AMENDED AND RESTATED
DISTRIBUTION AGREEMENT
Agreement executed as of October 22, 2003, by and between PRINCIPAL
INVESTORS FUND, INC., a Maryland corporation (referred to herein as the "Fund")
and PRINCOR FINANCIAL SERVICES CORPORATION, an Iowa corporation (referred to
herein as the "Distributor").
W I T N E S S E T H:
WHEREAS, The Fund and the Distributor wish to enter into an agreement
setting forth the terms upon which the Distributor will act as underwriter and
distributor of the Fund; and
WHEREAS, The Fund and the Distributor have adopted procedures to implement
an Anti-Money Laundering Program reasonably designed to prevent the funds from
being used to launder money or to support terrorist activities; and
WHEREAS, The Fund wants to appoint the Distributor as its agent to assure
the Fund's Anti-Money Laundering Program procedures are implemented and the
program is operated in accordance with those procedures, and the Distributor is
willing to accept this responsibility.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the Fund hereby appoints the Distributor to act as principal
underwriter (as such term is defined in Section 2(a)(29) of the Investment
Company Act of 1940 (as amended)) of the shares of Capital Stock of each of the
Fund's series (the "Series") (hereinafter sometimes called "shares"), and the
Distributor agrees to act and perform the duties and functions of underwriter in
the manner and subject to the conditions hereinafter set forth.
1. SOLICITATION OF ORDERS
In consideration of the rights granted herein to the Distributor,
Distributor agrees to use all reasonable efforts, consistent with its other
business, to secure purchasers for shares of the Fund. This shall not
prevent the Distributor from entering into like arrangements (including
arrangements involving the payment of underwriting commissions) with other
issuers. The Distributor shall have the right to enter into sales
agreements with dealers of its choice for the sale of shares of the Fund to
eligible purchasers as described in the Fund's current Prospectus and/or
Statement of Additional Information at the public offering price only and
fix in such agreements the portion of the sales charge which may be
retained by dealers, provided that the Fund shall approve the form of the
sales agreement and the dealer discounts set forth therein and shall
evidence such approval by filing said form of sales agreement and
amendments thereto as an exhibit to its currently effective registration
statement under the Securities Act of 1933 (the "1933 Act").
2. SALE OF SHARES
The Distributor is authorized to sell as agent on behalf of the Fund
authorized shares of the Fund by accepting unconditional orders placed with
the Distributor by investors in states wherever sales may lawfully be made
during the term of this Agreement and subject to the registration
requirements of the 1933 Act.
3. PUBLIC OFFERING PRICE
Except as otherwise noted in the Fund's current Prospectus and/or Statement
of Additional Information, all shares sold to investors by the Distributor
or the Fund will be sold at the public offering price. The public offering
price for all accepted orders will be the net asset value per share, as
determined in the manner described in the Fund's current Prospectus and/or
Statement of Additional Information, plus a sales charge (if any) described
in the Fund's current Prospectus and/or Statement of Additional
Information, subject to any waivers or reductions in the sales charge that
may be described therein. The Fund shall in all cases receive the net asset
value per share on all sales. If a sales charge is in effect, the
Distributor shall have the right subject to such rules or regulations of
the Securities and Exchange Commission as may then be in effect pursuant to
Section 22 of the Investment Company Act of 1940 to pay a portion of the
sales charge to its agents, employees and registered representatives and to
dealers who have sold shares of the Fund. The Distributor shall receive a
commission equal to the difference between the basic retail price and the
"net asset value" of the Fund's shares sold through the Distributor subject
to a sales charge at the basic retail price. If any such commission is
received by the Fund, it will pay such commission to the Distributor. If a
fee in connection with shareholder redemptions is in effect, the Fund shall
collect the fee on behalf of Distributor and, unless otherwise agreed upon
by the Fund and Distributor, the Distributor shall be entitled to receive
all of such fees. The Distributor may pay its agents and employees such
compensation, allow to dealers such concessions, and allow (and authorize
dealers to re-allow) such discounts to purchasers, as the Distributor may
determine from time to time. The Distributor may also purchase as principal
shares of the Fund at "net asset value" and sell such shares at the public
offering price.
