PRINCIPAL INVESTORS FUND, INC.
AMENDED AND RESTATED
DISTRIBUTION PLAN AND AGREEMENT
ADVISORS PREFERRED CLASS
DISTRIBUTION PLAN AND AGREEMENT made as of September 9, 2002, by and
between PRINCIPAL INVESTORS FUND, INC., a Maryland corporation (the "Fund"), and
PRINCOR FINANCIAL SERVICES CORPORATION, an Iowa corporation (the "Underwriter").
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by
Securities and Exchange Commission Rule 12b-1 under the Investment Company
Act of 1940, as amended (the "Act") for the Advisors Preferred Class shares
of each Series identified in Appendix A, attached hereto (the "Series"), a
class of shares of Principal Investors Fund, Inc. (the "Fund").
2. The Fund has entered into a Distribution Agreement on behalf of the Fund
with Princor Financial Services Corporation (the "Distributor"), under
which the Distributor uses all reasonable efforts, consistent with its
other business, to secure purchasers of shares of each Series of the Fund
(the "Shares"). Such efforts may include, but neither are required to
include nor are limited to, the following: (1) formulation and
implementation of marketing and promotional activities, such as mail
promotions and television, radio, newspaper, magazine and other mass media
advertising; (2) preparation, printing and distribution of sales literature
provided to the Fund's shareholders and prospective shareholders; (3)
preparation, printing and distribution of prospectuses and statements of
additional information of the Fund and reports to recipients other than
existing shareholders of the Fund; (4) obtaining such information, analyses
and reports with respect to marketing and promotional activities as the
Distributor may, from time to time, deem advisable; (5) making payment of
sales commission, ongoing commissions and other payments to brokers,
dealers, financial institutions or others who sell Shares pursuant to
Selling Agreements; (6) paying compensation to registered representatives
or other employees of the Distributor who engage in or support distribution
of the Fund's Shares; (7) paying compensation to, and expenses (including
overhead and telephone expenses) of, the Distributor; (8) providing
training, marketing and support to dealers and others with respect to the
sale of Shares; (9) receiving and answering correspondence from prospective
shareholders including distributing prospectuses, statements of additional
information, and shareholder reports; (10) providing of facilities to
answer questions from prospective investors about Shares; (11) complying
with federal and state securities laws pertaining to the sale of Shares;
(12) assisting investors in completing application forms and selecting
dividend and other account options; (13) providing of other reasonable
assistance in connection with the distribution of the Fund's shares; (14)
organizing and conducting of sales seminars and making payments in the form
of transactional compensation or promotional incentives; and (15) such
other distribution and services activities as the Fund determines may be
paid for by the Fund pursuant to the terms of this Plan and in accordance
with Rule 12b-1 of the Act.
3. In consideration for the services provided and the expenses incurred by the
Distributor pursuant to the Distribution Agreement and Paragraph 2 hereof,
all with respect to Advisors Preferred Class shares of a Series of the
Fund, Advisors Preferred Class of each Series shall pay to the Distributor
a fee at the annual rate of 0.31% (or such lesser amount as the Fund
Directors may, from time to time, determine) of the average daily net
assets of Advisors Preferred Class shares of such Series. This fee shall be
accrued daily and paid monthly or at such other intervals as the Fund
Directors shall determine. The determination of daily net assets shall be
made at the close of business each day throughout the month and computed in
the manner specified in the Fund's then current Prospectus for the
determination of the net asset value of the Fund's Advisors Preferred Class
shares. The Distributor may use all or any portion of the fee received
pursuant to this Plan to compensate securities dealers or other persons who
have engaged in the sale of Advisors Preferred Class shares or to pay any
of the expenses associated with other activities authorized under Paragraph
2 hereof.
4. The Fund presently pays, and will continue to pay, a management fee to
Principal Management Corporation (the "Manager") pursuant to a Management
Agreement between the Fund and the Manager (the "Management Agreement"). It
is recognized that the Manager may use its management fee revenue, as well
as its past profits or its resources from any other source, to make payment
to the Distributor with respect to any expenses incurred in connection with
the distribution of Advisors Preferred Class shares, including the
activities referred to in Paragraph 2 hereof. To the extent that the
payment of management fees by the Fund to the Manager should be deemed to
be indirect financing of any activity primarily intended to result in the
sale of Advisors Preferred Class shares within the meaning of Rule 12b-1,
then such payment shall be deemed to be authorized by this Plan.
