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<PAGE> PAGE 11
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<PAGE> PAGE 12
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<PAGE> PAGE 13
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<PAGE> PAGE 21
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<PAGE> PAGE 22
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<PAGE> PAGE 23
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<PAGE> PAGE 24
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<PAGE> PAGE 25
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<PAGE> PAGE 26
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<PAGE> PAGE 27
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<PAGE> PAGE 28
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<PAGE> PAGE 29
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<PAGE> PAGE 30
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<PAGE> PAGE 31
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<PAGE> PAGE 32
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<PAGE> PAGE 33
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<PAGE> PAGE 34
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<PAGE> PAGE 35
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<PAGE> PAGE 36
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<PAGE> PAGE 37
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<PAGE> PAGE 38
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<PAGE> PAGE 39
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070 E010800 Y
<PAGE> PAGE 40
070 E020800 N
070 F010800 Y
070 F020800 N
070 G010800 Y
070 G020800 N
070 H010800 Y
070 H020800 N
070 I010800 N
070 I020800 N
070 J010800 Y
070 J020800 Y
070 K010800 Y
070 K020800 N
070 L010800 Y
070 L020800 Y
070 M010800 Y
070 M020800 N
070 N010800 Y
070 N020800 N
070 O010800 N
070 O020800 N
070 P010800 Y
070 P020800 N
070 Q010800 N
070 Q020800 N
070 R010800 Y
070 R020800 N
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071 B000800 6754
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<PAGE> PAGE 41
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008 A000901 PRINCIPAL MANAGEMENT CORPORATION
<PAGE> PAGE 42
008 B000901 A
008 C000901 801-8144
008 D010901 DES MOINES
008 D020901 IA
008 D030901 50392
008 D040901 0200
008 A000902 INVISTA CAPITAL MANAGEMENT, INC.
008 B000902 S
008 C000902 801-23020
008 D010902 DES MOINES
008 D020902 IA
008 D030902 50309
014 A000901 PRINCOR FINANCIAL SERVICES CORPORATION
014 B000901 8-01137
015 A000901 CHASE MANHATTAN BANK
015 B000901 C
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024 000900 N
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<PAGE> PAGE 43
030 A000900 0
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033 000900 0
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055 A000900 N
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056 000900 Y
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<PAGE> PAGE 44
062 O000900 0.0
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066 B000900 N
066 C000900 N
066 D000900 Y
066 E000900 N
066 F000900 N
066 G000900 N
067 000900 N
068 A000900 N
068 B000900 Y
069 000900 N
070 A010900 Y
070 A020900 N
070 B010900 Y
070 B020900 N
070 C010900 Y
070 C020900 N
070 D010900 Y
070 D020900 N
070 E010900 Y
070 E020900 N
070 F010900 Y
070 F020900 N
070 G010900 Y
070 G020900 N
070 H010900 Y
070 H020900 N
070 I010900 N
070 I020900 N
070 J010900 Y
070 J020900 Y
070 K010900 Y
070 K020900 N
070 L010900 Y
070 L020900 Y
070 M010900 Y
070 M020900 Y
070 N010900 Y
070 N020900 N
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070 O020900 N
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070 P020900 N
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070 Q020900 N
<PAGE> PAGE 45
070 R010900 Y
070 R020900 N
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<PAGE> PAGE 46
074 I000900 0
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008 A001001 PRINCIPAL MANAGEMENT CORPORATION
008 B001001 A
008 C001001 801-8144
008 D011001 DES MOINES
008 D021001 IA
008 D031001 50392
008 D041001 0200
008 A001002 INVISTA CAPITAL MANAGEMENT, INC.
008 B001002 S
008 C001002 801-23020
008 D011002 DES MOINES
008 D021002 IA
008 D031002 50309
014 A001001 PRINCOR FINANCIAL SERVICES CORPORATION
014 B001001 8-01137
015 A001001 CHASE MANHATTAN BANK
015 B001001 C
015 C011001 BROOKLYN
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015 C031001 11245
015 E011001 X
024 001000 N
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<PAGE> PAGE 47
028 B011000 0
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045 001000 Y
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<PAGE> PAGE 48
048 J011000 0
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055 A001000 N
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067 001000 N
068 A001000 N
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070 A011000 Y
070 A021000 N
070 B011000 Y
070 B021000 N
070 C011000 Y
070 C021000 N
070 D011000 Y
070 D021000 N
070 E011000 Y
070 E021000 N
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070 F021000 N
<PAGE> PAGE 49
070 G011000 Y
070 G021000 N
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070 H021000 N
070 I011000 N
070 I021000 N
070 J011000 Y
070 J021000 Y
070 K011000 Y
070 K021000 N
070 L011000 Y
070 L021000 Y
070 M011000 Y
070 M021000 Y
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070 O021000 N
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070 Q021000 N
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070 R021000 N
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<PAGE> PAGE 50
072 X001000 32
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008 A001101 PRINCIPAL MANAGEMENT CORPORATION
008 B001101 A
008 C001101 801-8144
008 D011101 DES MOINES
<PAGE> PAGE 51
008 D021101 IA
008 D031101 50392
008 D041101 0200
008 A001102 GOLDMAN SACHS & CO.
008 B001102 S
008 C001102 801-16048
008 D011102 NEW YORK
008 D021102 NY
008 D031102 10004
014 A001101 PRINCOR FINANCIAL SERVICES CORPORATION
014 B001101 8-01137
015 A001101 BANK OF NEW YORK
015 B001101 C
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015 C021101 NY
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024 001100 N
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<PAGE> PAGE 52
045 001100 Y
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<PAGE> PAGE 53
066 B001100 N
066 C001100 N
066 D001100 Y
066 E001100 N
066 F001100 N
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068 A001100 N
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070 A011100 Y
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070 B021100 N
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070 C021100 N
070 D011100 Y
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070 E021100 N
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070 F021100 N
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070 J021100 N
070 K011100 Y
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070 L011100 Y
070 L021100 N
070 M011100 Y
070 M021100 N
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070 N021100 N
070 O011100 Y
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070 Q021100 N
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070 R021100 N
071 A001100 3534
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<PAGE> PAGE 54
072 B001100 32
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<PAGE> PAGE 55
074 P001100 0
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008 A001201 PRINCIPAL MANAGEMENT CORPORATION
