DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT is made this 15th day of September, 2004,
between Principal Life Insurance Company ("Principal"), a life insurance company
organized under the laws of the State of Iowa, and Princor Financial Services
Corporation ("Princor"), an affiliate of Principal organized under the laws of
the State of Iowa.
WITNESSETH
WHEREAS, Principal has established Separate Account B ("Separate
Account") and registered such Separate Account as an investment company under
the Investment Company Act of 1940 to fund variable annuity contracts issued by
Principal Life Insurance Company;
WHEREAS, Princor is registered with the Securities and Exchange
Commission as a broker-dealer under the Securities Exchange Act of 1934 and is a
member of the National Association of Securities Dealers, Inc.; and
WHEREAS, Principal desires to issue certain Principal Investment Plus
Variable AnnuitySM contracts ("Contracts") with respect to the Separate Account
which will be sold and distributed by and through Princor, and Princor is
willing to sell and distribute such Contracts under the terms and conditions
stated herein;
NOW, THEREFORE, the parties agree as follows:
1. Principal hereby appoints Princor as the principal underwriter of
the Contracts issued with respect to the Separate Account, and Princor agrees to
use its best efforts to sell and distribute the Contracts through its registered
representatives or through other broker-dealers registered under the Securities
and Exchange Act of 1934 whose registered representatives are authorized by
applicable law to sell variable annuity contracts.
2. All payments and other monies payable upon the sale, distribution,
renewal or other transaction involving the Contracts shall be the property of
and be paid or remitted directly to Principal, who shall retain all such
payments and monies for its own account except to the extent such payments and
monies are allocated to the Separate Account. Princor shall not be deemed to
have any interest in such payments.
3. For the administrative convenience of the parties, Principal shall
(a) pay to the registered representatives of Princor the
commissions earned on the sale, distribution, renewal or
other transaction involving the Contracts as determined in
the attached Commission Schedule, and provide Princor with
accurate records of all such commissions paid on its behalf;
and
(b) pay to broker-dealers with whom Princor has entered into a
Selling Agreement for the distribution of the Contracts any
applicable dealer allowance or other compensation as
provided in such Selling Agreement, and provide Princor with
accurate records of all such payments paid on its behalf.
4. Principal shall pay to Princor an amount equal to the expenses
incurred by Princor in the performance of this Agreement. Princor shall provide
a statement of expenses to Principal at least semi-annually in a form and manner
agreed to by the parties.
5. Princor shall be solely responsible for the supervision and control
of the conduct and activities of its registered representatives with regard to
the sale and distribution of the Contracts.
6. Principal shall assume the responsibility, including the costs
thereof, for all administrative and legal functions pertaining to the Contracts
not otherwise specifically assumed by Princor in this agreement, including but
not limited to the following: the preparation, printing and filing of
prospectuses; the development, filing, and compliance with federal and state
securities laws and regulations of the Separate Account; contract development;
SEC registration; filing and compliance with state insurance laws and
regulations; underwriting; contract issue and contractowner service functions;
developing sales and promotional material; and training agents.
7. Principal will prepare and maintain all the books and records in
connection with the offer and sales of variable annuity contracts which are
required to be maintained and preserved in accordance with applicable securities
law; and all such books and records are to be maintained and held by Principal
on behalf of and as agent for the broker-dealer whose property they are and
shall remain; and all such books and records will be made available for
inspection by the Securities and Exchange Commission at all times.
8. Principal shall send to each contractowner or such other person as
appropriate a confirmation as required by law or regulation of any transaction
made with respect to the Contracts which shall reflect the true facts of the
transaction and show that confirmation of the transaction is being sent on
behalf of the broker-dealer acting in the capacity of agent for the insurance
company.
9. Princor and Principal may enter into agreements with other
broker-dealers duly licensed under applicable federal and state laws and with
their affiliated general agencies, if any, for the sale and distribution of the
Contracts. The commission payable to registered representatives on the sale of
Contracts thereunder may not exceed the amount shown on the attached Commission
Schedule.
10. This agreement may be terminated by either party upon 60 days prior
written notice. Princor shall promptly notify the Securities and Exchange
Commission of any such termination.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed on the day and year written above.
