1
Exhibit 99.e
PARTICIPATION/DISTRIBUTION AGREEMENT
THIS AGREEMENT is entered into on this 20th day of November,
1998, between TIAA-CREF Life Insurance Company ("TCL"), a life insurance company
organized under the laws of the State of New York, for itself and on behalf of
TIAA-CREF Life Separate Account VA-1 (the "Account"), a separate account
established by TCL in accordance with the laws of the State of New York;
TIAA-CREF Life Funds (the "Company"), an open-end management investment company
organized under the laws of the State of Delaware, and Teachers Personal
Investors Services, Inc. ("TPIS"), a Delaware corporation operating as a
broker-dealer.
WITNESSETH:
WHEREAS, the Account has been established by TCL pursuant to
the insurance laws of the State of New York in connection with certain variable
annuity contracts ("Contracts") proposed to be issued to the public by TCL;
WHEREAS, the Account has been registered as a unit investment
trust under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the income, if any, and gains and losses, realized
and unrealized, from assets allocated to the Account are, in accordance with the
applicable contracts, to be credited to or charged against the Account without
regard to other income, gains or losses of TCL or any other separate account
thereof;
WHEREAS, the Account currently consists of a single investment
account and may in the future be subdivided into various investment accounts
(each a "subaccount") as to which income, if any, and gains and losses, realized
and unrealized, from assets allocated to each such subaccount would be credited
to or charged against such subaccounts without regard to other income, gains or
losses of other subaccounts;
WHEREAS, the Company is registered with the Securities and
Exchange Commission under the 1940 Act as an open-end management investment
company;
WHEREAS, the Company currently consists of a single investment
portfolio and may in the future be subdivided into various investment portfolios
(each a "Fund"), each of which may be subject to certain investment policies and
restrictions that may not be changed without a majority vote of the shareholders
of such Fund; and
1
2
WHEREAS, the shares of each Fund will be offered to a
corresponding subaccount; and
WHEREAS, TPIS is the principal underwriter for the Contracts
and is a broker-dealer registered as such under the Securities Exchange Act of
1934 and is a member of the National Association of Securities Dealers ("NASD");
NOW THEREFORE, in consideration of the foregoing and of the
mutual covenants and conditions set forth herein TCL, the Account, TPIS and the
Company hereby agree as follows:
1. The Contracts funded through the Account will provide for
the allocation of purchase payments among certain subaccounts for investment in
such shares of the Funds as may be offered from time to time in the prospectus
for the Contracts. The selection of the particular subaccount is to be made by
the contract owner and such selection may be changed or the cash value may be
transferred among or between subaccounts in accordance with the terms of the
Contracts.
2. The Company hereby appoints TPIS as its principal
underwriter and exclusive distributor to sell its shares to the Account, and
TPIS accepts such appointment. TPIS shall offer shares of the Company only on
the terms set forth in the Company's currently effective registration statement.
The Company reserves the right to sell its shares to other persons and to
appoint additional underwriters and distributors.
3. The Company agrees to sell to TCL, on behalf of the
Account, those shares of the Funds of the Company which the Account orders,
executing such orders on a daily basis at the net asset value next computed
after receipt by the Company or its designated agent of the order for the shares
of the Company. For purposes of this Section, TCL or its designated agent shall
be the designated agent of the Company for receipt of such orders from contract
owners and receipt by such designated agent shall constitute receipt by the
Company; provided that the Company's transfer agent receives notice of such
order by 9:30 a.m. New York time on the next following business day. "Business
day" shall mean any day on which the New York Stock Exchange is open for trading
and on which the Company calculates the net asset value of the Funds as
described in its registration statement.
The Company agrees to make shares of each Fund available
indefinitely for purchase at the applicable net asset value per share by the
Account on those days on which the Company calculates its net asset value as
described in its registration statement and the Company shall use reasonable
efforts to calculate such net asset value on each business day as defined above.
Notwithstanding the foregoing, the Board of Trustees of the Company (hereinafter
the "Board") may refuse to sell shares of any Fund to TCL, or suspend or
terminate the offering of shares of any Fund if such action is required by law
or by regulatory authorities having jurisdiction or is, in the sole discretion
of the Board acting in good faith and in light of their fiduciary duties
2
3
under federal and any applicable state laws, necessary in the best interests of
the shareholders of such Fund or contract owners indirectly invested in such
Fund.
