PRINCIPAL FUNDS, INC. AMENDED AND RESTATED SUB-ADVISORY AGREEMENT COLUMBUS CIRCLE INVESTORS SUB-ADVISED SERIES

PRINCIPAL FUNDS, INC.
AMENDED AND RESTATED
SUB-ADVISORY AGREEMENT
COLUMBUS CIRCLE INVESTORS SUB-ADVISED SERIES
AGREEMENT executed as of January 1, 2010, by and between PRINCIPAL MANAGEMENT CORPORATION
(hereinafter called "the Manager"), and COLUMBUS CIRCLE INVESTORS (“CCI”) (hereinafter called "the
Sub-Adviser").
W I T N E S S E T H:
WHEREAS, the Manager is the manager and investment adviser to each Series of Principal Funds, Inc., (the
"Fund"), an open-end management investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Manager desires to retain the Sub-Adviser to furnish it with investment advisory services with
respect to all or a portion of the portfolio assets of each Series of the Fund identified in Appendix A hereto
(hereinafter called “Series”), which the Manager has agreed to provide to the Fund, and the Sub-Adviser desires to
furnish such services; and
WHEREAS, The Manager has furnished the Sub-Adviser with copies properly certified or authenticated of each of
the following and will promptly provide the Sub-Adviser with copies properly certified or authenticated of any
amendment or supplement thereto:
(a)	Management Agreement (the "Management Agreement") with the Fund;
(b)	The Fund's registration statement and financial statements as filed with the Securities and Exchange
	Commission; and
(c)	Policies, procedures or instructions adopted or approved by the Board of Directors of the Fund relating to
	obligations and services to be provided by the Sub-Adviser.
NOW, THEREFORE, in consideration of the premises and the terms and conditions hereinafter set forth, the parties
agree as follows:
1.	Appointment of Sub-Adviser
	In accordance with and subject to the Management Agreement, the Manager hereby appoints the
	Sub-Adviser to perform the services described in Section 2 below for investment and reinvestment of the
	securities and other assets of each Series, subject to the control and direction of the Manager and the
	Fund's Board of Directors, for the period and on the terms hereinafter set forth. The Sub-Adviser accepts
	such appointment and agrees to furnish the services hereinafter set forth for the compensation herein
	provided. The Sub-Adviser shall for all purposes herein be deemed to be an independent contractor and
	shall, except as expressly provided or authorized, have no authority to act for or represent the Fund or the
	Manager in any way or otherwise be deemed an agent of the Fund or the Manager.
2.	Obligations of and Services to be Provided by the Sub-Adviser
	The Sub-Adviser will:
	(a)	Provide investment advisory services, including but not limited to research, advice and supervision for
		each Series.
	(b)	Furnish to the Board of Directors of the Fund for approval (or any appropriate committee of such
		Board), and revise from time to time as conditions require, a recommended investment program for
		each Series consistent with each Series investment objective and policies.
	(c)	Implement the approved investment program by placing orders for the purchase and sale of securities
		without prior consultation with the Manager and without regard to the length of time the securities
		have been held, the resulting rate of portfolio turnover or any tax considerations, subject always to the
		provisions of the Fund's registration statement, Articles of Incorporation and Bylaws and the
		requirements of the 1940 Act, as each of the same shall be from time to time in effect.

