Exhibit d.5c
EXPENSE LIMITATION AGREEMENT
FEBRUARY 28, 2008
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:
- The management fee.
- 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.
- 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.
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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 1(d)
and 1(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 1(d) and 1(e) of
this Agreement during the prior three (3) fiscal years, less any previous
reimbursement of such remitted payments. 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,
2008 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.
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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.
(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.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
MEMBERS MUTUAL FUNDS
By:
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Name:
Title:
MEMBERS CAPITAL ADVISORS, INC.
By:
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Name:
Title:
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SCHEDULE A
OPERATING EXPENSE LIMITS
FUND OPERATING EXPENSE LIMIT EXPIRATION OF TERM OF AGREEMENT
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Cash Reserves 0.15% February 27, 2009
Bond 0.15% February 27, 2009
High Income 0.20% February 27, 2009
Diversified Income 0.20% February 27, 2009
Large Cap Value 0.40% February 27, 2009
Large Cap Growth 0.20% February 27, 2009
Mid Cap Value 0.20% February 27, 2009
Mid Cap Growth 0.40% February 27, 2009
Small Cap Value 0.25% February 27, 2009
Small Cap Growth 0.25% February 27, 2009
International Stock 0.30% February 27, 2009
Conservative Allocation 0.25% February 27, 2009
Moderate Allocation 0.25% February 27, 2009
Aggressive Allocation 0.25% February 27, 2009
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