PRINCIPAL INVESTORS FUND, INC.
AMENDED AND RESTATED
DISTRIBUTION AGREEMENT
Agreement effective as of January 12, 2007, by and between PRINCIPAL
INVESTORS FUND, INC., a Maryland corporation (referred to herein as the "Fund")
and PRINCOR FINANCIAL SERVICES CORPORATION, an Iowa corporation (referred to
herein as the "Distributor").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, The Fund and the Distributor wish to enter into an agreement
setting forth the terms upon which the Distributor will act as underwriter and
distributor of the Class J, Preferred Class, Advisors Preferred Class, Select
Class, Advisors Select Class, Advisors Signature Class and Institutional Class
share of the Fund (the "Fund Shares"); and
WHEREAS, The Fund and the Distributor have adopted procedures to
implement an Anti-Money Laundering Program reasonably designed to prevent the
Fund Shares from being used to launder money or to support terrorist activities;
and
WHEREAS, The Fund wants to appoint the Distributor as its agent to assure
the Fund's Anti-Money Laundering Program procedures are implemented and the
program is operated in accordance with those procedures, and the Distributor is
willing to accept this responsibility.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the Fund hereby appoints the Distributor to act as
principal underwriter (as such term is defined in Section 2(a)(29) of the
Investment Company Act of 1940 (as amended)) of the Fund Shares of Capital Stock
of each of the Fund's series (the "Series"), and each Series hereafter offered
by the Fund, (hereinafter sometimes called "shares"), and the Distributor agrees
to act and perform the duties and functions of underwriter in the manner and
subject to the conditions hereinafter set forth.
1. SOLICITATION OF ORDERS
In consideration of the rights granted herein to the Distributor,
Distributor agrees to use all reasonable efforts, consistent with its
other business, to secure purchasers for Fund Shares of the Fund. This
shall not prevent the Distributor from entering into like arrangements
(including arrangements involving the payment of underwriting
commissions) with other issuers. The Distributor shall have the right to
enter into sales agreements with dealers of its choice for the sale of
Fund Shares of the Fund to eligible purchasers as described in the Fund's
current Prospectus and/or Statement of Additional Information at the
public offering price only and fix in such agreements the portion of the
sales charge which may be retained by dealers, provided that the Fund
shall approve the form of the sales agreement and the dealer discounts
set forth therein and shall evidence such approval by filing said form of
sales agreement and amendments thereto as an exhibit to its currently
effective registration statement under the Securities Act of 1933 (the
"1933 Act").
2. SERVICE AGREEMENTS
The Distributor shall have the right to enter into Service Agreements
with selling dealers and banks or other financial institutions to provide
shareholder services to the Advisors Preferred, Advisors Select, Select,
Advisors Signature and Class J shareholders, including without
limitation, services such as furnishing information as to the status of
shareholder accounts, responding to telephone and written inquiries of
shareholders, and assisting shareholders with tax information, provided
that the Fund shall approve the form of Service Agreement.
3. SALE OF SHARES
The Distributor is authorized to sell as agent on behalf of the Fund
authorized Fund Shares of the Fund by accepting unconditional orders
placed with the Distributor by investors in states wherever sales may
lawfully be made during the term of this Agreement and subject to the
registration requirements of the 1933 Act.
4. PUBLIC OFFERING PRICE
Except as otherwise noted in the Fund's current Prospectus and/or
Statement of Additional Information, all shares sold to investors by the
Distributor or the Fund will be sold at the public offering price. The
public offering price for all accepted orders will be the net asset value
per share, as determined in the manner described in the Fund's current
Prospectus and/or Statement of Additional Information, plus a sales
charge (if any) described in the Fund's current Prospectus and/or
Statement of Additional Information, subject to any waivers or reductions
in the sales charge that may be described therein. The Fund shall in all
cases receive the net asset value per share on all sales. If a sales
charge is in effect, the Distributor shall have the right subject to such
rules or regulations of the Securities and Exchange Commission as may
then be in effect pursuant to Section 22 of the Investment Company Act of
1940 to pay a portion of the sales charge to its agents, employees and
registered representatives and to dealers who have sold Fund Shares of
the Fund. The Distributor shall receive a commission equal to the
difference between the basic retail price and the "net asset value" of
the Fund's shares sold through the Distributor subject to a sales charge
at the basic retail price. If any such commission is received by the
Fund, it will pay such commission to the Distributor. If a fee in
connection with shareholder redemptions is in effect, the Fund shall
collect the fee on behalf of Distributor and, unless otherwise agreed
upon by the Fund and Distributor, the Distributor shall be entitled to
receive all of such fees. The Distributor may pay its agents and
employees such compensation, allow to dealers such concessions, and allow
(and authorize dealers to re-allow) such discounts to purchasers, as the
Distributor may determine from time to time. The Distributor may also
purchase as principal Fund Shares of the Fund at "net asset value" and
sell such shares at the public offering price.