4. AUTHORIZED REPRESENTATIONS
The Distributor is not authorized by the Fund to give any information or to
make any representations other than those contained in the appropriate
registration statement or Prospectus and Statement of Additional
Information filed with the Securities and Exchange Commission under the
1933 Act (as these registration statements, Prospectuses and Statements of
Additional Information may be amended from time to time), or contained in
shareholder reports or other material that may be prepared by or on behalf
of the Fund for the Distributor's use. This shall not be construed to
prevent the Distributor from preparing and distributing sales literature or
other material as it may deem appropriate.
5. DELIVERY OF PAYMENTS AND ISSUANCE OF SHARES
The Distributor will deliver to the Fund all payments made pursuant to
orders accepted by the Distributor upon receipt thereof by the Distributor
in its principal place of business.
After payment the Fund will issue shares of the applicable class of Capital
Stock by crediting the appropriate number of shares to a stockholder
account in such names and such manner as specified in the application or
order relating to such shares.
6. SALE OF SHARES TO INVESTORS BY THE FUND
Any right granted to the Distributor to accept orders for shares or make
sales on behalf of the Fund will not apply to shares issued in connection
with the merger or consolidation of any other investment company with the
Fund or its acquisition, purchase or otherwise, of all or substantially all
the assets of any investment company or substantially all the outstanding
shares of any such company. Also, any such right shall not apply to shares
issued, sold or transferred, whether Treasury or newly issued shares, that
may be offered by the Fund to investors on applications received and
accepted by the Fund or to its shareholders, as stock dividends or splits
for not less than "net asset value".
7. AGREEMENTS WITH DEALERS OR OTHERS
In making agreements with any dealers or others, the Distributor shall act
only in its own behalf and in no sense as agent for the Fund and shall be
agent for the Fund only in respect of sales and repurchases of Fund shares.
8. COPIES OF CORPORATE DOCUMENTS
The Fund will furnish the Distributor promptly with properly certified or
authenticated copies of any registration statements filed by it with the
Securities and Exchange Commission under the 1933 Act, as amended, or the
Investment Company Act of 1940, as amended, together with any financial
statements and exhibits included therein and all amendments or supplements
thereto hereafter filed. Also, the Fund shall furnish the Distributor, at
the Distributor's expense, with a reasonable number of printed copies of
each semi-annual and annual report (quarterly if made) of the Fund as the
Distributor may request, and shall cooperate fully in the efforts of the
Distributor to sell and arrange for the sale of the Fund's shares of
Capital Stock and in the performance by the Distributor of all of its
duties under this Agreement.
9. RESPONSIBILITY FOR CONTINUED REGISTRATION INCLUDING INCREASE IN SHARES
The Fund will assume the continued responsibility for meeting the
requirements of registration under the 1933 Act, as amended, under the
Investment Company Act of 1940, as amended, and under the securities laws
of the various states where the Distributor is registered as a
broker-dealer. The Fund, subject to the necessary approval of its
shareholders, will increase the number of authorized shares from time to
time as may be necessary to provide the Distributor with such number of
shares as the Distributor may reasonably be expected to sell.
10. SUSPENSION OF SALES
If and whenever the determination of asset value of a Series is suspended
pursuant to applicable law, and such suspension has become effective, until
such suspension is terminated no further applications for shares of the
Series shall be accepted. In addition, the Fund reserves the right to
suspend sales and the Distributor's authority to accept orders for shares
on behalf of the Fund, if in the judgment of the majority of its Board of
Directors, or of its Executive Committee if such Committee exists, it is in
the best interest of the Fund to do so, suspension to continue for such
period as may be determined by such majority; and in that event no shares
of that Series will be sold by the Fund or by the Distributor on behalf of
the Fund while such suspension remains in effect except for shares
necessary to cover unconditional orders accepted by the Distributor before
the Distributor had knowledge of the suspension.
11. RESPONSIBILITY FOR IMPLEMENTING THE FUND'S ANTI-MONEY LAUNDERING PROGRAM
The Fund hereby appoints the Distributor to act as its agent to assure the
Fund's Anti-Money Laundering Program procedures are implemented and the
Distributor accepts this appointment. The Distributor will assure such
procedures are implemented and that the program operates in accordance with
those procedures and will provide such reports and information as the Fund
may request from time to time to facilitate the Fund's oversight of such
program. The Distributor will also make information and records relating to
the Fund's Anti-Money Laundering Program available to federal regulators as
required by law and will permit such regulators to examine and inspect the
Distributor for purposes of the program. The Distributor will perform the
specific requirements of the Fund's Customer Identification Program and
will annually certify it has implemented the Fund's anti-money laundering
program.
