PRINCIPAL INVESTORS FUND, INC.
DISTRIBUTION PLAN AND AGREEMENT
CLASS A SHARES
DISTRIBUTION PLAN AND AGREEMENT made as of October 1, 2007, by and between
PRINCIPAL INVESTORS FUND, INC., a Maryland corporation (the "Fund"), and
PRINCIPAL FUNDS DISTRIBUTOR, INC., a Washington corporation (the " Distributor
").
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by
Securities and Exchange Commission Rule 12b-1 under the Investment Company
Act of 1940, as amended (the "Act") for the Class A shares of each Series
identified in Appendix A, attached hereto (the "Series"), a class of
shares of Principal Investors Fund, Inc. (the "Fund").
2. The Fund has entered into a Distribution Agreement on behalf of the Fund
with the Distributor, under which the Distributor uses all reasonable
efforts, consistent with its other business, to secure purchasers of shares
of each Series of the Fund (the "Shares"). Such efforts may include, but
neither are required to include nor are limited to, the following: (1)
formulation and implementation of marketing and promotional activities,
such as mail promotions and television, radio, newspaper, magazine and
other mass media advertising; (2) preparation, printing and distribution of
sales literature provided to the Fund's shareholders and prospective
shareholders; (3) preparation, printing and distribution of prospectuses
and statements of additional information of the Fund and reports to
recipients other than existing shareholders of the Fund; (4) obtaining such
information, analyses and reports with respect to marketing and promotional
activities as the Distributor may, from time to time, deem advisable; (5)
making payment of sales commission, ongoing commissions and other payments
to brokers, dealers, financial institutions or others who sell Shares
pursuant to Selling Agreements; (6) paying compensation to registered
representatives or other employees of the Distributor who engage in or
support distribution of the Fund's Shares; (7) paying compensation to, and
expenses (including overhead and telephone expenses) of, the Distributor;
(8) providing training, marketing and support to dealers and others with
respect to the sale of Shares; (9) receiving and answering correspondence
from prospective shareholders including distributing prospectuses,
statements of additional information, and shareholder reports; (10)
providing of facilities to answer questions from prospective investors
about Shares; (11) complying with federal and state securities laws
pertaining to the sale of Shares; (12) assisting investors in completing
application forms and selecting dividend and other account options; (13)
providing of other reasonable assistance in connection with the
distribution of the Fund's shares; (14) organizing and conducting of sales
seminars and making payments in the form of transactional compensation or
promotional incentives; and (15) such other distribution and services
activities as the Fund determines may be paid for by the Fund pursuant to
the terms of this Plan and in accordance with Rule 12b-1 of the Act.
3. The Distribution Agreement also authorizes the Distributor to enter into
Service Agreements with other selling dealers and with banks or other
financial institutions to provide shareholder services to existing Class A
shareholders, including without limitation, services such as furnishing
information as to the status of shareholder accounts, responding to
telephone and written inquiries of shareholders, and assisting Class A
shareholders with tax information.
4. In consideration for the services described above, and the expenses
incurred by the Distributor pursuant to the Distribution Agreement and
Paragraphs 2 and 3 hereof, all with respect to Class A shares of a Series
of the Fund, Class A shares of each Series shall pay to the Distributor a
fee at the annual rate as shown on Appendix A (or such lesser amount as
the Fund Directors may, from time to time, determine) of the average daily
net assets of Class A shares of such Series. This fee shall be accrued
daily and paid monthly or at such other intervals, as the Fund Directors
shall determine. The determination of daily net assets shall be made at
the close of business each day throughout the month and computed in the
manner specified in the Fund's then current Prospectus for the
determination of the net asset value of the Fund's Class A shares.
5. The Fund presently pays, and will continue to pay, a management fee to
Principal Management Corporation (the "Manager") pursuant to a Management
Agreement between the Fund and the Manager (the "Management Agreement").
It is recognized that the Manager may use its management fee revenue, as
well as its past profits or its resources from any other source, to make
payment to the Distributor with respect to any expenses incurred in
connection with the distribution of Class A shares, including the
activities referred to in Paragraph 2 hereof. To the extent that the
payment of management fees by the Fund to the Manager should be deemed to
be indirect financing of any activity primarily intended to result in the
sale of Class A shares within the meaning of Rule 12b-1, then such payment
shall be deemed to be authorized by this Plan.
6. This Plan shall not take effect until it has been approved (a) by a vote
of at least a majority (as defined in the Act) of the outstanding Class A
shares of the Series of the Fund and (b) by votes of the majority of both
(i) the Board of Directors of the Fund, and (ii) those Directors of the
Fund who are not "interested persons" (as defined in the Act) of the Fund
and who have no direct or indirect financial interest in the operation of
this Plan or any agreements related to this Plan (the "Disinterested
Directors"), cast in person at a meeting called for the purpose of voting
on this Plan or such agreements.
