UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant under Rule 14a-12
ULTRA SERIES FUND
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
N/A
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(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): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: $0
[ ] 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 its filing.
(1) Amount Previously Paid: N/A
(2) Form, Schedule or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
December 1, 2007
Dear Contract Owner:
Special meetings of the shareholders of the Small Cap Value Fund and the Small
Cap Growth Fund (together, the "Funds," and each, a "Fund"), each an investment
portfolio of the Ultra Series Fund (the "Trust"), will be held on December 28,
2007 at 9:00 a.m. and 9:15 a.m. Central Time, respectively, or any adjournment
or adjournments thereof (the "Meetings" and each a "Meeting"). Although CUNA
Mutual Insurance Society and separate accounts of CUNA Mutual Life Insurance
Company ("CMLIC") are the only shareholders of the Funds, as an owner of record
of a variable annuity contract or variable life insurance contract (each, a
"variable contract") investing in one or both of the Funds, you have the right
to instruct CMLIC as to the manner in which shares of the Funds attributable to
your variable contract should be voted.
The Funds are currently managed by MEMBERS Capital Advisors, Inc. ("MCA")
pursuant to an investment management agreement initially approved by the Trust's
board of trustees (the "Board") on March 1, 2007 and re-approved by the Board on
November 29, 2007. The agreement was also approved by the initial shareholder of
each Fund on May 1, 2007. The investment management agreement approved by the
Board provided for each Fund to pay to MCA an investment management fee based on
the average daily net assets of the Fund at the annual rate of 1.10%. However,
in the Funds' prospectus, the annual rate was set forth as 1.00% and that is the
rate at which the Funds are currently paying the investment management fee to
MCA. Because the prospectus set forth the annual rate as 1.00%, shareholder
approval is needed to change the rate to 1.10%, as originally intended and
approved by the Board. Assuming the requisite shareholder approval is obtained,
this change will take effect January 1, 2008.
As a contract owner, you are being asked to provide your voting instructions on
this proposal. The attached proxy materials provide more information about the
proposal, and a voting instruction form is enclosed for you to provide your
voting instructions.
The Trust's Board has concluded that the proposal is in the best interest of the
contract owners invested in the Funds and unanimously recommends that you vote
in favor of the proposal.
Your voting instructions are important. Whether or not you plan to attend the
Meeting(s), please complete, sign and return the enclosed voting instruction
form as soon as possible so that your voting instructions may be counted. A
postage-paid envelope is enclosed for this purpose or you can return the form
via fax. Please provide your voting instructions as soon as possible. Voting
Instruction Forms must be received by December 26, 2007 to be counted.
Thank you for your prompt attention to this matter.
Sincerely
/s/ David P. Marks
- -------------------------------------
David P. Marks
President
Ultra Series Fund
ULTRA SERIES FUND
2000 HERITAGE WAY, WAVERLY, IOWA 50677
NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS OF THE SMALL CAP
VALUE FUND AND THE SMALL CAP GROWTH FUND TO BE HELD ON
DECEMBER 28, 2007
To owners of variable life insurance contracts and variable annuity
contracts (together, the "variable contracts") issued by CUNA Mutual Life
Insurance Company ("CMLIC") entitled to give voting instructions in connection
with certain separate accounts established by CMLIC that invest in certain Funds
of the Ultra Series Fund (the "Trust").
Notice is hereby given that special meetings (the "Meetings" and each a
"Meeting") of the shareholders of the Small Cap Value Fund and the Small Cap
Growth Fund (together, the "Funds," and each, a "Fund") will be held on December
28, 2007 at 5810 Mineral Point Road, Madison, Wisconsin 53705, at 9:00 a.m. and
9:15 a.m. Central Time, respectively, or any adjournment or adjournments
thereof.
Each Meeting will be held for the following purposes:
1. To approve or disapprove an investment management agreement with
respect to the Fund between the Trust and MEMBERS Capital Advisors,
Inc.
2. To transact such other business as may properly come before the
Meeting or any adjournment(s) thereof.
CUNA Mutual Insurance Society ("CMIS") and separate accounts of CMLIC are
the only shareholders of the Funds. However, CMLIC hereby solicits, and agrees
to vote the shares of the Funds attributable to such separate accounts at the
Meetings in accordance with, timely instructions received from owners of the
variable contracts having contract values allocated to such separate accounts
invested in such shares. CMIS also agrees to vote the shares held by it in
accordance with the instructions received from owners of the variable contracts.
As a variable contract owner of record at the close of business on November
16, 2007, you have the right to instruct CMLIC as to the manner in which shares
of the Funds attributable to your variable contract should be voted. A Proxy
Statement is attached to this Notice that describes the matters to be voted upon
at the Meetings or any adjournment(s) thereof, and a Voting Instruction Form is
enclosed for you to provide your voting instructions to CMLIC.
YOUR VOTING INSTRUCTIONS ON THESE PROPOSALS ARE IMPORTANT. PLEASE PROVIDE
YOUR VOTING INSTRUCTIONS AS SOON AS POSSIBLE TO SAVE THE EXPENSE OF ADDITIONAL
SOLICITATIONS. You can vote quickly and easily by completing and mailing or
faxing the enclosed Voting Instruction Form. Just follow the simple instructions
that appear on your enclosed Voting Instruction Form. Voting Instruction Forms
must be received by December 26, 2007 to be counted. Please help avoid the
expense of a follow-up mailing by voting today.
By Order of the Board of Trustees
/s/ Holly S. Baggot
- -------------------------------------
Holly S. Baggot
Secretary
ULTRA SERIES FUND
2000 HERITAGE WAY
WAVERLY, IOWA 50677
DECEMBER 1, 2007
PROXY STATEMENT
This Proxy Statement is being furnished on behalf of the board of trustees
(the "Board") of the Ultra Series Fund (the "Trust") by CUNA Mutual Life
Insurance Company ("CMLIC") to owners of variable annuity contracts and variable
life insurance contracts (together, the "variable contracts") issued by CMLIC
and having contract values on November 16, 2007 (the "Record Date") allocated to
sub-accounts of certain separate accounts (the "Separate Accounts") of CMLIC
that are invested in shares of the Small Cap Value Fund and/or the Small Cap
Growth Fund, (together, the "Funds," and each, a "Fund"), each an investment
portfolio of the Trust. The Board has fixed November 16, 2007 as the Record Date
for the determination of shareholders entitled to notice of and to vote at the
Meetings. This Proxy Statement and attached materials are being mailed on or
about December 1, 2007.
This Proxy Statement is accompanied by a Voting Instruction Form for the
owners of variable contracts to use to instruct CMLIC how to vote at the special
meetings (the "Meetings" and each a "Meeting") of shareholders of the Funds. The
Meetings are to be held on December 28, 2007 at 5810 Mineral Point Road,
Madison, Wisconsin 53705, at 9:00 a.m. and 9:15 a.m. Central Time, respectively,
for the purposes set forth below and in the accompanying Notice of Special
Meetings.
At each Meeting, the shareholders will be asked to vote on the following
matters:
1. To approve or disapprove an investment management agreement with
respect to the Fund between the Trust and MEMBERS Capital Advisors,
Inc.
2. To transact such other business as may properly come before the
Meetings or any adjournment(s) thereof.
COPIES OF THE TRUST'S MOST RECENT ANNUAL REPORT AND SEMI-ANNUAL REPORT TO
SHAREHOLDERS WILL BE FURNISHED WITHOUT CHARGE UPON REQUEST BY CALLING
1-800-798-5500.
1
VOTING INFORMATION
GENERAL
The Trust is a business trust organized under the laws of the Commonwealth
of Massachusetts on September 16, 1983, and is registered with the U.S.
Securities and Exchange Commission (the "SEC") as an open-end management
investment company under the Investment Company Act of 1940 (the "1940 Act").
The Trust is comprised of eighteen investment portfolios, including the Funds.