12. EXPENSES
The Fund will pay (or will enter into arrangements providing for the
payment of) all fees and expenses: (1) in connection with the preparation
and filing of any registration statement or amendments thereto as required
under the Investment Company Act of 1940, as amended; (2) in connection
with the preparation and filing of any registration statement and
prospectus or amendments thereto under the 1933 Act, as amended, covering
the issue and sale of the Fund's shares; and (3) in connection with the
registration of the Fund and qualification of shares for sale in the
various states and other jurisdictions. The Fund will also pay (or will
enter into arrangements providing for the payment of) the cost of (i)
preparation and distribution to shareholders of prospectuses, reports, tax
information, notices, proxy statements and proxies; (ii) preparation and
distribution of dividend and capital gain payments to shareholders; (iii)
issuance, transfer, registry and maintenance of open account charges; (iv)
delivery, remittance, redemption and repurchase charges; and (v)
communication with shareholders concerning these items. The Fund will pay
taxes including, in the case of redeemed shares, any initial transfer taxes
unpaid.
The Distributor shall assume responsibility for (or will enter into
arrangements providing for the payment of) the expense of printing
prospectuses used for the solicitation of new accounts of the Fund. The
Distributor will pay (or will enter into arrangements providing for the
payment of) the expenses of other sales literature for the Fund, will pay
all fees and expenses in connection with the Distributor's qualification as
a dealer under the Securities Exchange Act of 1934, as amended, and in the
various states, and all other expenses in connection with the sale and
offering for sale of shares of the Fund which have not been herein
specifically allocated to or assumed by the Fund.
As provided in the Distribution and Service Plan adopted by the Fund, it is
recognized by the Fund that Principal Management Corporation (the
"Manager") may make payment to the Distributor with respect to any expenses
incurred in the distribution of shares of the Fund, such payments payable
from the past profits or other resources of the Manager including
management fees paid to it by the Fund.
13. CONFORMITY WITH LAW
The Distributor agrees that in selling the shares of the Fund it will duly
conform in all respects with the laws of the United States and any state or
other jurisdiction in which such shares may be offered for sale pursuant to
this Agreement.
14. MEMBERSHIP IN NATIONAL ASSOCIATION OF SECURITIES DEALERS
The Fund recognizes that the Distributor is now a member of the National
Association of Securities Dealers, and in the conduct of its duties under
this Agreement the Distributor is subject to the various rules, orders and
regulations of such organization. The right to determine whether such
membership should or should not continue, or to join other organizations,
is reserved by the Distributor.
15. OTHER INTERESTS
It is understood that directors, officers, agents and stockholders of the
Fund are or may be interested in the Distributor as directors, officers,
stockholders, or otherwise; that directors, officers, agents, and
stockholders of the Distributor are or may be interested in the Fund as
directors, officers, stockholders or otherwise; that the Distributor may be
interested in the Fund as a stockholder or otherwise; and that the
existence of any dual interest shall not affect the validity hereof or of
any transaction hereunder except as otherwise provided in the Articles of
Incorporation of the Fund and the Distributor, respectively, or by specific
provision of applicable law.
16. INDEMNIFICATION
The Fund agrees to indemnify, defend and hold the Distributor, its officers
and directors, and any person who controls the Distributor within the
meaning of Section 15 of the 1933 Act, free and harmless from and against
any and all claims, demands, liabilities and expenses (including the cost
of investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Distributor, its
officers, directors or any such controlling person may incur under the
Securities Act of 1933, or under common law or otherwise, arising out of or
based upon any untrue statement of a material fact contained in the Fund's
registration statement, Prospectus or Statement of Additional Information
or arising out of or based upon any alleged omission to state a material
fact required to be stated therein or necessary to make the statements in
either or necessary to make the statements therein not misleading, except
insofar as such claims, demands, liabilities or expenses arise out of or
are based upon any such untrue statement or omission made in conformity
with information furnished in writing by the Distributor to the Fund for
use in the Fund's registration statement or Prospectus or Statement of
Additional Information: provided, however, that this indemnity agreement,
to the extent that it might require indemnity of any person who is also an
officer or director of the Fund or who controls the Fund within the meaning
of Section 15 of the 1933 Act, shall not inure to the benefit of such
officer, director or controlling person unless a court of competent
jurisdiction shall determine, or it shall have been determined by
controlling precedent that such result would not be against public policy
as expressed in the Securities Act of 1933, and further provided, that in
no event shall anything contained herein be so construed as to protect the
Distributor against any liability to the Fund or to its security holders to
which the Distributor would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence, in the performance of its
duties, or by reason of its reckless disregard of its obligations under
this Agreement. The Fund's agreement to indemnify the Distributor, its
officers and directors and any such controlling person as aforesaid is
expressly conditioned upon the Fund being promptly notified of any action
brought against the Distributor, its officers or directors, or any such
controlling person, such notification to be given by letter or telegram
addressed to the Fund. The Fund agrees promptly to notify the Distributor
of the commencement of any litigation or proceedings against it or any of
its directors in connection with the issue and sale of any shares of it
Capital Stock.
