agents or employees. The Distributor assumes full responsibility for
its agents and employees under applicable laws and agrees to pay all employer
taxes relating thereto.
XII. NON-EXCLUSIVITY
The services of the Distributor to the Trust under this Agreement are not to be
deemed exclusive, and the Distributor shall be free to render similar services
to others (including other investment companies) so long as its services to the
Trust are not impaired thereby. It is understood and agreed that officers and
directors of the Distributor may serve as officers or directors of the Trust,
and that officers or directors of the Trust may serve as officers or directors
of the Distributor to the extent permitted by law. The officers and directors of
the Distributor are not prohibited from engaging in any other business activity
or from rendering services to any other person, or from serving as partners,
officers, directors or trustees of any other firm, fund or trust, including
other investment companies.
XIII. TERM
This Agreement shall become effective as of the later of: (i) the date on which
a Registration Statement becomes effective under the 1933 Act; and (ii) the date
on which this Agreement is executed, provided this Agreement is approved by the
vote of a majority of the Board and by the vote of a majority of those members
of the Board who are not parties to this Agreement or interested persons of any
such party, and who have no direct or indirect interest in the operation of any
12b-1 Plan or this Agreement, cast in person at a meeting called for the purpose
of voting on such renewal.
Unless terminated as herein provided, this Agreement shall remain in full force
and effect for one year from the date of execution of this Agreement and shall
continue in effect from year to year thereafter, only so long as such
continuance is approved at least annually:
1. by the vote of a majority of those Trustees of the Trust who are not
parties to this Agreement or interested persons of any such party, and who
have no direct or indirect interest in the operation of any 12b-1 Plan or
this Agreement, cast in person at a meeting called for the purpose of
voting on such renewal; and
2. by either the Board of the Trust or the vote of a majority of the
outstanding voting securities of the Trust.
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XIV. TERMINATION
This Agreement may be terminated as to any class of any Fund at any time,
without the payment of any penalty, by the vote of a majority of the Trustees of
the Trust who are not interested persons of the Trust and who have no direct or
indirect financial interest in the operation of any 12b-1 Plan or this
Agreement, or by the vote of a majority of the outstanding votes attributable to
that class of shares of the Fund, on sixty (60) days' written notice to the
Distributor, or by the Distributor at any time without the payment of any
penalty, on sixty (60) days written notice to the Trust.
XV. ASSIGNMENT
This Distribution Agreement may not be assigned by the Distributor and will
automatically and immediately terminate in the event of its assignment.
XVI. AMENDMENTS
This Agreement may be amended at any time or from time to time by an instrument
in writing, signed by a duly authorized officer of the Trust and by the
Distributor, but no amendment to this Agreement shall be effective until such
amendment is approved:
1. by the vote of a majority of those Trustees of the Trust who are not
parties to this Agreement or interested persons of any such party and who
have no direct or indirect financial interest in the operation of any 12b-1
Plan or this Agreement, cast in person at a meeting called for the purpose
of voting on such approval; and
2. by the vote of a majority of the Board of Trustees of the Trust; provided,
however, that amendments relating to any 12b-1 Plan shall not require the
consent of the Distributor.
XVII. GOVERNING LAW
This Agreement shall be governed by the laws of the State of Delaware, without
regard to conflicts of law principles; provided, however, that nothing herein
shall be construed as being inconsistent with the 1940 Act.
XVIII. DEFINITIONS
The terms "assignment," "affiliated person," and "interested person," when used
in this Agreement, shall have the respective meanings specified in the 1940 Act.
The term "majority of the outstanding votes" attributable to the shares of a
Fund means the lesser of (a) 67% or more of the votes attributable to such Fund
present at a meeting if the holders of more than 50% of such votes are present
or represented by proxy, or (b) more than 50% of the votes attributable to
shares of the Fund.
XIX. NOTICE
Any notice, advice or report to be given pursuant to this Agreement shall be
deemed sufficient if delivered by hand, transmitted by electronic facsimile, or
mailed by registered, certified or overnight United States mail, postage
prepaid, or sent by overnight delivery with a recognized
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courier, addressed by the party giving notice to the other party at the last
address furnished by the other party:
To the Distributor at: CUNA Brokerage Services, Inc.
0000 Xxxxxxxx Xxx
Xxxxxxx, Xxxx 00000
To the Trust at: President, MEMBERS Mutual Funds
c/o MEMBERS Capital Advisors Inc.
0000 Xxxxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
Each such notice, advice or report shall be effective upon receipt or three days
after mailing, whichever is first.
XX. SEVERABILITY
If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
XXI. ENTIRE AGREEMENT
This Agreement embodies the entire agreement and understanding between the
parties hereto, and supersedes all prior agreements and understandings relating
to this Agreement's subject matter. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
XXII. 1940 ACT
Where the effect of a requirement of the 1940 Act reflected in any provision of
this Agreement is altered by a rule, regulation or order of the Commission,
whether of special or general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first written
above.
CUNA BROKERAGE SERVICES, INC.
Attest: /s/ Xxxxxx Xxxxx By: /s/ Xxxx X. Xxxxxx
----------------------------- ------------------------------------
Xxxx X. Xxxxxx, President
MEMBERS MUTUAL FUNDS
Attest: /s/ Xxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxx
----------------------------- ------------------------------------
Xxxxx X. Xxxxx, President
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