PRINCIPAL FUNDS, INC. AMENDED AND RESTATED DISTRIBUTION PLAN AND AGREEMENT DISTRIBUTION PLAN AND AGREEMENT made as of September 21, 2009, by and between PRINCIPAL FUNDS, INC., a Maryland corporation (the "Fund"), and PRINCIPAL FUNDS DISTRIBUTOR, INC.,...
PRINCIPAL FUNDS, INC. |
AMENDED AND RESTATED |
DISTRIBUTION PLAN AND AGREEMENT |
R-4 CLASS |
DISTRIBUTION PLAN AND AGREEMENT made as of September 21, 2009, by and between | |
PRINCIPAL FUNDS, INC., a Maryland corporation (the "Fund"), and PRINCIPAL FUNDS | |
DISTRIBUTOR, INC., a Washington corporation (the "Underwriters"). | |
1. | This Distribution and Service Plan (the “Plan”), when effective in accordance with its terms, shall |
be the written plan contemplated by Securities and Exchange Commission Rule 12b-1 under | |
the Investment Company Act of 1940, as amended (the “Act”) for the R-4 Class shares of each | |
Series identified in Appendix A, attached hereto (the “Series”), a class of shares of Principal | |
Funds, Inc. (the “Fund”). | |
2. | The Fund has entered into a Distribution Agreement on behalf of the Fund Principal Funds |
Distributor, Inc. (“Distributor”), under which the Distributor will use all reasonable efforts, | |
consistent with its other business, to secure purchasers of shares of each Series of the Fund | |
(the “Shares”). Such efforts may include, but neither are required to include nor are limited to, | |
the following: (1) formulation and implementation of marketing and promotional activities, such | |
as mail promotions and television, radio, newspaper, magazine and other mass media | |
advertising; (2) preparation, printing and distribution of sales literature provided to the Fund’s | |
shareholders and prospective shareholders; (3) preparation, printing and distribution of | |
prospectuses and statements of additional information of the Fund and reports to recipients | |
other than existing shareholders of the Fund; (4) obtaining such information, analyses and | |
reports with respect to marketing and promotional activities as a Distributor may, from time to | |
time, deem advisable; (5) making payment of sales commission, ongoing commissions and | |
other payments to brokers, dealers, financial institutions or others who sell Shares pursuant to | |
Selling Agreements; (6) paying compensation to registered representatives or other employees | |
of a Distributor who engage in or support distribution of the Fund’s Shares; (7) paying | |
compensation to, and expenses (including overhead and telephone expenses) of, a Distributor; | |
(8) providing training, marketing and support to dealers and others with respect to the sale of | |
Shares; (9) receiving and answering correspondence from prospective shareholders including | |
distributing prospectuses, statements of additional information, and shareholder reports; (10) | |
providing of facilities to answer questions from prospective investors about Shares; (11) | |
complying with federal and state securities laws pertaining to the sale of Shares; (12) assisting | |
investors in completing application forms and selecting dividend and other account options; | |
(13) providing of other reasonable assistance in connection with the distribution of the Fund’s | |
shares; (14) organizing and conducting of sales seminars and making payments in the form of | |
transactional compensation or promotional incentives; and (15) such other distribution and | |
services activities as the Fund determines may be paid for by the Fund pursuant to the terms of | |
this Plan and in accordance with Rule 12b-1 of the Act. | |
3. | The Distribution Agreement also authorizes the Distributor to enter into Service Agreements |
with other selling dealers and with banks or other financial institutions to provide shareholder | |
services to existing R-4 Class shareholders, including without limitation, services such as | |
furnishing information as to the status of shareholder accounts, responding to telephone and | |
written inquiries of shareholders, and assisting shareholders with tax information. | |
4. | In consideration for the services provided and the expenses incurred by the Distributor pursuant |
to the Distribution Agreement and Paragraphs 2 and 3 hereof, all with respect to R-4 Class | |
shares of a Series of the Fund, R-4 Class of each Series shall pay to the Distributor a fee at the | |
annual rate of 0.10% (or such lesser amount as the Fund Directors may, from time to time, | |
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determine) of the average daily net assets of R-4 Class shares of such Series. This fee shall | ||
be accrued daily and paid monthly or at such other intervals as the Fund Directors shall | ||
determine. The determination of daily net assets shall be made at the close of business each | ||
day throughout the month and computed in the manner specified in the Fund’s then current | ||
Prospectus for the determination of the net asset value of the Fund’s R-4 Class shares. The | ||
Distributor may use all or any portion of the fee received pursuant to this Plan to compensate | ||
securities dealers or other persons who have engaged in the sale of R-4 Class shares or to pay | ||
any of the expenses associated with other activities authorized under Paragraphs 2 and 3 | ||
hereof. | ||
5. | The Fund presently pays, and will continue to pay, a management fee to Principal Management | |
Corporation (the “Manager”) pursuant to a Management Agreement between the Fund and the | ||
Manager (the “Management Agreement”). It is recognized that the Manager may use its | ||
management fee revenue, as well as its past profits or its resources from any other source, to | ||
