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

PRINCIPAL FUNDS, INC.
AMENDED AND RESTATED SUB-ADVISORY AGREEMENT
PRINCIPAL GLOBAL INVESTORS SUB-ADVISED SERIES
AGREEMENT effective as of January 1, 2009, by and between PRINCIPAL MANAGEMENT CORPORATION
(hereinafter called "the Manager"), and PRINCIPAL GLOBAL INVESTORS, LLC (hereinafter called "the Sub-Advisor").
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-Advisor to furnish it with portfolio selection and related research and
statistical services in connection with the investment advisory services for 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-Advisor
desires to furnish such services; and
WHEREAS, The Manager has furnished the Sub-Advisor with copies properly certified or authenticated of each of the
following and will promptly provide the Sub-Advisor 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;
(c)	The Fund's Articles of Incorporation and By-laws;
(d)	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-Advisor.
NOW, THEREFORE, in consideration of the premises and the terms and conditions hereinafter set forth, the parties
agree as follows:
1.	Appointment of Sub-Advisor
	In accordance with and subject to the Management Agreement, the Manager hereby appoints the Sub-Advisor
	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-Advisor accepts such appointment and agrees to
	furnish the services hereinafter set forth for the compensation herein provided. The Sub-Advisor 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-Advisor
	The Sub-Advisor 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-Advisor’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-Advisor. 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-Advisor in the
	manner the Sub-Advisor considers to be the most equitable and consistent with its fiduciary obligations to
	the Fund and to other clients. The Sub-Advisor 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-Advisor 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-Advisor
	may select brokers or dealers on the basis that they provide brokerage, research or other services or
	products to the Sub-Advisor. To the extent consistent with applicable law, the Sub-Advisor 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-Advisor 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-Advisor 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-Advisor 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-Advisor 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-Advisor 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 the Manager. The Sub-Advisor has no
		responsibility for the maintenance of Fund records except insofar as is directly related to the services the
		Sub-Advisor provides to a Series.
	(k)	Observe and comply with Rule 17j-1 under the 1940 Act and the Sub-Advisor’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-Advisor’s current Code of Ethics. Sub-Advisor shall promptly forward to the
		Manager a copy of any material amendment to the Sub-Advisor’s Code of Ethics along with certification
		that the Sub-Advisor has implemented procedures for administering the Sub-Advisor’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-Advisor 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-advisor 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)	Vote proxies received on behalf of the Series in a manner consistent with Sub-Advisor'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.
	(o)	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-Advisor 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-Advisor hereunder with
	respect to each Series, the Manager shall pay the compensation specified in Appendix A to this Agreement.
5.	Liability of Sub-Advisor
	Neither the Sub-Advisor 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-Advisor'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, bad faith or gross
	negligence of, or from reckless disregard of, the duties of the Sub-Advisor or any of its directors, officers,
	employees, agents, or affiliates.
6.	Supplemental Arrangements
	The Sub-Advisor may enter into arrangements with other persons affiliated with the Sub-Advisor or with
	unaffiliated third parties to better enable the Sub-Advisor to fulfill its obligations under this Agreement for the
	provision of certain personnel and facilities to the Sub- Advisor, 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-Advisor 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-Advisor, 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-Advisor 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-Advisor will continue to act as Sub-Advisor with
	respect to the Series pending the required approval of the Agreement or its continuance or of any contract with
	the Sub-Advisor or a different manager or sub-advisor or other definitive action; provided, that the compensation
	received by the Sub-Advisor 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-Advisor, 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-Advisor, 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 such notices. Until
		further notice to the other party, it is agreed that the address of the Manager and the Sub-Advisor for this
		purpose shall be Principal Financial Group, Xxx Xxxxxx, Xxxx 00000-0000.
	(c)	The Sub-Advisor will promptly notify the Manager in writing of the occurrence of any of the following events:
		(1) the Sub-Advisor fails to be registered as an investment adviser under the Investment Advisers Act or
		under the laws of any jurisdiction in which the Sub-Advisor is required to be registered as an investment
		advisor in order to perform its obligations under this Agreement.

