AMENDED AND RESTATED
MANAGEMENT AGREEMENT
AGREEMENT to be effective March __, 2004, 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").
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) Articles of Incorporation of the Fund;
(b) Bylaws of the Fund as adopted by the Board of Directors; and
(c) Resolutions of the Board of Directors of the Fund selecting the
Manager as investment adviser and approving the form of this
Agreement.
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 the Fund, and the Manager agrees to act, perform or
assume the responsibility therefor 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 the Fund:
(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 Directors of the Fund (or any appropriate
committee of such Board), and revise from time to time as conditions
require, a recommended investment program for the portfolio of each
Series of the Fund consistent with each Series' investment objective
and policies;
(d) Implement such of its recommended investment program as the Fund shall
approve, by placing orders for the purchase and sale of securities,
subject always to the provisions of the Fund's Articles of
Incorporation and Bylaws and the requirements of the Investment
Company Act of 1940 (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;
(e) 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
Directors and any appropriate committees of such Board regarding the
general conduct of the investment business of the Fund; and
(f) Report to the Board of Directors 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 the Fund are being observed.
2. CORPORATE ADMINISTRATIVE SERVICES
The Manager will provide the following corporate administrative services
for the Fund:
(a) furnish the services of such of the Manager's officers and employees
as may be elected officers or directors 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 corporate functions of the Fund (i.e.,
functions other than (i) underwriting and distribution of Fund shares;
(ii) custody of Fund assets, (iii) transfer and paying agency
services; and (iv) corporate and portfolio accounting services); and
(c) furnish the services of executive and clerical personnel necessary to
perform the general corporate functions of the Fund.
3. RESERVED RIGHT TO DELEGATE DUTIES AND SERVICES TO OTHERS
The Manager in assuming responsibility for the various services as set
forth in this Agreement reserves the right to enter into agreements with
others for the performance of certain duties and services or to delegate
the performance of some or all of such duties and services to Principal
Life Insurance Company, or one or more affiliates thereof; provided,
however, that 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 Directors.
4. EXPENSES BORNE BY THE MANAGER
The Manager will pay:
(a) the organizational expenses of the Fund and its portfolios and share
classes, including the Fund's registration under the Investment
Company Act of 1940, and the initial registration of its Capital Stock
for sale under the Securities Act of 1933 with the Securities and
Exchange Commission;
(b) Compensation of personnel, officers and directors who are also
affiliated with the Manager; and
(c) Expenses and compensation associated with furnishing office space, and
all necessary office facilities and equipment, and personnel necessary
to perform the general corporate functions of the Fund.
5. COMPENSATION OF THE MANAGER BY FUND
For all services to be rendered and payments made as provided in Sections
1, 2 and 4 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 Articles of Incorporation of the Fund. If pursuant to such provisions
the determination of net asset value is suspended, then for the purposes of
this Section 5 the value of the net assets of the Fund 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.
6. EXPENSES BORNE BY FUND
The Fund will pay, without reimbursement by the Manager, all expenses
attributable to the services described in this Agreement and not
specifically identified in this Agreement as being paid by the Manager.
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
directors, 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 CORPORATE DOCUMENTS
The Fund will furnish the Manager promptly with properly certified or
authenticated copies of amendments or supplements to its Articles of
Incorporation or Bylaws. Also, the Fund will furnish the Manager financial
and other corporate 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 remain in force until the conclusion of the first
meeting of the shareholders of the Fund following the execution of this
agreement and if it is approved by a vote of 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 Series and in either
event by vote of a majority of the directors 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
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 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 Investment
Company Act of 1940 (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 vote of 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.
12. 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.
13. 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 INVESTORS FUND, INC.
By ______________________________________________________
Xxxxx X. Xxxxxx, President and Chief Executive Officer
PRINCIPAL MANAGEMENT CORPORATION
By ______________________________________________________
Xxxxxx X. Xxxxxx, Senior Vice President
SCHEDULE 1
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Management Fee Management Fee
Series as a Percentage Series as a Percentage
at Daily Average Net at Daily Average Net
Assets Assets
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Bond and Mortgage Securities Fund 0.55% Partners LargeCap Blend Fund 0.75%
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Capital Preservation Fund 0.52% Partners LargeCap Blend Fund I 0.45%
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Government Securities Fund 0.40% Partners LargeCap Growth Fund 1.00%
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High Quality Intermediate-Term Bond Fund 0.40% Partners LargeCap Growth Fund I 0.75%
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High Quality Long-Term Bond Fund 0.40% Partners LargeCap Growth Fund II 1.00%
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High Quality Short-Term Bond Fund 0.40% Partners LargeCap Value Fund 0.80%
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International Emerging Markets Fund 1.35% Partners LargeCap Value Fund I 0.80%
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International Fund I 0.90% Partners MidCap Growth Fund 1.00%
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International Fund II 1.00% Partners MidCap Growth Fund I 1.00%
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LargeCap Blend Fund I 0.60% Partners MidCap Value 1.00%
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LargeCap Growth Fund 0.55% Partners MidCap Value Fund I 1.00%
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LargeCap S&P 500 Index Fund 0.15% Partners SmallCap Blend Fund 1.00%
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LargeCap Value Fund 0.45% Partners SmallCap Growth Fund I 1.10%
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LifeTime 2010 Fund 0.1225% Partners SmallCap Growth Fund II 1.00%
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LifeTime 2020 Fund 0.1225% Partners SmallCap Growth Fund III 1.10%
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LifeTime 2030 Fund 0.1225% Partners SmallCap Value Fund 1.00%
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LifeTime 2040 Fund 0.1225% Partners SmallCap Value Fund I 1.00%
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LifeTime 2050 Fund 0.1225% Partners SmallCap Value Fund II 1.00%
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LifeTime Strategic Income Fund 0.1225% Preferred Securities Fund 0.75%
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MidCap Blend Fund 0.65% Real Estate Securities Fund 0.85%
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MidCap Growth Fund 0.65% SmallCap Blend Fund 0.75%
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MidCap S&P 400 Index Fund 0.15% SmallCap Growth Fund 0.75%
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MidCap Value Fund 0.65% SmallCap S&P 600 Index Fund 0.15%
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Money Market Fund 0.40% SmallCap Value Fund 0.75%
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Partners International Fund 1.10%
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