(d)	Advise and assist the officers of the Fund, as requested by the officers, 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 each Series.
(e)	Maintain, in connection with the Sub-Adviser’s investment advisory services obligations, compliance
	with the 1940 Act and the regulations adopted by the Securities and Exchange Commission
	thereunder and the Series’ investment strategies and restrictions as stated in the Fund’s prospectus
	and statement of additional information.
(f)	Report to the Board of Directors of the Fund at such times and in such detail as the Board of Directors
	may reasonably deem appropriate in order to enable it to determine that the investment policies,
	procedures and approved investment program of each Series are being observed.
(g)	Upon request, provide assistance and recommendations for the determination of the fair value of
	certain securities when reliable market quotations are not readily available for purposes of calculating
	net asset value in accordance with procedures and methods established by the Fund's Board of
	Directors.
(h)	Furnish, at its own expense, (i) all necessary investment and management facilities, including salaries
	of clerical and other personnel required for it to execute its duties faithfully, and (ii) administrative
	facilities, including bookkeeping, clerical personnel and equipment necessary for the efficient conduct
	of the investment advisory affairs of each Series.
(i)	Open accounts with broker-dealers and futures commission merchants (“broker-dealers”), select
	broker-dealers to effect all transactions for each Series, place all necessary orders with
	broker-dealers or issuers (including affiliated broker-dealers), and negotiate commissions, if
	applicable. To the extent consistent with applicable law, purchase or sell orders for each Series may
	be aggregated with contemporaneous purchase or sell orders of other clients of the Sub-Adviser. In
	such event allocation of securities so sold or purchased, as well as the expenses incurred in the
	transaction, will be made by the Sub-Adviser in the manner the Sub-Adviser considers to be the most
	equitable and consistent with its fiduciary obligations to the Fund and to other clients. The Sub-
	Adviser will report on such allocations at the request of the Manager, the Fund or the Fund’s Board of
	Directors providing such information as the number of aggregated trades to which each Series was a
	party, the broker-dealers to whom such trades were directed and the basis for the allocation for the
	aggregated trades. The Sub-Adviser shall use its best efforts to obtain execution of transactions for
	each Series at prices which are advantageous to the Series and at commission rates that are
	reasonable in relation to the benefits received. However, the Sub-Adviser may select brokers or
	dealers on the basis that they provide brokerage, research or other services or products to the Sub-
	Adviser. To the extent consistent with applicable law, the Sub-Adviser may pay a broker or dealer an
	amount of commission for effecting a securities transaction in excess of the amount of commission or
	dealer spread another broker or dealer would have charged for effecting that transaction if the Sub-
	Adviser determines in good faith that such amount of commission is reasonable in relation to the
	value of the brokerage and research products and/or services provided by such broker or dealer. This
	determination, with respect to brokerage and research products and/or services, may be viewed in
	terms of either that particular transaction or the overall responsibilities which the Sub-Adviser and its
	affiliates have with respect to each Series as well as to accounts over which they exercise investment
	discretion. Not all such services or products need be used by the Sub-Adviser in managing the
	Series. In addition, joint repurchase or other accounts may not be utilized by the Series except to the
	extent permitted under any exemptive order obtained by the Sub-Adviser provided that all conditions
	of such order are complied with.
(j)	Maintain all accounts, books and records with respect to each Series as are required of an investment
	advisor of a registered investment company pursuant to the 1940 Act and Investment Advisers Act of
	1940 (the “Investment Advisers Act”), and the rules thereunder, and furnish the Fund and the
	Manager with such periodic and special reports as the Fund or Manager may reasonably request. In
	compliance with the requirements of Rule 31a-3 under the 1940 Act, the Sub-Adviser hereby agrees
	that all records that it maintains for each Series are the property of the Fund, agrees to preserve for
	the periods described by Rule 31a-2 under the 1940 Act any records that it maintains for the Series
	and that are required to be maintained by Rule 31a-1 under the 1940 Act, and further agrees to
	surrender promptly to the Fund any records that it maintains for a Series upon request by the Fund or

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		the Manager. The Sub-Adviser has no responsibility for the maintenance of Fund records except
		insofar as is directly related to the services the Sub-Adviser provides to a Series.
	(k)	Observe and comply with Rule 17j-1 under the 1940 Act and the Sub-Adviser’s Code of Ethics
		adopted pursuant to that Rule as the same may be amended from time to time. The Manager
		acknowledges receipt of a copy of Sub-Adviser’s current Code of Ethics. Sub-Adviser shall promptly
		forward to the Manager a copy of any material amendment to the Sub-Adviser’s Code of Ethics along
		with certification that the Sub-Adviser has implemented procedures for administering the Sub-
		Adviser’s Code of Ethics.
	(l)	From time to time as the Manager or the Fund may request, furnish the requesting party reports on
		portfolio transactions and reports on investments held by a Series, all in such detail as the Manager or
		the Fund may reasonably request. The Sub-Adviser will make available its officers and employees to
		meet with the Fund’s Board of Directors at the Fund’s principal place of business on due notice to
		review the investments of a Series.
	(m)	Provide such information as is customarily provided by a sub-adviser and may be required for the
		Fund or the Manager to comply with their respective obligations under applicable laws, including,
		without limitation, the Internal Revenue Code of 1986, as amended (the “Code”), the 1940 Act, the
		Investment Advisers Act, the Securities Act of 1933, as amended (the “Securities Act”), and any state
		securities laws, and any rule or regulation thereunder.
	(n)	Perform quarterly and annual tax compliance tests to monitor each Series’ compliance with
		Subchapter M of the Code. The Sub-Adviser shall notify the Manager immediately upon having a
		reasonable basis for believing that a Series has ceased to be in compliance or that it might not be in
		compliance in the future. If it is determined that a Series is not in compliance with the requirements
		noted above, the Sub-Adviser, in consultation with the Manager, will take prompt action to bring the
		Series back into compliance (to the extent possible) within the time permitted under the Code.
	(o)	Provide a copy of the Sub-Adviser’s Form ADV and any amendments thereto contemporaneously
		with the filing of such documents with the Securities and Exchange Commission or other regulatory
		agency.
	(p)	Vote proxies received on behalf of the Series in a manner consistent with Sub-Adviser's proxy voting
		policies and procedures and provide a record of votes cast containing all of the voting information
		required by Form N-PX in an electronic format to enable the Series to file Form N-PX as required by
		SEC rule.
	(q)	Respond to tender offers, rights offerings and other voluntary corporate action requests affecting
		securities held by the Fund and complete and file notices of claims in connection with class action
		lawsuits concerning securities owned by the Fund.
3.	Prohibited Conduct
	In providing the services described in this agreement, the Sub-Adviser will not consult with any other
	investment advisory firm that provides investment advisory services to any investment company sponsored
	by Principal Life Insurance Company regarding transactions for the Fund in securities or other assets.
4.	Compensation
	As full compensation for all services rendered and obligations assumed by the Sub-Adviser hereunder with
	respect to each Series, the Manager shall pay the compensation specified in Appendix A to this
	Agreement.
5.	Liability of Sub-Adviser
	Neither the Sub-Adviser nor any of its directors, officers, employees, agents or affiliates shall be liable to
	the Manager, the Fund or its shareholders for any loss suffered by the Manager or the Fund resulting from
	any error of judgment made in the good faith exercise of the Sub-Adviser's investment discretion in
	connection with selecting investments for a Series or as a result of the failure by the Manager or any of its
	affiliates to comply with the terms of this Agreement, except for losses resulting from willful misfeasance,

