SUB-ADVISORY AGREEMENT
AGREEMENT executed as of the _____________________, 1997, by and between
PRINCOR MANAGEMENT CORPORATION, an Iowa Corporation (hereinafter called "the
Manager") and INVISTA CAPITAL MANAGEMENT, INC. (hereinafter called "Invista").
W I T N E S S E T H:
WHEREAS, the Manager is the manager and investment adviser to Principal
Variable Contracts Fund, Inc., (the "Fund"), an open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Manager desires to retain Invista to furnish certain portfolio
selection and related research and statistical services in connection with the
investment advisory services which the Manager has agreed to provide to the
Fund, and Invista desires to furnish such services; and
WHEREAS, The Manager has furnished Invista with copies properly certified
or authenticated of each of the following:
(a) Management Agreement (the "Management Agreement") with the Fund;
(b) Copies of the registration statement of the Fund as filed pursuant to
the federal securities laws of the United States, including all
exhibits and amendments;
NOW, THEREFORE, in consideration of the premises and the terms and
conditions hereinafter set forth, it is agreed as follows:
1. Appointment of Invista
In accordance with and subject to the Management Agreement, the Manager
hereby appoints Invista to perform portfolio selection services described in
Section 2 below for investment and reinvestment of the securities and other
assets of certain series of the Fund (see Schedule A), subject to the control
and direction of the Fund's Board of Directors, as well as to assume other
obligations as specified in Section 2 below, for the period and on the terms
hereinafter set forth. Invista accepts such appointment and agrees to furnish
the services hereinafter set forth for the compensation herein provided. Invista
shall for all purposes herein be deemed to be an independent contractor and
shall, except as expressly provided or authorized, have no authority to act for
or represent the Fund or the Manager in any way or otherwise be deemed an agent
of the Fund or the Manager.
2. Obligations of and Services to be Provided by Invista
(a) Invista shall provide with respect to those Accounts of the Fund
described in Schedule 1 hereto (the "Accounts") all services and
obligations of the Manager described in Section 1, Investment
Advisory Services, of the Management Agreement.
(b) Invista shall use the same skill and care in providing services to
the Accounts as it uses in providing services to fiduciary
accounts for which it has investment responsibility. Invista will
conform with all applicable rules and regulations of the
Securities and Exchange Commission.
3. Compensation
As full compensation for all services rendered and obligations assumed by
Invista hereunder with respect to the Accounts, the Manager shall pay Invista
within 10 days after the end of each calendar month, or as otherwise agreed, an
amount representing Invista's actual cost of providing such services and
assuming such obligations.
4. Duration and Termination of This Agreement
This Agreement shall become effective as to an Account on the latest of (i)
the date of its execution, (ii) the date of its approval by a majority of the
directors of the Fund, including approval by the vote of a majority of the
directors of the Fund who are not interested persons of the Manager, Principal
Mutual Life Insurance Company, Invista or the Fund cast in person at a meeting
called for the purpose of voting on such approval and (iii) the date of its
approval by a majority of the outstanding voting securities of the Account. 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 Account and in either event by vote of a majority of the
directors of the Fund who are not interested persons of the Manager, Principal
Mutual Life Insurance Company, Invista 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 as to an Account 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 Account, Invista or by the
Manager. This Agreement shall automatically terminate in the event of its
assignment. In interpreting the provisions of this Section 4, 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.
5. Amendment of this Agreement
No amendment of this Agreement as to an Account shall be effective until
approved by vote of the holders of a majority of the outstanding voting
securities of the Account and by vote of a majority of the directors of the Fund
who are not interested persons of the Manager, Invista, Principal Mutual Life
Insurance Company or the Fund cast in person at a meeting called for the purpose
of voting on such approval.
6. General Provisions
(a) Each party agrees to perform such further acts and execute such
further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Iowa. The
captions in this Agreement are included for convenience only and
in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
(b) Any notice under this Agreement shall be in writing, addressed and
delivered or mailed postage pre-paid 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 Invista and of the Manager for this purpose
shall be The Principal Financial Group, Xxx Xxxxxx, Xxxx
00000-0000.
(c) Invista agrees to notify the Manager of any change in Invista's
officers and directors within a reasonable time after such change.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
date first above written.
PRINCOR MANAGEMENT CORPORATION
By __________________________________________
Xxxxxxx X. Xxxxx, President
INVISTA CAPITAL MANAGEMENT, INC.
By __________________________________________
Xxxxx X. Xxxxxx, President
SCHEDULE A
Invista serves as Sub-Advisor for:
Balanced Account
Capital Value Account
Government Securities Account
Growth Account
International Account
MidCap Account
