PRINCIPAL EXCHANGE-TRADED FUNDS
MANAGEMENT AGREEMENT
AGREEMENT to be effective July 8, 2015, by and between
PRINCIPAL EXCHANGE-TRADED
FUNDS, a Delaware statutory trust (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) Agreement and Declaration of Trust of the Fund;
(b) Bylaws of the Fund as adopted by the Board of
Trustees; and
(c) Resolutions of the Board of Trustees 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 Trustees 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
Agreement and Declaration of Trust 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 Trustees 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 Trustees 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 NASDAQ OMX Group, 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 trustees
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 Trustees.
3. TRUST ADMINISTRATIVE SERVICES
The Manager will provide the following trust administrative
services for the Fund:
(a) furnish the services of such of the Manager's officers
and employees as may be elected officers
or trustees 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 trust
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 trust
functions of the Fund.
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 Trustees.
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 trustees 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 trust functions of the
Fund.
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 Agreement and
Declaration of Trust of the Fund. If pursuant to such provisions
the determination of net asset value is
suspended, then for the purposes of this Section 6 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.
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.
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 trustees, officers or
employees will act as a principal or agent or
receive any commission.
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.
10. COPIES OF TRUST DOCUMENTS
The Fund will furnish the Manager promptly with properly
certified or authenticated copies of
amendments or supplements to its Agreement and Declaration
of Trust or Bylaws. Also, the Fund
will furnish the Manager financial and other trust information as
needed, and otherwise cooperate
fully with the Manager in its efforts to carry out its duties and
responsibilities under this Agreement.
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 Trustees 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 trustees 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
Trustees 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.
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
trustees 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.
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.
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 EXCHANGE-TRADED FUNDS
By /s/ Xxxx X. XXxxxx
Xxxx X. Xxxxxx, Vice President & Secretary
By /s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx, Assistant Counsel
PRINCIPAL MANAGEMENT CORPORATION
By /s/ Xxxxxxx X. Beer
Xxxxxxx X. Beer, President and Chief Executive Officer
SCHEDULE 1
Series
Management Fee as a Percentage
of Average Daily Net Assets
First $500 million 0.75%
Next $500 million 0.73%
Next $500 million 0.71%
Over $1.5 billion 0.70%
Principal EDGE Active Income ETF