PRINCIPAL LIFE INSURANCE COMPANY
By: /s/Xxxxxxx Crew
---------------------------------------------------------
Xxxxxxx Crew
PRINCOR FINANCIAL SERVICES CORPORATION
By: /s/A. S. Filean
---------------------------------------------------------
A. S. Filean, Senior Vice President
VA2004 Commission Schedules
Standard First-Year Commission Schedule
Commissions Trails
Band 1 Band 2
Under 76 76 & Over Over $2M Yrs 2-7 Yrs 8+
-------- --------- -------- - -------- - -------
3.5% Schedule - Standard
Option A 3.500 2.500 2.500 - 0.200
Option B 3.000 2.000 2.000 0.100 0.300
Option C 2.000 1.000 1.000 0.300 0.500
6.0% Schedule
Option A 6.000 4.500 4.500 - -
Option B 5.500 4.000 4.000 0.100 0.100
Option C 4.500 3.000 3.000 0.300 0.300
Option D - No Trail on Over Age 76 0.500 - 0.375 1.000 1.000
6.25% Schedule - Optional
Option A 6.250 4.650 4.650 - -
Option B 5.750 4.150 4.150 0.100 0.100
Option C 4.750 3.150 3.150 0.300 0.300
Option D - No Trail on Over Age 76 0.750 - 0.500 1.000 1.000
6.5% Schedule - Optional (Princor)
Option A 6.500 4.875 4.875 - -
Option B 6.000 4.375 4.375 0.100 0.100
Option C 5.000 3.375 3.375 0.300 0.300
Option D - No Trail on Over Age 76 1.000 - 0.750 1.000 1.000
ICCs Mgmt Comp
Band 1 Band 2 Band 1 Band 2
Under 76 76 & Over Over $2M Under 76 76 & Over Over $2M
-------- --------- -------- ---------- ----------- - ---------
3.5% Schedule - Standard
Option A 1.750 1.250 1.250 - - -
Option B 1.500 1.000 1.000 - - -
Option C 1.000 0.500 0.500 - - -
6.0% Schedule
Option A - - - - - -
Option B - - - - - -
Option C - - - - - -
Option D - No Trail on Over Age 76 - - - - - -
6.25% Schedule - Optional
Option A - - - - - -
Option B - - - - - -
Option C - - - - - -
Option D - No Trail on Over Age 76 - - - - - -
6.5% Schedule - Optional (Princor)
Option A - - - - - -
Option B - - - - - -
Option C - - - - - -
Option D - No Trail on Over Age 76 - - - - - -
Total Compensation
Band 1 Band 2
Under 76 76 & Over Over $2M
---------- ----------- ----------
3.5% Schedule - Standard
Option A 3.500 2.500 2.500
Option B 3.000 2.000 2.000
Option C 2.000 1.000 1.000
6.0% Schedule
Option A 6.000 4.500 4.500
Option B 5.500 4.000 4.000
Option C 4.500 3.000 3.000
Option D - No Trail on Over Age 76 0.500 - 0.375
6.25% Schedule - Optional
Option A 6.250 4.650 4.650
Option B 5.750 4.150 4.150
Option C 4.750 3.150 3.150
Option D - No Trail on Over Age 76 0.750 - 0.500
6.5% Schedule - Optional (Princor)
Option A 6.500 4.875 4.875
Option B 6.000 4.375 4.375
Option C 5.000 3.375 3.375
Option D - No Trail on Over Age 76 1.000 - 0.750
.. In the State of Washington, additional deposits on or after the later of
policy anniversary age 70 and 10 years after issue are payable at 1% for
Option A, .05% for Option B, and 0% for Option C. In the State of New
jersey, additional deposits on or after the alter of policy anniversary age
64 and 4 years after issue are payable at 1% for Option A, .05% for Option
B, and 0% for Option C. In the state of Massachusetts, no commissions are
paid on additional deposits after the 11th contract year. Trail commissions
are not affected.
.. For Options B and C, one fourth of the annual trail commission is
multiplied by the total VA account value on the last day of the contract
quarter and paid quarterly beginning at the end of the fifth contract
quarter through the end of the 28th contract quarter. Only available on new
sales. The trail commission is paid to the current active servicing agent.
.. For options A, B and C, one fourth of the annual trail commission is
multiplied by the total VA account value on the last day of the contract
quarter and paid quarterly beginning at the end of the 20th contract
quarter. The trail commission is paid to the current active servicing
agent.