CUNA Mutual Insurance Society ("CMIS") and the Separate Accounts of CMLIC
are the only shareholders of record of each of the Funds. Each Separate Account
is a segregated asset account established by CMLIC and each is registered with
the SEC under the 1940 Act as a unit investment trust. Net premiums paid by a
variable contract owner may be allocated to one or more of the sub-accounts of
each Separate Account that invest in shares of the Funds. Each sub-account
invests in a series of shares corresponding to an investment portfolio of the
Trust, such as the Funds, or another open-end management investment company
(alternatively referred to as a "mutual fund" or a "fund").
CMLIC will vote the shares of the Funds held by its Separate Accounts at
the Meetings in accordance with timely instructions received from persons
entitled to give voting instructions under the variable contracts. All properly
executed voting instruction forms received by CMLIC by the close of business on
December 26, 2007 will be counted for purposes of voting at the Meetings.
Additionally, CMIS will also vote the shares held by it in accordance with
timely instructions received from persons entitled to give voting instructions
under the variable contracts.
The number of shares of each Fund for which a variable contract owner may
give voting instructions is equal to the number of shares, or fraction of
shares, held in the Separate Account attributable to the owner's variable
contract on the Record Date. Each share has one vote for each dollar of net
asset value, and fractional votes are counted.
CMLIC will vote shares attributable to variable contracts as to which no
voting instructions are received, and CMIS will vote shares owned by it, in
proportion (for, against or abstain) to those for which instructions are
received. If a voting instruction form is received that does not specify a
choice, CMLIC will consider its timely receipt as an instruction to vote in
favor of Proposal 1. Consistent with the foregoing, voting instructions to
abstain with respect to a proposal, and broker "non-votes" (voting instructions
from brokers or other nominees indicating that they have not received
instructions from the owner or other persons entitled to give voting
instructions) will effectively be votes against the proposal. In certain
circumstances, CMLIC has the right to disregard voting instructions from certain
variable contract owners, although CMLIC does not believe that these
circumstances exist with respect to the matters currently before shareholders.
Variable contract owners may revoke voting instructions given to CMLIC at any
time prior to the Meetings by notifying CMLIC in writing: 2000 Heritage Way,
Waverly, Iowa 50677.
2
CMLIC does not require that a specific number of contract owners submit
voting instructions before CMLIC will vote the shares of the Funds held by its
respective Separate Accounts at the Meetings. Instead, CMLIC, in its sole
discretion, will vote the shares of the Funds held by its Separate Accounts at
the Meetings after consideration of such factors as (1) the percentage of votes
represented by voting instructions received by CMLIC, and (2) the percentage of
variable contracts represented by voting instructions received by CMLIC. CMIS
will vote its shares in proportion to the votes cast by CMLIC. As a result, a
relatively small number of contract owners can determine the outcome of the
votes.
SOLICITATION OF VOTING INSTRUCTIONS
Voting instructions are being solicited by mail. Additional solicitations
may be made by telephone or facsimile by officers or employees of CMLIC or its
affiliates, who will not be separately compensated for such activities. The cost
of the solicitation will be borne by CMLIC or its affiliates, but not by the
Funds.
Contract owners should provide voting instructions by completing the
enclosed voting instruction form and mailing it to the address shown on the
voting instruction form.
SHAREHOLDER INFORMATION
As of the close of business on the Record Date, there were issued and
outstanding 581,436.832 shares of the Small Cap Value Fund and 571,890.992
shares of the Small Cap Growth Fund (collectively, the "Outstanding Shares").
Each Fund currently has only one class of shares outstanding.
As of the Record Date, the following shareholders owned more than 5% of the
outstanding voting securities of either Fund:
PERCENT OF
FUND SHAREHOLDER OUTSTANDING SHARES
---- ----------- ------------------
Small Cap Value Fund CMIS 86.0%
Small Cap Value Fund CUNA Mutual Life Variable Annuity Account 13.6%
Small Cap Growth Fund CMIS 87.4%
Small Cap Growth Fund CUNA Mutual Life Variable Annuity Account 12.4%
As of the Record Date, no contract owners owned contracts that individually
or in the aggregate had a total interest in either Fund of 5% or more of that
Fund.
As of the Record Date, officers and directors of the Trust together
beneficially owned (i.e., as owners of variable contracts) less than 1% of each
Fund's shares.
3
QUORUM
The presence, in person or by proxy, of the holders of a majority of the
Outstanding Shares of each Fund constitutes a quorum for the Meeting for that
Fund. However, because CMIS and the Separate Accounts are the holders of record
of all the Outstanding Shares, the Trust expects all such shares to be present
at each Meeting.
ADJOURNMENTS
It is possible that the Trust may propose to CMIS and CMLIC one or more
adjournments of the Meetings. Any such adjournment with respect to each Fund
will require an affirmative vote by the holders of a majority of the Outstanding
Shares of that Fund present (in person or by proxy) at the Meeting. CMLIC will
vote upon such adjournment after consideration of the best interests of all
owners of its variable contracts invested in the Fund. CMIS will mirror the vote
of CMLIC.
VOTE REQUIRED
For each Meeting, approval of Proposal 1 requires the affirmative vote of
the lesser of: (1) votes representing more than 50% of the Outstanding Shares,
or (2) if the holders of votes representing more than 50% of the Outstanding
Shares of that Fund are present at the Meeting (in person or represented by
proxy), votes representing 67% or more of the Outstanding Shares present at the
Meeting.
PROPOSAL 1
APPROVAL OF THE INVESTMENT MANAGEMENT AGREEMENT
FOR EACH FUND
Each Fund began operations on May 1, 2007 and is currently managed by
MEMBERS Capital Advisors, Inc. ("MCA") pursuant to an investment management
agreement (the "Management Agreement"). MCA is responsible for the overall
management of each Fund. MCA currently manages the assets of each Fund using a
"manager of managers" approach under which MCA may manage some or all of the
Funds' assets and may allocate some or all of the Funds' assets among one or
more specialist sub-advisers. MCA has retained a sub-adviser to provide
day-to-day portfolio management for all of the assets of each Fund. Wellington
Management Company, LLP ("Wellington") is the sub-adviser for the Small Cap
Value Fund and Paradigm Asset Management Company, LLC ("Paradigm") is the
sub-adviser for the Small Cap Growth Fund, each pursuant to a sub-advisory
agreement (each a "Sub-Advisory Agreement" and, together, the "Sub-Advisory
Agreements").
The Funds' Management Agreement was approved by the Board, including a
majority of the trustees who are not "interested persons," as defined in the
1940 Act ("Independent Trustees"), on March 1, 2007 and approved by the initial
shareholder of each Fund on May 1, 2007. Also on March 1, 2007, the Board,
including the Independent Trustees, approved a Sub-Advisory Agreement between
MCA and Wellington on behalf of the Small Cap Value Fund, and
4
approved a Sub-Advisory Agreement between MCA and Paradigm on behalf of the
Small Cap Growth Fund. Each Sub-Advisory Agreement was also approved by the
initial shareholder of the applicable Fund on May 1, 2007. Each of the
Management Agreement and the Sub-Advisory Agreements was also re-approved by the
Board, including the Independent Trustees, on November 29, 2007.
The Management Agreement approved by the Board provides for each Fund to
pay to MCA an investment management fee as a percentage of the average daily net
assets of the Fund at the annual rate of 1.10%. However, in the Funds'
prospectus, the annual rate was incorrectly set forth as 1.00% and that is the
rate at which the investment management fee has been paid by each Fund since its
inception on May 1, 2007. Because contract owners made the decision to invest
contract value in the Funds under the assumption that the annual rate of each
Fund's investment management fee was 1.00%, neither Fund may pay a higher rate
without shareholder approval. Because MCA desires to charge each Fund an
investment management fee at the annual rate of 1.10%, as approved by the Board,
shareholders are being asked to approve the Management Agreement reflecting the
1.10% rate.(1) Assuming the requisite shareholder approval is obtained, this
change will take effect January 1, 2008. In the event that shareholders of a
Fund do not approve the Management Agreement, MCA may continue to manage the
Fund and accept the management fee at the annual rate of 1.00%, as currently
being administered, and the Board will take such action as it deems to be in the
best interests of the Fund and its shareholders, including variable contract
owners indirectly invested in the Fund.
