Exhibit 4
INVESTMENT MANAGEMENT AGREEMENT
FOR TIAA SEPARATE ACCOUNT VA-1
This Agreement made this 15th day of September, 1994, by and among:
Teachers Insurance and Annuity Association of America ("TIAA"), a non-profit New
York insurance company; TIAA Separate Account VA-1 (the "Separate Account"), a
separate account of TIAA established pursuant to the New York State Insurance
Law; and Teachers Advisors, Inc. ("Advisors") a Delaware corporation.
WITNESSETH;
WHEREAS, TIAA has established the Separate Account to segregate assets
funding the variable benefits provided by the Teachers Personal Annuity, an
individual, flexible premium, deferred annuity, as well as by other contracts
that may be offered by TIAA in the future; and
WHEREAS, the Separate Account is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"Act"), and currently consists of a single investment portfolio (known as the
Stock Index Account), and may consist of additional investment portfolios in the
future (collectively, with the Stock Index Account, referred to herein as
"Portfolios"); and
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WHEREAS, the assets of the Separate Account are and will be owned by TIAA,
its successors and assigns, although held separately from the other assets of
TIAA;
WHEREAS, Advisors will be engaged principally in the business of rendering
investment management services and is registered as an investment advisor under
the Investment Advisors Act of 1940;
WHEREAS, the Separate Account desires to retain Advisors to render
investment management services to the Separate Account in the manner and on the
terms set forth herein;
WHEREAS, the Management Committee of the Separate Account (the "Management
Committee") believes that Advisors' expertise and business contacts are and will
be of material benefit to the Separate Account in employing and supervising any
sub-advisor of a Portfolio ("Sub-Advisors"), in the event that one or more
Sub-Advisors are so employed in the future; and
WHEREAS, Advisors is willing to provide investment management services to
the Separate Account in the manner and on the terms set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, TIAA, the Separate Account, and Advisors hereby agree as
follows:
1. DUTIES OF ADVISORS. TIAA and the Separate Account hereby employ
Advisors to act as the investment manager for the Separate Account. Advisors
hereby agrees, subject to the
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supervision of the Management Committee, for the period and on the terms and
conditions set forth in this Agreement: to act as the investment manager for the
Separate Account and to manage the investment and reinvestment of the assets of
each Portfolio of the Separate Account for the period and on the terms and
conditions set forth in this Agreement. In taking any action hereunder, Advisors
shall always be subject to, and shall follow at all times (i) any restriction of
the Separate Account's Rules and Regulations, as amended from time to time, (ii)
the applicable provisions of the Act and the rules thereunder, (iii) the
statements relating to each Portfolio's investment objectives, policies, and
restrictions as the same are set forth in the registration statement for the
Separate Account and the variable contracts then currently effective under the
Securities Act of 1933 (the "Registration Statement"), and (iv) any other
provisions of state and federal law applicable to Advisors in connection with
its duties hereunder, including any applicable provisions imposed by state
insurance regulations or by the Internal Revenue Code of 1986, as amended, and
regulations thereunder.
(a) INVESTMENT MANAGEMENT SERVICES. In performing the duties stated
in paragraph 1 above, Advisors will regularly provide each Portfolio of the
Separate Account with such investment research, advice, and management as the
Management Committee or officers of the Separate Account may from time to time
consider necessary for the proper management of each Portfolio. Advisors will
furnish continuously an investment program and will conduct a
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continuous program of evaluation of assets in each Portfolio. In this
connection, Advisors will determine which securities or other investments shall
be purchased, sold, or exchanged and what portion of the assets of each
Portfolio shall be held in the various securities or other investments in which
the Portfolio may invest. Should the Management Committee at any time, however,
make any definite determination as to investment policy for a Portfolio and
notify, in writing, Advisors thereof, Advisors shall be bound by such
determination for the period, if any, specified in such notice or until
similarly notified that such determination has been revoked. In addition,
Advisors will determine the value of each Portfolio's assets and liabilities and
will provide the Separate Account with such valuations and with all statistical
information with respect to investments of each Portfolio and such periodic and
special reports and information as the Management Committee of officers of the
Separate Account may reasonably request. Advisors shall take, on behalf of each
Portfolio, all actions which it deems necessary to implement the investment
objectives, policies, and restrictions of the Portfolio, determined as provided
above, and in particular shall place orders for the purchase or sale of
securities and other investments for the Portfolio with brokers or dealers
selected by Advisors.