008 B001201 A
008 C001201 801-8144
008 D011201 DES MOINES
008 D021201 IA
008 D031201 50392
008 A001202 INVISTA CAPITAL MANAGEMENT, INC.
008 B001202 S
008 C001202 801-23020
008 D011202 DES MOINES
008 D021202 IA
008 D031202 50309
014 A001201 PRINCOR FINANCIAL SERVICES CORPORATION
014 B001201 8-01137
015 A001201 BANK OF NEW YORK
015 B001201 C
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024 001200 N
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<PAGE> PAGE 56
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<PAGE> PAGE 57
062 A001200 N
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<PAGE> PAGE 58
070 K011200 Y
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<PAGE> PAGE 59
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008 A001301 PRINCIPAL MANAGEMENT CORPORATION
008 B001301 A
008 C001301 801-8144
008 D011301 DES MOINES
008 D021301 IA
008 D031301 50392
008 D041301 0200
008 A001302 THE DREYFUS CORPORATION
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<PAGE> PAGE 60
008 D031302 10166
014 A001301 PRINCOR FINANCIAL SERVICES CORPORATION
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024 001300 Y
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<PAGE> PAGE 61
030 A001300 0
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045 001300 Y
046 001300 N
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<PAGE> PAGE 62
063 A001300 0
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070 A011300 Y
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070 H021300 N
070 I011300 N
070 I021300 N
070 J011300 Y
070 J021300 N
070 K011300 Y
070 K021300 N
070 L011300 Y
070 L021300 Y
070 M011300 Y
070 M021300 N
070 N011300 Y
070 N021300 N
070 O011300 Y
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070 P011300 Y
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<PAGE> PAGE 63
071 C001300 4742
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<PAGE> PAGE 64
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<PAGE> PAGE 65
028 A031400 0
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<PAGE> PAGE 66
048 I011400 0
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<PAGE> PAGE 67
070 H011400 N
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<PAGE> PAGE 68
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008 A001501 PRINCIPAL MANAGEMENT CORPORAITON
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008 D011501 DES MOINES
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<PAGE> PAGE 69
008 D041501 0200
014 A001501 PRINCOR FINANCIAL SERVICES CORPORATION
014 B001501 8-01137
015 A001501 BANK OF NEW YORK
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015 E011501 X
024 001500 N
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<PAGE> PAGE 70
048 C011500 100000
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<PAGE> PAGE 71
067 001500 N
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<PAGE> PAGE 72
072 H001500 0
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<PAGE> PAGE 73
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008 A001601 PRINCIPAL MANAGEMENT CORPORATION
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008 D011601 DES MOINES
008 D021601 IA
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008 D041601 0200
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008 D011602 DES MOINES
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015 A001601 BANK OF NEW YORK
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<PAGE> PAGE 74
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<PAGE> PAGE 75
062 F001600 0.0
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<PAGE> PAGE 76
070 M021600 N
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<PAGE> PAGE 77
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<PAGE> PAGE 78
015 C011701 NEW YORK
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<PAGE> PAGE 79
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<PAGE> PAGE 80
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<PAGE> PAGE 81
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<PAGE> PAGE 82
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<PAGE> PAGE 83
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<PAGE> PAGE 84
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<PAGE> PAGE 85
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<PAGE> PAGE 86
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<PAGE> PAGE 87
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<PAGE> PAGE 88
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<PAGE> PAGE 89
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SIGNATURE A. S. FILEAN
TITLE VICE PRES & SEC'Y
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<S> <C>
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<S> <C>
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<S> <C>
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<PER-SHARE-NAV-BEGIN> 9.94
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> (.44)
<PER-SHARE-DIVIDEND> 0
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<PER-SHARE-NAV-END> 9.50
<EXPENSE-RATIO> 1.21
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<S> <C>
<PERIOD-TYPE> 6-MOS
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<S> <C>
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<PER-SHARE-NAV-END> 10.11
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
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<REALIZED-GAINS-CURRENT> 79,136
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<S> <C>
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<PER-SHARE-NAV-BEGIN> 9.84
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<PER-SHARE-NAV-END> 9.77
<EXPENSE-RATIO> 1.14
<AVG-DEBT-OUTSTANDING> 0
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
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<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,439,744
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<ACCUMULATED-NET-GAINS> (48,816)
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<ACCUM-APPREC-OR-DEPREC> (305,662)
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<REALIZED-GAINS-CURRENT> (48,816)
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<NUMBER-OF-SHARES-SOLD> 549,329
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<AVERAGE-NET-ASSETS> 4,862,949
<PER-SHARE-NAV-BEGIN> 9.84
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<PER-SHARE-NAV-END> 9.30
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</TABLE>
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<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11,177,635
<SHARES-COMMON-STOCK> 1,122,614
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<ACCUMULATED-NII-CURRENT> 83,913
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<DIVIDEND-INCOME> 88,800
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</TABLE>
SPECIAL MEETING OF SHAREHOLDER
OF
INTERNATIONAL SMALLCAP ACCOUNT, MICROCAP ACCOUNT,
MIDCAP GROWTH ACCOUNT, REAL ESTATE ACCOUNT,
SMALLCAP ACCOUNT, SMALLCAP GROWTH ACCOUNT,
SMALLCAP VALUE ACCOUNT AND UTILITIES ACCOUNT
OF THE
PRINCIPAL VARIABLE CONTRACTS FUND, INC.
801 Grand Avenue, Des Moines, Iowa April 27, 1998 3:00 p.m.
A special meeting of the shareholder of International SmallCap Account,
MicroCap Account, MidCap Growth Account, Real Estate Account, SmallCap Account,
SmallCap Growth Account, SmallCap Value Account and the Utilities Account of the
Principal Variable Contracts Fund, Inc. was held at 801 Grand Avenue, Des
Moines, Iowa at 3:00 p.m. on April 27, 1998.
The meeting was called to order by Mr. S. L. Jones, who presided as
chairman of the meeting. Ms. K. L. McCartney acted as secretary of the meeting.
Also present was A. S. Filean.
The Secretary reported the only shareholder of each of the International
SmallCap Account, MicroCap Account, MidCap Growth Account, Real Estate Account,
SmallCap Account, SmallCap Growth Account, SmallCap Value Account and the
Utilities Account of the Corporation was Principal Mutual Life Insurance
Company, that all such shares were represented by proxies held by Mr. Filean and
that a quorum was present.
The Chairman directed that the proxies be appended to the minutes of this
meeting.
The Chairman stated it would be in order to consider ratification and
approval of the Amendment to the Management Agreement between the Corporation
and Principal Management Corporation in the form approved by the Corporation's
Board of Directors. A copy of said amendment was presented at the meeting.
Thereupon, the following resolution was duly adopted by the vote of all the
outstanding shares of Common Stock of the International SmallCap Account,
MicroCap Account, MidCap Growth Account, Real Estate Account, SmallCap Account,
SmallCap Growth Account, SmallCap Value Account and the Utilities Account of the
Corporation:
"BE IT RESOLVED, That the First Amendment to the Principal Variable
Contracts Fund, Inc. Management Agreement between the Corporation and
Principal Management Corporation, which was approved by the Board of
Directors, including a majority of the non-interested directors
thereof, be, and it hereby is, ratified and approved."
The Chairman then stated it would be appropriate to consider ratification
and approval of the Amendment to the Sub-Advisory Agreement between Principal
Management Corporation and Invista Capital Management, Inc. in the form approved
by the Corporation's Board of Directors. A copy of such amendment was presented
at the meeting. Thereupon, the following resolution was duly adopted by the vote
of all the outstanding shares of Common Stock of the International SmallCap
Account, SmallCap Account and the Utilities Account of the Corporation:
"BE IT RESOLVED, That the First Amendment to the Principal Variable
Contracts Fund, Inc. Sub- Advisory Agreement between Principal
Management Corporation and Invista Capital Management, Inc., which was
approved by the Board of Directors, including a majority of the
non-interested directors thereof, be, and it hereby is, ratified and
approved."