5. AUTHORIZED REPRESENTATIONS
The Distributor is not authorized by the Fund to give any information or
to make any representations other than those contained in the appropriate
registration statement or Prospectus and Statement of Additional
Information filed with the Securities and Exchange Commission under the
1933 Act (as these registration statements, Prospectuses and Statements
of Additional Information may be amended from time to time), or contained
in shareholder reports or other material that may be prepared by or on
behalf of the Fund for the Distributor's use. This shall not be construed
to prevent the Distributor from preparing and distributing sales
literature or other material as it may deem appropriate.
6. DELIVERY OF PAYMENTS AND ISSUANCE OF SHARES
The Distributor will deliver to the Fund all payments made pursuant to
orders accepted by the Distributor upon receipt thereof by the
Distributor in its principal place of business.
After payment the Fund will issue shares of the applicable class of
Capital Stock by crediting the appropriate number of shares to a
stockholder account in such names and such manner as specified in the
application or order relating to such shares.
7. SALE OF SHARES TO INVESTORS BY THE FUND
Any right granted to the Distributor to accept orders for shares or make
sales on behalf of the Fund will not apply to Fund Shares issued in
connection with the merger or consolidation of any other investment
company with the Fund or its acquisition, purchase or otherwise, of all
or substantially all the assets of any investment company or
substantially all the outstanding shares of any such company. Also, any
such right shall not apply to Fund Shares issued, sold or transferred,
whether Treasury or newly issued shares, that may be offered by the Fund
to investors on applications received and accepted by the Fund or to its
shareholders, as stock dividends or splits for not less than "net asset
value".
8. AGREEMENTS WITH DEALERS OR OTHERS
In making agreements with any dealers or others, the Distributor shall
act only in its own behalf and in no sense as agent for the Fund and
shall be agent for the Fund only in respect of sales and repurchases of
Fund shares.
9. COPIES OF CORPORATE DOCUMENTS
The Fund will furnish the Distributor promptly with properly certified or
authenticated copies of any registration statements filed by it with the
Securities and Exchange Commission under the 1933 Act, as amended, or the
Investment Company Act of 1940, as amended, together with any financial
statements and exhibits included therein and all amendments or
supplements thereto hereafter filed. Also, the Fund shall furnish the
Distributor, at the Distributor's expense, with a reasonable number of
printed copies of each semi-annual and annual report (quarterly if made)
of the Fund as the Distributor may request, and shall cooperate fully in
the efforts of the Distributor to sell and arrange for the sale of the
Fund's shares of Capital Stock and in the performance by the Distributor
of all of its duties under this Agreement.
10. RESPONSIBILITY FOR CONTINUED REGISTRATION INCLUDING INCREASE IN SHARES
The Fund will assume the continued responsibility for meeting the
requirements of registration under the 1933 Act, as amended, under the
Investment Company Act of 1940, as amended, and under the securities laws
of the various states where the Distributor is registered as a
broker-dealer. The Fund, subject to the necessary approval of its
shareholders, will increase the number of authorized shares from time to
time as may be necessary to provide the Distributor with such number of
shares as the Distributor may reasonably be expected to sell.
11. SUSPENSION OF SALES
If and whenever the determination of asset value of a Series is suspended
pursuant to applicable law, and such suspension has become effective,
until such suspension is terminated no further applications for shares of
the Series shall be accepted. In addition, the Fund reserves the right to
suspend sales and the Distributor's authority to accept orders for shares
on behalf of the Fund, if in the judgment of the majority of its Board of
Directors, or of its Executive Committee if such Committee exists, it is
in the best interest of the Fund to do so, suspension to continue for
such period as may be determined by such majority; and in that event no
shares of that Series will be sold by the Fund or by the Distributor on
behalf of the Fund while such suspension remains in effect except for
shares necessary to cover unconditional orders accepted by the
Distributor before the Distributor had knowledge of the suspension.
