Exhibit 5
DISTRIBUTION AGREEMENT
FOR THE CONTRACTS FUNDED BY
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 corporation; TIAA Separate Account VA-1 (the "Separate Account"),
a separate account of TIAA established pursuant to the New York State Insurance
Law; and Teachers Personal Investors Services, Inc. ("TPIS"), 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 (the "Contracts"), 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
"1940 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
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(collectively, with the Stock Index Account, referred to herein as
"Portfolios"); and
WHEREAS, TPIS will be engaged principally in the business of distributing
the Contracts and possibly other variable insurance products or investment
company shares, and is registered as a broker-dealer under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and will become a member of
the National Association of Securities Dealers, Inc.("NASD"); and
WHEREAS, TIAA and the Separate Account have registered the Contracts under
the Securities Act of 1933, as amended (the "1933 Act"), and desires to retain
TPIS to distribute the Contracts and TPIS is willing to distribute the Contracts
in the manner and on the terms set forth herein; and
WHEREAS, TIAA is willing to compensate TPIS for the services to be
provided 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 TPIS hereby agree as
follows:
1. DISTRIBUTION OF THE CONTRACTS.
(a) TIAA and the Separate Account hereby grant to TPIS the exclusive
right, subject to the requirements of the 1933 Act,
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the 1934 Act, and the 1940 Act, and the terms set forth herein, to distribute
the Contracts during the term of this Agreement. TPIS agrees to use its best
efforts to distribute the Contracts, and to advise owners of Contracts in
connection therewith.
(b) To the extent necessary to offer the Contracts, TPIS shall be
duly registered or otherwise qualified under the securities laws of any state or
other jurisdiction in which such Contracts may lawfully be sold and in which
TPIS is licensed or otherwise authorized to sell the Contracts. TPIS shall be
responsible for the training, supervision and control of its registered
representatives for the purpose of the NASD Rules and Fair Practice and federal
and state securities law requirements applicable in connection with the offering
and sale of the Contracts. In this connection, TPIS shall retain written
supervisory procedures in compliance with Section 27 of the NASD Rules of Fair
Practice.
(c) TPIS agrees to offer the Contracts for sale in accordance with
the then-current prospectus and statement of additional information ("SAI")
therefor filed with the Securities and Exchange Commission (the "Commission").
(d) TIAA shall furnish TPIS with copies of all prospectuses, SAIs,
financial statements and other documents which TPIS reasonably requires for use
in connection with the distribution of the Contracts. TPIS will be entitled to
rely on all documentation and information furnished to it by TIAA's or the
Separate Account's management.
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(e) It is understood that no payments made under the Contracts shall
be paid or remitted to TPIS.
2. BOOKS AND RECORDS
(a) TIAA, the Separate Account, and TPIS shall cause to be
maintained and preserved all required books of account and related financial
records as are required by the 1934 Act, the NASD and any other applicable laws
and regulations. All the books and records maintained by TIAA (on behalf of
TPIS) in connection with the offer and sale of the Contracts shall be maintained
and preserved in conformity with the requirements of Rules 17a-3 and 17a-4 under
the 1934 Act or the corresponding provisions of any future federal securities
laws or regulations, to the extent that such requirements are applicable to the
variable annuity operations. All such books and records shall be maintained and
held by TIAA on behalf of and as agent for TPIS, whose property they are and
shall remain. Such books and records shall be at all times subject to inspection
by the Commission in accordance with Section 17(a) of the 0000 Xxx.
(b) TPIS shall have the responsibility for maintaining the records
of sales representatives licensed, registered and otherwise qualified to sell
the Contracts.
3. REPORTS. TPIS shall cause TIAA and/or the Separate Account to be
furnished with such reports as either or both may reasonably request for the
purpose of meeting reporting and
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recordkeeping requirements under the insurance laws of the State of New York and
any other applicable states or jurisdictions.
4. STAFF, FACILITIES, AND SERVICES. TIAA shall provide TPIS, at TPIS's
expense, the staff, facilities, and services necessary to meet TPIS's
obligations hereunder in connection with the distribution of the Contracts.
TIAA's providing of staff, facilities, and services for such purpose shall in no
way diminish any obligation or liability of TPIS hereunder.
5. COMPENSATION AND EXPENSES.
(a) In consideration of the services performed by TPIS hereunder,
TIAA shall compensate TPIS monthly. The amount of this compensation shall be
based on the premiums (which shall include amounts from investment vehicles of
companies other than TIAA) received by TIAA and allocated to the Separate
Account under the Contracts. The current rate of compensation is shown on
Schedule A, attached herewith.
(b) The Separate Account shall not be liable to TPIS (or TIAA) for
any expenses incurred for services related to the distribution of the Contracts
(except to the extent that amounts arising from the mortality and expense risk
charge paid to TIAA are deemed to cover such distribution expenses). TPIS shall
be responsible for all expenses relating to the distribution of the Contracts,
including but not limited to:
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(i) the costs and expenses of providing the necessary
facilities, personnel, office equipment and supplies, telephone service, and
other utility service necessary to carry out its obligations hereunder;
(ii) charges and expenses of outside legal counsel retained
with respect to activities related to the distribution of the Contracts;
(iii) the costs and expenses of underwriting and issuance of
the Contracts;
(iv) the costs and expenses of printing definitive
prospectuses and statements of additional information and any supplements
thereto for prospective purchasers;
(v) expenses incurred in connection with TPIS's registration
as a broker or dealer or in the registration or qualification of its officers,
directors or representatives under federal and state securities laws;
(vi) the costs of promotional, sales and advertising
materials; and
(vii) any other expenses incurred by TPIS or its
representatives in connection with performing the obligations of TPIS under this
Agreement.