(b) SUB-CONTRACTING. Notwithstanding any other provision hereof,
Advisors, with the approval of the owners of contracts with interests in the
Separate Account to the extent required by applicable law and the Management
Committee, may
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contract with one or more Sub-Advisors to perform any of the investment
management services required of Advisors; provided, however, that the
compensation of such Sub-Advisors will be the sole responsibility of Advisors
and the duties and responsibilities of such Sub-Advisors shall be as set forth
in a written agreement.
TIAA shall provide Advisors, at Advisors' expense, the staff,
facilities, and services necessary to meet Advisors' obligations hereunder.
TIAA's providing of staff, facilities, and services for such purpose shall in no
way diminish any obligation or liability of Advisors hereunder.
Advisors shall exercise reasonable care in recommending, monitoring,
and supervising the performance of such Sub-Advisors and any other
sub-contractors serving pursuant to this paragraph 1(b), but Advisors shall not
otherwise be liable or legally responsible for the conduct of any Sub-Advisors.
In this connection, it shall be a particular responsibility of Advisors to
evaluate the investment performance of Sub-Advisors and that of potential
Sub-Advisors, and Advisors shall supply the Management Committee with such
statistical and research data bearing on each Portfolio's performance and that
of any Sub-Advisors and potential Sub-Advisors as the Management Committee and
Advisors deem necessary. It shall also be a particular responsibility of
Advisors to supervise and monitor (i) the practices of any Sub-Advisors in
placing orders and selecting brokers and dealers to effect portfolio
transactions, and (ii) the services provided by such brokers and dealers.
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2. (a) PURCHASE AND SALE OF ASSETS. Nothing in this Agreement shall
preclude the combining of orders for the sale or purchase of securities or other
investments by two or more Portfolios of the Separate Account or by the Separate
Account and other separate accounts or other accounts (collectively, "accounts")
managed by Advisors, provided that Advisors does not favor any account over any
other account and provided further that any purchase or sale orders executed
contemporaneously shall be allocated in a manner that Advisors deems to be
equitable to all accounts involved and, under normal circumstances, such
transactions will be (i) done on a pro rata basis substantially in proportion to
the amounts ordered by each account, (ii) entered into only if, in Advisors'
opinion, the trade is likely to produce a benefit for the Portfolio involved,
and (iii) is at a price which is approximately the same for all parties
involved. Neither Advisors, nor any of its directors, officers, or personnel,
nor any person, firm, or corporation controlling, controlled by, or under common
control with it shall act as a principal or receive any commission as agent in
connection with the purchase or sale of assets for a Portfolio, except as may be
permitted under applicable law.
(b) BROKERAGE FEES. In placing orders for the purchase or sale of
securities or other investments for a portfolio, in the name of a Portfolio or
its nominees, Advisors shall use its best efforts to obtain for the Portfolio
the most favorable price and best execution available, considering all of the
circumstances, and
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shall maintain records adequate to demonstrate compliance with this requirement.
Notwithstanding the foregoing, however, Advisors may, to the extent authorized
by Section 28(e) of the Securities Exchange Act of 1934, cause the Separate
Account to pay a broker or dealer that provides research or other brokerage
services to Advisors and the Separate Account with respect to the Portfolio an
amount of commission for effecting a portfolio transaction in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if Advisors determines in good faith that such amount of
commission is reasonable in relationship to the value of such services, viewed
in terms of that particular transaction or Advisors's overall responsibilities
to the Portfolio or its other advisory clients. To the extent authorized by such
Section 28(e) and the Management Committee, Advisors shall not be deemed to have
acted unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of such action.