The tables below provide data concerning each Fund's fees and expenses as a
percentage of average net assets for each Fund. The row labeled "current" shows
the fees as they are currently being deducted, and the row labeled "pro forma"
shows the fees as they will be deducted if shareholders approve the Management
Agreement.
<Table>
<Caption>
- --------------------- --------------------- ---------------------- --------------------
TOTAL ANNUAL
FUND MANAGEMENT FEE* OTHER EXPENSES** OPERATING EXPENSES
- --------------------- --------------------- ---------------------- --------------------
SMALL CAP VALUE
- --------------------- --------------------- ---------------------- --------------------
Current 1.00% 0.01% 1.01%
- --------------------- --------------------- ---------------------- --------------------
Pro Forma 1.10% 0.01% 1.11%
- --------------------- --------------------- ---------------------- --------------------
SMALL CAP GROWTH
- --------------------- --------------------- ---------------------- --------------------
Current 1.00% 0.01% 1.01%
- --------------------- --------------------- ---------------------- --------------------
Pro Forma 1.10% 0.01% 1.11%
- --------------------- --------------------- ---------------------- --------------------
</Table>
* Management fees are amounts paid to MCA for managing the Funds investments
and administering Fund operations.
** Since the Funds are new, other expenses are based on estimated amounts for
the current fiscal year.
The following example indicates the expenses you would pay under the
current and proposed expense structures, assuming an initial investment of
$10,000, a 5% total annual return each year, and redemption at the end of each
period. Your actual cost may be higher or lower.
<Table>
<Caption>
----------------------- ------------------ --------------------
FUND 1 YEAR 3 YEAR
----------------------- ------------------ --------------------
SMALL CAP VALUE
----------------------- ------------------ --------------------
Current 103 322
----------------------- ------------------ --------------------
Pro Forma 113 353
----------------------- ------------------ --------------------
SMALL CAP GROWTH
----------------------- ------------------ --------------------
Current 103 322
----------------------- ------------------ --------------------
Pro Forma 113 353
----------------------- ------------------ --------------------
</Table>
THE BOARD RECOMMENDS THAT SHAREHOLDERS OF EACH FUND VOTE FOR THE APPROVAL OF THE
MANAGEMENT AGREEMENT.
THE MANAGEMENT AGREEMENT
The Management Agreement that shareholders are being asked to approve is
the same Management Agreement approved by the Board on March 1, 2007 and by the
initial shareholder of each Fund on May 1, 2007. The Management Agreement, which
is attached hereto as Appendix A, requires MCA to provide, or arrange to provide
at MCA's expense, the services reasonably necessary for the operation of each
Fund, including investment advisory, custody, transfer agency, dividend
disbursing, legal, accounting, and administrative services. MCA may contract
with qualified service providers to perform any of the services under the
Management Agreement and is required to coordinate the activities of such
service providers. For its services under the Management Agreement, the
Management Agreement states that each Fund shall pay MCA compensation in the
form of an investment management fee, which is paid monthly and is calculated as
a percentage of the average daily net assets of the Fund at the annual rate of
1.10%.
The management fee paid by each Fund is a "unitary fee" and is intended to
compensate MCA for both investment advisory services and certain ordinary
operating expenses necessary to operate the Funds. The Management Agreement
excludes the following expenses from the set of ordinary operating expenses for
which MCA would be compensated: fees paid to Independent Trustees; external
audit fees; interest on borrowing by a Fund; certain taxes; and extraordinary
expenses (as approved by a majority of the Independent Trustees).
- ----------
(1) Shareholders are not being asked to approve the Sub-Advisory agreements.
5
The Management Agreement provides: (1) that it shall continue in effect for
two years from its effective date and thereafter shall continue automatically
for periods of one year so long as such continuance is specifically approved at
least annually by the vote of a majority of the Independent Trustees; (2) that
it may be terminated by a Fund or by MCA at any time, without the payment of any
penalty, by vote of a majority of the trustees or by vote of a majority in
interest of the shareholders on sixty (60) days written notice to the
non-terminating party; and (3) that it will terminate automatically in the event
of its assignment.
The Management Agreement also contains provisions that: (1) limit MCA's
liability for any error of judgment, mistake of law, loss arising out of any
investment, or for any act or omission in the management of a Fund to instances
of willful misfeasance, bad faith, gross negligence or reckless disregard for
its duties under the Management Agreement; (2) allow MCA to effect transactions
between a Fund and MCA's other clients in an manner deemed equitable to all; (3)
allow MCA to aggregate orders to purchase or sell securities for a Fund and
other MCA clients in order to obtain favorable execution and lower brokerage
commissions or prices; and (4) designate the laws of the Commonwealth of
Massachusetts as the governing law for the Management Agreement.
BOARD CONSIDERATIONS IN APPROVING THE MANAGEMENT AGREEMENT AND SUB-ADVISORY
AGREEMENTS
Under the 1940 Act, an investment company's investment management
agreement, and any sub-advisory agreement, must be approved initially and
re-approved annually, by that investment company's board of trustees, including
a majority of the trustees who are not "interested persons" under the 1940 Act.
At an in-person meeting on March 1, 2007, the Board, including a majority
of the Independent Trustees, determined that it would be in the best interests
of the future shareholders of each Fund to approve the Management Agreement. At
an in person meeting on November 29, 2007, the Board, including a majority of
the Independent Trustees, re-approved the Management Agreement and determined
that it would be in the best interests of the shareholders of each Fund,
including variable contract owners indirectly invested in each Fund, to submit
the Management Agreement to the shareholders for their approval.
The Board also serves as the board of trustees for the MEMBERS Mutual
Funds, for which MCA also acts as investment advisor. The MEMBERS Mutual Funds,
unlike the Ultra Series Fund, do not serve as vehicles for funding variable
insurance products, and they are offered directly to the public. At a meeting
held on November 30, 2006, the board of trustees approved MCA as investment
advisor for a new MEMBERS Small Cap Value Fund and MEMBERS Small Cap Growth
Fund. In addition, at that meeting, the board of trustees approved Wellington as
sub-adviser for the new MEMBERS Small Cap Value Fund, and Paradigm as
sub-adviser for the new MEMBERS Small Cap Growth Fund.
In approving the Management Agreement and Sub-Advisory Agreements for the
Funds, at the March 1, 2007 meeting, the trustees considered information,
presentations, and responses to trustees' questions which had been provided by
representatives of MCA, Wellington and
6
Paradigm in conjunction with the MEMBERS Mutual Funds' board of trustee's
November 30, 2006 approval of the agreements for the MEMBERS small cap funds, as
well as additional information which MCA representatives provided at the March 1
meeting. The trustees felt comfortable in doing so because the MEMBERS and the
Ultra Series small cap funds have identical investment objectives and styles,
and the same investment adviser and sub-advisers. Thus, the information
presented at the November 30, 2006 meeting with respect to the MEMBERS small cap
funds remained relevant to the approvals which were considered at the March 1
meeting with respect to the Ultra Series small cap funds.
At both the March 1, 2007 and November 29, 2007 meetings, in determining to
approve the Management Agreement and Sub-Advisory Agreements for the Funds, the
Board considered the following factors and reached the following conclusions.
Nature, Extent and Quality of Services to be Provided by MCA and the
Sub-advisers
The trustees received and considered a variety of information pertaining to
the nature, extent and quality of the services proposed to be provided by MCA,
Wellington and Paradigm. This information included professional qualifications
and experience of the portfolio management teams for each Fund; the portfolio
management processes utilized by these teams; the organization, resources and
research capabilities of the investment management companies of which these
teams are a part; and MCA's and the sub-advisers' compliance, regulatory and
litigation experience, their portfolio transaction execution policies and
practices, and their policies and procedures for allocating transactions among
accounts. After reviewing this information and discussing it with
representatives of MCA and the sub-advisers, the Board, at its March 1, 2007
meeting, concluded that it was generally satisfied with the nature, extent and
quality of the services to be provided by MCA and the sub-advisers and that
these services compare satisfactorily to those provided by others in the
industry.
At the November 29, 2007 meeting, the Board reviewed the information noted
above and also reviewed the services that had been provided by MCA and the
sub-advisers during the Funds' first few months of operations and concluded that
that it continued to be generally satisfied with the nature, extent and quality
of the services provided by MCA and the sub-advisers and that these services
compare satisfactorily to those provided by others in the industry.
