Exhibit 5
DISTRIBUTION AGREEMENT
AGREEMENT made this 1st day of May, 1996 between MUTUAL OF AMERICA
INSTITUTIONAL FUNDS, INC., a corporation organized under the laws of Maryland
(the "Investment Company"), and MUTUAL OF AMERICA SECURITIES CORPORATION, a
Delaware corporation (the "Distributor"):
W I T N E S S E T H :
WHEREAS, the Investment Company is registered under the Investment Company
Act of 1940, as amended (the "Investment Company Act"), as a diversified
open-end management investment company; and
WHEREAS, the Investment Company is authorized to issue shares of capital
stock ("shares") in separate series, each of which pursues its investment
objective through separate investment policies (each a "Fund"); and
WHEREAS, the Distributor is duly registered as a broker-dealer under the
Securities Exchange Act of 1934 and is a member of the National Association of
Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Investment Company desires the Distributor to be its
principal underwriter and distributor with respect to distribution of the
shares; and
WHEREAS, the Investment Company and the Distributor wish to enter into an
agreement with each other with respect to the continuous offering of the shares,
in order to promote the growth of the assets of the Investment Company and
facilitate the distribution of its shares;
NOW, THEREFORE, the parties agree as follows:
Section 1. Appointment of the Distributor. The Investment Company hereby
appoints the Distributor as the principal underwriter and distributor of the
Investment Company to sell its shares to persons and entities eligible to
purchase shares ("Purchasers") as set forth in the Investment Company's then
current prospectus ("Prospectus"), and the Distributor hereby accepts such
appointment and agrees to serve without compensation. The Investment Company
during the term of this Agreement shall sell its shares to the Distributor upon
the terms and conditions set forth below.
Section 2. Exclusive Nature of Duties. The Distributor shall be the
exclusive representative of the Investment Company to act as principal
underwriter and distributor.
Section 3. Purchase of Shares from the Investment Company.
(a) The Investment Company will offer the shares and the Distributor shall
have the right to buy from the Investment Company the shares needed, but not
more than the shares needed (except for clerical errors in transmission) to fill
unconditional orders for shares of the Investment Company placed with the
Distributor by the Purchasers. The price which the Distributor shall pay for the
shares of each Fund so purchased from the Investment Company shall be the net
asset value per share of such Fund, determined as set forth in Section 3(c)
hereof.
(b) The shares of each Fund are to be resold by the Distributor to the
Purchasers at the net asset value per share of such Fund.
(c) The net asset value of shares of each Fund of the Investment Company
shall be determined by the Investment Company, or any agent of the Investment
Company, at the close of trading on the New York Stock Exchange on each business
day on which the New York Stock Exchange is open for trading, in accordance with
the method set forth in the Prospectus and guidelines established by the Board
of Directors of the Investment Company. The Investment Company may also cause
the net asset value of shares of each Fund to be determined in substantially the
same manner or estimated in such manner and as of such other hour or hours as
may from time to time be agreed upon in writing by the Investment Company and
the Distributor. All payments to the Investment Company hereunder shall be made
in the manner set forth in Section 3(e).
(d) The Investment Company shall have the right to suspend the sale of
shares of any of its Funds at times when redemption of any such shares is
suspended pursuant to the conditions set forth in Section 4(b) hereof. The
Investment Company shall also have the right to suspend the sale of shares of
any or all of its Funds if trading on the New York Stock Exchange shall have
been suspended, if a banking moratorium shall have been declared by Federal or
New York authorities, or if there shall have been some other extraordinary
event, which, in the judgment of the Investment Company, makes it impracticable
to sell any such shares.
(e) The Investment Company, or any agent of the Investment Company
designated in writing by the Investment Company, shall be promptly advised of
all purchase orders for shares of each Fund received by the Distributor. The
Investment Company (or its agent) will confirm orders upon their receipt, will
make appropriate book entries and upon receipt by the Investment Company (or its
agent) of payment therefor, will deliver deposit receipts or certificates for
such shares pursuant to the instructions of the Distributor. Payment shall be
made to the Investment Company in Federal funds or as otherwise specified in the
Investment Company's then current Prospectus. The Distributor agrees to cause
such payment and such instructions to be delivered promptly to the Investment
Company (or its agent).
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Section 4. Repurchase or Redemption of Shares by the Investment Company.
(a) Any of the outstanding shares of each Fund may be tendered for
redemption at any time, and the Investment Company agrees to repurchase or
redeem any such shares so tendered in accordance with its obligations as set
forth in its Articles of Incorporation, as amended from time to time, and in
accordance with the applicable provisions set forth in the Prospectus. The price
to be paid to redeem or repurchase shares of any Fund shall be equal to the net
asset value per share of such Fund calculated in accordance with the provisions
of Section 3(c) hereof. All payments by the Investment Company hereunder shall
be made in the manner set forth below.