	(2) the Sub-Advisor 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-Advisor
	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-Advisor to
	perform its duties and responsibilities hereunder.
(e)	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 and Chief 

                                                                                                                Operating Officer 

                                                                                                           PRINCIPAL GLOBAL INVESTORS, LLC 

                                                                                                               /s/ X. X. XxXxxxxx

                                                                                                           By:___________________________________________ 

                                                                                                                X.X. XxXxxxxx, Chief Operations Officer and Chief 

                                                                                                                Compliance Officer 

APPENDIX A

PGI shall serve as investment sub-advisor for each Fund identified below. The Manager will pay PGI, 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 Fund’s net assets as of the first day of each month allocated to PGI’s management. 

In calculating the fee for a fund included in Table A, assets of all other funds included in Table A as well as assets of any 

unregistered separate account of Principal Life Insurance Company and any investment company sponsored by 

Principal Life Insurance Company to which PGI provides investment advisory services and which invests primarily in 

fixed-income securities (except money market separate accounts or investment companies, and excluding assets of all 

such separate accounts or investment companies for which advisory services are provided directly or indirectly by 

employees of Post Advisory Group, LLC), as well as the assets of the Balanced Account of Principal Variable Contracts 

Fund, will be combined with the assets of the fund to arrive at net assets. 

In calculating the fee for a fund included in Table B and Table D, assets of any unregistered separate account of 

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

which PGI provides investment advisory services and which have the same investment mandate (e.g. MidCap Value) as 

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

The fee for assets of any fund for which advisory services are provided directly or indirectly by employees of Post 

Advisory Group, LLC is equal to an annual rate of 0.2937% of the portion of the net assets of such fund with regard to 

which employees of Post Advisory Group, LLC provide investment advisory services. 

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. 

		Table A
		Net Asset Value of Fund
Fund			First $5B	Next $1B	Next $4B		Over $10B
Bond & Mortgage Securities Fund, and High			0.1126%	0.0979%	0.0930%		0.0881%
Quality Intermediate-Term Bond Fund
TABLE B
Net Asset Value of Fund
	First	Next	Next	Next	Next	Next		Over
Fund	$50M	$50M	$100M	$200M	$350M	$750M		$1.5B
Disciplined LargeCap Blend
Fund, Equity Income	0.2643%	0.2448%	0.2154%	0.1762%	0.1273%	0.0881%		0.0587%
Fund, and LargeCap
Value Fund
Diversified International
Fund, and International	0.3427%	0.2741%	0.1958%	0.1566%	0.1175%	0.0979%		0.0783%
Growth Fund
MidCap Blend Fund, and	0.3916%	0.3133%	0.2643%	0.2252%	0.1762%	0.1273%		0.0783%
MidCap Value Fund
SmallCap Blend Fund,
SmallCap Growth Fund,	0.4699%	0.3524%	0.2643%	0.2448%	0.2154%	0.1762%		0.1175%
and SmallCap Value
Fund

Table C
	Sub-Advisor Percentage Fee as a
Fund	Percentage of Net Assets
International Emerging Markets Fund	0.4895%
LargeCap S&P 500 Index Fund	0.0147%
Principal LifeTime 2010 Fund	0.0416%
Principal LifeTime 2015 Fund	0.0416%
Principal LifeTime 2020 Fund	0.0416%
Principal LifeTime 2025 Fund	0.0416%
Principal LifeTime 2030 Fund	0.0416%
Principal LifeTime 2035 Fund	0.0416%
Principal LifeTime 2040 Fund	0.0416%
Principal LifeTime 2045 Fund	0.0416%
Principal LifeTime 2050 Fund	0.0416%
Principal LifeTime 2055 Fund	0.0416%
Principal LifeTime Strategic Income Fund	0.0416%
MidCap S&P 400 Index Fund	0.0147%
SmallCap S&P 600 Index Fund	0.0147%
Money Market Fund	0.0734%
Ultra Short Bond Fund	0.0734%

	Table D
	Global Diversified Income Fund
	Net Asset Value of Underlying Portfolio
	First	Next	Over
Underlying Portfolio	$500 Million	$500 Million	$ 1 Billion
Global Value Equity	0.34%	0.27%	0.20%
	Sub-Advisor Percentage Fee
	as a Percentage of New Assets
High Yield	0.30%
Emerging Market Debt	0.50%