BROKER-DEALER
MARKETING AND COMPENSATION AGREEMENT
FOR
PERSONAL VARIABLE ANNUITY CONTRACTS
AGREEMENT made this day of , 19 , by and between Princor Financial Services
Corporation (hereinafter called Distributor), (hereinafter called Broker) and
Principal Mutual Life Insurance Company (hereinafter called Issuer).
MARKETING
In consideration of the mutual agreements herein contained, the Parties hereto
agree as follows:
1. The Distributor hereby appoints the Broker to sell Personal Variable
Annuity Contracts (hereinafter called Annuity Contracts) issued by the
Issuer. This agreement is a selling agreement between broker-dealers. It
does not designate any party as the broker, agent, or employee of any
other Party. Words and phrases in this Agreement given special meaning in
any Annuity Contracts shall have that same special meaning in this
Agreement unless specifically defined otherwise herein.
2. The Broker hereby agrees to direct its best efforts to find purchasers
for Annuity Contracts issued by the Issuer. The Broker does not undertake
hereby to sell any specific number of Annuity Contracts issued by the
Issuer.
3. The Distributor shall provide the Broker with a reasonable number of
current prospectuses and such other material as the Distributor
determines to be desirable for use in connection with the sale of Annuity
Contracts or the solicitation of applications for participation
thereunder. The Distributor shall indemnify and hold the Broker harmless
for misrepresentations or omissions with regard to prospectuses and sales
materials provided by the Distributor as well as misrepresentations or
omissions of employees of the Distributor or Principal Mutual Life
Insurance Company relied upon in connection with the sale of Annuity
Contracts or the solicitation of applications for participation
thereunder.
4. The Broker warrants that it is a member in good standing of the National
Association of Securities Dealers, Inc. (NASD) and will promptly notify
Distributor of any change in Broker's status as a member of the NASD.
5. The Broker represents that it is currently a member of SIPC and, while
this agreement is in effect, will continue to be a member of SIPC. The
Broker agrees to notify the Distributor if the Broker's SIPC membership
status changes.
6. The Broker warrants that the Broker and any person associated with or
acting for the Broker in the solicitation of applications for Annuity
Contracts shall be qualified pursuant to the requirements of the National
Association of Securities Dealers, Inc. and appropriate federal and state
agencies regulating securities, insurance, any other aspect of the
Annuity Contracts or the sale of them. The Broker shall be responsible
for seeing to such qualifications, and will indemnify and hold the
Distributor and the Issuer harmless for any failure to have all persons
engaged in solicitation properly licensed, registered, and appointed for
securities and insurance sales.
7. The Broker shall be responsible for supervising and controlling the
conduct and activities of its Registered Representatives with regard to
the sale and distribution of Annuity Contracts. The Broker agrees to
indemnify and hold the Distributor and the Issuer harmless for claims and
actions of any sort which arise from the conduct and activities of the
persons involved in the sale and distribution of the Annuity Contracts.
8. The Broker shall act only in its own behalf in making agreements with
Registered Representatives or other persons in connection with the
solicitation or sales of Annuity Contracts.
9. The Broker agrees to maintain all books and records relating to the sale
of Annuity Contracts or interests therein required to be maintained by
the Broker pursuant to the Securities Exchange Act of 1934, in conformity
with the requirements of Rules 17a-3 and 17a-4 under such Act, and to the
applicable securities or insurance laws of any state.
10. The broker shall transmit promptly and directly to the Distributor all
Contributions collected by or paid to the Broker. All Annuity Contracts
are to be delivered promptly, and any undelivered Annuity Contracts are
to be returned within the time allowed or on demand.
COMPENSATION
With respect to the Annuity Contracts issued by the Issuer and distributed by
the Distributor upon applications for Annuity Contracts obtained by the Broker
while this agreement is in force, it is agreed that, subject to all provisions
of this Agreement and only so long as the Agreement remains in force, the Broker
shall receive Compensation in the form of a dealer concession as provided by
Schedule A attached hereto.
1. Compensation shall only be paid with respect to Annuity Contracts issued
while this Agreement is in force. Determination of the Annuity Contracts
applicable to this Agreement shall be by the Issuer.
2. The Distributor may, at any time, upon written notice to the Broker,
change any and all of the rates of Compensation set out herein.
3. If the Issuer, for any reason, refunds any Contributions, or any part
thereof, on any Annuity Contract, any Compensation paid on the amount
refunded shall be repaid to the Issuer by the Broker promptly and on
demand.
4. Any indebtedness of any kind due to the Distributor or Issuer from the
Broker may be offset against any amount due the Broker.
5. No assignment of the Compensation payable pursuant to this Agreement
shall be valid unless it is accepted in writing by the Issuer and
Distributor.
6. Broker agrees that if its Representatives are paid for a portion of their
expenses incurred in the sale of Annuity Contracts out of the Broker's
dealer concession, such payment will be conditioned upon the statement of
the Representative that he or she has actual unreimbursed expenses
incurred in the sale of the Annuity Contracts equal to or exceeding the
payment.
GENERAL
1. The Broker shall have no authority to incur any liability or debt against
the Distributor or the Issuer; accept risks or contracts of any kind;
make, alter, authorize or discharge any contract; extend the time of
payment of any Contributions; waive payments, fail to transmit any
Contributions collected promptly to the Distributor; use any advertising
or sales material which has not first been submitted to and approved by
the Distributor and the Issuer; nor bind the Distributor or the Issuer in
any way.
2. Any modifications of this Agreement must be in writing and signed by an
authorized officer of the Distributor and the Issuer.
3. This Agreement may be terminated by either the Distributor, the Broker or
the Issuer upon written notice to the last known address of the other
parties.
4. This Agreement supersedes and replaces any and all prior agreements of
the Distributor or the Issuer with the Broker on the subject of Contracts
or the sale of them.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
in triplicate on the date first above written.
Broker
By ___________________________________
PRINCOR FINANCIAL SERVICES CORPORATION
By ___________________________________
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
By ___________________________________
SCHEDULE A
DEALER CONCESSION
PERSONAL VARIABLE ANNUITY CONTRACTS
A Dealer Concession will be paid to the Broker according to one of the following
schedules as elected by the Contractholder:
Schedule A Schedule B
------------------------------------- -------------------------------------
Amount Amount
Amount of Plan Payable as a Amount of Plan Payable as a
Contributions Percent of Plan Contributions Percent of Plan
in Each Deposit Year Contributions in Each Deposit Year Contributions
-------------------- --------------- -------------------- ---------------
The first $ 5,000 4.50 The first $ 50,000 3.00
The next 5,000 3.00 The next 50,000 2.00
The next 5,000 1.70 The next 400,000 1.00
The next 35,000 1.40 The next 2,500,000 0.50
The next 50,000 0.90 Excess over 3,000,000 0.25
The next 400,000 0.60
Excess over 500,000 0.25