12. RESPONSIBILITY FOR IMPLEMENTING THE FUND'S ANTI-MONEY LAUNDERING PROGRAM
The Fund hereby appoints the Distributor to act as its agent to assure
the Fund's Anti-Money Laundering Program procedures applicable to Fund
Shares are implemented and the Distributor accepts this appointment. The
Distributor will assure such procedures are implemented and that the
program operates in accordance with those procedures and will provide
such reports and information as the Fund may request from time to time to
facilitate the Fund's oversight of such program. The Distributor will
also make information and records relating to the Fund's Anti-Money
Laundering Program available to federal regulators as required by law and
will permit such regulators to examine and inspect the Distributor for
purposes of the program. The Distributor will perform the specific
requirements of the Fund's Customer Identification Program and will
annually certify it has implemented the Fund's anti-money laundering
program.
13. EXPENSES
The Fund will pay (or will enter into arrangements providing for the
payment of) all fees and expenses: (1) in connection with the preparation
and filing of any registration statement or amendments thereto as
required under the Investment Company Act of 1940, as amended; (2) in
connection with the preparation and filing of any registration statement
and prospectus or amendments thereto under the 1933 Act, as amended,
covering the issue and sale of the Fund's shares; and (3) in connection
with the registration of the Fund and qualification of shares for sale in
the various states and other jurisdictions. The Fund will also pay (or
will enter into arrangements providing for the payment of) the cost of
(i) preparation and distribution to shareholders of prospectuses,
reports, tax information, notices, proxy statements and proxies; (ii)
preparation and distribution of dividend and capital gain payments to
shareholders; (iii) issuance, transfer, registry and maintenance of open
account charges; (iv) delivery, remittance, redemption and repurchase
charges; and (v) communication with shareholders concerning these items.
The Fund will pay taxes including, in the case of redeemed shares, any
initial transfer taxes unpaid.
The Distributor shall assume responsibility for (or will enter into
arrangements providing for the payment of) the expense of printing
prospectuses used for the solicitation of new accounts of the Fund. The
Distributor will pay (or will enter into arrangements providing for the
payment of) the expenses of other sales literature for the Fund, will pay
all fees and expenses in connection with the Distributor's qualification
as a dealer under the Securities Exchange Act of 1934, as amended, and in
the various states, and all other expenses in connection with the sale
and offering for sale of shares of the Fund which have not been herein
specifically allocated to or assumed by the Fund.
As provided in the Distribution and Service Plan adopted by the Fund, it
is recognized by the Fund that Principal Management Corporation (the
"Manager") may make payment to the Distributor with respect to any
expenses incurred in the distribution of shares of the Fund, such
payments payable from the past profits or other resources of the Manager
including management fees paid to it by the Fund.
14. CONFORMITY WITH LAW
The Distributor agrees that in selling the shares of the Fund it will
duly conform in all respects with the laws of the United States and any
state or other jurisdiction in which such shares may be offered for sale
pursuant to this Agreement.
15. MEMBERSHIP IN NATIONAL ASSOCIATION OF SECURITIES DEALERS
The Fund recognizes that the Distributor is now a member of the National
Association of Securities Dealers, and in the conduct of its duties under
this Agreement the Distributor is subject to the various rules, orders
and regulations of such organization. The right to determine whether such
membership should or should not continue, or to join other organizations,
is reserved by the Distributor.
16. OTHER INTERESTS
It is understood that directors, officers, agents and stockholders of the
Fund are or may be interested in the Distributor as directors, officers,
stockholders, or otherwise; that directors, officers, agents, and
stockholders of the Distributor are or may be interested in the Fund as
directors, officers, stockholders or otherwise; that the Distributor may
be interested in the Fund as a stockholder or otherwise; and that the
existence of any dual interest shall not affect the validity hereof or of
any transaction hereunder except as otherwise provided in the Articles of
Incorporation of the Fund and the Distributor, respectively, or by
specific provision of applicable law.
17. INDEMNIFICATION
The Fund agrees to indemnify, defend and hold the Distributor, its
officers and directors, and any person who controls the Distributor
within the meaning of Section 15 of the 1933 Act, free and harmless from
and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which
the Distributor, its officers, directors or any such controlling person
may incur under the Securities Act of 1933, or under common law or
otherwise, arising out of or based upon any untrue statement of a
material fact contained in the Fund's registration statement, Prospectus
or Statement of Additional Information or arising out of or based upon
any alleged omission to state a material fact required to be stated
therein or necessary to make the statements in either or necessary to
make the statements therein not misleading, except insofar as such
claims, demands, liabilities or expenses arise out of or are based upon
any such untrue statement or omission made in conformity with information
furnished in writing by the Distributor to the Fund for use in the Fund's
registration statement or Prospectus or Statement of Additional
Information: provided, however, that this indemnity agreement, to the
extent that it might require indemnity of any person who is also an
officer or director of the Fund or who controls the Fund within the
meaning of Section 15 of the 1933 Act, shall not inure to the benefit of
such officer, director or controlling person unless a court of competent
jurisdiction shall determine, or it shall have been determined by
controlling precedent that such result would not be against public policy
as expressed in the Securities Act of 1933, and further provided, that in
no event shall anything contained herein be so construed as to protect
the Distributor against any liability to the Fund or to its security
holders to which the Distributor would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence, in the performance
of its duties, or by reason of its reckless disregard of its obligations
under this Agreement. The Fund's agreement to indemnify the Distributor,
its officers and directors and any such controlling person as aforesaid
is expressly conditioned upon the Fund being promptly notified of any
action brought against the Distributor, its officers or directors, or any
such controlling person, such notification to be given by letter or
telegram addressed to the Fund. The Fund agrees promptly to notify the
Distributor of the commencement of any litigation or proceedings against
it or any of its directors in connection with the issue and sale of any
shares of it Capital Stock.
