PRINCIPAL FUNDS, INC. AMENDED AND RESTATED DISTRIBUTION PLAN AND AGREEMENT CLASS R-3
PRINCIPAL FUNDS, INC. |
AMENDED AND RESTATED |
DISTRIBUTION PLAN AND AGREEMENT |
CLASS R-3 |
DISTRIBUTION PLAN AND AGREEMENT made as of December 14, 2010, by and between | |
PRINCIPAL FUND, INC., a Maryland corporation (the "Fund"), and PRINCIPAL FUNDS DISTRIBUTOR, | |
INC., a Washington corporation (the "Underwriters"). | |
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 R-3 Class shares of each Series | |
identified in Appendix A, attached hereto (the “Series”), a class of shares of Principal Funds, Inc. | |
(the “Fund”). | |
2. | The Fund has entered into a Distribution Agreement on behalf of the Fund with Principal Funds |
Distributor, Inc. (“Distributor”), under which the Distributor will use 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 a 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 a Distributor who engage in or support distribution of the | |
Fund’s Shares; (7) paying compensation to, and expenses (including overhead and telephone | |
expenses) of, a 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. | The Distribution Agreement also authorizes the Distributor to enter into Service Agreements with |
other selling dealers and with banks or other financial institutions to provide shareholder services to | |
existing R-3 Class 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. | |
4. | In consideration for the services provided and the expenses incurred by the Distributor pursuant to |
the Distribution Agreement and Paragraphs 2 and 3 hereof, all with respect to R-3 Class shares of a | |
Series of the Fund, R-3 Class of each Series shall pay to the Distributor a fee at the annual rate of | |
0.25% (or such lesser amount as the Fund Directors may, from time to time, determine) of the | |
average daily net assets of R-3 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 |
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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 R-3 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 R-3 Class shares or to pay any of the expenses associated with other activities | ||
authorized under Paragraphs 2 and 3 hereof. | ||
5. | 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 R-3 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 R-3 Class shares within | ||
the meaning of Rule 12b-1, then such payment shall be deemed to be authorized by this Plan. | ||
6. | 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 R-3 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. | ||
7. | Unless sooner terminated pursuant to Paragraph 6, 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 6(b). | ||
8. | A representative of each 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. | ||
9. | 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 R-3 Class shares of the Series of the | ||
Fund. | ||
10. 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 R-3 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. | |
11. | While the Plan is in effect, the Fund’s board of directors shall satisfy the fund governance standards | |
as defined in Securities and Exchange Commission Rule 0-1(a)(7). | ||
12. | 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 R-3 Class shares. |
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13. The Fund shall preserve copies of this Plan and any related agreements and all reports made |
pursuant to Paragraph 8, 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. |
14. This Plan may not be amended to increase materially the amount of Fees provided for in Paragraph |
4 hereof unless such amendment is approved in the manner provided for initial approval in |
Paragraph 6 hereof and no other material amendment to this Plan shall be made unless approved |
in the manner provided for initial approval in Paragraph 6(b) hereof. |
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Plan as of the first |
date written above. |
PRINCIPAL FUNDS, INC. |
By: |
Xxxx X. Xxxxxxx, CEO & President |
By: |
Xxxx X. Xxxxxx, Vice President & Secretary |
PRINCIPAL FUNDS DISTRIBUTOR, INC. |
By: |
Xxxxxxx X. Beer, Executive Vice-President |
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PRINCIPAL FUNDS, INC. | |
APPENDIX A | |
SERIES | |
Bond & Mortgage Securities Fund | Mortgage Securities Fund |
Bond Market Index Fund | Preferred Securities Fund |
Core Plus Bond Fund I | Principal Capital Appreciation Fund |
Disciplined LargeCap Blend Fund | Principal LifeTime 2010 Fund |
Diversified International Fund | Principal LifeTime 2015 Fund |
Equity Income Fun | Principal LifeTime 2020 Fund |
Government & High Quality Bond Fund | Principal LifeTime 2025 Fund |
Income Fund | Principal LifeTime 2030 Fund |
Inflation Protection Fund | Principal LifeTime 2035 Fund |
International Emerging Markets Fund | Principal LifeTime 2040 Fund |
International Equity Index Fund | Principal LifeTime 2045 Fund |
International Fund I | Principal LifeTime 2050 Fund |
International Growth Fund | Principal LifeTime 2055 Fund |
LargeCap Blend Fund II | Principal LifeTime Strategic Income Fund |
LargeCap Growth Fund | Real Estate Securities Fund |
LargeCap Growth Fund I | XXX Balanced Portfolio |
LargeCap Growth Fund II | XXX Conservative Balanced Portfolio |
LargeCap S&P 500 Index Fund | XXX Conservative Growth Portfolio |
LargeCap Value Fund | XXX Flexible Income Portfolio |
LargeCap Value Fund I | XXX Strategic Growth Portfolio |
LargeCap Value Fund III | Short-Term Income Fund |
MidCap Blend Fund | SmallCap Blend Fund |
MidCap Growth Fund | SmallCap Growth Fund |
MidCap Growth Fund III | SmallCap Growth Fund I |
MidCap S&P 400 Index Fund | SmallCap Growth Fund II |
MidCap Value Fund I | SmallCap S&P 600 Index Fund |
MidCap Value Fund III | SmallCap Value Fund |
Money Market Fund | SmallCap Value Fund II |
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