The Chairman then stated it would be appropriate to consider ratification
and approval of the Sub-Advisory Agreement between Principal Management
Corporation and Goldman Sachs Asset Management in the form approved by the
Corporation's Board of Directors. A copy of such agreement was presented at the
meeting. Thereupon, the following resolution was duly adopted by the vote of all
the outstanding shares of Common Stock of the MicroCap Account of the
Corporation:
"BE IT RESOLVED, That the Sub-Advisory Agreement between Principal
Management Corporation and Goldman Sachs Asset Management, which was
approved by the Board of Directors, including a majority of the
non-interested directors thereof, be, and it hereby is, ratified and
approved."
The Chairman then stated it would be appropriate to consider ratification
and approval of the Sub-Advisory Agreement between Principal Management
Corporation and Dreyfus Corporation in the form approved by the Corporation's
Board of Directors. A copy of such agreement was presented at the meeting.
Thereupon, the following resolution was duly adopted by the vote of all the
outstanding shares of Common Stock of the MidCap Growth Account of the
Corporation:
"BE IT RESOLVED, That the Sub-Advisory Agreement between Principal
Management Corporation and Dreyfus Corporation, which was approved by
the Board of Directors, including a majority of the non-interested
directors thereof, be, and it hereby is, ratified and approved."
The Chairman then stated it would be appropriate to consider ratification
and approval of the Sub-Advisory Agreement between Principal Management
Corporation and Berger Associates, Inc. in the form approved by the
Corporation's Board of Directors. A copy of such agreement was presented at the
meeting. Thereupon, the following resolution was duly adopted by the vote of all
the outstanding shares of Common Stock of the SmallCap Growth Account of the
Corporation:
"BE IT RESOLVED, That the Sub-Advisory Agreement between Principal
Management Corporation and Berger Associates, Inc., which was approved
by the Board of Directors, including a majority of the non-interested
directors thereof, be, and it hereby is, ratified and approved."
The Chairman then stated it would be appropriate to consider ratification
and approval of the Sub-Advisory Agreement between Principal Management
Corporation and J.P. Morgan Investment Management, Inc. in the form approved by
the Corporation's Board of Directors. A copy of such agreement was presented at
the meeting. Thereupon, the following resolution was duly adopted by the vote of
all the outstanding shares of Common Stock of the SmallCap Value Account of the
Corporation:
"BE IT RESOLVED, That the Sub-Advisory Agreement between Principal
Management Corporation and J.P. Morgan Investment Management, Inc.,
which was approved by the Board of Directors, including a majority of
the non-interested directors thereof, be, and it hereby is, ratified
and approved."
The Chairman then stated that the Corporation and the Manager have filed an
application with the Securities and Exchange commission seeking an order that
would permit the Manager and the Corporation to enter into Sub-Advisory
contracts relating to any Account of the Corporation without approval by a
majority of the outstanding voting securities of each Account involved,
conditioned upon the Corporation furnishing to shareholders of each Account,
within 90 days of the employment of a new subadvisor for that Account, or any
material change to a Sub-Advisory agreement for that Account, an information
statement satisfying various requirements of the Securities Exchange Act. The
Chairman further stated that the order granting the requested relief will be
subject to a condition requiring that the Corporation not rely on the requested
order with respect to a new Account unless the public shareholders of that
Account purchase shares on the basis of a prospectus containing certain
disclosures and the sole initial shareholder of the Account approves the
operation of the Account in the manner described in the application before
shares of the Account are offered to the public. Thereupon, the following
resolution was duly adopted by the vote of all the outstanding shares of Common
Stock of the International SmallCap Account, MicroCap Account, MidCap Growth
Account, Real Estate Account, SmallCap Account, SmallCap Growth Account,
SmallCap Value Account and the Utilities Account of the Corporation:
"BE IT RESOLVED, That the operation of the International SmallCap
Account, MicroCap Account, MidCap Growth Account, Real Estate Account,
SmallCap Account, SmallCap Growth Account, SmallCap Value Account and
the Utilities Account of the Corporation in the manner described in the
application filed with the Securities and Exchange Commission on
January 9, 1998 by the Corporation and Principal Management Corporation
is hereby approved."
There being no further business, the meeting was adjourned.
/s/ K. L. McCartney
--------------------------------
Secretary
AGREEMENT AND PLAN OF
REORGANIZATION AND LIQUIDATION
This AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION is entered into
this 9th day of June , 1997 by and between Principal Variable
Contract Fund, Inc., a Maryland Corporation (the "Surviving Corporation") and
Principal Aggressive Growth Fund, Inc., Principal Asset Allocation Fund, Inc.,
Principal Balanced Fund, Inc., Principal Bond Fund, Inc., Principal Capital
Accumulation Fund, Inc., Principal Emerging Growth Fund, Inc., Principal
Government Securities Fund, Inc., Principal Growth Fund, Inc., Principal High
Yield Fund, Inc., Principal Money Market Fund, Inc., and Principal World Fund,
Inc. (individually, a Liquidating Corporation; together the "Liquidating
Corporations").
WHEREAS, The Liquidating Corporations are open-end management investment
companies registered under the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, The Liquidating Corporations have authorized capital stock
consisting of the following shares of common stock, par value $.01 per share:
Principal Aggressive Growth Fund, Inc.......................100 Million
Principal Asset Allocation Fund, Inc........................100 Million
Principal Balanced Fund, Inc................................100 Million
Principal Bond Fund, Inc....................................100 Million
Principal Capital Accumulation Fund, Inc....................100 Million
Principal Emerging Growth Fund, Inc.........................100 Million
Principal Government Securities Fund, Inc...................100 Million
Principal Growth Fund, Inc..................................100 Million
Principal High Yield Fund, Inc..............................100 Million
Principal Money Market Fund, Inc............................500 Million
Principal World Fund, Inc...................................100 Million
WHEREAS, the Surviving Corporation was organized as a Maryland Corporation
pursuant to Articles of Incorporation and is presently authorized to issue 1.5
billion shares, par value $0.01 per share, of a single class divisible into an
indefinite number of different series and will be operated as a "series company"
as provided by Rule 18f-2 under the 1940 Act;
WHEREAS, Liquidating Corporations desire to reorganize into separate series
of a single corporation through a reorganization within the meaning of Section
368(a)(1)(F) of the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, each Liquidating Corporation desires generally to accomplish this
change by transferring all of its assets to the series of Surviving Corporation
corresponding to it in consideration for the assumption by the Surviving
Corporation of all of each Liquidating Corporation's liabilities and the
issuance to each Liquidating Corporation of shares of the series of Surviving
Corporation corresponding to it, which shares each Liquidating Corporation will
thereupon distribute pro rata to its shareholders in complete liquidation, all
in accordance with the procedures and subject to the terms and conditions of
this Agreement;
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the parties hereto agree as follows:
1. Plan of Reorganization and Liquidation.
(a) At the Closing each Liquidating Corporation will convey, transfer
and deliver to the Surviving Corporation all of its then existing
assets. In consideration thereof, the Surviving Corporation will
at the Closing (i) assume all of each Liquidating Corporation's
obligations and liabilities then existing, whether absolute,
accrued, contingent or otherwise, including without limitation,
all fees and expenses in connection with the transactions
contemplated hereby, and (ii) deliver to each Liquidating
Corporation a number of full and fractional shares of the
appropriate series of Surviving Corporation equal to the number of
each Liquidating Corporation's full and fractional shares then
outstanding.