Investment Performance of the Funds
At the March 2007 meeting, the trustees noted that the Funds had no
performance history, and that their counterpart MEMBERS small cap funds had only
one month's performance history. For this reason, the trustees considered the
longer-term performance of other accounts which the sub-advisers manage in the
same styles, as compared to the performance of unmanaged benchmark indices.
Based on this information, the trustees concluded that they were comfortable
with the new funds' anticipated performance under the proposed sub-advisers'
management.
7
At the November 2007 meeting, the trustees reviewed the performance of the
Funds over their first several months of operations compared to (i) the
performance of each Fund's respective managed benchmark, and (ii) the
performance of Funds which Morningstar places in the same style boxes as are
indicated by the respective Funds' names. The trustees also considered written
discussions which MCA and the subadvisers provided to them regarding the major
elements of each Fund's investment strategy which contributed positively or
negatively to the Fund's performance during the preceding year. Based on the
foregoing, the trustees concluded that they were comfortable with the Funds'
performance.
Cost of Services Provided and Profitability
At the March 2007 meeting, the trustees reviewed a written presentation by
MCA setting forth, on a fund-by-fund basis, its revenues, expenses, and pre-tax
profitability under its investment management agreements with the Ultra Series
Funds which had been in existence for more than a year as of November 30, 2006.
The trustees also reviewed the methodology which MCA used to allocate revenues
and expenses for purposes of this presentation. In the course of their review,
the trustees noted that the pre-tax margins reported by MCA appeared reasonable
and were substantially lower than the margins which have been upheld in reported
judicial decisions concerning investment management fees. Although the trustees
did not receive projected profitability information for the proposed new Funds,
they anticipated that the new Funds' profitability to MCA would follow the
pattern of the existing funds.
The trustees also considered information provided by MCA concerning the
average and median total expense ratios of other small cap value and small cap
growth funds which serve as funding vehicles for variable insurance products.
MCA derived this information from a Morningstar database which was current as of
January 31, 2007. Because the Funds are so-called "unitary fee" funds which pay
a single fee which covers both investment advisory and most other administrative
services, the trustees did not consider comparative Morningstar data pertaining
to investment advisory fees standing alone. The trustees noted that each Fund's
proposed unitary fee of 1.10% per annum was less than or equal to both the
median and the average total expense ratios for the comparable funds. Based on
this information, the trustees concluded that the unitary fee proposed to be
charged to the new Funds was reasonable in relation to the services to be
provided, and that MCA's anticipated level of profitability from its Management
Agreement with respect to the new Funds was well within reason.
At the November 2007 meeting, the trustees reviewed similar data which was
current as of October 31, 2007 and reached the same conclusions.
Economies of Scale
At both the March 2007 and the November 2007 meetings, MCA provided the
trustees with its estimate of how large a fund must be before it begins to
realize economies of scale under its investment management agreement. MCA also
noted that under its unitary fee agreement, economies of scale can change from
year to year as the amounts charged by third-party service providers and borne
by MCA change. The trustees noted that the Funds would need to achieve very
significant growth before they would approach the level at which MCA believes
economies
8
of scale begin, and that MCA was not recommending the institution of breakpoints
in the Funds' investment management fee schedules at this time. The trustees,
taking these factors into account and also noting that MCA bears the risk of
increases in third-party expenses under its unitary fee agreement, determined
not to pursue breakpoints for the new Funds at this time.
Other Benefits to MCA and the Sub-advisers from their Relationships with the
Funds
At both the March 2007 and the November 2007 meetings, the trustees also
considered the nature and extent of other benefits which may flow to MCA and the
sub-advisers from their relationships with the Funds. The trustees noted in this
regard that the sub-advisers expected to execute a portion of the Funds'
portfolio transactions on a "soft dollar" basis, pursuant to which the
sub-advisers would receive research services from or through the executing
brokers. They also noted the sub-advisers' representations that they seek to
achieve "best execution" in executing all clients' portfolio transactions, and
that their "soft dollar" practices comply with applicable law. The trustees
concluded that while additional benefits would flow to the sub-advisers from
their relationships with the Funds in the form of "soft dollar" benefits, the
nature and extent of these additional benefits would not be unreasonable when
considered in the context of the overall services provided by, and fees received
by, the sub-advisers.
Conclusion
After taking the foregoing information and the other information provided
by MCA and the proposed sub-advisers into account, the Board, acting in the
exercise of its business judgment, unanimously approved the Management Agreement
and the Sub-Advisory Agreements. In doing so, the Board did not assign specific
weights to the various factors considered, nor did it deem any one factor or set
of factors to be decisive. Instead, it considered the total mix of information
provided to it in reaching its decisions.
ADDITIONAL INFORMATION ABOUT MCA
The principal business address of MCA is 5910 Mineral Point Road, Madison,
WI 53705. MCA is a subsidiary of CUNA Mutual Life Insurance Company and CUNA
Mutual Investment Corporation. CUNA Mutual Investment Corporation is a wholly
owned subsidiary of CMIS. The name and principal occupation of the principal
executive officers of MCA are as set forth in Appendix B. The principal address
of each individual as it relates to his or her duties at MCA is the same as that
of MCA.
MCA was established on July 6, 1982. In addition to the Trust, MCA provides
investment advice to the investment portfolios of CMIS and CMLIC, and their
subsidiaries and affiliates, and MEMBERS Mutual Funds. MCA had over $14.6
billion of assets under management as of December 31, 2006.
The MEMBERS Mutual Funds Small Cap Value Fund has an identical investment
objective to the Ultra Series Small Cap Value Fund and the MEMBERS Mutual Funds
Small Cap Growth Fund has an identical investment objective to the Ultra Series
Small Cap Growth Fund. The table below sets forth the investment advisory fees
paid to MCA by each of these MEMBERS Funds. If shareholders approve the
Management Agreement, the Ultra Series Funds Small Cap Funds will have higher
management fees than the MEMBERS Mutual Funds Small Cap Funds. However, an
accurate comparison of the these fees cannot be made because the Ultra Series
Funds Small Cap Funds pay a unified management fee to MCA, which covers the
majority of each Fund's other expenses, whereas the MEMBERS Mutual Funds pay a
management fee, in addition to paying for other expenses. Depending upon the
share class, the total annual operating expenses of the MEMBERS Mutual Funds
Small Cap Funds range from 2.60% to 3.60%, as a percentage of average daily net
assets, before expense reimbursements made by MCA, and from 1.25% to 2.25%, as a
percentage of average daily net assets, after expense reimbursements.
<Table>
<Caption>
- ------------------------ -------------------- -----------------------------
FUND NET ASSETS* INVESTMENT ADVISORY FEE**
- ------------------------ -------------------- -----------------------------
MEMBERS MUTUAL FUNDS
SMALL CAP VALUE FUND $19,956,227 1.00%
- ------------------------ -------------------- -----------------------------
MEMBERS MUTUAL FUNDS
SMALL CAP GROWTH FUND $23,365,838 1.00%
- ------------------------ -------------------- -----------------------------
</Table>
* As of November 27, 2007.
** As a percent of average daily net assets.
9
ADDITIONAL INFORMATION
REPORTS TO SHAREHOLDERS
Copies of the Trust's most recent annual report and most recent semi-annual
report to shareholders will be furnished without charge upon request by calling
1-800-798-5500.
SERVICE PROVIDERS
Independent Registered Public Accounting Firm
Deloitte & Touche LLP, 111 S. Wacker Drive, Chicago, Illinois 60606, is the
independent registered public accounting firm of the Trust.
Custodian
State Street Bank and Trust Company, 225 Franklin Street, Boston, MA 02110, acts
as custodian of the Trust's assets.
Principal Underwriter
CUNA Brokerage Services, Inc., 5910 Mineral Point Road, Madison, WI 53705, acts
as the Trust's principal underwriter.
Transfer Agent
CUNA Mutual Life Insurance Company, 2000 Heritage Way, Waverly IA 50677, is the
transfer agent for the Trust.
