PRINCIPAL INVESTORS FUND, INC.
DISTRIBUTION AGREEMENT
Agreement executed as of September 15, 2000 by and between PRINCIPAL INVESTORS
FUND, INC., a Maryland corporation (hereinafter sometimes called the "Fund") and
PRINCOR FINANCIAL SERVICES CORPORATION, an Iowa corporation (hereinafter
sometimes called 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 Fund.
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 shares of Capital Stock of the Fund's
series set forth in Appendix A (the "Series") (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 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
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. SALE OF SHARES
The Distributor is authorized to sell as agent on behalf of the Fund
authorized 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.
3. 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 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 shares of the Fund at "net asset value" and
sell such shares at the public offering price.
4. 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.
5. DELIVERY OF PAYMENTS AND ISSUANCE OF SHARESThe 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.
6. 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 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 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".
7. 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.
8. 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.
9. 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.
10. 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.
11. 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.
12. 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.
13. 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.
14. 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.
15. 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.
16. 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 15, 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.
17. 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 therefor, 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.
18. 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.
By _/s/A.S. Filean___________________________
A. S. Filean, Senior Vice President
PRINCOR FINANCIAL SERVICES CORPORATION
By /s/R.C. Eucher____________________
X. X. Xxxxxx, President
PRINCIPAL INVESTORS FUND, INC.
DISTRIBUTION AGREEMENT - APPENDIX A
Series
Balanced Fund
Bond and Mortgage Securities 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
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 I
Partners LargeCap Growth Fund II
Partners LargeCap Value Fund
Partners MidCap Growth Fund
Partners MidCap Value Fund
Partners SmallCap Growth Fund I
Partners SmallCap Growth Fund II
Real Estate Fund
SmallCap Blend Fund
SmallCap Growth Fund
SmallCap S&P 600 Index Fund
SmallCap Value Fund
Technology Fund