3. COMPENSATION OF ADVISORS. Except as hereinafter provided, for the
services rendered and expenses assumed by Advisors while this Agreement is in
effect, the Separate Account shall pay to Advisors on each Valuation Day (as
that term is defined in the Registration Statement), a fee based on an annual
rate of thirty one-hundredths of one percent (0.30%) of the net assets of the
Stock Index Account.
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The fees payable to Advisors by the Separate Account hereunder shall
be reduced by any tender solicitation fees or similar payments received by
Advisors, or any affiliated person of Advisors, in connection with the tender of
investments of a Portfolio (less any direct expenses incurred by Advisors, or
any affiliated person of Advisors, in connection with obtaining such fees or
payments). Advisors shall use its best efforts to recapture all available tender
offer solicitation fees and similar payments in connection with tenders of the
securities or other investments of a Portfolio, provided, however, that Advisors
shall not be required to register as a broker-dealer for this purpose. Advisors
shall advise the Management Committee of any fees or payments of whatever type
that it may be possible for Advisors to receive in connection with the purchase
or sale of securities or other investments for a Portfolio.
4. NON-EXCLUSIVITY. TIAA and the Separate Account agree that the services
to be provided by Advisors hereunder are not to be deemed exclusive and Advisors
is free to act as investment manager to other investment companies and as
fiduciary for other managed accounts affiliated with TIAA. Advisors shall, for
all purposes herein, be deemed to be an independent contractor and shall, unless
otherwise provided or authorized, have no authority to act for or represent TIAA
or the Separate Account in any way or otherwise be deemed an agent of TIAA or
the Separate Account other than in furtherance of its duties and
responsibilities as set forth
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in this Agreement, which shall be deemed to include the voting of proxies for
shares held by a Portfolio at Advisors' discretion on behalf of the Separate
Account.
5. BOOKS AND RECORDS. Advisors will maintain all books and records
required for the Separate Account with respect to each Portfolio's investments,
to the extent not maintained by the custodian or any Sub-Advisors. Advisors
agrees that all books and records which it maintains for the Separate Account
are the Separate Account's property,and, in the event of termination of this
Agreement for any reason, Advisors agrees promptly to return to the Separate
Account, free from any claim or retention of rights by Advisors, all records
relating to the Separate Account. Advisors also agrees, upon request of the
Separate Account, promptly to surrender such books and records to the Separate
Account or, at the Separate Account's expense, to make copies thereof available
to the Separate Account or to make such books and records available for
inspection by representatives of regulatory authorities or other persons
reasonably designated by the Separate Account. Advisors further agrees to
maintain, prepare, and preserve such books and records in accordance with the
Act and rules thereunder, including but not limited to, Rules 31a-1 and 31a-2.
Advisors will use records or information obtained under this
Agreement only for the purposes contemplated hereby, and will not disclose such
records or information in any manner other than
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as expressly authorized by the Management Committee or officers of the Separate
Account, or unless disclosure is expressly required by applicable federal or
state regulatory authorities or by this Agreement. Advisors shall supply all
information requested by any insurance regulatory authorities to determine
whether all insurance laws and regulations are being complied with.
6. LIABILITY. Advisors will not be liable for any error of judgment or
mistake of law or for any loss suffered by a Portfolio in connection with any
investment policy established by the Separate Account for the purchase, sale, or
redemption of any securities or other investments at the direction of the
Management Committee. Nothing herein contained shall be construed to protect
Advisors against any liability resulting from the willful misfeasance, bad
faith, or gross negligence of Advisors in the performance of its obligations and
duties or from reckless disregard of its obligations and duties under this
Agreement or by virtue of violation of any applicable law.
7. (a) EXPENSES OF THE SEPARATE ACCOUNT. As between the Separate
Account and Advisors, the following expenses shall be borne exclusively by the
Separate Account:
(i) brokerage commissions and transfer taxes and any similar
fees and charges incurred in connection with the acquisition, disposition,
lending, or borrowing of Portfolio securities or other investments;
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(ii) any and all other state, federal, local, or foreign
governmental fees and taxes (including any insurance, transfer, franchise, or
income taxes) payable by the Separate Account, and all corporate or filing fees
payable by the Separate Account to any governmental entity or agency; and
(iii) interest and any other cost related to borrowings by the
Separate Account.