The Investment Company shall pay the total amount of the redemption price
as defined in the above paragraph pursuant to the instructions of the
Distributor in Federal funds, or as otherwise specified in the Investment
Company's Prospectus, on or before the second business day subsequent to its
having received the notice of redemption in proper form.
(b) Redemption of shares of any Fund or payment may be suspended at times
when the New York Stock Exchange is closed, when trading on said Exchange is
closed, when trading on said Exchange is restricted, when an emergency exists as
a result of which disposal by the Investment Company of securities owned by it
for such Fund is not reasonably practicable or it is not reasonably practicable
for the Investment Company fairly to determine the value of the net assets of
such Fund, or during any other period when the Securities and Exchange
Commission, by order, so permits.
Section 5. Duties of the Investment Company.
(a) The Investment Company shall furnish to the Distributor copies of all
information, financial statements and other papers which the Distributor may
reasonably request for use in connection with the distribution of shares of the
Investment Company, and this shall include one copy, upon request by the
Distributor, of all financial statements prepared for the Investment Company and
certified by independent public accountants. The Investment Company shall make
available to the Distributor such number of camera ready copies of its
Prospectus, Statement of Additional Information, and supplements thereto, as the
Distributor shall reasonably request.
(b) The Investment Company shall take, from time to time, but subject to
any necessary approval of its shareholders, all necessary action to maintain its
registration as an investment company under the Investment Company Act and to
fix the number of its authorized shares and to register shares under the
Securities Act of 1933, to the end that there will be available for sale such
number of shares as Purchasers may reasonably be expected to purchase.
(c) The Investment Company shall use its best efforts to qualify and
maintain the qualification of an appropriate number of shares of each of its
Funds for sale under the securities laws of such states as the Distributor and
the Investment Company may approve, if such qualification is required by such
securities laws. Any such qualification may be withheld, terminated or withdrawn
by the Investment Company at any time in its discretion. As provided
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in Section 8(c) hereof, the expense of qualification and maintenance of
qualification of shares of a Fund shall be borne by such Fund. The Distributor
shall furnish such information and other material relating to its affairs and
activities as may be required by the Investment Company in connection with such
qualification.
(d) The Investment Company will furnish, in reasonable quantities upon
request by the Distributor, copies of annual and interim reports of the
Investment Company.
Section 6. Duties of the Distributor.
(a) The Distributor shall devote reasonable time and effort to effect
sales of shares of the Investment Company, but shall not be obligated to sell
any specific number of shares. The services of the Distributor hereunder are not
to be deemed exclusive and nothing herein contained shall prevent the
Distributor from entering into distribution arrangements with other investment
companies so long as the performance of its obligations hereunder is not
impaired thereby.
(b) In selling the shares of the Investment Company, the Distributor shall
use its best efforts in all respects duly to conform with the requirements of
all federal and state laws and regulations and the regulations of the NASD,
relating to the sale of such securities. Upon the written direction of the
Investment Company, the Distributor may select one or more dealers complying
with such requirements (each a "selected dealer") to participate in the purchase
and sale of Fund shares pursuant to a form of agreement approved by the
Investment Company. Neither the Distributor nor any selected dealer nor any
other person is authorized by the Investment Company to give any information or
to make any representations, other than those contained in the registration
statement or related Prospectus and any sales literature specifically approved
by the Investment Company.
Section 7. Payment of Expenses.
(a) The Investment Company shall bear all costs and expenses of the
Investment Company, including fees and disbursements of its counsel and
auditors, in connection with the preparation and filing of any required
registration statements and prospectuses under the Investment Company Act, the
Securities Act, and all amendments and supplements thereto, and the expense of
preparing, printing, mailing and otherwise distributing to shareholders its
prospectuses, annual or interim reports to shareholders and proxy materials.
(b) Each Fund shall bear the costs and expenses of qualification of shares
of such Fund for sale, and the Distributor shall bear the cost and expense of
qualifying the Distributor as a broker or dealer, in such states of the United
States or other jurisdictions as shall be selected by the Investment Company and
the Distributor pursuant to Section 5(c) hereof. The Investment Company shall
bear the costs and expenses payable to each such state for continuing
qualification of Fund shares therein until the Investment Company decides to
discontinue such qualification pursuant to Section 5(c) hereof.
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Section 8. Indemnification.