OTHER BUSINESS
Management knows of no business to be presented at the Meetings other than
the matters set forth in this Proxy Statement, but should any other matter
requiring the vote of shareholders arise, the proxies will vote thereon
according to their best judgment in the interest of the Trust and the Funds.
SHAREHOLDER PROPOSALS
As a general matter, the Trust does not hold annual or regular meetings of
the shareholders. Ordinarily, there will be no shareholder meeting unless
required by the 1940 Act or otherwise. Shareholders wishing to submit proposals
for inclusion in a proxy statement for a subsequent meeting of the shareholders
should send their written proposals to the Secretary of the Trust, Attn: Holly
S. Baggot, 4C-14, 5910 Mineral Point Road, Madison, WI 53705. Proposals must be
received by the Trust within a reasonable period of time prior to any such
shareholder meeting.
10
APPENDIX A
ULTRA SERIES FUND
MANAGEMENT AGREEMENT
AMENDED AND RESTATED NOVEMBER 29, 2007
THIS MANAGEMENT AGREEMENT ("Agreement") is made effective as of this 29th day of
November, 2007, by and between Ultra Series Fund, a business trust organized and
existing under the laws of the Commonwealth of Massachusetts (the "Fund"), and
MEMBERS Capital Advisors, Inc. (the "Manager"), a corporation organized and
existing under the laws of the state of Iowa.
RECITALS
1. The Fund is a series-type, open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), that
currently consists of the investment portfolios (each, a "Series") designated on
Exhibit A hereto, each such Series having its own investment objective;
2. The Fund issues a separate series of shares of beneficial interest for each
Series, which shares represent fractional undivided interests in the Series;
3. The Manager is engaged principally in rendering investment advisory services
and is registered as an investment adviser under the Investment Advisers Act of
1940, as amended (the "Advisers Act");
4. The Fund desires to retain the Manager to provide or to arrange to provide
overall management of the Fund and each Series, including, but not limited to,
investment advisory, custody, transfer agency, dividend disbursing, legal,
accounting, and administrative services, in the manner and on the terms and
conditions set forth in this Agreement; and
5. The Manager is willing to provide or to arrange to provide, investment
advisory, custody, transfer agency, dividend disbursing, legal, accounting, and
administrative services to the Fund and each Series on the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the covenants hereinafter
contained, the Fund and the Manager hereby agree as follows:
ARTICLE I
Duties of the Manager
The Fund hereby engages the Manager to act as the Fund's general manager to
provide or to arrange to provide directly or through third parties, investment
advisory, custody, transfer
A-1
agency, dividend disbursing, legal, accounting, and administrative services to
each existing Series of the Fund and to any additional investment portfolios
that the Fund may establish in the future; and to provide or to arrange to
provide the above services subject to the supervision of the board of trustees
of the Fund (the "Board"), for the period and on the terms and conditions set
forth in this Agreement. The Manager hereby accepts such engagement and agrees
during such period, at its own expense, to provide or to arrange to provide,
such investment advisory and general management services, and to assume the
obligations set forth in this Agreement for the compensation provided for
herein. Subject to the provisions of the 1940 Act and the Advisers Act, the
Manager may retain any affiliated or unaffiliated parties including, but not
limited to, investment adviser(s) and/or investment sub-adviser(s),
custodian(s), transfer agent(s), dividend-disbursing agent(s), attorney(s), and
accountant(s) to perform any or all of the services set forth in this Agreement.
The Manager, its affiliates and any investment adviser(s), sub-adviser(s),
custodian(s), transfer agent(s), dividend-disbursing agent(s), attorney(s),
accountant(s), or other parties performing services for the Manager shall for
all purposes herein be deemed to be independent contractors and shall, unless
otherwise expressly provided or authorized, have no authority to act for or
represent the Fund or a Series in any way or otherwise be deemed agents of the
Fund or a Series.
The Manager shall, for purposes of this Agreement, have and exercise full
investment discretion and authority to act as agent for the Fund in buying,
selling or otherwise disposing of or managing the Fund's investments, directly
or through sub-advisers, subject to supervision by the Board.
The Manager and any other party performing services covered by this Agreement
(each such party is hereafter referred to as a "Service Provider") shall be
subject to: (1) the restrictions of the Declaration of Trust and Bylaws of the
Fund, as amended from time to time; (2) the provisions of the 1940 Act and the
Advisers Act; (3) the statements relating to the Series' investment objectives,
investment policies and investment restrictions as set forth in the currently
effective (and as amended from time to time) registration statement of the Fund
(the "registration statement") under the Securities Act of 1933, as amended (the
"1933 Act"); (4) appropriate state insurance laws; and (5) any applicable
provisions of the Internal Revenue Code of 1986, as amended (the "Code").
(a) Investment Advisory Services. The Manager shall provide the Fund directly or
through sub-advisers with such investment research, advice and supervision as
the Fund may from time to time consider necessary for the proper management of
the assets of each Series, shall furnish continuously an investment program for
each Series, shall determine from time to time which securities or other
investments shall be purchased, sold or exchanged and what portions of each
Series shall be held in the various securities or other investments or cash, and
shall take such steps as are necessary to implement an overall investment plan
for each Series, including providing or obtaining such services as may be
necessary in managing, acquiring or disposing of securities, cash or other
investments.
The Fund has furnished or will furnish the Manager (who is authorized to furnish
any Service Provider) with copies of the Fund's registration statement,
Declaration of Trust, and Bylaws as
A-2
currently in effect and agrees during the continuance of this Agreement to
furnish the Manager with copies of any amendments or supplements thereto before
or at the time the amendments or supplements become effective. The Manager and
any Service Providers will be entitled to rely on all documents furnished by the
Fund.
The Manager represents that in performing investment advisory services for each
Series, the Manager shall make every effort to ensure that: (1) each Series
shall comply with Section 817(h) of the Code and the regulations issued
thereunder, specifically Regulation Section 1.817-5, relating to the
diversification requirements for variable annuity, endowment, and life insurance
contracts, and any amendments or other modifications to such Section or
regulations; (2) each Series continuously qualifies as a regulated investment
company under Subchapter M of the Code or any successor provision; and (3) any
and all applicable state insurance law restrictions on investments that operate
to limit or restrict the investments that a Series may otherwise make are
complied with as well as any changes thereto. Except as instructed by the Board,
the Manager shall also make decisions for the Fund as to the manner in which
voting rights, rights to consent to corporate action, and any other rights
pertaining to the Fund's securities shall be exercised. If the Board at any time
makes any determination as to investment policy and notifies the Manager of such
determination, the Manager shall be bound by such determination for the period,
if any, specified in the notice or until similarly notified that such
determination has been revoked.
The Manager shall take, on behalf of each Series, all actions which it deems
necessary to implement the investment policies of such Series, and in
particular, to place all orders for the purchase or sale of portfolio
investments for the account of each Series with brokers, dealers, futures
commission merchants or banks selected by the Manager. The Manager also is
authorized as the agent of the Fund to give instructions to any Service Provider
serving as custodian of the Fund as to deliveries of securities and payments of
cash for the account of each Series. In selecting brokers or dealers and placing
purchase and sale orders with respect to assets of the Series, the Manager is
directed at all times to seek to obtain best execution and price within the
policy guidelines determined by the Board and set forth in the current
registration statement. Subject to this requirement and the provisions of the
Act, the Advisers Act, the Securities Exchange Act of 1934, as amended (the
"1934 Act"), and other applicable provisions of law, the Manager may select
brokers or dealers that are affiliated with the Manager or the Fund.
In addition to seeking the best price and execution, the Manager may also take
into consideration research and statistical information, wire, quotation and
other services provided by brokers and dealers to the Manager. The Manager is
also authorized to effect individual securities transactions at commission rates
in excess of the minimum commission rates available, if the Manager determines
in good faith that such amount of commission is reasonable in relation to the
value of the brokerage, research and other services provided by such broker or
dealer, viewed in terms of either that particular transaction or the Manager's
overall responsibilities with respect to each Series. The policies with respect
to brokerage allocation, determined from time to time by the Board are those
disclosed in the currently effective registration statement. The execution of
such transactions shall not be deemed to represent an unlawful act or breach of
any duty created by this Agreement or otherwise. The Manager will periodically
evaluate the statistical
A-3
data, research and other investment services provided to it by brokers and
dealers. Such services may be used by the Manager in connection with the
performance of its obligations under this Agreement or in connection with other
advisory or investment operations including using such information in managing
its own accounts.