5. This Plan shall not take effect until it has been approved (a) by a vote of
at least a majority (as defined in the Act) of the outstanding Advisors
Preferred Class shares of the Series of the Fund and (b) by votes of the
majority of both (i) the Board of Directors of the Fund, and (ii) those
Directors of the Fund who are not "interested persons" (as defined in the
Act) of the Fund and who have no direct or indirect financial interest in
the operation of this Plan or any agreements related to this Plan (the
"Disinterested Directors"), cast in person at a meeting called for the
purpose of voting on this Plan or such agreements.
6. Unless sooner terminated pursuant to Paragraph 5, this Plan shall continue
in effect for a period of twelve months from the date it takes effect and
thereafter shall continue in effect so long as such continuance is
specifically approved at least annually in the manner provided for approval
of this Plan in Paragraph 5(b).
7. A representative of the Underwriter shall provide to the Board and the
Board shall review at least quarterly a written report of the amounts so
expended and the purposes for which such expenditures were made.
8. This Plan may be terminated at any time by vote of a majority of the
Disinterested Directors, or by vote of a majority (as defined in the Act)
of the outstanding Advisors Preferred Class shares of the Series of the
Fund.
9. Any agreement of the Fund related to this Plan shall be in writing and
shall provide:
A. That such agreement may be terminated at any time, without payment of
any penalty, by vote of a majority of the Disinterested Directors or
by a vote of a majority (as defined in the Act) of the outstanding
Advisors Preferred Class shares of the Series of the Fund on not more
than sixty (60) days' written notice to any other party to the
agreement); and
B. That such agreement shall terminate automatically in the event of its
assignment.
10. While the Plan is in effect, the selection and nomination of Directors who
are not "interested persons" (as defined in the Act) of the Fund shall be
committed to the discretion of the Directors who are not interested
persons.
11. This Plan does not require the Manager or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of Advisors Preferred Class shares.
12. The Fund shall preserve copies of this Plan and any related agreements and
all reports made pursuant to Paragraph 7, for a period of not less than six
years from the date of the Plan, or the agreements or such report, as the
case may be, the first two years in an easily accessible place.
13. This Plan may not be amended to increase materially the amount of Fees
provided for in Paragraph 3 hereof unless such amendment is approved in the
manner provided for initial approval in Paragraph 5 hereof and no other
material amendment to this Plan shall be made unless approved in the manner
provided for initial approval in Paragraph 5(b) hereof.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Plan as of the first date written above.
PRINCIPAL INVESTORS FUND, INC.
BY: /s/ A. S. Filean
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A. S. FILEAN, SENIOR VICE PRESIDENT AND SECRETARY
PRINCOR FINANCIAL SERVICES CORPORATION
BY: /s/ Xxxxx X. Xxxxxx
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XXXXX X. XXXXXX, PRESIDENT
PRINCIPAL INVESTORS FUND, INC.
APPENDIX A
Series
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Balanced Fund
Bond and Mortgage Securities Fund
Capital Preservation Fund
European Fund
Government Securities Fund
High Quality Intermediate-Term Bond Fund
High Quality Long-Term Bond Fund
High Quality Short-Term Bond Fund
International Emerging Markets Fund
International Fund I
International Fund II
International SmallCap Fund
LargeCap Blend Fund
LargeCap Growth Fund
LargeCap S&P 500 Index Fund
LargeCap Value Fund
LifeTime 2010 Fund
LifeTime 2020 Fund
LifeTime 2030 Fund
LifeTime 2040 Fund
LifeTime 2050 Fund
LifeTime Strategic Income Fund
MidCap Blend Fund
MidCap Growth Fund
MidCap S&P 400 Index Fund
MidCap Value Fund
Money Market Fund
Pacific Basin Fund
Partners LargeCap Blend Fund
Partners LargeCap Growth Fund
Partners LargeCap Growth Fund I
Partners LargeCap Growth Fund II
Partners LargeCap Value Fund
Partners MidCap Blend Fund
Partners MidCap Growth Fund
Partners MidCap Value Fund
Partners SmallCap Blend Fund
Partners SmallCap Growth Fund I
Partners SmallCap Growth Fund II
Partners SmallCap Value Fund
Partners SmallCap Value Fund I
Real Estate Fund
SmallCap Blend Fund
SmallCap Growth Fund
SmallCap S&P 600 Index Fund
SmallCap Value Fund
Technology Fund
