SERVICE SUB-AGREEMENT
AGREEMENT to be effective January 13, 2004, by and between PRINCIPAL
MANAGEMENT CORPORATION (the "Manager") and Employee Benefit Services, Inc.
("EBS").
In consideration of the premises and mutual agreements herein contained,
the Manager hereby appoints EBS to provide personal services to shareholders and
beneficial owners as described herein and EBS agrees to act, perform or assume
the responsibility therefor in the manner and subject to the conditions
hereinafter set forth.
1. SERVICES FURNISHED BY EBS
EBS will provide personal services to shareholders and beneficial owners of
Advisors Preferred Class, Preferred Class, Advisors Select Class and Select
Class shares of each Series of Principal Investors Fund, Inc. ("Fund")
identified in Appendix A hereto. Personal services include:
(a) responding to plan sponsor and plan member inquiries; (b)
providing information regarding plan sponsor and plan member
investments;
(c) other similar personal services or services related to the
maintenance of shareholder accounts as contemplated by NASD Rule
2830, or any successor thereto.
In the carrying out of this function, EBS may contract with others,
including companies affiliated with EBS, for data systems, processing services
and other administrative services. EBS may at any time or times in its
discretion appoint (and may at any time remove) other parties, including
companies affiliated with EBS, as its agent to carry out such provisions of the
Agreement as EBS may from time to time direct; provided, however, that the
appointment of any such agent shall not relieve EBS of any of its
responsibilities or liabilities hereunder.
2. COMPENSATION FOR SERVICES
The Manager will pay EBS service fees equal to 0.17% of the average daily
net assets attributable to each of the Advisors Preferred Class and Preferred
Class shares and 0.25% of the average daily net assets attributable to each of
the Advisors Select Class and Select Class shares for services provided pursuant
to this agreement. Service fees under this Agreement will be calculated and
accrued daily and paid monthly to EBS, or at such other intervals as the Manager
and EBS may agree. For purpose of this Agreement, "service fees" shall mean
payments in connection with the provision of personal, continuing services to
investors in the Fund and/or the maintenance of shareholder accounts, excluding
(i) transfer agent and sub-transfer agent services for beneficial owners of the
Fund's shares, (ii) aggregating and processing purchase and redemption orders,
(iii) providing beneficial owners with account statements, processing dividend
payments, (iv) providing sub-accounting services for shares held beneficially,
(v) forwarding shareholder communications to beneficial owners, and (vi)
receiving, tabulating and transmitting proxies executed by beneficial owners;
provided, however, that if the NASD adopts a definition of "service fees" for
purposes of NASD Rule 2830 (or any successor to such rule) that differs from the
definition of "service activities" hereunder, or if the NASD adopts a related
definition intended to define the same concept, the definition of "service fees"
in this Section shall be automatically amended, without further action of the
parties, to conform to such NASD definition.
3. LIMITATION OF LIABILITY OF EBS
EBS shall not be liable for any error of judgment or mistake of law or for
any loss suffered by the Manager in connection with the matters to which this
Agreement relates, except a loss resulting from willful misfeasance, bad faith
or gross negligence on EBS's part in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement.
4. TERMINATION OF THIS AGREEMENT
This Agreement may, on sixty days written notice, be terminated at any time
without the payment of any penalty, by the Manager or by EBS.
5. 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.
6. 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 Manager and EBS for
this purpose shall be the Principal Financial Group, Xxx Xxxxxx, Xxxx 00000.
7. MISCELLANEOUS
The captions in this Agreement are included for convenience of reference
only, and in no way define or limit 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 Management Corporation
/s/Xxxxxx X. Xxxxxx
By _____________________________________________
Xxxxxx X. Xxxxxx, Vice President
Employee Benefit Services, Inc.
/s/Xxxxxx X. Xxxxxxxxx
By _____________________________________________
Xxxxxx X. Xxxxxxxxx, Chief Financial Officer
PRINCIPAL INVESTORS FUND, INC.
APPENDIX A
Series
-------------------------------------------------------------- ------------------------------------------------------------
Bond and Mortgage Securities Fund Partners LargeCap Blend Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
Capital Preservation Fund Partners LargeCap Blend Fund I
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
Government Securities Fund Partners LargeCap Growth Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
High Quality Intermediate-Term Bond Fund Partners LargeCap Growth Fund I
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
High Quality Long-Term Bond Fund Partners LargeCap Growth Fund II
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
High Quality Short-Term Bond Fund Partners LargeCap Value Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
International Emerging Markets Fund Partners LargeCap Value Fund I
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
International Fund I Partners MidCap Growth Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
International Fund II Partners MidCap Growth Fund I
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
LargeCap Blend Fund I Partners MidCap Value Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
LargeCap Growth Fund Partners MidCap Value Fund I
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
LargeCap S&P 500 Index Fund Partners SmallCap Blend Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
LargeCap Value Fund Partners SmallCap Growth Fund I
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
LifeTime 2010 Fund Partners SmallCap Growth Fund II
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
LifeTime 2020 Fund Partners SmallCap Growth Fund III
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
LifeTime 2030 Fund Partners SmallCap Value Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
LifeTime 2040 Fund Partners SmallCap Value Fund I
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
LifeTime 2050 Fund Partners SmallCap Value Fund II
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
LifeTime Strategic Income Fund Preferred Securities Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
MidCap Blend Fund Real Estate Securities Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
MidCap Growth Fund SmallCap Blend Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
MidCap S&P 400 Index Fund SmallCap Growth Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
MidCap Value Fund SmallCap S&P 600 Index Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
Money Market Fund SmallCap Value Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
Partners International Fund
-------------------------------------------------------------- ------------------------------------------------------------
PRINCIPAL INVESTORS FUND, INC.
APPENDIX A
Series
-------------------------------------------------------------- ------------------------------------------------------------
Bond and Mortgage Securities Fund Partners LargeCap Blend Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
Capital Preservation Fund Partners LargeCap Blend Fund I
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
Government Securities Fund Partners LargeCap Growth Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
High Quality Intermediate-Term Bond Fund Partners LargeCap Growth Fund I
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
High Quality Long-Term Bond Fund Partners LargeCap Growth Fund II
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
High Quality Short-Term Bond Fund Partners LargeCap Value Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
International Emerging Markets Fund Partners LargeCap Value Fund I
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
International Fund I Partners MidCap Growth Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
International Fund II Partners MidCap Growth Fund I
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
LargeCap Blend Fund I Partners MidCap Value Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
LargeCap Growth Fund Partners MidCap Value Fund I
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
LargeCap S&P 500 Index Fund Partners SmallCap Blend Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
LargeCap Value Fund Partners SmallCap Growth Fund I
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
LifeTime 2010 Fund Partners SmallCap Growth Fund II
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
LifeTime 2020 Fund Partners SmallCap Growth Fund III
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
LifeTime 2030 Fund Partners SmallCap Value Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
LifeTime 2040 Fund Partners SmallCap Value Fund I
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
LifeTime 2050 Fund Partners SmallCap Value Fund II
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
LifeTime Strategic Income Fund Preferred Securities Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
MidCap Blend Fund Real Estate Securities Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
MidCap Growth Fund SmallCap Blend Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
MidCap S&P 400 Index Fund SmallCap Growth Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
MidCap Value Fund SmallCap S&P 600 Index Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
Money Market Fund SmallCap Value Fund
-------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------- ------------------------------------------------------------
Partners International Fund
-------------------------------------------------------------- ------------------------------------------------------------