As part of carrying out its obligations to manage the investment and
reinvestment of the assets of each Series consistent with the requirements under
the 1940 Act, the Manager shall:
(1) Perform research and obtain and analyze pertinent economic,
statistical, and financial data relevant to the investment policies of
each Series as set forth in the Fund's registration statement;
(2) Consult with the Board and furnish to the Board recommendations with
respect to an overall investment strategy for each Series for
approval, modification, or rejection by the Board;
(3) Seek out and implement specific investment opportunities, consistent
with any investment strategies approved by the Board;
(4) Take such steps as are necessary to implement any overall investment
strategies approved by the Board for each Series, including making and
carrying out day-to-day decisions to acquire or dispose of permissible
investments, managing investments and any other property of the
Series, and providing or obtaining such services as may be necessary
in managing, acquiring or disposing of investments;
(5) Regularly report to the Board with respect to the implementation of
any approved overall investment strategy and any other activities in
connection with management of the assets of each Series including
furnishing, within 60 days after the end of each calendar quarter, a
statement of investment performance for the period since the last
report and a schedule of investments and other assets of each Series
as of the end of the quarter;
(6) Maintain all required accounts, records, memoranda, instructions or
authorizations relating to the acquisition or disposition of
investments for each Series and the Fund;
(7) Furnish any personnel, office space, equipment and other facilities
necessary for the operation of each Series as contemplated in this
Agreement;
(8) Provide the Fund with such accounting or other data concerning the
Fund's investment activities as shall be necessary or required to
prepare and to file all periodic financial reports or other documents
required to be filed with the Securities and Exchange Commission and
any other regulatory entity;
(9) Assist in determining each business day the net asset value of the
shares of each Series in accordance with applicable law; and
A-4
(10) Enter into any written investment advisory or investment sub-advisory
contract with another affiliated or unaffiliated party, subject to any
approvals required by Section 15 of the 1940 Act, pursuant to which
such party will carry out some or all of the Manager's
responsibilities (as specified in such investment advisory or
investment sub-advisory contract) listed above.
(b) General Management Services. The Manager shall provide or arrange to provide
all custody, transfer agency, dividend disbursing, legal, accounting, and
administrative services necessary for the operation of the Fund, including,
without limitation, the following services:
(1) Custody services including, but not limited to:
(i) placing and maintaining each Series' securities, cash or other
investments pursuant to the requirements of Section 17(f) of the
1940 Act and the rules thereunder;
(ii) holding and physically segregating for the Fund's account, all of
the Fund's assets, including securities that the Fund desires to
be held in places within the United States ("domestic
securities") or in places outside the United States ("foreign
securities");
(iii) releasing and delivering domestic securities owned by the Fund
only upon receipt of instructions from persons and by means
authorized by the Board;
(iv) assuring that all domestic securities held are registered in the
name of the Fund or in the name of any nominee of the Fund or of
any nominee of the Manager or any Service Provider acting as
custodian which nominee shall be assigned exclusively to the
Fund, unless the Fund has provided written authorization to use a
nominee not meeting the above requirement;
(v) maintaining a separate bank account(s) in the United States in
the name of the Fund, and holding all cash received by it from or
for the account of the Fund in such account;
(vi) collecting on a timely basis all income and other payments with
respect to securities to which the Fund shall be entitled either
by law or pursuant to custom in the securities business;
(vii) paying out monies of the Fund upon receipt of instructions from
persons and by means authorized by the Board;
(viii) appointing or removing, in its discretion, any other entity
qualified under the 1940 Act to act as a custodian, as its agent
to carry out any custody duties;
A-5
(ix) employing, in the discretion of the Manager or a Service Provider
employed by the Manager, other parties as sub-custodians for the
Fund's domestic securities or foreign securities. With respect to
the Fund's foreign securities, such employment shall be effected
and such foreign securities shall be maintained in accordance
with the provisions of Rule 17f-5 under the 1940 Act, as such
provisions may be amended from time to time, provided that the
Manager or a Service Provider employed by the Manager shall
furnish annually to the Fund, information concerning the Service
Provider or sub-custodians employed by the Manager or other
Service Provider;
(x) creating and maintaining all records relating to its activities
and obligations under any contract relating to the Fund or a
Series thereof in accordance with the provisions of Section 31 of
the 1940 Act and Rules 31a-1 and 31a-2 under the 1940 Act. Such
records shall be the property of the Fund and shall at all times
during the regular business hours of the Manager (or separate
Service Provider acting as custodian) be open for inspection by
duly authorized officers, employees or agents of the Fund and
employees and agents of the Securities and Exchange Commission;
and
(xi) performing or arranging for the performance of any other usual
duties and functions of a custodian for a registered investment
company;
(2) Transfer agency services, including, but not limited to:
(i) receiving for acceptance, orders for the purchase of Fund shares,
and promptly delivering payment and appropriate documentation
thereof to any Service Provider acting as custodian;
(ii) issuing, pursuant to purchase orders, the appropriate number of
the Fund's shares and holding such shares in the appropriate
account;
(iii) receiving for acceptance redemption requests and redemption
directions and delivering the appropriate documentation to any
Service Provider acting as custodian;
(iv) effecting transfers of Fund shares by the registered owners
thereof upon receipt of appropriate instructions;
(v) preparing and transmitting payments for dividends and
distributions declared by the Fund;
(vi) maintaining records of accounts for shareholders and advising the
Fund and its shareholders as to the foregoing;
A-6
(vii) handling shareholder relations, and providing reports and other
information and services related to the maintenance of
shareholder accounts;
(viii) recording the issuance of shares of the Fund and maintaining
pursuant to Rule 17Ad-10(e) under the 1934 Act a record of the
total number of shares of the Fund that are authorized, based
upon data provided by the Fund, and issued and outstanding; and
(ix) performing or arranging for the performance of any other
customary services of a transfer agent or dividend-disbursing
agent for a registered investment company;
(3) The calculation of the net asset value of each Series and the net
asset value per share of each class of shares at such times and in
such manner as specified in the Fund's current registration statement
and at such other times upon which the parties hereto may from time to
time agree; and
(4) The creation and maintenance of such records relating to the business
of the Fund as the Fund may from time to time reasonably request.
The Manager may contract with qualified Service Providers for the provision of
any of the services necessary for the operation of the Fund as described in this
Section (b). Where the Manager engages separate Service Providers, the Manager
shall also, on behalf of the Fund, coordinate the activities of such Service
Providers, as well as other agents, attorneys, brokers and dealers, insurers,
sub-advisers and such other persons in any such other capacity deemed to be
necessary or desirable. The Manager shall make reports to the Board of its
performance hereunder and shall furnish advice and recommendations with respect
to such other aspects of the business and affairs of the Fund as the Board or
the Manager shall consider desirable.
ARTICLE II
Allocation of Charges and Expenses
(a) The Manager. The Manager assumes the expense of and shall pay for
maintaining the staff and personnel necessary to perform its obligations under
this Agreement, and shall at its own expense provide the office space, equipment
and facilities that it is obligated to provide under this Agreement, and shall
pay all compensation of officers of the Fund and all trustees of the Fund who
are affiliated persons of the Manager, except as otherwise specified in this
Agreement.
Except for those expenses assumed by the Fund as provided in section (b) below,
the Manager shall bear all of the Fund's expenses including, but not limited to:
custodian fees; transfer agent fees; pricing costs (including the daily
calculation of net asset value); accounting fees; legal fees (except
extraordinary litigation expenses); expenses of shareholders' and/or trustees'
meetings; bookkeeping expenses related to shareholder accounts; insurance
charges; cost of printing and mailing shareholder reports and proxy statements;
costs of printing and mailing registration
A-7
statements and updated prospectuses to current shareholders; and the fees of any
trade association of which the Fund is a member.
