PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
SUB-ADVISORY AGREEMENT
AGREEMENT executed as of the July 1, 1997, by and between PRINCOR
MANAGEMENT CORPORATION, an Iowa Corporation (hereinafter called "the Manager")
and INVISTA CAPITAL MANAGEMENT, INC. (hereinafter called "Invista").
W I T N E S S E T H:
WHEREAS, the Manager is the manager and investment adviser to Principal
Variable Contracts Fund, 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 Invista to furnish portfolio
selection and related research and statistical services in connection with the
investment advisory services which the Manager has agreed to provide to the
Fund, and Invista desires to furnish such services; and
WHEREAS, The Manager has furnished Invista with copies properly certified
or authenticated of each of the following:
(a) Management Agreement (the "Management Agreement") with the
Fund;
(b) Copies of the registration statement of the Fund as filed
pursuant to the federal securities laws of the United States,
including all exhibits and amendments;
NOW, THEREFORE, in consideration of the premises and the terms and
conditions hereinafter set forth, it is agreed as follows:
1. Appointment of Invista
In accordance with and subject to the Management Agreement, the Manager
hereby appoints Invista to perform portfolio selection services described in
Section 2 below for investment and reinvestment of the securities and other
assets of the Fund, subject to the control and direction of the Fund's Board of
Directors, as well as to assume other obligations as specified in Section 2
below, for the period and on the terms hereinafter set forth. Invista accepts
such appointment and agrees to furnish the services hereinafter set forth for
the compensation herein provided. Invista 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 Invista
(a) Invista shall provide with respect to the Fund all services and
obligations of the Manager described in Section 1, Investment Advisory Services,
of the Management Agreement.
(b) Invista shall use the same skill and care in providing services to the
Fund as it uses in providing services to fiduciary accounts for which it has
investment responsibility. Invista will conform with all applicable rules and
regulations of the Securities and Exchange Commission.
3. Compensation
As full compensation for all services rendered and obligations assumed by
Invista hereunder with respect to the Fund, the Manager shall pay Invista within
10 days after the end of each calendar month, or as otherwise agreed, an amount
representing Invista's actual cost of providing such services and assuming such
obligations.
4. 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 directors of the
Fund, including approval by the vote of a majority of the directors of the Fund
who are not interested persons of the Manager, Principal Mutual Life Insurance
Company, Invista or the Fund cast in person at a meeting called for the purpose
of voting on such approval and (iii) the date of its approval by a majority of
the outstanding voting securities of the Fund. 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 Fund and in
either event by vote of a majority of the directors of the Fund who are not
interested persons of the Manager, Principal Mutual Life Insurance Company,
Invista 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
Directors of the Fund, by vote of a majority of the outstanding voting
securities of the Fund, Invista or by the Manager. This Agreement shall
automatically terminate in the event of its assignment. In interpreting the
provisions of this Section 4, 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.
5. Amendment of this Agreement
No amendment of this Agreement shall be effective until approved by vote of
the holders of a majority of the outstanding voting securities and by vote of a
majority of the directors of the Fund who are not interested persons of the
Manager, Invista, Principal Mutual Life Insurance Company or the Fund cast in
person at a meeting called for the purpose of voting on such approval.
6. 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 Invista and of the Manager
for this purpose shall be The Principal Financial Group, Xxx Xxxxxx, Xxxx
00000-0000.
(c) Invista agrees to notify the Manager of any change in Invista's
officers and directors within a reasonable time after such change.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
date first above written.
PRINCOR MANAGEMENT CORPORATION
/s/ Xxxxxxx X. Xxxxx
By __________________________________________
Xxxxxxx X. Xxxxx, President
INVISTA CAPITAL MANAGEMENT, INC.
/s/ X. X. Xxxxxx
By __________________________________________
X. X. Xxxxxx, President
FIRST AMENDMENT TO THE
PRINCIPAL VARIABLE CONTRACTS FUND, INC.
SUB-ADVISORY AGREEMENT
The Sub-Advisory Agreement executed and entered into by and between Principal
Management Corporation (formerly known as Princor Management Corporation), an
Iowa corporation, and Invista Capital Management, Inc., an Iowa corporation,
on the 1st day of July, 1997, is hereby amended to add certain series of the
Corporation to the Agreement. Appendix A therefore now reads as follows:
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
SUB-ADVISORY AGREEMENT - APPENDIX A
Invista Capital Management, Inc. serves as Sub-Advisor for:
Balanced Account
Capital Value Account
Government Securities Account
Growth Account
International Account
International SmallCap Account
MidCap Account
SmallCap Account
Utilities Account
Executed this 27th day of February, 1998
Principal Management Corporation
/s/ Xxxxxxx X. Xxxxx
by:_________________________________
Invista Capital Management, Inc.
/s/ X. X. Xxxxxx
by:_________________________________