(b) Upon consummation of the transactions described in paragraph (a)
of this Section 1, each Liquidating Corporation will liquidate and
the shares of the Surviving Corporation received by each
Liquidating Corporation will be distributed to its shareholders of
record as of the Closing Date, each shareholder to receive a
number of shares equal to the number of share then held by such
shareholder. Such liquidation and distribution will be accompanied
by the establishment of an open account on the share records of
the Surviving Corporation in the name of each shareholder of each
Liquidating Corporation and representing the respective pro rata
number of shares of the Surviving Corporation due such
shareholder.
(c) As soon as practicable after the Closing Date, each Liquidating
Corporation will take, in accordance with the Maryland General
Corporation Law, all steps as shall be necessary and proper to
effect a complete dissolution.
(d) Prior to the Closing and after each Liquidating Corporation has
taken the actions authorized pursuant to Section 3(e) hereof, the
shares of the Surviving Corporation heretofore held by each
Liquidating Corporation will be redeemed and canceled by the
Surviving Corporation.
2. Closing and Closing Date. The Closing will occur at 11:59 p.m. on
December 31, 1997, or at such other time and date as the parties may
mutually agree (the "Closing Date").
3. Conditions Precedent. The obligations of each Liquidating Corporation
and the Surviving Corporation to effectuate the Plan of Reorganization
and Liquidation shall be subject to the satisfaction of each of the
following conditions:
(a) Such authority and orders from the Securities and Exchange
Commission (the "Commission") and state securities commissions as
may be necessary to permit the parties to carry out the
transactions contemplated by this Agreement shall have been
received.
(b) One or more post-effective amendments to the Registration
Statement of Principal Capital Accumulation Fund, Inc. on Form
N-1A under the Securities Act of 1933 and the 1940 Act containing
(i) such amendments to such Registration Statement as are
determined by the Board of Directors of the Surviving Corporation
to be necessary and appropriate as a result of the Plan of
Reorganization and Liquidation and (ii) the adoption by the
Surviving Corporation as its own of such Registration Statement,
as so amended, shall have been filed with the Commission and such
post-effective amendment or amendments to the Registration
Statement shall have become effective, and no stop-order
suspending the effectiveness of the Registration Statement shall
have been issued, and no proceeding for that purpose shall have
been initiated or threatened by the Commission (and not withdrawn
or terminated).
(c) Each party shall have received an opinion of counsel in form and
substance satisfactory to it, relating to its authority to engage
in the transactions contemplated hereby and to the effect that
(i) this Agreement has been duly authorized, executed and
delivered by each Liquidating Corporation and the Surviving
Corporation and constitutes a legal, valid and binding agreement
of each such party in accordance with its terms; (ii) the shares
of the Surviving Corporation to be issued pursuant to the terms
of this Agreement, will be validly issued, fully paid and
non-assessable; and (iii) the Surviving Corporation is duly
organized and validly existing under the laws of the State of
Maryland.
(d) Each party shall have received an opinion of counsel to the
effect that the reorganization contemplated by this Agreement
qualifies as a "reorganization" under Section 368(a)(1)(F) of the
Code.
(e) A vote approving this Agreement and the reorganization
contemplated hereby shall have been adopted by at least a
majority of the outstanding shares of common stock of each
Liquidating Corporation entitled to vote at an annual or special
meeting and the shareholders of each Liquidating Corporation
shall have voted at such meeting to authorize each Liquidating
Corporation to vote, and each Liquidating Corporation shall have
voted, as the sole shareholder of its corresponding series of the
Surviving Corporation, to:
(1) elect the Directors of each Liquidating Corporation as
Directors of the Surviving Corporation;
(2) approve (i) a management agreement between the Surviving
Corporation and Princor Management, Inc. (the "Manager"),
(ii) an Investment Service Agreement between and among the
Manager, Principal Mutual Life Insurance Company ("Principal
Mutual") and the Surviving Corporation (the "Service
Agreement"), (iii) with respect to the Surviving
Corporation's Balanced, Capital Value, Government, Growth,
International and MidCap series, a Sub-Advisory Agreement
between and among the Manager, Invista Capital Management,
Inc. and the Surviving Corporation, and (iv) with respect to
the Surviving Corporation's Aggressive Growth and Asset
Allocation series, a Sub-Advisory Agreement between and
among the Manager, Morgan Stanley Asset Management, Inc. and
the Surviving Corporation (together, the "Advisory
Agreements"); and
(3) ratify the selection of Ernst & Young as the Surviving
Corporation's independent public accountants for the fiscal
year ending December 31, 1997.
(f) The Directors of the Surviving Corporation (and, to the extent
required by law, the Directors of the Surviving Corporation who
are not "interested persons" of the Surviving Corporation as
defined in the 1940 Act) shall have taken the following actions
at a meeting duly called for such purposes:
(1) approval of the Advisory Agreements;
(2) selection of Ernst & Young as the Surviving Corporation's
independent public accountants for the fiscal year ending
December 31, 1997;
(3) authorization of the issuance by the Surviving Corporation,
prior to the Closing, of a share of the Surviving
Corporation to each Liquidating Corporation in consideration
of the payment of $1.00 per share for the purpose of
enabling each Liquidating Corporation to vote on the matters
referred to in paragraph (e) of this Section 3;
(4) submission of the matters referred to in paragraph (e) of
this Section 3 to each Liquidating Corporation as the sole
shareholder of its corresponding series of the Surviving
Corporation; and
(5) authorization of the issuance by the Surviving Corporation
of shares at the Closing in exchange for the assets of each
Liquidating Corporation pursuant to the terms and provisions
of this Agreement.
At any time prior to the Closing, any of the foregoing conditions may
be waived by the Board of Directors of each Liquidating Corporation on
behalf of such Liquidating Corporation and the Directors of the
Surviving Corporation on behalf of the Surviving Corporation if, in
their judgment, such waiver will not have a material adverse effect on
the interests of the shareholders of such Liquidating Corporation.
4. Amendment. This Agreement may be amended at any time by action of the
Board of Directors of any Liquidating Corporation and the Directors of
the Surviving Corporation, notwithstanding approval thereof by the
shareholders of any Liquidating Corporation, provided that no
amendment shall have a material adverse effect on the interests of the
shareholders of any Liquidating Corporation unless approved by such
shareholders.
5. Termination. The Board of Directors of any Liquidating Corporation and
the Board of Directors of the Surviving Corporation may terminate this
Agreement and abandon the reorganization contemplated hereby,
notwithstanding approval thereof by the shareholders of any
Liquidating Corporation, at any time prior to the Closing, if
circumstances should develop that, in their judgment, make proceeding
with the plan inadvisable.
6. Governing Law. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Maryland.
7. Further Assistance. The Liquidating Corporations and the Surviving
Corporation shall take further action as may be necessary or desirable
and proper to consummate the transactions contemplated hereby.
8. Entire Agreement. This Agreement embodies the entire agreement between
the parties and there are no agreements, understandings, restrictions
or warranties among the parties other than those set forth or provided
for herein.
9. Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have hereunto caused this Agreement to be
executed and delivered by their duly authorized officers as of the day and year
first above written.