The Distributor agrees to indemnify, defend and hold the Fund, its
officers and directors and any person who controls the Fund, if any,
within the meaning of Section 15 of the 1933 Act, free and harmless from
and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands
liabilities and any counsel fees incurred in connection therewith) which
the Fund, its directors or officers or any such controlling person may
incur under the 1933 Act or under common law or otherwise; but only to
the extent that such liability or expense incurred by the Fund, its
directors or officers or such controlling person resulting from such
claims or demands shall arise out of or be based upon any alleged untrue
statement of a material fact contained in information furnished in
writing by the Distributor to the Fund for use in the Fund's registration
statement, Prospectus or Statement of Additional Information or shall
arise out of or be based upon any alleged omission to state a material
fact in connection with such information required to be stated in the
registration statement, Prospectus or Statement of Additional Information
or shall arise out of or be based upon any alleged omission to state a
material fact in connection with such information required to be stated
in the registration statement or Prospectus or necessary to make such
information not misleading. The Distributor's agreement to indemnify the
Fund, its directors and officers, and any such controlling person as
aforesaid is expressly conditioned upon the Distributor being promptly
notified of any action brought against the Fund, its officers or
directors or any such controlling person.
18. DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of the execution date specified
on page 1 of this Agreement and will remain in effect for more than two
years thereafter only so long as such continuance is specifically
approved, at least annually, either by the Board of Directors of the Fund
or by a vote of a majority of the outstanding voting securities of the
Fund, provided that in either event such continuation shall be approved
by the vote of a majority of the directors who are not interested persons
of the Distributor, Principal Life Insurance Company, or the Fund cast in
person at a meeting called for the purpose of voting on such approval.
This Agreement may be terminated on 60 days written notice at any time,
without payment of any penalty, by the Fund or by the Distributor. This
Agreement shall terminate automatically in the event of its assignment.
In interpreting the provisions of this paragraph 18, the definitions
contained in section 2(a) of the Investment Company Act of 1940 and the
rules thereunder (particularly the definitions of "interested person",
"assignment" and "voting security") shall be applied.
19. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the
party against which enforcement of the change, waiver, discharge or
termination is sought. If the Fund should at any time deem it necessary
or advisable in the best interests of the Fund that any amendment of this
Agreement be made in order to comply with the recommendations or
requirements of the Securities and Exchange Commission or other
governmental authority or to obtain any advantage under state or federal
tax laws and should notify the Distributor of the form of such amendment,
and the reasons therefore, and if the Distributor should decline to
assent to such amendment, the Fund may terminate this Agreement
forthwith. If the Distributor should at any time request that a change be
made in the Fund's Articles of Incorporation or By-laws, or in its method
of doing business, in order to comply with any requirements of federal
law or regulations of the Securities and Exchange Commission or of a
national securities association of which the Distributor is or may be a
member, relating to the sale of shares of the Fund, and the Fund should
not make such necessary change within a reasonable time, the Distributor
may terminate this Agreement forthwith.
20. ADDRESS FOR PURPOSES OF NOTICE
Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address
as such other party may designate for the receipt of such notices. Until
further notice to the other party, it is agreed that the address of the
Fund and that of the Distributor for this purpose shall be The Principal
Financial Group, Xxx Xxxxxx, Xxxx 00000-0000.
IN WITNESS WHEREOF, the parties hereof have caused this Agreement to be
executed in duplicate on the day and year first above written.
PRINCIPAL INVESTORS FUND, INC. PRINCOR FINANCIAL SERVICES CORPORATION
/s/ Xxxxx X. Xxxxxx /s/ Xxxxxxx X. Beer
By ________________________________ By ______________________________________
Xxxxx X. Xxxxxx, President and Xxxxxxx X. Beer, President
Chief Executive Officer