The Manager agrees that neither it nor any Service Provider will make any
separate charge to any shareholder or his individual account for any services
rendered to said shareholder or the Fund unless such charge for special services
is specifically approved by the Board including a majority of the trustees who
are not "interested persons" (as such term is defined in the 1940 Act) of the
Manager (the "disinterested trustees"). No special charge will be levied
retroactively or without appropriate notice to affected shareholders.
(b) The Fund. The Fund assumes and shall pay or cause to be paid the following
expenses of the Fund, including, without limitation: compensation of the
Manager; fees of disinterested trustees; brokerage commissions, dealer markups
and other expenses incurred in the acquisition or disposition of any securities
or other investments; costs, including the interest expense, of borrowing money;
expenses for independent audits; taxes; and extraordinary expenses (including
extraordinary litigation expenses and extraordinary consulting expenses) as
approved by a majority of the disinterested trustees.
ARTICLE III
Compensation of the Manager
For the services rendered, the facilities furnished and expenses assumed by the
Manager, the Fund shall pay to the Manager at the end of each calendar month a
unitary fee calculated as a percentage of the average value of the net assets
each day for each Series during that month at the annual rates set forth in
Exhibit A hereto.
The Manager's fee shall be accrued daily at 1/365th of the applicable annual
rate set forth above. For the purpose of accruing compensation, the net assets
of each Series shall be determined in the manner and on the dates set forth in
the Declaration of Trust or the current registration statement of the Fund and,
on days on which the net assets are not so determined, the net asset value
computation to be used shall be as determined on the immediately preceding day
on which the net assets were determined.
In the event of termination of this Agreement, all compensation due through the
date of termination will be calculated on a pro-rated basis through the date of
termination and paid within fifteen business days of the date of termination.
During any period when the determination of net asset value is suspended, the
net asset value of a Series as of the last business day prior to such suspension
shall for this purpose be deemed to be the net asset value at the close of each
succeeding business day until it is again determined.
A-8
ARTICLE IV
Limitation of Liability of the Manager
The Manager shall not be liable for any error of judgment or mistake of law or
for any loss arising out of any investment or for any act or omission in the
management of the Fund, except for (i) willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of reckless disregard
of its obligations and duties hereunder, and (ii) to the extent specified in
section 36(b) of the 1940 Act concerning loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation.
ARTICLE V
Activities of the Manager
The services of the Manager are not deemed to be exclusive, and the Manager is
free to render services to others, so long as the Manager's services under this
Agreement are not impaired. It is understood that trustees, officers, employees
and shareholders of the Fund are or may become interested persons of the
Manager, as directors, officers, employees and shareholders or otherwise, and
that directors, officers, employees and shareholders of the Manager are or may
become similarly interested persons of the Fund, and that the Manager may become
interested in the Fund as a shareholder or otherwise.
It is agreed that the Manager may use any supplemental investment research
obtained for the benefit of the Fund in providing investment advice to its other
investment advisory accounts. The Manager or its affiliates may use such
information in managing their own accounts. Conversely, such supplemental
information obtained by the placement of business for the Manager or other
entities advised by the Manager will be considered by and may be useful to the
Manager in carrying out its obligations to the Fund.
Securities or other investments held by a Series of the Fund may also be held by
separate investment accounts or other mutual funds for which the Manager may act
as an investment adviser or by the Manager or its affiliates. Because of
different investment objectives or other factors, a particular security may be
bought by the Manager or its affiliates for one or more clients when one or more
clients are selling the same security. If purchases or sales of securities for a
Series or other entities for which the Manager or its affiliates act as
investment adviser or for their advisory clients arise for consideration at or
about the same time, the Fund agrees that the Manager may make transactions in
such securities, insofar as feasible, for the respective entities and clients in
a manner deemed equitable to all. To the extent that transactions on behalf of
more than one client of the Manager during the same period may increase the
demand for securities being purchased or the supply of securities being sold,
the Fund recognizes that there may be an adverse effect on price.
It is agreed that, on occasions when the Manager deems the purchase or sale of a
security to be in the best interest of a Series as well as other accounts or
companies, it may, to the extent permitted by applicable laws or regulations,
but will not be obligated to, aggregate the securities to be sold or purchased
for other accounts or companies in order to obtain favorable execution and lower
brokerage commissions or prices. In that event, allocation of the securities
purchased
A-9
or sold, as well as the expenses incurred in the transaction, will be made by
the Manager in accordance with any written procedures maintained by the Manager
or, if there are no such written procedures, in the manner it considers to be
most equitable and consistent with its fiduciary obligations to the Fund and to
such other accounts or companies. The Fund recognizes that in some cases this
procedure may adversely affect the size of the position obtainable for a Series.
ARTICLE VI
Books and Records
The Manager hereby undertakes and agrees to maintain, in the form and for the
period required by Rule 31a-2 and Rule 2a-7 under the 1940 Act, all records
relating to the Fund's investments that are required to be maintained by the
Fund pursuant to the requirements of Rule 31a-1 and Rule 2a-7 of the 1940 Act.
The Manager agrees that all books and records which it or any other Service
Provider maintains for the Fund are the property of the Fund and further agrees
to surrender promptly to the Fund any such books, records or information upon
the Fund's request. All such books and records shall be made available, within
five business days of a written request, to the Fund's accountants or auditors
during regular business hours at the Manager's offices. The Fund or its
authorized representative shall have the right to copy any records in the
possession of the Manager or a Service Provider that pertain to the Fund. Such
books, records, information or reports shall be made available to properly
authorized government representatives consistent with state and federal law
and/or regulations. In the event of the termination of this Agreement, all such
books, records or other information shall be returned to the Fund free from any
claim or assertion of rights by the Manager.
The Manager further agrees that it will not disclose or use any records or
information obtained pursuant to this Agreement in any manner whatsoever except
as authorized in this Agreement and that it will keep confidential any
information obtained pursuant to this Agreement and disclose such information
only if the Fund has authorized such disclosure, or if such disclosure is
required by federal or state regulatory authorities.
ARTICLE VII
Duration and Termination of this Agreement
This Agreement shall not become effective unless and until it is approved by the
Board, including a majority of trustees who are not parties to this Agreement or
interested persons of any such party, and by the vote of a majority of the
outstanding voting shares of each Series of the Fund. This Agreement shall come
into full force and effect on the date which it is so approved, provided that it
shall not become effective as to any subsequently created investment portfolio
until it has been approved by the Board specifically for such portfolio. As to
each Series of the Fund, the Agreement shall continue in effect for two years
and shall thereafter continue in effect from year to year so long as such
continuance is specifically approved for each Series at least annually by (i)
the Board, or by the vote of a majority of the outstanding votes attributable to
the shares of the class representing an interest in the Series; and (ii) a
majority of
A-10
those trustees who are not parties to this Agreement or interested persons of
any such party cast in person at a meeting called for the purpose of voting on
such approval.
This Agreement may be terminated at any time as to any Series or to all Series,
without the payment of any penalty, by the Board, or by vote of a majority of
the outstanding votes attributable to the shares of the applicable Series, or by
the Manager, on 60 days written notice to the other party. If this Agreement is
terminated only with respect to one or more, but less than all, of the Series,
or if a different adviser is appointed with respect to a new portfolio, the
Agreement shall remain in effect with respect to the remaining Series. This
Agreement shall automatically terminate in the event of its assignment.
ARTICLE VIII
Amendments of this Agreement
This Agreement may be amended as to each Series by the parties only if such
amendment is specifically approved by (i) the vote of a majority of outstanding
votes attributable to the shares of the Series, and (ii) a majority of those
trustees who are not parties to this Agreement or interested persons of any such
party cast in person at a meeting called for the purpose of voting on such
approval.
ARTICLE IX
Definitions of Certain Terms
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
Series means the lesser of (a) 67% or more of the votes attributable to such
Series 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 Series.
ARTICLE X
Governing Law
This Agreement shall be construed in accordance with laws of the Commonwealth of
Massachusetts, and applicable provisions of the 1940 Act, the Advisers Act, and
the 1934 Act.
ARTICLE XI
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.