(a) The Investment Company shall indemnify and hold harmless the
Distributor and each person, if any, who controls the Distributor against any
loss, liability, claim, damage or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, claim, damage or expense
and reasonable counsel fees incurred in connection therewith) arising by reason
of any person acquiring any shares, which may be based upon the Securities Act,
or on any other statute or at common law, on the ground that the Investment
Company's registration statement or related Prospectus, as from time to time
amended and supplemented, or the annual or interim reports to shareholders of
the Investment Company, includes an untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, unless such statement or omission
was made in reliance upon, and in conformity with, information furnished to the
Investment Company in connection therewith by or on behalf of the Distributor;
provided, however, that in no case (i) is the indemnity of the Investment
Company in favor of the Distributor and any such controlling persons to be
deemed to protect such Distributor or any such controlling persons thereof
against any liability to the Investment Company or its shareholders to which the
Distributor or any such controlling persons would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of reckless disregard of its obligations and duties under
this Agreement; or (ii) is the Investment Company to be liable under its
indemnity agreement contained in this paragraph with respect to any claim made
against the Distributor or any such controlling persons, unless the Distributor
or such controlling persons, as the case may be, shall have notified the
Investment Company in writing within a reasonable time after the summons or
other first legal process giving information or the nature of the claim shall
have been served upon the Distributor or such controlling persons (or after the
Distributor or such controlling persons shall have received notice of such
service on any designated agent), but failure to notify the Investment Company
of any such claim shall not relieve it from any liability which it may have to
the person against whom such action is brought otherwise than on account of its
indemnity agreement contained in this paragraph. The Investment Company will be
entitled to participate at its own expense in the defense, or, if it so elects,
to assume the defense of any suit brought to enforce any such liability, but if
the Investment Company elects to assume the defense, such defense shall be
conducted by counsel chosen by it and satisfactory to the Distributor or such
controlling person or persons, defendant or defendants in the suit. In the event
the Investment Company elects to assume the defense of any such suit and retain
such counsel, the Distributor or such controlling person or persons, defendant
or defendants in the suit, shall bear the fees and expenses of any additional
counsel retained by them but, in case the Investment Company does not elect to
assume the defense of any such suit, it will reimburse the Distributor or such
controlling person or persons, defendant or defendants in the suit, for the
reasonable fees and expenses of any counsel retained by them. The Investment
Company shall promptly notify the Distributor of the commencement of any
litigation or proceedings against it or any of its officers or directors in
connection with the issuance or sale of the shares.
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(b) The Distributor shall indemnify and hold harmless the Investment
Company and each of its directors and officers and each person, if any, who
controls the Investment Company against any loss, liability, claim, damage, or
expense described in the foregoing indemnity contained in subsection (a) of this
Section, (i) but only with respect to statements or omissions made in reliance
upon, and in conformity with, information furnished to the Investment Company in
writing by or on behalf of the Distributor for use in connection with the
Investment Company's registration statement or related Prospectus, as from time
to time amended, or the annual or interim reports to shareholders, or (ii) based
on any breach of this Agreement by the Distributor or any of its officers or
representatives. In case any action shall be brought against the Investment
Company or any person so indemnified, in respect of which indemnity may be
sought against the Distributor, the Distributor shall have the rights and duties
given to the Investment Company, and the Investment Company and each person so
indemnified shall have the rights and duties given to the Distributor by the
provisions of subsection (a) of this Section 8.
Section 9. Duration and Termination of This Agreement. This Agreement
shall become effective as of the date first above written and shall remain in
force for two years and thereafter, but only so long as such continuance is
specifically approved at least annually by (i) the Board of Directors of the
Investment Company, or by the vote of a majority of the outstanding voting
securities of the Investment Company, cast in person or by proxy, and (ii) a
majority of those directors 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 upon such approval. This Agreement may be terminated at any time, without
the payment of any penalty, by the Board of Directors of the Investment Company
or by vote of a majority of the outstanding voting securities of the Investment
Company, or by the Distributor, on sixty days' written notice to the other
party. This Agreement shall automatically terminate in the event of its
assignment.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," "affiliated person" and "interested person," when used in this
Agreement, shall have the respective meaning specified in the Investment Company
Act.
Section 10. Amendments. This Agreement may be amended by the parties only
if such amendment is specifically approved by (i) the Board of Directors of the
Investment Company, or by the vote of a majority of outstanding voting
securities of the Investment Company, and (ii) a majority of those directors of
the Investment Company 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.
Section 11. Governing Law. This Agreement shall be construed in accordance
with the laws of the State of New York and the applicable provisions of the
Investment Company Act. To the extent the applicable law of the State of New
York, or any of the provisions herein, conflict with the applicable provisions
of the Investment Company Act, the latter shall control.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement in New York, New York as of the day and year first above written.
MUTUAL OF AMERICA
INSTITUTIONAL FUNDS, INC.
Attest: /s/ Xxxxxxx X. Xxxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx
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Secretary President
MUTUAL OF AMERICA SECURITIES
CORPORATION
By: /s/ Xxxx Xxxx
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Attest: /s/ Xxxxxxxxx X. Xxxx President
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Secretary
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