INVESTMENT SERVICE AGREEMENT
THIS INVESTMENT SERVICE AGREEMENT, to be effective the 1st day of
February, 2000, by and between PRINCIPAL LARGECAP STOCK INDEX FUND, INC. (the
"Fund"), an open-end investment company formed under the laws of Maryland,
PRINCIPAL MANAGEMENT CORPORATION ("Manager"), an Iowa corporation, and PRINCIPAL
LIFE INSURANCE COMPANY, an Iowa life insurance company;
W I T N E S S E T H:
WHEREAS, Principal Life Insurance Company has organized the Manager to
serve as investment adviser and is under common control with the Manager; and
WHEREAS, the Manager and the Fund have entered into a Management
Agreement effective as of February 1, 2000 whereby the Manager undertakes to
furnish the Fund with investment advisory services and certain other services;
and
WHEREAS, the Manager has the right under the Management Agreement to
appoint one or more sub-advisors to furnish such services to the Fund; and
WHEREAS, Principal Life Insurance Company is willing to make available to
the Manager on a part-time basis certain employees and services of Principal
Life Insurance Company and its subsidiaries for the purpose of better enabling
the Manager to fulfill its investment advisory obligations under the Management
Agreement, provided that the Manager bears all costs allocable to the time spent
by them on the affairs of the Manager, and the Manager and the Fund believe that
such an arrangement will be for their mutual benefit:
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. The Manager shall have the right to use, on a part-time basis, and
Principal Life Insurance Company shall make available on such basis, such
employees of Principal Life Insurance Company and its subsidiaries and for such
periods as may be agreed upon by the Manager and Principal Life Insurance
Company and its subsidiaries, as reasonably needed by the Manager in the
performance of its investment advisory services (but not its administrative,
transfer and paying services) under the Management Agreement. It is anticipated
that such employees will be persons employed in the Investment Department of
Principal Life Insurance Company or its subsidiaries. Principal Life Insurance
Company will also make available to the Manager or the Fund such clerical,
stenographic and administrative services as the Manager may reasonably request
to facilitate its performance of such investment advisory services.
2. The employees of Principal Life Insurance Company and its subsidiaries
in performing services for the Manager hereunder may, to the full extent that
they deem appropriate, have access to and utilize statistical and economic data,
investment research reports and other material prepared for or contained in the
files of the Investment Department of Principal Life Insurance Company or its
subsidiaries which is relevant to making investments for the Fund, and may make
such materials available to the Manager, provided, that any such materials
prepared or obtained in connection with a private placement or other non-public
transaction need not be made available to the Manager if Principal Life
Insurance Company or its subsidiaries deem such materials confidential.
3. Employees of Principal Life Insurance Company or its subsidiaries
performing services for the Manager pursuant hereto shall report and be
responsible solely to the officers and directors of the Manager or persons
designated by them. Principal Life Insurance Company or its subsidiaries shall
have no responsibility for investment recommendations and decisions of the
Manager based upon information or advice given or obtained by or through such
Principal Life Insurance Company employees or employees of Principal Life
Insurance Company subsidiaries.
4. Principal Life Insurance Company will, to the extent requested by the
Manager, supply to employees of the Manager (including part-time employees of
Principal Life Insurance Company or its subsidiaries serving the Manager) such
clerical, stenographic and administrative services and such office supplies and
equipment as may be reasonably required in order that they may properly perform
their respective functions on behalf of the Manager in connection with its
performance of its investment advisory services under the Management Agreement.
5. The obligation of performance under the Management Agreement is solely
that of the Manager, and Principal Life Insurance Company and its subsidiaries
undertake no obligation in respect thereto, except as otherwise expressly
provided herein.
6. In consideration of the services to be rendered by Principal Life
Insurance Company or its subsidiaries and their employees pursuant to this
Investment Service Agreement, the Manager agrees to pay Principal Life Insurance
Company or its subsidiaries within 10 days after the end of each calendar month,
or as otherwise agreed, on amount calculated in accordance with Schedule A,
attached hereto.
7. This Investment Service Agreement shall remain in force until the
conclusion of the first meeting of the shareholders of the Fund and if it is
approved by a vote of a majority of the outstanding voting securities of the
Fund, it shall continue 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 vote of a majority of the outstanding voting securities of the Fund
and in either event such continuance shall be approved by the vote of a majority
of the directors who are not interested persons of the Manager, Principal Life
Insurance Company or its subsidiaries or the Fund cast in person at a meeting
called for the purpose of voting on such approval. This Investment Service
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 Fund, by the Manager or
Principal Life Insurance Company. This Investment Service Agreement shall
automatically terminate in the event of its assignment. In interpreting the
provisions of this Section 7, the definitions contained in Section 2(a) of the
Investment Company Act of 1940 (particularly the definitions of "interested
persons", "assignment" and "voting securities") shall be applied.
8. Any notice under this Investment Service Agreement shall be in
writing, addressed and delivered or mailed postage prepaid to the other parties
at such addresses as such other parties may designate for the receipt of such
notices. Until further notice it is agreed that the address of the fund, that of
the Manager and that of Principal Life Insurance Company and its subsidiaries
for this purpose shall be The Principal Financial Group, Xxx Xxxxxx, Xxxx 00000.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed in three counterparts by their duly authorized officers the day and
year first above written.
PRINCIPAL LARGECAP STOCK INDEX FUND, INC.
/s/ A. S. Filean
By _________________________________________
A. S. Filean
PRINCIPAL MANAGEMENT CORPORATION
/s/ Xxxxx X. Xxxxxx
By _________________________________________
X. X. Xxxxxx
PRINCIPAL LIFE INSURANCE COMPANY
/s/ Xxxx Xxxx
By _________________________________________
SCHEDULE A
For the services provided and the expenses incurred by Principal Life Insurance
Company or its subsidiaries pursuant to the Investment Service Agreement, the
Manager, not the Fund, shall pay Principal Life or its subsidiaries a fee,
computed daily and paid monthly, at an annual rate of 0.06% of the Fund's
average daily net assets.