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	bad faith or gross negligence of, or from reckless disregard of, the duties of the Sub-Adviser or any of its
	directors, officers, employees, agents, or affiliates.
6.	Supplemental Arrangements
	The Sub-Adviser may enter into arrangements with other persons affiliated with the Sub-Adviser or with
	unaffiliated third parties to better enable the Sub-Adviser to fulfill its obligations under this Agreement for
	the provision of certain personnel and facilities to the Sub- Adviser, subject to written notification to and
	approval of the Manager and, where required by applicable law, the Board of Directors of the Fund.
7.	Regulation
	The Sub-Adviser shall submit to all regulatory and administrative bodies having jurisdiction over the
	services provided pursuant to this Agreement any information, reports or other material which any such
	body may request or require pursuant to applicable laws and regulations.
8.	Duration and Termination of This Agreement
	This Agreement shall become effective on the latest of (i) the date of its execution, (ii) the date of its
	approval by a majority of the Board of Directors of the Fund, including approval by the vote of a majority of
	the Board of Directors of the Fund who are not interested persons of the Manager, the Sub-Adviser,
	Principal Life Insurance Company or the Fund cast in person at a meeting called for the purpose of voting
	on such approval or (iii) if required by the 1940 Act, the date of its approval by a majority of the outstanding
	voting securities of the Series. It shall continue in effect thereafter from year to year 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 a vote of a
	majority of the Board of Directors of the Fund who are not interested persons of the Manager, Principal Life
	Insurance Company, the Sub-Adviser or the Fund cast in person at a meeting called for the purpose of
	voting on such approval.
	If the shareholders of a Series fail to approve the Agreement or any continuance of the Agreement in
	accordance with the requirements of the 1940 Act, the Sub-Adviser will continue to act as Sub-Adviser with
	respect to the Series pending the required approval of the Agreement or its continuance or of any contract
	with the Sub-Adviser or a different manager or sub-adviser or other definitive action; provided, that the
	compensation received by the Sub-Adviser in respect to the Series during such period is in compliance
	with Rule 15a-4 under the 1940 Act.
	This Agreement may be terminated at any time without the payment of any penalty by the Board of
	Directors of the Fund or by the Sub-Adviser, the Manager or by vote of a majority of the outstanding voting
	securities of the Series on sixty days written notice. This Agreement shall automatically terminate in the
	event of its assignment. In interpreting the provisions of this Section 8, the definitions contained in Section
	2(a) of the 1940 Act (particularly the definitions of "interested person," "assignment" and "voting security")
	shall be applied.
9.	Amendment of this Agreement
	No material amendment of this Agreement shall be effective until approved, if required by the 1940 Act or
	the rules, regulations, interpretations or orders issued thereunder, by vote of the holders of a majority of the
	outstanding voting securities of the Series and by vote of a majority of the Board of Directors of the Fund
	who are not interested persons of the Manager, the Sub-Adviser, Principal Life Insurance Company or the
	Fund cast in person at a meeting called for the purpose of voting on such approval.
10. General Provisions
	(a)	Each party agrees to perform such further acts and execute such further documents as are necessary
		to effectuate the purposes hereof. This Agreement shall be construed and enforced in accordance with
		and governed by the laws of the State of Iowa. The captions in this Agreement are included for
		convenience only and in no way define or delimit any of the provisions hereof or otherwise affect their
		construction or effect.
	(b)	Any notice under this Agreement shall be in writing, addressed and delivered or mailed postage
		pre-paid to the other party at such address as such other party may designate for the receipt of