Principal Aggressive Growth Fund, Inc.
Principal Asset Allocation Fund, Inc.
Principal Balanced Fund, Inc.
Principal Bond Fund, Inc.
Principal Capital Accumulation Fund, Inc.
Principal Emerging Growth Fund, Inc.
Principal Government Securities Fund, Inc.
Principal Growth Fund, Inc.
Principal High Yield Fund, Inc.
Principal Money Market Fund, Inc.
Principal World Fund, Inc.
As to each of the foregoing:
/s/ A. S. Filean
By:_________________________________
Vice President & Secretary
Title:_______________________________
Principal Variable Contracts Fund, Inc.
/s/ E. H. Gillum
By:_________________________________
Assistant Vice President
Title:________________________________
AMENDMENT AND RESTATEMENT
OF THE
ARTICLES OF INCORPORATION
OF
PRINCIPAL VARIABLE CONTRACTS FUND, INC.
FIRST: The Articles of Incorporation are hereby amended by striking out
Articles 5 and 6 of the Articles and inserting in lieu thereof the following:
ARTICLE V
Capital Stock
Section 1. Authorized Shares: The total number of shares of stock which the
Corporation shall have authority to issue is two billion three hundred million
(2,300,000,000) shares, of the par value of one cent ($.01) each and of the
aggregate par value of twenty-three million dollars ($23,000,000). The shares
may be issued by the Board of Directors in such separate and distinct series and
classes of series as the Board of Directors shall from time to time create and
establish. The Board of Directors shall have full power and authority, in its
sole discretion, to establish and designate series and classes of series, and to
classify or reclassify any unissued shares in separate series or classes having
such preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption as shall be fixed and determined from time to time by the Board of
Directors. In the event of establishment of classes, each class of a series
shall represent interests in the assets belonging to that series and have
identical voting, dividend, liquidation and other rights and the same terms and
conditions as any other class of the series, except that expenses allocated to
the class of a series may be borne solely by such class as shall be determined
by the Board of Directors and may cause differences in rights as described in
the following sentence. The shares of a class may be converted into shares of
another class upon such terms and conditions as shall be determined by the Board
of Directors, and a class of a series may have exclusive voting rights with
respect to matters affecting only that class. Expenses related to the
distribution of, and other identified expenses that should properly be allocated
to, the shares of a particular series or class may be charged to and borne
solely by such series or class, and the bearing of expenses solely by a series
or class may be appropriately reflected (in a manner determined by the Board of
Directors) and cause differences in the net asset value attributable to, and the
dividend, redemption and liquidation rights of, the shares of each series or
class. Subject to the authority of the Board of Directors to increase and
decrease the number of, and to reclassify the shares of any series or class,
there are hereby established eleven series of common stock all of the same
class, each comprising the number of shares and having the designation
indicated:
Series Number of Shares
------ ----------------
Aggressive Growth 100,000,000
Asset Allocation 100,000,000
Balanced 100,000,000
Bond 100,000,000
Capital Value 100,000,000
Government Securities 100,000,000
Growth 100,000,000
High Yield 100,000,000
International 100,000,000
International SmallCap 100,000,000
MicroCap 100,000,000
Midcap 100,000,000
MidCap Growth 100,000,000
Money Market 500,000,000
Real Estate 100,000,000
SmallCap 100,000,000
SmallCap Growth 100,000,000
SmallCap Value 100,000,000
Utiltiies 100,000,000
In addition, the Board of Directors is hereby expressly granted authority to
change the designation of any series or class, to increase or decrease the
number of shares of any series or class, provided that the number of shares of
any series or class shall not be decreased by the Board of Directors below the
number of shares thereof then outstanding, and to reclassify any unissued shares
into one or more series or classes that may be established and designated from
time to time. Notwithstanding the designations herein of series and classes, the
Corporation may refer, in prospectuses and other documents furnished to
shareholders, filed with the Securities and Exchange Commission or used for
other purposes, to a series of shares as a "class" and to a class of shares of a
particular series as a "series."
(a) The Corporation may issue shares of stock in fractional
denominations to the same extent as its whole shares, and shares in
fractional denominations shall be shares of stock having proportionately,
to the respective fractions represented thereby, all the rights of whole
shares, including without limitation, the right to vote, the right to
receive dividends and distributions and the right to participate upon
liquidation of the Corporation, but excluding the right to receive a stock
certificate representing fractional shares.
(b) The holder of each share of stock of the Corporation shall be
entitled to one vote for each full share, and a fractional vote for each
fractional share, of stock, irrespective of the series or class, then
standing in the holder's name on the books of the Corporation. On any
matter submitted to a vote of stockholders, all shares of the Corporation
then issued and outstanding and entitled to vote shall be voted in the
aggregate and not by series or class except that (1) when otherwise
expressly required by the Maryland General Corporation Law or the
Investment Company Act of 1940, as amended, shares shall be voted by
individual series or class, and (2) if the Board of Directors, in its sole
discretion, determines that a matter affects the interests of only one or
more particular series or class or classes then only the holders of shares
of such affected series or class or classes shall be entitled to vote
thereon.
(c) Unless otherwise provided in the resolution of the Board of
Directors providing for the establishment and designation of any new series
or class or classes, each series of stock of the Corporation shall have the
following powers, preferences and rights, and qualifications, restrictions,
and limitations thereof:
(1) Assets Belonging to a Class. All consideration received by the
Corporation for the issue or sale of shares of a particular class,
together with all assets in which such consideration is invested or
reinvested, all income, earnings, profits and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation
of such assets, and any funds or payments derived from any reinvestment
of such proceeds in whatever form the same may be, shall irrevocably
belong to that class for all purposes, subject only to the rights of
creditors, and shall be so recorded upon the books and accounts of the
Corporation. Such consideration, assets, income, earnings, profits and
proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation of such assets, and any funds or payments
derived from any reinvestment of such proceeds, in whatever form the
same may be, together with any General Items allocated to that class as
provided in the following sentence, are herein referred to as "assets
belonging to" that class. In the event that there
are any assets, income, earnings, profits, proceeds thereof, funds or
payments which are not readily identifiable as belonging to any
particular class (collectively "General Items"), such General Items
shall be allocated by or under the supervision of the Board of
Directors to and among any one or more of the classes established and
designated from time to time in such manner and on such basis as the
Board of Directors, in its sole discretion, deems fair and equitable,
and any General Items so allocated to a particular class shall belong
to that class. Each such allocation by the Board of Directors shall be
conclusive and binding for all purposes.
(2) Liabilities Belonging to a Class. The assets belonging to each
particular class shall be charged with the liabilities of the
Corporation in respect of that class and all expenses, costs, charges
and reserves attributable to that class, and any general liabilities,
expenses, costs, charges or reserves of the Corporation which are not
readily identifiable as belonging to any particular class shall be
allocated and charged by or under the supervision of the Board of
Directors to and among any one or more of the classes established and
designated from time to time in such manner and on such basis as the
Board of Directors, in its sole discretion, deems fair and equitable.