6. NON-EXCLUSIVITY. TIAA and the Separate Account agree that the services
to be provided by TPIS hereunder are not to be deemed exclusive and TPIS is free
to act as distributor of other variable insurance products or investment company
shares issued by
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TIAA or any entity affiliated therewith. TPIS 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 in this Agreement.
7. LIABILITY. TPIS will not be liable for any error of judgment or mistake
of law or for any loss suffered by the Separate Account in connection with the
matters to which this Agreement relates. Nothing herein contained shall be
construed to protect TPIS against any liability resulting from the willful
misfeasance, bad faith, or gross negligence of TPIS 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.
8. REGULATION.
(a) This Agreement shall be subject to the provisions of the 1940
Act, the 1934 Act and the rules, regulations and rulings thereunder, and of the
NASD, as in effect from time to time, including such exemptions and other relief
as the Commission, its staff, or the NASD may grant, and the terms hereof shall
be interpreted and construed in accordance therewith. Without limiting the
generality of the foregoing, the term "assigned" shall
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not include any transactions exempted from Section 15(b)(2) of the 1940 Act.
(b) TPIS shall submit to all regulatory and administrative bodies
having jurisdiction over the present and future operations of the Separate
Account, any information, reports or other material which any such body by
reason of this Agreement may request or require pursuant to applicable law or
regulations. Without limiting the generality of the foregoing, TPIS shall
furnish the SEC, the State of New York Secretary of State and/or the
Superintendent of Insurance with any information or reports which the SEC, the
Secretary of State and/or the Superintendent of Insurance may request in order
to ascertain whether the operations of the Separate Account are being conducted
in a manner consistent with applicable laws or regulations.
9. INVESTIGATION AND PROCEEDINGS.
(a) TIAA, the Separate Account, and TPIS agree to cooperate fully in
any insurance or securities regulatory inspection, inquiry, investigation, or
proceeding or any judicial proceeding with respect to TIAA, the Separate
Account, or TPIS, their affiliates and their representatives to the extent that
such inspection, inquiry, investigation or proceeding is in connection with the
Contracts distributed under this Agreement.
(b) In the case of a customer complaint, TIAA, the Separate Account,
and TPIS will cooperate in investigating such complaint and shall arrive at a
mutually satisfactory response.
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10. DURATION AND TERMINATION OF THE AGREEMENT.
(a) This Agreement shall become effective with respect to the
Contracts as of the date first written above. It shall become effective as to
any subsequently offered contract when it has been approved by the Management
Committee (including a majority of members thereof who are not parties to this
Agreement not interested persons of any such parties) specifically for such
contract. "Subsequently offered contract" means a contract issued and funded by
the Separate Account subsequent to the initial effective date of this Agreement.
(b) This Agreement shall continue in effect for two years from the
date of its 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
Separate Account, and (ii) a vote of a majority of those members of the
Management Committee who are not parties to this Agreement nor interested
persons of any such parties, 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 so long as
such continuance is specifically approved at least annually in the manner
described in (i) and (ii) above.
(c) This Agreement may be terminated, without the payment of any
penalty, by TIAA, the Separate Account, or TPIS on
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sixty days' written notice to the other parties. This Agreement shall
automatically terminate in the event of its assignment.
(d) Upon termination of this agreement, all authorizations, rights
and obligations shall cease except the obligation to settle accounts hereunder
and the agreements contained in paragraph 9 hereunder.
11. DEFINITIONS. The term "assignment", "interested person" and "majority
of the outstanding shares", when used in this Agreement, shall have the
respective meanings specified under the 1940 Act and rules thereunder.
12. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
13. 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 1940 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 1940 Act and rules thereunder or
other federal laws and regulations which may be applicable, the latter shall
control.
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14. 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.
15. 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 TPIS -
Teachers Personal Investors
Services, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, xxx Xxxx 00000-0000
Attention: Xxxxxx X. XxXxxx
or to such other address as TIAA, the Separate Account, or TPIS shall designate
by written notice to the others.
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16. 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 TPIS, 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 PERSONAL INVESTORS SERVICES, INC.
By: /s/ Xxxxxx X. XxXxxx Attest: /s/ Xxxx Xxxx
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Title: Senior Vice President Title: Assistant Secretary
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SCHEDULE A to
Distribution Agreement
for the Contracts Funded By
TIAA Separate Account VA-1
The amount payable monthly by TIAA to TPIS in consideration of the services
performed by TPIS under this Agreement is seventy-five hundredths of one percent
(0.75%) of the premiums (as that term is used in paragraph 5(a) of this
Agreement) received by TIAA and allocated to the Separate Account under the
Contracts during each month.
