SERVICE AGREEMENT
AGREEMENT to be effective September 15, 2000, by and between PRINCIPAL
INVESTORS FUND, INC., a Maryland corporation (hereinafter called the "Fund") and
PRINCIPAL MANAGEMENT CORPORATION, an Iowa corporation (hereinafter called "the
Manager").
In consideration of the premises and mutual agreements herein contained,
the Fund hereby appoints the Manager to provide personal services to
shareholders and beneficial owners as described herein and the Manager agrees to
act, perform or assume the responsibility therefor in the manner and subject to
the conditions hereinafter set forth.
1. SERVICES FURNISHED BY THE MANAGER
The Manager will provide personal services to shareholders and beneficial
owners of Advisors Preferred Class, Advisors Select Class, Preferred Class
and Select Class shares of each Series of Fund shares identified in Appendix A
hereto. Personal services include:
(a) responding to plan sponsor and plan member inquiries;
(b) providing information regarding plan sponsor and plan member investments;
(c) other similar personal services or services related to the maintenance of
shareholder accounts as contemplated by NASD Rule 2830, or any successor
thereto.
In the carrying out of this function, the Manager may contract with others,
including companies affiliated with the Manager, for data systems, processing
services and other administrative services. The Manager may at any time or times
in its discretion appoint (and may at any time remove) other parties, including
companies affiliated with the Manager, as its agent to carry out such provisions
of the Agreement as the Manager may from time to time direct; provided, however,
that the appointment of any such agent shall not relieve the Manager of any of
its responsibilities or liabilities hereunder.
2. COMPENSATION FOR SERVICES
The Fund will pay the Manager service fees equal to 0.17% of the average
daily net assets attributable to each of the Advisors Preferred Class and
Preferred Class shares and 0.25% of the average daily net assets attributable to
each of the Advisors Select Class and Select Class shares for services provided
pursuant to this agreement. Service fees under this Agreement will be calculated
and accrued daily and paid monthly to the Manager, or at such other intervals as
the Fund and Manager may agree. For purpose of this Agreement , "service fees"
shall mean payments in connection with the provision of personal, continuing
services to investors in the Fund and/or the maintenance of shareholder
accounts, excluding (i) transfer agent and sub-transfer agent services for
beneficial owners of the Fund's shares, (ii) aggregating and processing purchase
and redemption orders, (iii) providing beneficial owners with account
statements, processing dividend payments, (iv) providing sub-accounting services
for shares held beneficially, (v) forwarding shareholder communications to
beneficial owners, and (vi) receiving, tabulating and transmitting proxies
executed by beneficial owners; provided, however, that if the NASD adopts a
definition of "service fees" for purposes of NASD Rule 2830 (or any successor to
such rule) that differs from the definition of "service activities" hereunder,
or if the NASD adopts a related definition intended to define the same concept,
the definition of "service fees" in this Section shall be automatically amended,
without further action of the parties, to conform to such NASD definition.
3. 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.
4. TERM AND RENEWAL
This Agreement will continue in effect for successive periods of up to one
year, provided that each continuance is approved by the Board of Directors of
the Fund including a majority of the directors 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.
5. TERMINATION OF THIS AGREEMENT
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, or by the
Manager.
6. 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.
7. 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.
8. MISCELLANEOUS
The captions in this Agreement are included for convenience of reference
only, and in no way define or limit 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 Investors Fund, Inc.
By /s/Xxxxxx X. Xxxxxx
_________________________________________
Xxxxxx X. Xxxxxx, Senior Vice President
Principal Management Corporation
By /s/Xxxxx X. Xxxxxx
_________________________________________
Xxxxx X. Xxxxxx, President
PRINCIPAL INVESTORS FUND, INC.
APPENDIX A
Series
Balanced Fund
Bond and Mortgage Securities Fund
European Fund
Government Securities Fund
High Quality Intermediate-Term Bond Fund
High Quality Long-Term Bond Fund
High Quality Short-Term Bond Fund
International Emerging Markets Fund
International Fund I
International Fund II
International SmallCap Fund
LargeCap Blend Fund
LargeCap Growth Fund
LargeCap S&P 500 Index Fund
LargeCap Value Fund
MidCap Blend Fund
MidCap Growth Fund
MidCap S&P 400 Index Fund
MidCap Value Fund
Money Market Fund
Pacific Basin Fund
Partners LargeCap Blend Fund
Partners LargeCap Growth Fund I
Partners LargeCap Growth Fund II
Partners LargeCap Value Fund
Partners MidCap Growth Fund
Partners MidCap Value
Partners SmallCap Growth Fund I
Partners SmallCap Growth Fund II
Real Estate Fund
SmallCap Blend Fund
SmallCap Growth Fund
SmallCap S&P 600 Index Fund
SmallCap Value Fund
Technology Fund