The liabilities, expenses, costs, charges and reserves allocated and so
charged to a class are herein referred to as "liabilities belonging to"
that class. Expenses related to the shares of a series may be borne
solely by that series (as determined by the Board of Directors). Each
allocation of liabilities, expenses, costs, charges and reserves by the
Board of Directors shall be conclusive and binding for all purposes.
(3) Dividends. The Board of Directors may from time to time
declare and pay dividends or distributions, in stock, property or cash,
on any or all series of stock or classes of series, the amount of such
dividends and property distributions and the payment of them being
wholly in the discretion of the Board of Directors. Dividends may be
declared daily or otherwise pursuant to a standing resolution or
resolutions adopted only once or with such frequency as the Board of
Directors may determine, after providing for actual and accrued
liabilities belonging to that class. All dividends or distributions on
shares of a particular class shall be paid only out of surplus or other
lawfully available assets determined by the Board of Directors as
belonging to such class. Dividends and distributions may vary between
the classes of a series to reflect differing allocations of the expense
of each class of that series to such extent and for such purposes as
the Boards of Directors may deem appropriate. The Board of Directors
shall have the power, in its sole discretion, to distribute in any
fiscal year as dividends, including dividends designated in whole or in
part as capital gains distributions,
amounts sufficient, in the opinion of the Board of Directors, to enable
the Corporation, or where applicable each series of shares or class of
a series, to qualify as a regulated investment company under the
Internal Revenue Code of 1986, as amended, or any successor or
comparable statute thereto, and regulations promulgated thereunder, and
to avoid liability for the Corporation, or each series of shares or
class of a series, for Federal income and excise taxes in respect of
that or any other year.
(4) Liquidation. In the event of the liquidation of the
Corporation or of the assets attributable to a particular series or
class, the shareholders of each series or class that has been
established and designated and is being liquidated shall be entitled to
receive, as a series or class, when and as declared by the Board of
Directors, the excess of the assets belonging to that series or class
over the liabilities belonging to that series or class. The holders of
shares of any series or class shall not be entitled thereby to any
distribution upon liquidation of any other series or class. The assets
so distributable to the shareholder of any particular series or class
shall be distributed among such shareholders according to their
respective rights taking into account the proper allocation of expenses
being borne by that series or class. The liquidation of assets
attributable to any particular series or class in which there are
shares then outstanding may be authorized by vote of a majority of the
Board of Directors then in office, subject to the approval of a
majority of the outstanding voting securities of that series or class,
as defined in the Investment Company Act of 1940, as amended. In the
event that there are any general assets not belonging to any particular
series or class of stock and available for distribution, such
distribution shall be made to holders of stock of various series or
classes in such proportion as the Board of Directors determines to be
fair and equitable, and such determination by the Board of Directors
shall be conclusive and binding for all purposes.
(5) Redemption. All shares of stock of the Corporation shall have
the redemption rights provided for in Article V, Section 5.
(d) The Corporation's shares of stock are issued and sold, and all
persons who shall acquire stock of the Corporation shall do so, subject to
the condition and understanding that the provisions of the Corporation's
Articles of Incorporation, as from time to time amended, shall be binding
upon them.
Section 2. Quorum Requirements and Voting Rights: Except as otherwise
expressly provided by the Maryland General Corporation Law, the presence in
person or by proxy of the holders of one-third of the shares of capital stock of
the Corporation outstanding and entitled to vote thereat shall constitute a
quorum at any meeting of the stockholders, except that where the holders of any
series or class are required or permitted to vote as a series or class,
one-third of the aggregate number of shares of that series or class outstanding
and entitled to vote shall constitute a quorum.
Notwithstanding any provision of Maryland General Corporation Law requiring
a greater proportion than a majority of the votes of all series or classes or of
any series or class of the Corporation's stock entitled to be cast in order to
take or authorize any action, any such action may be taken or authorized upon
the concurrence of a majority of the aggregate number of votes entitled to be
cast thereon subject to the applicable laws and regulations as from time to time
in effect or rules or orders of the Securities and Exchange Commission or any
successor thereto. All shares of stock of this Corporation shall have the voting
rights provided for in Article V, Section 1, paragraph (b).
Section 3. No Preemptive Rights: No holder of shares of capital stock of
the Corporation shall, as such holder, have any right to purchase or subscribe
for any shares of the capital stock of the Corporation which the Corporation may
issue or sell (whether consisting of shares of capital stock authorized by these
Articles of Incorporation, or shares of capital stock of the Corporation
acquired by it after the issue thereof, or other shares) other than any right
which the Board of Directors of the Corporation, in its discretion, may
determine.
Section 4. Determination of Net Asset Value: The net asset value of each
share of each series or class of each series of the Corporation shall be the
quotient obtained by dividing the value of the net assets of the Corporation, or
if applicable of the series or class (being the value of the assets of the
Corporation or of the particular series or class or attributable to the
particular series or class less its actual and accrued liabilities exclusive of
capital stock and surplus), by the total number of outstanding shares of the
Corporation or the series or class, as applicable. Such determination may be
made on a series-by-series basis or made or adjusted on a class-by-class basis,
as appropriate, and shall include any expenses allocated to a specific series or
class thereof. The Board of Directors may adopt procedures for determination of
net asset value consistent with the requirements of applicable statutes and
regulations and, so far as accounting matters are concerned, with generally
accepted accounting principles. The procedures may include, without limitation,
procedures for valuation of the Corporation's portfolio securities and other
assets, for accrual of expenses or creation of reserves and for the
determination of the number of shares issued and outstanding at any given time.
Section 5. Redemption and Repurchase of Shares of Capital Stock: Any
shareholder may redeem shares of the Corporation for the net asset value of each
series or class thereof by presentation of an appropriate request, together with
the certificates, if any, for such shares, duly endorsed, at the office or
agency designated by the Corporation. Redemptions as aforesaid, or purchases by
the Corporation of its own stock, shall be made in the manner and subject to the
conditions contained in the bylaws or approved by the Board of Directors.
Section 6. Purchase of Shares: The Corporation shall be entitled to
purchase shares of any series or class of its capital stock, to the extent that
the Corporation may lawfully effect such purchase under Maryland General
Corporation Law, upon such terms and conditions and for such consideration as
the Board of Directors shall deem advisable, by agreement with the stockholder
at a price not exceeding the net asset value per share computed in accordance
with Section 4 of this Article.
Section 7. Redemption of Minimum Amounts:
(a) If after giving effect to a request for redemption by a
stockholder, the aggregate net asset value of his remaining shares of any
series or class will be less than the Minimum Amount then in effect, the
Corporation shall be entitled to require the redemption of the remaining
shares of such series or class owned by such stockholder, upon notice given
in accordance with paragraph (c) of this Section, to the extent that the
Corporation may lawfully effect such redemption under Maryland General
Corporation Law.
(b) The term "Minimum Amount" when used herein shall mean Three Hundred
Dollars ($300) unless otherwise fixed by the Board of Directors from time
to time, provided that the Minimum Amount may not in any event exceed Five
Thousand Dollars ($5,000).
(c) If any redemption under paragraph (a) of this Section is upon
notice, the notice shall be in writing personally delivered or deposited in
the mail, at least thirty days prior to such redemption. If mailed, the
notice shall be addressed to the stockholder at his post office address as
shown on the books of the Corporation, and sent by certified or
registered mail, postage prepaid. The price for shares redeemed by the
Corporation pursuant to paragraph (a) of this Section shall be paid in cash
in an amount equal to the net asset value of such shares, computed in
accordance with Section 4 of this Article.