(b) EXPENSES OF ADVISORS. Except as provided in paragraph 7(a)
above, Advisors shall be responsible for all expenses related to management of
the investment of the assets of each Portfolio, which expenses shall include,
not be limited to:
(i) the cost of obtaining quotes necessary for valuing the
assets and related liabilities for each Portfolio;
(ii) the cost of obtaining quotes necessary for valuing the
assets and related liabilities for each Portfolio;
(iii) the charges and expenses of the custodian(s) for the
Portfolios;
(iv) the charges and expenses of outside legal counsel
retained with respect to the Separate Account's investment-related activity; and
(v) the costs and expenses of any Sub-Advisor or other
sub-contractor retained by Advisors pursuant to paragraph 1(b) of this
Agreement.
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8. DURATION AND TERMINATION OF THE AGREEMENT.
(a) This Agreement shall become effective with respect to the Stock
Index Account as of the date first written above. It shall become effective as
to any subsequently created Portfolio when it has been approved by the
Management Committee (including a majority of members thereof who are neither
parties to this Agreement nor interested persons of any such party) cast in
person at a meeting called for the purpose of voting on such approval
specifically for such Portfolio. "Subsequently created Portfolio" means a
Portfolio created subsequent to the initial effective date of this Agreement.
(b) This Agreement shall continue in effect with respect to the
Stock Index Account for two years from the date of execution and thereafter from
year to year, but only so long as such continuance is specifically approved at
least annually by (i) the Management Committee, or by the vote of a majority of
the outstanding shares of the Portfolio, and (ii) a vote of a majority of those
members of the Management Committee who are neither parties to this Agreement
nor interested persons of any such party, cast in person at a meeting called for
the purpose of voting on such approval. As to each subsequently created
Portfolio, this Agreement shall continue in effect with respect to that
Portfolio for two years and thereafter from year to year, but only so long as
such continuance is specifically approved at least annually in the manner
described in (i) and (ii) above.
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(c) This Agreement may be terminated with respect to a Portfolio,
without the payment of any penalty, by the Management Committee or by vote of a
majority of the outstanding shares of the Portfolio on sixty days' written
notice to Advisors, or by Advisors on sixty days' written notice to the Separate
Account. This Agreement shall automatically terminate in the event of its
assignment.
9. DEFINITIONS. The terms "assignment", "interested person" and "majority
of the outstanding shares", when used in this Agreement, shall have the
respective meanings specified under the Act and rules thereunder.
10. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
11. GOVERNING LAW. The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of New York, as at the time
in effect, and the applicable provisions of the Act and rules thereunder or
other federal laws and regulations which may be applicable. To the extent that
the applicable law of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the Act and rules thereunder or other
federal laws and regulations which may be applicable, the latter shall control.
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12. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
be deemed one instrument.
13. NOTICES. All notices and other communications provided for hereunder
shall be in writing and shall be delivered by hand or mailed first class,
postage prepaid, addressed as follows:
(a) If to TIAA -
Teachers Insurance and Annuity
Association of America
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxx
(b) If to the Separate Account -
TIAA Separate Account VA-1
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxx
(c) If to Advisors -
Teachers Advisors, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxx
or to such other address as TIAA, the Separate Account, or Advisors shall
designate by written notice to the other.
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14. Miscellaneous. Captions in this Agreement are included for convenience
or reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
IN WITNESS WHEREOF, TIAA, the Separate Account, and Advisors, have caused
this Agreement to be executed in their names and on their behalf by and through
their duly authorized officers on the day and year first above written.
TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA
By: /s/ Xxxxxx X. Xxxxx Attest: /s/ Xxxx Xxxx
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Title: Executive Vice President Title: Assistant Secretary
TIAA SEPARATE ACCOUNT VA-1
By: /s/ Xxxxxx X. Xxxxx Attest: /s/ Xxxx Xxxx
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Title: President Title: Assistant Secretary
TEACHERS ADVISORS, INC.
By: /s/ Xxxxx X. Xxxxxx Attest: /s/ Xxxx Xxxx
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Title: President Title: Assistant Secretary
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