PRINCIPAL INVESTORS FUND, INC.
AMENDED AND RESTATED
MANAGEMENT AGREEMENT
AGREEMENT to be effective September 30, 2005,__________________, by and
between PRINCIPAL INVESTORS FUND, INC., a Maryland corporation (hereinafter
called the "Fund") and PRINCIPAL MANAGEMENT CORPORATION, an Iowa corporation
(hereinafter called the "Manager").
W I T N E S S E T H:
WHEREAS, The Fund has furnished the Manager with copies properly
certified or authenticated of each of the following:
(a) Articles of Incorporation of the Fund;
(b) Bylaws of the Fund as adopted by the Board of Directors; and
(c) Resolutions of the Board of Directors of the Fund selecting the
Manager as investment adviser and approving the form of this
Agreement.
NOW THEREFORE, in consideration of the premises and mutual agreements
herein contained, the Fund hereby appoints the Manager to act as investment
adviser and manager of the Fund, and the Manager agrees to act, perform or
assume the responsibility therefore in the manner and subject to the conditions
hereinafter set forth. The Fund will furnish the Manager from time to time with
copies, properly certified or authenticated, of all amendments of or supplements
to the foregoing, if any.
1. INVESTMENT ADVISORY SERVICES
The Manager will regularly perform the following services for the Fund:
(a) Provide investment research, advice and supervision;
(b) Provide investment advisory, research and statistical facilities
and all clerical services relating to research, statistical and
investment work;
(c) Furnish to the Board of Directors of the Fund (or any appropriate
committee of such Board), and revise from time to time as
conditions require, a recommended investment program for the
portfolio of each Series of the Fund consistent with each Series'
investment objective and policies;
(d) Implement such of its recommended investment program as the Fund
shall approve, by placing orders for the purchase and sale of
securities, subject always to the provisions of the Fund's
Articles of Incorporation and Bylaws and the requirements of the
Investment Company Act of 1940 (the "1940 Act"), and the Fund's
Registration Statement, current Prospectus and Statement of
Additional Information, as each of the same shall be from time to
time in effect;
(e) Advise and assist the officers of the Fund in taking such steps
as are necessary or appropriate to carry out the decisions of its
Board of Directors and any appropriate committees of such Board
regarding the general conduct of the investment business of the
Fund; and
(f) Report to the Board of Directors of the Fund at such times and in
such detail as the Board may deem appropriate in order to enable
it to determine that the investment policies of the Fund are
being observed.
2. ACCOUNTING SERVICES
The Manager will provide all accounting services customarily required
by investment companies, in accordance with the requirements of
applicable laws, rules and regulations and with the policies and
practices of the Fund as communicated to the Manager from time to
time, including, but not limited to, the following:
(a) Maintain fund general ledger and journal;
(b) Prepare and record disbursements for direct Fund expenses;
(c) Prepare daily money transfer;
(d) Reconcile all Fund bank and custodian accounts;
(e) Assist Fund independent auditors as appropriate;
(f) Prepare daily projection of available cash balances;
(g) Record trading activity for purposes of determining net asset
values and daily dividend;
(h) Prepare daily portfolio valuation report to value portfolio
securities and determine daily accrued income;
(i) Determine the net asset value per share daily or at such other
intervals as the Fund may reasonably request or as may be
required by law;
(j) Prepare monthly, quarterly, semi-annual and annual financial
statements;
(k) Provide financial information for reports to the Securities and
Exchange Commission in compliance with the provisions of the
Investment Company Act of 1940 and the Securities Act of 1933,
the Internal Revenue Service and any other regulatory or
governmental agencies as required;
(l) Provide financial, yield, net asset value, and similar
information to National Association of Securities Dealers, Inc.,
and other survey and statistical agencies as instructed from time
to time by the Fund;
(m) Investigate, assist in the selection of and conduct relations
with custodians, depositories, accountants, legal counsel,
insurers, banks and persons in any other capacity deemed to be
necessary or desirable for the Fund's operations; and
(n) Obtain and keep in effect fidelity bonds and directors and
officers/errors and omissions insurance policies for the Fund in
accordance with the requirements of the Investment Company Act of
1940 and the rules thereunder, as such bonds and policies are
approved by the Fund's Board of Directors.
3. CORPORATE ADMINISTRATIVE SERVICES
The Manager will provide the following corporate administrative services
for the Fund:
(a) furnish the services of such of the Manager's officers and
employees as may be elected officers or directors of the Fund,
subject to their individual consent to serve and to any
limitations imposed by law;
(b) furnish office space, and all necessary office facilities and
equipment, for the general corporate functions of the Fund (i.e.,
functions other than (i) underwriting and distribution of Fund
shares; (ii) custody of Fund assets, (iii) transfer and paying
agency services; and (iv) corporate and portfolio accounting
services); and
(c) furnish the services of executive and clerical personnel
necessary to perform the general corporate functions of the Fund.