make payment to the Distributor with respect to any expenses incurred in connection with the | ||
distribution of R-4 Class shares, including the activities referred to in Paragraph 2 hereof. To | ||
the extent that the payment of management fees by the Fund to the Manager should be | ||
deemed to be indirect financing of any activity primarily intended to result in the sale of R-4 | ||
Class shares within the meaning of Rule 12b-1, then such payment shall be deemed to be | ||
authorized by this Plan. | ||
6. | This Plan shall not take effect until it has been approved (a) by a vote of at least a majority (as | |
defined in the Act) of the outstanding R-4 Class shares of the Series of the Fund and (b) by | ||
votes of the majority of both (i) the Board of Directors of the Fund, and (ii) those Directors of the | ||
Fund who are not "interested persons" (as defined in the Act) of the Fund and who have no | ||
direct or indirect financial interest in the operation of this Plan or any agreements related to this | ||
Plan (the "Disinterested Directors"), cast in person at a meeting called for the purpose of voting | ||
on this Plan or such agreements. | ||
7. | Unless sooner terminated pursuant to Paragraph 6, this Plan shall continue in effect for a period | |
of twelve months from the date it takes effect and thereafter shall continue in effect so long as | ||
such continuance is specifically approved at least annually in the manner provided for approval | ||
of this Plan in Paragraph 6(b). | ||
8. | A representative of each Underwriter shall provide to the Board and the Board shall review at | |
least quarterly a written report of the amounts so expended and the purposes for which such | ||
expenditures were made. | ||
9. | This Plan may be terminated at any time by vote of a majority of the Disinterested Directors, or | |
by vote of a majority (as defined in the Act) of the outstanding R-4 Class shares of the Series of | ||
the Fund. | ||
10. | Any agreement of the Fund related to this Plan shall be in writing and shall provide: | |
A. | That such agreement may be terminated at any time, without payment of any penalty, by | |
vote of a majority of the Disinterested Directors or by a vote of a majority (as defined in the | ||
Act) of the outstanding R-4 Class shares of the Series of the Fund on not more than sixty | ||
(60) days' written notice to any other party to the agreement); and | ||
B. | That such agreement shall terminate automatically in the event of its assignment. | |
11. | While the Plan is in effect, the Fund’s board of directors shall satisfy the fund governance | |
standards as defined in Securities and Exchange Commission Rule 0-1(a)(7). | ||
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12. This Plan does not require the Manager or Distributor to perform any specific type or level of |
distribution activities or to incur any specific level of expenses for activities primarily intended to |
result in the sale of R-4 Class shares. |
13. The Fund shall preserve copies of this Plan and any related agreements and all reports made |
pursuant to Paragraph 8, for a period of not less than six years from the date of the Plan, or the |
agreements or such report, as the case may be, the first two years in an easily accessible |
place. |
14. This Plan may not be amended to increase materially the amount of Fees provided for in |
Paragraph 4 hereof unless such amendment is approved in the manner provided for initial |
approval in Paragraph 6 hereof and no other material amendment to this Plan shall be made |
unless approved in the manner provided for initial approval in Paragraph 6(b) hereof. |
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Plan as of the |
first date written above. |
Principal Funds, Inc. |
By: /s/ Xxxx X. Xxxxxx |
Xxxx X. Xxxxxx, Vice President & Secretary |
Principal Funds Distributor, Inc. |
By: /s/ Xxxxxxx X. Beer |
Xxxxxxx X. Beer, Executive Vice-President |
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PRINCIPAL FUNDS, INC. | |
APPENDIX A | |
SERIES | |
Bond & Mortgage Securities Fund | Preferred Securities Fund |
Bond Market Index Fund | Principal LifeTime 2010 Fund |
Disciplined LargeCap Blend Fund | Principal LifeTime 2015 Fund |
Diversified International Fund | Principal LifeTime 2020 Fund |
High Quality Intermediate-Term Bond Fund | Principal LifeTime 2025 Fund |
Inflation Protection Fund | Principal LifeTime 2030 Fund |
International Emerging Markets Fund | Principal LifeTime 2035 Fund |
International Equity Index Fund | Principal LifeTime 2040 Fund |
International Fund | Principal LifeTime 2045 Fund |
International Growth Fund | Principal LifeTime 2050 Fund |
LargeCap Blend Fund I | Principal LifeTime 2055 Fund |
LargeCap Blend Fund II | Principal LifeTime Strategic Income Fund |
LargeCap Growth Fund | Real Estate Securities Fund |
LargeCap Growth Fund I | XXX Balanced Portfolio |
LargeCap S&P 500 Index Fund | XXX Conservative Balanced Portfolio |
LargeCap Value Fund | XXX Conservative Growth Portfolio |
LargeCap Value Fund I | XXX Flexible Income Portfolio |
LargeCap Value Fund II | XXX Strategic Growth Portfolio |
LargeCap Value Fund III | Short-Term Bond Fund |
MidCap Blend Fund | SmallCap Blend Fund |
MidCap Growth Fund | SmallCap Growth Fund |
MidCap Growth Fund I | SmallCap Growth Fund I |
MidCap Growth Fund III | SmallCap Growth Fund II |
MidCap S&P 400 Index Fund | SmallCap S&P 600 Index Fund |
MidCap Value Fund | SmallCap Value Fund |
MidCap Value Fund I | SmallCap Value Fund I |
Money Market Fund | SmallCap Value Fund II |
Mortgage Securities Fund | |
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