PRINCIPAL EXCHANGE-TRADED FUNDS
AMENDED AND RESTATED MANAGEMENT AGREEMENT
AGREEMENT to be effective May 9, 2017, by and between PRINCIPAL
EXCHANGE-TRADED FUNDS, a Delaware statutory trust (hereinafter called
the "Fund") on behalf of each series identified on Schedule 1 attached
hereto, as may be amended from time to time (each, a "Series"), and
PRINCIPAL GLOBAL INVESTORS, LLC, a Delaware Limited Liability Company
(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 for each Series and approving the form
of this Agreement with respect to each such Series; and
WHEREAS, The Fund desires to retain the Manager to provide
investment management services to each Series on the terms set forth
in this Agreement, and the Manager is willing to provide such
investment management services to each Series on the terms set forth
in this Agreement; and
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 each Series, 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
each Series:
(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 provide ongoing review, evaluation and
revision from time to time as conditions require of, a recommended
investment program for the portfolio of each Series of the Fund
consistent with each Series' investment objective and policies,
including any recommendation for any combination of liquidation of
Series;
(d) Where applicable, based on upon research, analysis and due
diligence, recommend to the Board of Trustees of the Fund one or more
sub-advisers for a Series of the Fund; regularly monitor and evaluate
each sub-adviser's performance and recommend changes to the
sub-advisers in situations in which appropriate.
(e) Implement such of its recommended investment program for each
Series 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, as amended (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;
(f) 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 each Series; and
(g) 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 each Series 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 each Series 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 expenses of each
Series;
(c) Prepare daily money transfer;
(d) Reconcile all bank and custodian accounts of each Series;
(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 if each Series 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 (the "SEC") in compliance with the provisions
of the 1940 Act and the Securities Act of 1933, as amended the (the
"Securities Act"), the Internal Revenue Service and any other
regulatory or governmental agencies as required;
(l) Provide financial, yield, net asset value, and similar
information to National Association of Securities Dealers, 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 operations of each Series; 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 1940 Act 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
the shares of each Series; (ii) custody of the assets of each Series,
(iii) transfer and paying agency services; and (iv) corporate and
portfolio accounting services);
(c) furnish the services of executive and clerical personnel necessary
to perform the general trust functions of the Fund.
(d) design, develop, implement and regularly monitor appropriate
compliance processes; and
(e) prepare, or provide oversight and review of the preparation of,
registration statements, shareholder reports and other disclosure
materials and regulatory filings for each Series.
4. RESERVED RIGHT TO DELEGATE DUTIES AND SERVICES TO OTHERS
In each case, to the extent required by applicable law (i) subject to
the prior approval of a majority of the Board of Trustees of the Fund,
including a majority of the Trustees who are not interested persons
(as defined in the 1940 Act of the manager, Principal Life Insurance
Company, or the Fund and, (ii) by vote of a majority of the
outstanding voting securities (as defined in the 0000 Xxx) of the
applicable Series, the Manager, in assuming responsibility for the
various services as set forth in this Agreement may (a) enter into
agreements with others for the performance of certain duties and
services or (b) delegate the performance of some or all of such duties
and (services to Principal Life Insurance Company, one or more
affiliates or to unaffiliated parties thereof; provided, however, that
the (x) 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 and (y) the
entry into any such agreements in clause (a) or any such delegation
in clause (b) shall not relieve the Manager of any of its obligations
under this Agreement.
5. EXPENSES
The Manager shall pay all expenses of each Series except for the
Management Fees, payments made under each Series 12b-1 plan, brokerage
commissions and other expenses connected to the execution of portfolio
transactions, interest expense, taxes, acquired fund fees and
expenses, litigation expenses and other extraordinary expenses.
6. COMPENSATION OF THE MANAGER BY FUND
For all services to be rendered and payments made as provided in
Sections 1, 2 and 3 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
each Series 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. 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.
8. 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.
9. 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.
10. DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective with respect to a Series as of
the corresponding date set forth on Schedule 2 to this Agreement, as
may be amended from time to time, and, unless otherwise terminated
with respect to such Series shall continue in effect thereafter for
the initial term set forth on Schedule 2 to this Agreement, and
thereafter from year to year, provided that in each case the
continuance is specifically approved within the period required by the
1940 Act 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 with respect to a Series 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 1940 Act (particularly the definitions of "interested
person," "assignment," and "voting security") shall be applied.
11. 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 the 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.
12. ADDRESS FOR PURPOSE OF NOTICE
In the event the Fund establishes one or more Series after the
effective date of this Agreement, such Series will become Series under
this Agreement upon approval of this Agreement for such Series in the
manner required by the 1940 Act and the amendment of Schedules 1 and 2
hereto.
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/ Xxxxxxx X. Beer
Xxxxxxx X. Beer,
President & Chief Executive Officer
By
/s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx,
Assistant Counsel
PRINCIPAL GLOBAL INVESTORS, LLC
By
/s/ Xxxxxxx
XxXxxxxx
Xxxxxxx XxXxxxxx, Xx. Exec Dire - Investments
By
/s/ Xxxxxx X.
Xxxxxxxx
Xxxxxx X. Xxxxxxxx, Assistant General Counsel
SCHEDULE 1
Management Fee as a Percentage
of Average Daily Net Assets
Series
First $500 million
Next $500
million
Next $500 million
Over $1.5 billion
Principal Price Setters Index
ETF
0.40%
0.38%
0.36%
0.35%
Principal Shareholder Yield Index ETF
0.40%
0.
38%
0.36%
0.35%
Principal Healthcare Innovators Index ETF
0.42%
0.40%
0.
38%
0.37%
Principal Millennials Index ETF
0.45%
0.43%
0.41%
0.40%
Series
Management Fee as a Percentage of
Average Daily Net Assets All Assets
Principal Active Global Dividend
Income ETF
0.58%
Principal U.S. Small Cap Index ETF
0.38%
SCHEDULE 2
Effective Date and Initial Term of Management Agreement for each
Series
Series
Effective Date
Initial Term
Principal Active Global Dividend
Income ETF
05/08/2017
Two Years
Principal Healthcare Innovators Index
ETF
08/19/2016
Two Years
Principal Price Setters Index ETF
03/21//2016
Two
Years
Principal Shareholder Yield Index ETF
03/21/2016
Two Years
Principal
Millennials Index ETF
08/19/2016
Two Years
Principal U.S. Small Cap Index
ETF
09/21/2016
Two Years