3.4. RESERVED RIGHT TO DELEGATE DUTIES AND SERVICES TO OTHERS
The Manager in assuming responsibility for the various services as set
forth in this Agreement reserves the right to enter into agreements
with others for the performance of certain duties and services or to
delegate the performance of some or all of such duties and services to
Principal Life Insurance Company, or one or more affiliates thereof;
provided, however, that entry into any such agreements shall not
relieve the Manager of its duty to review and monitor the performance
of such persons to the extent provided in the agreements with such
persons or as determined from time to time by the Board of Directors.
4.5. EXPENSES BORNE BY THE MANAGER
The Manager will pay:
(a) the organizational expenses of the Fund and its portfolios and
share classes, including the Fund's registration under the
Investment Company Act of 1940, and the initial registration of
its Capital Stock for sale under the Securities Act of 1933 with
the Securities and Exchange Commission;
(b) Compensation of personnel, officers and directors who are also
affiliated with the Manager; and
(c) Expenses and compensation associated with furnishing office
space, and all necessary office facilities and equipment, and
personnel necessary to perform the general corporate functions of
the Fund.
5.6. COMPENSATION OF THE MANAGER BY FUND
For all services to be rendered and payments made as provided in
Sections 1, 2 and 4 hereof, the Fund will accrue daily and pay the
Manager monthly, or at such other intervals as the Fund and Manager
may agree, a fee based on the average of the values placed on the net
assets of each Series of the Fund as of the time of determination of
the net asset value on each trading day throughout the month in
accordance with Schedule 1 attached hereto.
Net asset value shall be determined pursuant to applicable provisions
of the Articles of Incorporation of the Fund. If pursuant to such
provisions the determination of net asset value is suspended, then for
the purposes of this Section 5 the value of the net assets of the Fund
as last determined shall be deemed to be the value of the net assets
for each day the suspension continues.
The Manager may, at its option, waive all or part of its compensation
for such period of time as it deems necessary or appropriate.
6.7. EXPENSES BORNE BY FUND
The Fund will pay, without reimbursement by the Manager, all expenses
attributable to the operation of the Fund or the services described in
this Agreement and not specifically identified in this Agreement as
being paid by the Manager.
7.8. AVOIDANCE OF INCONSISTENT POSITION
In connection with purchases or sales of portfolio securities for the
account of the Fund, neither the Manager nor any of the Manager's
directors, officers or employees will act as a principal or agent or
receive any commission.
8.9. LIMITATION OF LIABILITY OF THE MANAGER
The Manager shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Fund in connection with the
matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on the Manager's
part in the performance of its duties or from reckless disregard by it
of its obligations and duties under this Agreement.
9.10. COPIES OF CORPORATE DOCUMENTS
The Fund will furnish the Manager promptly with properly certified or
authenticated copies of amendments or supplements to its Articles of
Incorporation or Bylaws. Also, the Fund will furnish the Manager
financial and other corporate information as needed, and otherwise
cooperate fully with the Manager in its efforts to carry out its
duties and responsibilities under this Agreement.
10.11. DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall remain in force and in effect from year to year
following its execution provided that the 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 Series and in either event by vote of a majority of the
directors of the Fund who are not interested persons of the Manager,
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, on sixty days written notice, be terminated at any time
without the payment of any penalty, by the Board of Directors of the
Fund, by vote of a majority of the outstanding voting securities of
the Series, or by the Manager. This Agreement shall automatically
terminate in the event of its assignment. In interpreting the
provisions of this Section 10, the definitions contained in Section
2(a) of the Investment Company Act of 1940 (particularly the
definitions of "interested person," "assignment" and "voting
security") shall be applied.
11.12. 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, and no amendment of this Agreement shall be
effective until approved by vote of the holders of a majority of the
outstanding voting securities of the Series to which such amendment
relates and by vote of a majority of the directors who are not
interested persons of the Manager, Principal Life Insurance Company or
the Fund cast in person at a meeting called for the purpose of voting
on such approval.
12.13. ADDRESS FOR PURPOSE 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 Manager for this purpose shall
be the Principal Financial Group, Xxx Xxxxxx, Xxxx 00000-0000.
13.14. MISCELLANEOUS
The captions in this Agreement are included for convenience of
reference only, and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized.
PRINCIPAL INVESTORS FUND, INC.
By _____________________________________________
Xxxxx X. Xxxxxx, President and Chief Executive Officer
PRINCIPAL MANAGEMENT CORPORATION
By _____________________________________________
Xxxxxx X. Xxxxxx, SeniorMichael J. Beer,
Chief Operating Officer - Mutual Funds Vice
President