TCL shall pay for such shares by 9:30 a.m. New York time on
the next business day after an order to purchase shares is made in accordance
with the provisions of this Section 5. Payment shall be in federal funds
transmitted by wire to the Company's transfer agent or by a credit for any
shares redeemed.
4. The Company agrees to redeem for cash, on TCL's request,
any full or fractional shares of the Company held by TCL, executing such
requests on a daily basis at the net asset value next computed after receipt by
the Company or its designated agents of the request for redemption by Contract
owners. For purposes of this Section, TCL or or its designated agent shall be
the designated agent of the Company for receipt of requests for redemption from
Contract owners and receipt by such designated agent shall constitute receipt by
the Company; provided that the Company receives notice of such request for
redemption by 9:30 a.m. New York time on the next following business day.
The Company ordinarily shall make payment to TCL for shares
redeemed on the day the Company receives notice from TCL or its designated
agent, but the Company may delay payment for up to seven calendar days after the
request is received. Payment shall be in federal funds transmitted by wire or by
a credit for any shares purchased.
5. Transfer of shares shall be by book entry. No stock
certificates will be issued to the Account. Shares of each Fund will be recorded
with an appropriate identifier for the corresponding subaccount on the books of
TCL. If, however, state law requires transfer other than by book entry, then the
Company agrees to provide the required form of transfer.
6. The Company shall make the net asset value per share for
each Fund available to TCL or its designated agent on a daily basis as soon as
reasonably practicable after the net asset value per share is calculated and
shall use its best efforts to make such net asset value per share available to
TCL or its designated agent by 7 p.m. New York time.
7. The Company or its transfer agent shall furnish notice on
the ex-dividend date to TCL or its designated agent of any dividend or
distribution payable on any shares to the Account. All of such dividends and
distributions as are payable on shares of a Fund shall be automatically
reinvested in additional shares of that Fund. The Company shall notify TCL or
its designated agent of the number of shares so issued.
8. The Company shall pay all of its expenses incidental to its
performance under this Agreement. The Company shall take all reasonable steps to
ensure that all of its shares are registered and authorized for issue in
accordance with applicable federal and state laws prior to their purchase by TCL
for the Account. The Company shall bear the expenses for the cost of
registration of its shares, preparation of its prospectus, proxy materials and
reports, the printing
3
4
and distribution of such items to each Contract owner who has allocated net
amounts to any subaccount, the preparation of all statements and notices
required by any federal or state law, and taxes imposed upon the Company on the
issue or transfer of the Company's shares subject to this Agreement. The parties
shall cooperate in the printing of the prospectuses of the Contracts and the
Company. The Company shall provide TCL with a reasonable quantity of Company
prospectuses and reports to be sent to existing Contract owners.
9. The Company does not charge a load or redemption fee in
connection with the sale or redemption of its shares and TPIS will not charge
any load or redemption fee in connection with the sale of shares to or
redemption of shares from the Account. Notwithstanding this, TPIS assumes and
will pay, from its own resources, all expenses related to distribution of the
Company's shares and will bear other costs and expenses attributable to any
activity primarily intended to result in the sale of shares. Such expenses
include, but are not limited to:
a. printing and distribution of the Company's prospectus
to prospective investors;
b. preparation, printing and distribution of advertising
and sales literature for use in the offering of the
Company's shares (in connection with the offering of
the Contracts or otherwise) and printing and
distribution of reports to shareholders used as sales
literature; and
c. the qualification of TPIS as a distributor or broker
or dealer under any applicable federal or state
securities laws;
10. In selling shares of the Company, TPIS shall use its best
efforts in all respects duly to conform with the requirements of all federal and
state laws and regulations and the rules of the NASD, relating to the sales of
the Company's shares or the Contracts.
11. TPIS shall act as an independent contractor and nothing
contained herein shall be construed to make it, its agents or representatives,
or any employees, employees of the Company. In addition, TPIS shall remain fully
responsible for its own conduct and that of its agents, representatives and
employees under applicable law.
12. TCL and TPIS shall make no representations concerning the
Company or its shares except those contained in the then-current prospectus of
the Company and in printed information subsequently issued on behalf of the
Company and approved by the Company as supplemental to such prospectus, or
otherwise approved by the Company.
