Exhibit d.5c
AMENDED AND RESTATED
EXPENSE LIMITATION AGREEMENT
FEBRUARY 28,2009
This Expense Limitation Agreement (this "Agreement") is by and between MEMBERS
Capital Advisors, Inc. ("MCA") and MEMBERS Mutual Funds (the "Trust"), on behalf
of each investment portfolio of the Trust.
RECITALS
(A) The Trust is an open-end management investment company organized under the
laws of the State of Delaware and registered under the Investment Company Act of
1940, as amended (the "1940 Act").
(B) The Trust comprises several separate investment portfolios (the "Funds"),
and issues a separate series of shares representing an interest in each Fund.
The Trust currently offers three classes of shares of each Fund.
(C) MCA is an Iowa corporation registered as an investment adviser under the
Investment Advisers Act of 1940, as amended.
(D) Pursuant to an Amended and Restated Investment Management Agreement dated as
of November 30, 2006 between MCA and the Trust (the "Management Agreement"), MCA
provides investment advisory and administrative services to the Funds in
exchange for a fee paid by the Trust with respect to the Funds at the rate
specified in the Management Agreement (the "Management Fee").
(E) The Trust and MCA have determined that it is appropriate and in the best
interests of each Fund, its classes and its shareholders to maintain the
expenses of the Funds at the levels specified in Schedule A hereto.
(F) The Trust and MCA desire that the provisions of this Agreement: (1) do not
adversely affect any Fund's status as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"), (2)
do not interfere with a Fund's ability to compute its taxable income under Code
Section 852, (3) do not adversely affect the status of the distributions a Fund
makes as deductible dividends under Code Section 562, and (4) comply with the
requirements of Revenue Procedure 99- 40 (or any successor pronouncement of the
Internal Revenue Service).
NOW THEREFORE, in consideration of the promises and mutual covenants herein, the
parties hereto agree as follows:
1. Expense Limitation
------------------
(a) Operating Expense Limit. During the term of this Agreement, each Fund shall
be subject to
a limit on operating expenses (the "Operating Expense Limit") equal to the
amount set forth in Schedule A hereto.
(b) Operating Expenses. As used in this Agreement, "Operating Expenses" includes
all operating expenses incurred by a Fund other than the following:
o The management fee.
o Expenses attributable to specific classes of shares in accordance
with the Trust's Multiple-Class Plan pursuant to Rule 18f-3 under
the 1940 Act, as such Multiple Class Plan is in effect from time
to time.
o The following additional expenses: interest, taxes, brokerage
commissions, other expenditures that are capitalized in accordance
with generally accepted accounting principles, and other
extraordinary expenses not incurred in the ordinary course of a
Fund's business.
(c) Application of Operating Expense Limit. To the extent that Operating
Expenses in any fiscal year exceed the applicable Operating Expense Limit, MCA
shall be liable to the extent of such excess amount (the "Excess Amount") as
provided in paragraphs (d) and (e) below.
(d) Method of Computation. For each class of shares of each Fund, the Trust's
accounting agent shall determine a daily expense accrual representing the
Operating Expenses on an annualized basis as well as a daily expense accrual
based on the Operating Expense Limit. On each day for which the daily expense
accrual representing the Operating Expenses exceeds the daily expense accrual
based on the Operating Expense Limit, the Trust's accounting agent shall
establish an account receivable for that share class and Fund equal to the
difference between the daily accruals. Within three (3) business days of each
month end, MCA shall remit to each Fund an amount equal to the aggregate account
receivables for all the share classes of the Fund for that month. Any such
amounts remitted to a Fund shall be allocated among the share classes of the
Fund based on the relative net assets attributable to each class.
(e) Year-End Adjustment. If necessary, within 30 days after the completion of
the audit of the Trust's financial statements for such fiscal year, an
adjustment payment shall be made by the appropriate party in order that the
amount of the payments remitted by MCA to a Fund with respect to the previous
fiscal year shall equal the Excess Amount with respect to the previous fiscal
year. Any such amounts remitted to a Fund, or repaid by a Fund, shall be
allocated among the share classes of the Fund based on the relative net assets
attributable to each class.
2. Reimbursement of Fee Waivers and Remittances
--------------------------------------------
(a) Reimbursement. If in any fiscal year in which the Management Agreement is in
effect for a Fund, the Operating Expenses of the Fund are less than the
Operating Expense Limit, MCA shall be entitled to reimbursement by the Fund of
certain of the payments remitted by MCA to the Fund pursuant to Sections l(d)
and l(e) of this Agreement. For each Fund, the maximum amount of reimbursement
to which MCA is entitled (the "Reimbursement Amount") shall equal, at any time,
the sum of all payments remitted by MCA pursuant to Sections l(d) and l(e) of
this Agreement during the prior three (3) fiscal years, less any previous
reimbursement of such remitted payments, and cannot exceed the expense caps in
place during the year in which
2
the expenses were initially waived. The Reimbursement Amount shall not include
any charges or fees (e.g., interest on outstanding Reimburse Amounts).