The Distributor agrees to indemnify, defend and hold the Fund, its officers
and directors and any person who controls the Fund, if any, within the
meaning of Section 15 of the 1933 Act, free and harmless from and against
any and all claims, demands, liabilities and expenses (including the cost
of investigating or defending such claims, demands liabilities and any
counsel fees incurred in connection therewith) which the Fund, its
directors or officers or any such controlling person may incur under the
1933 Act or under common law or otherwise; but only to the extent that such
liability or expense incurred by the Fund, its directors or officers or
such controlling person resulting from such claims or demands shall arise
out of or be based upon any alleged untrue statement of a material fact
contained in information furnished in writing by the Distributor to the
Fund for use in the Fund's registration statement, Prospectus or Statement
of Additional Information or shall arise out of or be based upon any
alleged omission to state a material fact in connection with such
information required to be stated in the registration statement, Prospectus
or Statement of Additional Information or shall arise out of or be based
upon any alleged omission to state a material fact in connection with such
information required to be stated in the registration statement or
Prospectus or necessary to make such information not misleading. The
Distributor's agreement to indemnify the Fund, its directors and officers,
and any such controlling person as aforesaid is expressly conditioned upon
the Distributor being promptly notified of any action brought against the
Fund, its officers or directors or any such controlling person.
17. DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of the execution date specified on
page 1 of this Agreement and will remain in effect for more than two years
thereafter only so long as such 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, provided
that in either event such continuation shall be approved by the vote of a
majority of the directors who are not interested persons of the
Distributor, 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 be terminated on 60 days written notice at any time, without
payment of any penalty, by the Fund or by the Distributor. This Agreement
shall terminate automatically in the event of its assignment.
In interpreting the provisions of this paragraph 15, the definitions
contained in section 2(a) of the Investment Company Act of 1940 and the
rules thereunder (particularly the definitions of "interested person",
"assignment" and "voting security") shall be applied.
18. 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. If the Fund should at any time deem it necessary or advisable in
the best interests of the Fund that any amendment of this Agreement be made
in order to comply with the recommendations or requirements of the
Securities and Exchange Commission or other governmental authority or to
obtain any advantage under state or federal tax laws and should notify the
Distributor of the form of such amendment, and the reasons therefore, and
if the Distributor should decline to assent to such amendment, the Fund may
terminate this Agreement forthwith. If the Distributor should at any time
request that a change be made in the Fund's Articles of Incorporation or
By-laws, or in its method of doing business, in order to comply with any
requirements of federal law or regulations of the Securities and Exchange
Commission or of a national securities association of which the Distributor
is or may be a member, relating to the sale of shares of the Fund, and the
Fund should not make such necessary change within a reasonable time, the
Distributor may terminate this Agreement forthwith.
19. ADDRESS FOR PURPOSES 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 Distributor for this purpose shall be The Principal
Financial Group, Xxx Xxxxxx, Xxxx 00000-0000.
IN WITNESS WHEREOF, the parties hereof have caused this Agreement to be
executed in duplicate on the day and year first above written.
PRINCIPAL INVESTORS FUND, INC. PRINCOR FINANCIAL SERVICES CORPORATION
By /s/A.S. Filean____________________ By /s/Xxxxx X. Eucher________________
A.S. Filean, Senior Vice President X. X. Xxxxxx, President and
Chief Executive Officer