13. The Company represents that each Fund of the Company shall
comply with Section 817(h) of the Internal Revenue Code of 1986, as amended (the
"Code"), and the regulations issued thereunder (Reg. Section 1.817-5), relating
to the diversification requirements
4
5
for variable annuity contracts and any amendments or other modifications to such
Section or regulations.
The Company represents that each Fund of the Company is
currently qualified or will be qualified as a Regulated Investment Company under
Subchapter M of the Code and that every effort will be made to maintain such
qualification under Subchapter M or under any successor or similar provision,
and that the Company will notify TCL orally (followed by written notice) or by
wire immediately upon having a reasonable basis for believing that any Series
might not so qualify in the future.
14. It is understood among the parties to this Agreement that,
subject to obtaining any applicable regulatory approvals that may be conditioned
on the parties complying with certain requirements, shares of each Fund may be
offered in the future to the separate accounts of various insurance companies in
addition to TCL and in connection with variable life insurance contracts or
variable annuity contracts other than the Contracts. It is also understood among
the parties that shares of each Fund only may be offered to the other persons
identified in paragraph (f) of Regulation Section 1.817-5.
15. The Company represents and warrants that all of its
officers, employees, investment advisers, and other individuals or entities
having access to the assets of the Company are and shall continue to be at all
times covered by a blanket fidelity bond or similar coverage for the benefit of
the Company in an amount not less than the minimal coverage as required
currently by Section 17(g) of the 1940 Act and Rule 17g-1 or related provisions
as may be promulgated from time to time.
16. This Agreement shall terminate:
(a) at any time on six months written notice by
the Company to TCL and TPIS or on six months' written notice by TCL to the
Company and TPIS or on six months' written notice by TPIS to TCL and the Company
without the payment of any penalty (provided, however, that if TCL is not able,
acting in good faith, to obtain suitable substitute investment media within six
months, this Agreement shall terminate one year from the date of the notice of
termination); or
(b) at the option of any party hereto upon
institution of formal enforcement proceedings against the Company, the Company's
investment manager, TCL or TPIS by the Securities and Exchange Commission, or if
TCL or the Company is determined by the other to have failed to perform its
obligations under this Agreement in a satisfactory manner; or
(c) upon a vote of the holders of a majority of
the votes attributable to the shares supporting the Contracts having an interest
in a particular subaccount to substitute the shares of another investment
company or Fund for the Company shares then being held by that
5
6
subaccount in accordance with the terms of the Contracts. TCL will give 60 days'
prior written notice to the Company upon becoming aware of a proposed Contract
owner vote; or
(d) in the event the shares of the Company are
not registered, issued, or sold in accordance with applicable state and/or
federal law or such law prohibits the use of such shares as an underlying
investment for the Contracts issued or to be issued by TCL. Prompt notice of
such an event shall be given by each party to the other in the event the
conditions of this provision occur; or
(e) upon assignment of this Agreement, at the
option of any party not assigning this Agreement.
17. Each notice required by this Agreement shall be given in
writing to:
Attn: Xxxxxx X. Xxxxx
TIAA-CREF Life Insurance Company
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxx X. Xxxxx
TIAA-CREF Life Funds
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxx Xxxx
Teachers Personal Investors Services, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
18. Each party hereto shall cooperate with each other party
and all appropriate government authorities and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
The Company agrees that all records and other data pertaining
to the Contracts are the exclusive property of TCL and that any such records and
other data shall be furnished to TCL by the Company upon termination of this
Agreement for any reason whatsoever. TCL shall have the right to inspect, audit
and copy all pertinent records pertaining to the Contracts. This shall not
preclude the Company from keeping copies of such data or records for its own
files subject to the provisions of this section.
19. TCL, the Account and TPIS agree to look solely to the
assets of the Company for the satisfaction of any liability of the Company, with
respect to this agreement and
6
7
will not seek recourse against the members of the Board or its officers,
employees, agents, or shareholders, or any of them, or any of their personal
assets for such satisfaction.