(b) Method of Computing Reimbursement Payments. Payment of Reimbursement Amounts
by a Fund to MCA shall be computed as follows. For each share class of each
Fund, on each day for which the daily expense accrual based on the Operating
Expense Limit exceeds the daily expense accrual representing the Operating
Expenses, the Trust's accounting agent shall establish an account payable for
that share class and Fund equal to the difference between the daily amounts.
Within three (3) business days of each month end, each Fund shall pay to MCA an
amount equal to the aggregate account payables for all the share classes of the
Fund for that month; provided, however, that the amount of such payment shall
not exceed the remaining Reimbursement Amount for the Fund.
(c) Year-End Adjustment. If necessary to ensure that the actual Operating
Expenses of any Fund (including any payment by the Fund of any Reimbursement
Amount to MCA) for any fiscal year do not exceed the Fund's Operating Expense
Limit for that year, the Fund or MCA, as appropriate, shall pay the other,
during the first month of the next fiscal year, an adjustment amount equal to
the difference between the Operating Expenses and the Operating Expense Limit.
3. Term and Termination
--------------------
(a) Term of Agreement. This Agreement will become effective February 28, 2009
and will continue in effect until the date set forth on Schedule A. This
Agreement may be extended upon agreement of the parties, at which time Schedule
A shall be amended to reflect the new term.
(b) Termination of Agreement. This Agreement will terminate: (1) upon
termination of the Management Agreement, or (2) by the Trust, without payment of
any penalty, upon sixty (60) days written notice to MCA.
4. Amendment
---------
This Agreement may be amended only by a written agreement signed by each of the
parties hereto.
5. Miscellaneous
-------------
(a) Successors. This Agreement shall be binding upon the parties hereto, but not
upon their transferees, successors and assigns.
(b) Assignment. Neither party may assign the Agreement, or any of the rights,
obligations, or liabilities under the Agreement, without the written consent of
the other party.
(c) Intended Beneficiaries. No provision of this Agreement shall be construed to
give any person or entity other than the parties hereto any legal or equitable
claim, right or remedy. The Agreement is intended for the exclusive benefit of
the parties hereto.
(d) Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but both of which shall together constitute
one and the same instrument.
3
(e) Applicable Law. This Agreement shall be interpreted, construed, and enforced
in accordance with the laws of the state of Delaware, without reference to the
conflict of laws principles thereof.
(f) Severability. If any portion of this Agreement shall be found to be invalid
or unenforceable by a court or tribunal or regulatory agency of competent
jurisdiction, the remainder shall not be affected thereby, but shall have the
same force and effect as if the invalid or unenforceable portion had not been
part of this Agreement.
(g) Captions. The captions in this Agreement are included for convenience of
reference only and in no other way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
(h) Definitions. Any question of interpretation of any term or provision of this
Agreement, including, but not limited to, the Management Fee, having a
counterpart in or otherwise derived from the terms and provisions of the
Management Agreement or the 1940 Act, shall have the same meaning as and be
resolved by reference to the Management Agreement or the 1940 Act, as
applicable.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
MEMBERS MUTUAL FUNDS
By: /s/ Xxxxx X. Xxxxx
--------------------
Name: Xxxxx X. Xxxxx
Title: President
MEMBERS CAPITAL ADVISORS, INC.
By: /s/ Xxxx Xxxxxxxx
--------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
4
SCHEDULE A
OPERATING EXPENSE LIMITS
FUND OPERATING EXPENSE LIMIT EXPIRATION OF TERM OF
AGREEMENT
Cash Reserves 0.15% February 27, 2010
Bond 0.15% February 27, 2010
High Income 0.20% February 27, 2010
Diversified Income 0.20% February 27, 2010
Large Cap Value 0.40% February 27, 2010
Large Cap Growth 0.20% February 27, 2010
Mid Cap Value 0.20% February 27, 2010
Mid Cap Growth 0.40% February 27, 2010
Small Cap Value 0.25% February 27, 2010
Small Cap Growth 0.25% February 27, 2010
International Stock 0.30% February 27, 2010
Conservative Allocation 0.25% February 27, 2010
Moderate Allocation 0.25% February 27, 2010
Aggressive Allocation 0.25% February 27, 2010
5