Section 8. Mode of Payment: Payment by the Corporation for shares of any
series or class of the capital stock of the Corporation surrendered to it for
redemption shall be made by the Corporation within three business days of such
surrender out of the funds legally available therefor, provided that the
Corporation may suspend the right of the holders of capital stock of the
Corporation to redeem shares of capital stock and may postpone the right of such
holders to receive payment for any shares when permitted or required to do so by
law. Payment of the redemption or purchase price may be made in cash or, at the
option of the Corporation, wholly or partly in such portfolio securities of the
Corporation as the Corporation may select.
Section 9. Rights of Holders of Shares Purchased or Redeemed: The right of
any holder of any series or class of capital stock of the Corporation purchased
or redeemed by the Corporation as provided in this Article to receive dividends
thereon and all other rights of such holder with respect to such shares shall
terminate at the time as of which the purchase or redemption price of such
shares is determined, except the right of such holder to receive (i) the
purchase or redemption price of such shares from the Corporation or its
designated agent and (ii) any dividend or distribution or voting rights to which
such holder has previously become entitled as the record holder of such shares
on the record date for the determination of the stockholders entitled to receive
such dividend or distribution or to vote at the meeting of stockholders.
Section 10. Status of Shares Purchased or Redeemed: In the absence of any
specification as to the purpose for which such shares of any series or class of
capital stock of the Corporation are redeemed or purchased by it, all shares so
redeemed or purchased shall be deemed to be retired in the sense contemplated by
the laws of the State of Maryland and may be reissued. The number of authorized
shares of capital stock of the Corporation shall not be reduced by the number of
any shares redeemed or purchased by it.
Section 11. Additional Limitations and Powers: The following provisions are
inserted for the purpose of defining, limiting and regulating the powers of the
Corporation and of the Board of Directors and stockholders:
(a) Any determination made in good faith and, so far as accounting
matters are involved, in accordance with generally accepted accounting
principles by or pursuant to the direction of the Board of Directors, as to
the amount of the assets, debts, obligations or liabilities of the
Corporation, as to the amount of any reserves or charges set up and the
propriety thereof, as to the time of or purpose for creating such reserves
or charges, as to the use, alteration or cancellation of any reserves or
charges (whether or not any debt, obligation or liability for which such
reserves or charges shall have been created shall have been paid or
discharged or shall be then or thereafter required to be paid or
discharged), as to the establishment or designation of procedures or
methods to be employed for valuing any investment or other assets of the
Corporation and as to the value of any investment or other asset, as to the
allocation of any asset of the Corporation to a particular series or class
or classes of the Corporation's stock, as to the funds available for the
declaration of dividends and as to the declaration of dividends, as to the
charging of any liability of the Corporation to a particular series or
class or classes of the Corporation's stock, as to the number of shares of
any series or class or classes of the Corporation's outstanding stock, as
to the estimated expense to the Corporation in connection with purchases or
redemptions of its shares, as to the ability to liquidate investments in
orderly fashion, or as to any other matters relating to the issue, sale,
purchase or redemption or other acquisition or disposition of investments
or shares of the Corporation, or in the determination of the net asset
value per share of shares of any series or class of the Corporation's stock
shall be conclusive and binding for all purposes.
(b) Except to the extent prohibited by the Investment Company Act of
1940, as amended, or rules, regulations or orders thereunder promulgated by
the Securities and Exchange Commission or any successor thereto or by the
bylaws of the Corporation, a director, officer or employee of the
Corporation shall not be disqualified by his position from dealing or
contracting with the Corporation, nor shall any transaction or contract of
the Corporation be void or voidable by reason of the fact that any
director, officer or employee or any firm of which any director, officer or
employee is a member, or any corporation of which any director, officer or
employee is a stockholder, officer or director, is in any way interested in
such transaction or contract; provided that in case a director, or a firm
or corporation of which a director is a member, stockholder, officer or
director is so interested, such fact shall be disclosed to or shall have
been known by the Board of Directors or a majority thereof. Nor shall any
director or officer of the Corporation be liable to the Corporation or to
any stockholder or creditor thereof or to any person for any loss incurred
by it or him or for any profit realized by such director or officer under
or by reason of such contract or transaction; provided that nothing herein
shall protect any director or officer of the Corporation against any
liability to the Corporation or to its security holders to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
his office; and provided always that such contract or transaction shall
have been on terms that were not unfair to the Corporation at the time at
which it was entered into. Any director of the Corporation who is so
interested, or who is a member, stockholder, officer or director of such
firm or corporation, may be counted in determining the existence of a
quorum at any meeting of the Board of Directors of the Corporation which
shall authorize any such transaction or contract, with like force and
effect as if he were not such director, or member, stockholder, officer or
director of such firm or corporation.
(c) Specifically and without limitation of the foregoing paragraph (b)
but subject to the exception therein prescribed, the Corporation may enter
into management or advisory, underwriting, distribution and administration
contracts, custodian contracts and such other contracts as may be
appropriate.
ARTICLE VI
Directors
Section 1. Initial Board of Directors: The number of directors of the
Corporation shall be nine. The names of the directors who shall hold office
until the next annual meeting of stockholders or until their successors are duly
chosen and qualified are:
James D. Davis Roy W. Ehrle Pamela A. Ferguson
Richard W. Gilbert J. Barry Griswell Stephan L. Jones
Ronald E. Keller Barbara A. Lukavsky Richard G. Peebler
Section 2. Number of Directors: The number of directors in office may be
changed from time to time in the manner specified in the bylaws of the
Corporation, but this number shall never be less than three.
Section 3. Certain Powers of Board of Directors: The business and affairs
of the Corporation shall be managed under the direction of the Board of
Directors, which shall have and may exercise all powers of the Corporation
except those powers which are by law, by these Articles of Incorporation or by
the bylaws of the Corporation conferred upon or reserved to the stockholders. In
addition to its other powers explicitly or implicitly granted under these
Articles of Incorporation, by law or otherwise, the Board of Directors of the
Corporation (a) is expressly authorized to make, alter, amend or repeal bylaws
for the Corporation, (b) is empowered to authorize, without stockholder
approval, the issuance and sale from time to time of shares of capital stock of
the Corporation, whether now or hereafter authorized, in such amounts, for such
amount and kind of consideration and on such terms and conditions as the Board
of Directors shall determine, (c) is empowered to classify or reclassify any
unissued stock, whether now or hereafter authorized, by setting or changing the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, or terms or conditions of
redemption of such stock, and (d) shall have the power from time to time to set
apart, out of any assets of the Corporation otherwise available for dividends, a
reserve or reserves for taxes or for any other proper purposes, and to reduce,
abolish or add to any such reserve or reserves from time to time as said Board
of Directors may deem to be in the best interests of the Corporation; and to
determine in its discretion what part of the assets of the Corporation available
for dividends in excess of such reserve or reserves shall be declared in
dividends and paid to the stockholders of the Corporation.