20. The Company agrees to indemnify and hold harmless TCL,
each member of its Board of Directors, each of its officers, and any person that
controls TCL within the meaning of Section 15 of the Securities Act of 1933, as
amended (the "1933 Act") against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
the Company) or litigation (including legal and other expenses) to which TCL may
become subject under any statute, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
or settlements arise as a result of TCL's reliance on any information contained
in a then current prospectus, statement of additional information, or report of
the Company; or any current information communicated to TCL in writing by the
Company.
The Company shall, at all times, have the right, but not the
obligation, to take over and conduct, in the name of TCL, the Account and/or
TPIS, the investigation and defense of any claim by a third party for which
indemnification may be sought, and in such event, TCL, the Account and/or TPIS
shall cooperate in every way with the Company.
21. The Company agrees to indemnify and hold harmless TPIS,
each member of its Board of Directors, each of its officers, and any person that
controls TPIS within the meaning of Section 15 of the 1933 Act against any and
all losses, claims, damages, liabilities (including amounts paid in settlement
with the written consent of the Company) or litigation (including legal and
other expenses) to which TPIS may become subject under any statute, at common
law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements arise as a result of
TPIS's reliance on any information contained in a then current prospectus,
statement of additional information, or report of the Company; or any current
information communicated to TPIS in writing by the Company.
The Company shall, at all times, have the right, but not the
obligation, to take over and conduct, in the name of TPIS, or any controlling
person of TPIS, the investigation and defense of any claim by a third party for
which indemnification may be sought, and in such event, TPIS shall cooperate in
every way with the Company.
22. TCL agrees to indemnify and hold harmless the Company,
each member of its Board, each of its officers, and each person that controls
the Company within the meaning of Section 15 of the 1933 Act against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of TCL) or litigation (including legal and other expenses)
to which the Company may become subject under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements arise as a result of the Company's
reliance on any information contained in the then current prospectus, statement
of additional information, or contract of the Account; or any information
communicated to the Company in writing by TCL.
7
8
TCL shall, at all times, have the right, but not the
obligation, to take over and conduct, in the name of the Company, the
investigation and defense of any claim by a third party for which
indemnification may be sought, and in such event, the Company shall cooperate in
every way with TCL.
23. TPIS agrees to indemnify and hold harmless the Company,
each member of its Board, each of its officers, and each person that controls
the Company within the meaning of Section 15 of the 1933 Act against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of TPIS) or litigation (including legal and other expenses)
to which the Company may become subject under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements arise as a result of the Company's
reliance on any information communicated to the Company in writing by TPIS (for
inclusion in the Company's registration statement or otherwise), as a result of
any misrepresentation or omission to state a material fact by TPIS (or any agent
or employee of TPIS) unless such misrepresentation or omission was made in
reliance on written information furnished by the Company or as a result of
TPIS's wilful misconduct or failure to exercise reasonable care and diligence
(including supervision of its agents representatives and employees) in providing
the services the Company specified herein.
TPIS shall, at all times, have the right, but not the
obligation, to take over and conduct, in the name of the Company, the
investigation and defense of any claim by a third party for which
indemnification may be sought, and in such event, the Company shall cooperate in
every way with TPIS.
24. This Agreement shall be construed in accordance with the
laws of the State of New York.
25. This Agreement shall be subject to the provisions of the
1933 Act, the 1940 Act and the Securities Exchange Act of 1934, as amended, and
the rules and regulations and rulings thereunder, including such exemptions form
those statutes, rules and regulations as the Securities and Exchange Commission
may grant and the terms hereof shall be interpreted and construed in accordance
therewith.
8
9
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested as of the date shown on the First
page.
TIAA-CREF LIFE INSURANCE
COMPANY ON BEHALF OF ITSELF
AND TIAA-CREF LIFE SEPARATE
ACCOUNT VA-1
Attest:
/s/ Xxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxx
----------------------------------- ---------------------------------------
Xxxxxx X. Xxxxx
Assistant Secretary President
TIAA-CREF LIFE FUNDS
Attest:
/s/ Xxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxx
----------------------------------- -------------------------------------
Xxxxx X. Xxxxx
Assistant Secretary Executive Vice President
TEACHERS PERSONAL
INVESTORS SERVICES, INC.
Attest:
/s/ Xxxx X. Xxxxxx By: /s/ Xxxx Xxxx
----------------------------------- -------------------------------------
Xxxx Xxxx
Assistant Secretary Vice President, Chief Counsel
and Secretary
9