A-11
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
ULTRA SERIES FUND
By: /s/ David P. Marks
------------------------------------
David P. Marks
Title: President
ATTEST:
/s/ Diane M. Fisher
- -------------------------------------
MEMBERS CAPITAL ADVISORS, INC.
By: /s/ John Petchler
------------------------------------
John Petchler
Title: Vice President
ATTEST:
/s/ Diane M. Fisher
- -------------------------------------
A-12
EXHIBIT A
Series Name Unitary Fee
- ----------- -----------
Conservative Allocation Fund 0.30%*
Moderate Allocation Fund 0.30%*
Aggressive Allocation Fund 0.30%*
Money Market Fund 0.45%
Bond Fund 0.55%
High Income Fund 0.75%
Diversified Income Fund 0.70%
Large Cap Value Fund 0.60%
Large Cap Growth Fund 0.80%
Mid Cap Value Fund 1.00%
Mid Cap Growth Fund 0.85%
Small Cap Value Fund 1.10%
Small Cap Growth Fund 1.10%
Global Securities Fund 0.95%
International Stock Fund 1.20%
Target Retirement 2020 Fund 0.40%
Target Retirement 2030 Fund 0.40%
Target Retirement 2040 Fund 0.40%
* For the period May 1, 2007 until April 30, 2008, the fee shall be reduced
from 0.30% to 0.20%.
A-13
APPENDIX B
Officers and Directors of MCA
Mary E. Hoffman Director, Treasurer, Assistant Secretary
Thomas J. Merfeld Director
David P. Marks Director, President
Faye A. Patzner Director, Secretary
John W. Petchler Vice President
James H. Metz Vice President
Marian M. Nelson Chief Compliance Officer
Tracy K. Lien Assistant Secretary
B-1
CUNA MUTUAL LIFE INSURANCE COMPANY
ULTRA SERIES FUND
SMALL CAP VALUE FUND
MEETING OF SHAREHOLDERS - DECEMBER 28, 2007
VOTING INSTRUCTION FORM
THESE VOTING INSTRUCTIONS ARE SOLICITED BY CUNA MUTUAL LIFE INSURANCE COMPANY
("CMLIC") ON BEHALF OF THE BOARD OF TRUSTEES OF THE ULTRA SERIES FUND FOR A
SPECIAL MEETING OF THE SHAREHOLDERS OF THE SMALL CAP VALUE FUND, A SERIES OF THE
ULTRA SERIES FUND, TO BE HELD ON DECEMBER 28, 2007.
The undersigned hereby instructs CMLIC to vote the shares of the Small Cap Value
Fund (the "Fund"), a series of the Ultra Series Fund (the "Trust"), to which the
undersigned is entitled to give instructions at the Special Meeting of
Shareholders of the Fund to be held on December 28, 2007, at 9:00 a.m., Central
Time, at 5810 Mineral Point Road, Madison, Wisconsin 53705, and at any
adjournment(s) thereof.
The undersigned hereby revokes any previous voting instructions he or she has
given with respect to such shares. By signing below, the undersigned
acknowledges receipt of the Notice of Special Meeting of Shareholders and the
Proxy Statement dated December 1, 2007.
Please mark your vote, sign in the box, date and
return this Voting Instruction Form
promptly in the enclosed envelope or by secure
fax to 608-236-6408.
Dated: ______________, 2007
------------------------------------------------
(Signature of contract owner) (SIGN IN THE BOX)
------------------------------------------------
(Signature of contract owner
(Other) if held jointly) (SIGN IN THE BOX)
Please sign exactly as your name appears on the
Voting Instruction Form. If the individual
signing the form is a fiduciary (e.g., attorney,
executor, trustee, guardian), the individual
must provide his or her full title following the
signature. If a corporation is entitled to
provide voting instructions, the Voting
Instruction Form should be signed by an
authorized officer of the corporation.
PLEASE COMPLETE AND RETURN THIS VOTING INSTRUCTION FORM PROMPTLY BY MAIL USING
THE ENCLOSED ENVELOPE OR BY SECURE FAX TO 608-236-6408. VOTING INSTRUCTION FORMS
MUST BE RECEIVED BY DECEMBER 26, 2007 TO BE COUNTED.
PLEASE FILL IN BOX AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL. PLEASE
DO NOT USE FINE POINT PENS.
VOTE ON PROPOSAL: FOR AGAINST ABSTAIN
----------------- --- ------- -------
1. To approve an investment management agreement [ ] [ ] [ ]
with respect to the Small Cap Value Fund between
Ultra Series Fund and MEMBERS Capital Advisors,
Inc.
2. To transact such other business as may properly [ ] [ ] [ ]
come before the Meeting or any adjournment(s)
thereof.
THE VOTING INSTRUCTION FORM MUST BE SIGNED AND DATED FOR YOUR INSTRUCTIONS TO BE
COUNTED. CMLIC WILL VOTE IN THE MANNER INDICATED, OR IF NO INSTRUCTION HAS BEEN
INDICATED, "FOR" THE PROPOSAL.
CUNA MUTUAL LIFE INSURANCE COMPANY
ULTRA SERIES FUND
SMALL CAP GROWTH FUND
MEETING OF SHAREHOLDERS - DECEMBER 28, 2007
VOTING INSTRUCTION FORM
THESE VOTING INSTRUCTIONS ARE SOLICITED BY CUNA MUTUAL LIFE INSURANCE COMPANY
("CMLIC") ON BEHALF OF THE BOARD OF TRUSTEES OF THE ULTRA SERIES FUND FOR A
SPECIAL MEETING OF THE SHAREHOLDERS OF THE SMALL CAP GROWTH FUND, A SERIES OF
THE ULTRA SERIES FUND, TO BE HELD ON DECEMBER 28, 2007.
The undersigned hereby instructs CMLIC to vote the shares of the Small Cap
Growth Fund (the "Fund"), a series of the Ultra Series Fund (the "Trust"), to
which the undersigned is entitled to give instructions at the Special Meeting of
Shareholders of the Fund to be held on December 28, 2007, at 9:15 a.m., Central
Time, at 5810 Mineral Point Road, Madison, Wisconsin 53705,, and at any
adjournment(s) thereof.
The undersigned hereby revokes any previous voting instructions he or she has
given with respect to such shares. By signing below, the undersigned
acknowledges receipt of the Notice of Special Meeting of Shareholders and the
Proxy Statement dated December 1, 2007.
Please mark your vote, sign in the box, date and
return this Voting Instruction Form
promptly in the enclosed envelope or by secure
fax to 608-236-6408.
Dated: ______________, 2007
------------------------------------------------
(Signature of contract owner) (SIGN IN THE BOX)
------------------------------------------------
(Signature of contract owner
(Other) if held jointly) (SIGN IN THE BOX)
Please sign exactly as your name appears on the
Voting Instruction Form. If the individual
signing the form is a fiduciary (e.g., attorney,
executor, trustee, guardian), the individual
must provide his or her full title following the
signature. If a corporation is entitled to
provide voting instructions, the Voting
Instruction Form should be signed by an
authorized officer of the corporation.
PLEASE COMPLETE AND RETURN THIS VOTING INSTRUCTION FORM PROMPTLY USING THE
ENCLOSED ENVELOPE OR BY SECURE FAX TO 608-236-6408. VOTING INSTRUCTION FORMS
MUST BE RECEIVED BY DECEMBER 26, 2007 TO BE COUNTED.
PLEASE FILL IN BOX AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL. PLEASE
DO NOT USE FINE POINT PENS.
VOTE ON PROPOSAL: FOR AGAINST ABSTAIN
----------------- --- ------- -------
1. To approve an investment management agreement [ ] [ ] [ ]
with respect to the Small Cap Growth Fund between
Ultra Series Fund and MEMBERS Capital Advisors,
Inc.
2. To transact such other business as may properly [ ] [ ] [ ]
come before the Meeting or any adjournment(s)
thereof.
THE VOTING INSTRUCTION FORM MUST BE SIGNED AND DATED FOR YOUR INSTRUCTIONS TO BE
COUNTED. CMLIC WILL VOTE IN THE MANNER INDICATED, OR IF NO INSTRUCTION HAS BEEN
INDICATED, "FOR" THE PROPOSAL.