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	such notices. Until further notice to the other party, it is agreed that the address of the Manager for
	this purpose shall be Principal Financial Group, Xxx Xxxxxx, Xxxx 00000-0000, and the address of
	the Sub-Adviser shall be Columbus Circle Investors, Metro Center, Xxx Xxxxxxx Xxxxx, Xxxxxxxx
	XX 00000.
(c)	The Sub-Adviser will promptly notify the Manager in writing of the occurrence of any of the following
	events:
	(1)	the Sub-Adviser fails to be registered as an investment adviser under the Investment Advisers Act
		or under the laws of any jurisdiction in which the Sub-Adviser is required to be registered as an
		investment advisor in order to perform its obligations under this Agreement.
	(2)	the Sub-Adviser is served or otherwise receives notice of any action, suit, proceeding, inquiry or
		investigation, at law or in equity, before or by any court, public board or body, involving the affairs
		of a Series.
(d)	The Manager shall provide (or cause the Series custodian to provide) timely information to the Sub-
	Adviser regarding such matters as the composition of the assets of a Series, cash requirements and
	cash available for investment in a Series, and all other reasonable information as may be necessary
	for the Sub-Adviser to perform its duties and responsibilities hereunder.
(e) The Sub-Advisor represents that it will not enter into any agreement, oral or written, or other
	understanding under which the Fund directs or is expected to direct portfolio securities transactions, or
	any remuneration, to a broker or dealer in consideration for the promotion or sale of Fund shares or
	shares issued by any other registered investment company. Sub-advisor further represents that it is
	contrary to the Sub-advisor’s policies to permit those who select brokers or dealers for execution of fund
	portfolio securities transactions to take into account the broker or dealer’s promotion or sale of Fund
	shares or shares issued by any other registered investment company.
(f)	This Agreement contains the entire understanding and agreement of the parties.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date first above written.

PRINCIPAL MANAGEMENT CORPORATION 

                             /s/ Xxxxxxx X. Beer 

By 

     Xxxxxxx X. Beer, Executive Vice President 

COLUMBUS CIRCLE INVESTORS 

                             /s/ Xxxxx X. Xxxxxxx 

By 

     Xxxxx X. Xxxxxxx, Managing Director and 

     Chief Administrative Officer 

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APPENDIX A

CCI shall serve as investment sub-adviser for each Series identified below. The Manager will pay CCI, as full 

compensation for all services provided under this Agreement, a fee, computed and paid monthly, at an annual 

rate as shown below of the Series’ net assets managed by CCI as of the first day of each month allocated to 

CCI’s management. With respect to the SmallCap Growth Fund I Series, cash and cash equivalents shall be 

included in the Series net assets calculation up to a maximum of 1.00% of the Series net assets. If the Manager 

requests the Sub-Advisor to raise cash in the Series portfolio in excess of 1.00% of the Series net assets for the 

purpose of funding redemptions from the Series, such amount requested shall be included in the Series net 

assets calculation. 

In calculating the fee for a series included in the table, assets of any unregistered separate account of Principal Life 

Insurance Company and any investment company sponsored by Principal Life Insurance Company to which CCI 

provides investment advisory services and which have the same investment mandate (e.g. LargeCap Growth) as the 

series for which the fee is calculated, will be combined with the assets of the series to arrive at net assets. 

If this Agreement becomes effective or terminates before the end of any month, the fee (if any) for the period from the 

effective date to the end of such month or from the beginning of such month to the date of termination, as the case 

may be, shall be prorated according to the proportion which such period bears to the full month in which such 

effectiveness or termination occurs. 

Compensation Table
Fund Net Assets Managed by CCI
	First	Next	Next	Next	Next	Next	Next	Next	Over
Fund	$50	$50	$100	$200	$350	$750	$500	$2.5	$4.5
	million	million	million	million	million	million	million	billion	billion
LargeCap	0.2643%	0.2448%	0.2154%	0.1762%	0.1273%	0.0881%	0.0587%	0.2448%	0.1664%
Growth Fund

Fund Net Assets Managed by CCI
	First	Next	Next	Next	Over
Fund	$25 million	$75 million	$100 million	$100 million	$300 million
MidCap Growth Fund	0.3916%	0.3133%	0.2643%	0.2252%	0.3427%

Fund Net Assets Managed by CCI
Fund	All Assets
SmallCap Growth Fund I	0.50%

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