7. Unless sooner terminated pursuant to Paragraph 6, this Plan shall continue
in effect for a period of twelve months from the date it takes effect and
thereafter shall continue in effect so long as such continuance is
specifically approved at least annually in the manner provided for
approval of this Plan in Paragraph 6(b).
8. A representative of the Distributor shall provide to the Board and the
Board shall review at least quarterly a written report of the amounts so
expended and the purposes for which such expenditures were made.
9. This Plan may be terminated at any time by vote of a majority of the
Disinterested Directors, or by vote of a majority (as defined in the Act)
of the outstanding Class A shares of the Series of the Fund.
10. Any agreement of the Fund related to this Plan shall be in writing and
shall provide:
A. That such agreement may be terminated at any time, without payment of
any penalty, by vote of a majority of the Disinterested Directors or
by a vote of a majority (as defined in the Act) of the outstanding
Class A shares of the Series of the Fund on not more than sixty (60)
days' written notice to any other party to the agreement); and
B. That such agreement shall terminate automatically in the event of its
assignment.
11. While the Plan is in effect, the Fund's board of directors shall satisfy
the fund governance standards as defined in Securities and Exchange
Commission Rule 0-1(a)(7).
12. This Plan does not require the Manager or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of Class A shares.
13. The Fund shall preserve copies of this Plan and any related agreements and
all reports made pursuant to Paragraph 8, for a period of not less than
six years from the date of the Plan, or the agreements or such report, as
the case may be, the first two years in an easily accessible place.
14. This Plan may not be amended to increase materially the amount of Fees
provided for in Paragraph 4 hereof unless such amendment is approved in
the manner provided for initial approval in Paragraph 6 hereof and no
other material amendment to this Plan shall be made unless approved in the
manner provided for initial approval in Paragraph 6(b) hereof.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Plan as of the first date written above.
PRINCIPAL INVESTORS FUND, INC.
BY: /s/ Xxxxx X. Xxxxxx
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XXXXX X. XXXXXX, PRESIDENT AND CHIEF EXECUTIVE OFFICER
PRINCIPAL FUNDS DISTRIBUTOR, INC.
BY: /s/ Xxxxxxx X. Beer
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XXXXXXX X. BEER, EXECUTIVE VICE PRESIDENT
PRINCIPAL INVESTORS FUND, INC.
APPENDIX A
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Distribution
or Service
Series Fee
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Bond & Mortgage Securities Fund 0.25%
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California Insured Intermediate Municipal Bond 0.25%
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California Municipal Bond 0.25%
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Disciplined LargeCap Blend 0.25%
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Diversified International Fund 0.25%
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Equity Income Fund I 0.25%
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Global Real Estate Securities Fund 0.25%
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Government Securities & High Quality Bond Fund 0.25%
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High Yield II 0.25%
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Income 0.25%
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Inflation Protection Fund 0.25%
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International Emerging Markets Fund 0.25%
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LargeCap Growth Fund 0.25%
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LargeCap S&P 500 Index Fund 0.15%
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LargeCap Value Fund 0.25%
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MidCap Blend Fund 0.25%
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MidCap Stock 0.25%
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Money Market 0.25%
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Mortgage Securities 0.25%
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Partners LargeCap Blend Fund 0.25%
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Partners LargeCap Blend Fund I 0.25%
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Partners LargeCap Growth Fund I 0.25%
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Partners LargeCap Growth Fund II 0.25%
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Partners LargeCap Value Fund 0.25%
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Partners MidCap Growth Fund 0.25%
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Partners MidCap Growth Fund I 0.25%
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Partners MidCap Value Fund 0.25%
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Partners SmallCap Growth Fund II 0.25%
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Preferred Securities Fund 0.25%
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Principal LifeTime 2010 Fund 0.25%
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Principal LifeTime 2020 Fund 0.25%
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Principal LifeTime 2030 Fund 0.25%
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Principal LifeTime 2040 Fund 0.25%
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Principal LifeTime 2050 Fund 0.25%
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Principal LifeTime Strategic Income Fund 0.25%
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Real Estate Securities Fund 0.25%
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XXX - Balanced Portfolio 0.25%
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XXX - Conservative Balanced Portfolio 0.25%
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XXX - Conservative Growth Portfolio 0.25%
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XXX - Flexible Income 0.25%
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XXX - Strategic Growth 0.25%
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Short-Term Bond Fund 0.15%
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Short-Term Income 0.25%
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Small Cap Growth 0.25%
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SmallCap Blend Fund 0.25%
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SmallCap Value Fund 0.25%
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Tax-Exempt Bond Fund I 0.25%
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Ultra Short Bond Fund 0.15%
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West Coast Equity 0.25%
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