SECOND: The Fund desires to restate its Articles of Incorporation so that, as
amended, said Articles of Incorporation shall be restated as follows:
ARTICLE I
Incorporator
The undersigned Arthur S. Filean and Michael D. Roughton, whose post office
address is The Principal Financial Group, Des Moines, Iowa 50392, being at least
18 years of age, incorporators, hereby form a corporation under and by virtue of
the laws of Maryland.
ARTICLE II
Name
The name of the corporation is Principal Variable Contracts Fund, Inc.
hereinafter called the "Corporation."
ARTICLE III
Corporate Purposes and Powers
The Corporation is formed for the following purposes:
(1) To conduct and carry on the business of an investment company.
(2) To hold, invest and reinvest its assets in securities and other
investments or to hold part or all of its assets in cash.
(3) To issue and sell shares of its capital stock in such amounts and on
such terms and conditions and for such purposes and for such amount or kind of
consideration as may now or hereafter be permitted by law.
(4) To redeem, purchase or acquire in any other manner, hold, dispose of,
resell, transfer, reissue or cancel (all without the vote or consent of the
stockholders of the Corporation) shares of its capital stock, in any manner and
to the extent now or hereafter permitted by law and by these Articles of
Incorporation.
(5) To do any and all additional acts and to exercise any and all
additional powers or rights as may be necessary, incidental, appropriate or
desirable for the accomplishment of all or any of the foregoing purposes.
To carry out all or any part of the foregoing objects as principal, factor,
agent, contractor, or otherwise, either alone or through or in conjunction with
any person, firm, association or corporation, and, in carrying on its business
and for the purpose of attaining or furnishing any of its objects and purposes,
to make and perform any contracts and to do any acts and things, and to exercise
any powers suitable, convenient or proper for the accomplishment of any of the
objects and purposes herein enumerated or incidental to the powers herein
specified, or which at any time may appear conducive to or expedient for the
accomplishment of any such objects and purposes.
To carry out all or any part of the aforesaid objects and purposes, and to
conduct its business in all or any of its branches, in any or all states,
territories, districts and possessions of the United States of America and in
foreign countries; and to maintain offices and agencies in any or all states,
territories, districts and possessions of the United States of America and in
foreign countries.
The foregoing objects and purposes shall, except when otherwise expressed,
be in no way limited or restricted by reference to or inference from the terms
of any other clause of this or any other article of these Articles of
Incorporation or of any amendment thereto, and shall each be regarded as
independent, and construed as powers as well as objects and purposes.
The Corporation shall be authorized to exercise and enjoy all of the
powers, rights and privileges granted to, or conferred upon, corporations of a
similar character by the Maryland General Corporation Law now or hereafter in
force, and the enumeration of the foregoing powers shall not be deemed to
exclude any powers, rights or privileges so granted or conferred.
ARTICLE IV
Principal Office and Resident Agent
The post office address of the principal office of the Corporation in this
State is c/o The Corporation Trust Incorporated, 32 South Street, Baltimore,
Maryland 21202. The name of the resident agent of the Corporation in this State
is The Corporation Trust Incorporated, a corporation of this State, and the post
office address of the resident agent is 32 South Street, Baltimore, Maryland
21202.
ARTICLE V
Capital Stock
Section 1. Authorized Shares: The total number of shares of stock which the
Corporation shall have authority to issue is two billion three hundred million
(2,300,000,000) shares, of the par value of one cent ($.01) each and of the
aggregate par value of twenty-three million dollars ($23,000,000). The shares
may be issued by the Board of Directors in such separate and distinct series and
classes of series as the Board of Directors shall from time to time create and
establish. The Board of Directors shall have full power and authority, in its
sole discretion, to establish and designate series and classes of series, and to
classify or reclassify any unissued shares in separate series or classes having
such preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption as shall be fixed and determined from time to time by the Board of
Directors. In the event of establishment of classes, each class of a series
shall represent interests in the assets belonging to that series and have
identical voting, dividend, liquidation and other rights and the same terms and
conditions as any other class of the series, except that expenses allocated to
the class of a series may be borne solely by such class as shall be determined
by the Board of Directors and may cause differences in rights as described in
the following sentence. The shares of a class may be converted into shares of
another class upon such terms and conditions as shall be determined by the Board
of Directors, and a class of a series may have exclusive voting rights with
respect to matters affecting only that class. Expenses related to the
distribution of, and other identified expenses that should properly be allocated
to, the shares of a particular series or class may be charged to and borne
solely by such series or class, and the bearing of expenses solely by a series
or class may be appropriately reflected (in a manner determined by the Board of
Directors) and cause differences in the net asset value attributable to, and the
dividend, redemption and liquidation rights of, the shares of each series or
class. Subject to the authority of the Board of Directors to increase and
decrease the number of, and to reclassify the shares of any series or class,
there are hereby established eleven series of common stock all of the same
class, each comprising the number of shares and having the designation
indicated:
Series Number of Shares
------ ----------------
Aggressive Growth 100,000,000
Asset Allocation 100,000,000
Balanced 100,000,000
Bond 100,000,000
Capital Value 100,000,000
Government Securities 100,000,000
Growth 100,000,000
High Yield 100,000,000
International 100,000,000
International SmallCap 100,000,000
MicroCap 100,000,000
Midcap 100,000,000
MidCap Growth 100,000,000
Money Market 500,000,000
Real Estate 100,000,000
SmallCap 100,000,000
SmallCap Growth 100,000,000
SmallCap Value 100,000,000
Utilities 100,000,000
In addition, the Board of Directors is hereby expressly granted authority to
change the designation of any series or class, to increase or decrease the
number of shares of any series or class, provided that the number of shares of
any series or class shall not be decreased by the Board of Directors below the
number of shares thereof then outstanding, and to reclassify any unissued shares
into one or more series or classes that may be established and designated from
time to time. Notwithstanding the designations herein of series and classes, the
Corporation may refer, in prospectuses and other documents furnished to
shareholders, filed with the Securities and Exchange Commission or used for
other purposes, to a series of shares as a "class" and to a class of shares of a
particular series as a "series."
(a) The Corporation may issue shares of stock in fractional
denominations to the same extent as its whole shares, and shares in
fractional denominations shall be shares of stock having proportionately,
to the respective fractions represented thereby, all the rights of whole
shares, including without limitation, the right to vote, the right to
receive dividends and distributions and the right to participate upon
liquidation of the Corporation, but excluding the right to receive
a stock certificate representing fractional shares.
(b) The holder of each share of stock of the Corporation shall be
entitled to one vote for each full share, and a fractional vote for each
fractional share, of stock, irrespective of the series or class, then
standing in the holder's name on the books of the Corporation. On any
matter submitted to a vote of stockholders, all shares of the Corporation
then issued and outstanding and entitled to vote shall be voted in the
aggregate and not by series or class except that (1) when otherwise
expressly required by the Maryland General Corporation Law or the
Investment Company Act of 1940, as amended, shares shall be voted by
individual series or class, and (2) if the Board of Directors, in its sole
discretion, determines that a matter affects the interests of only one or
more particular series or class or classes then only the holders of shares
of such affected series or class or classes shall be entitled to vote
thereon.
(c) Unless otherwise provided in the resolution of the Board of
Directors providing for the establishment and designation of any new series
or class or classes, each series of stock of the Corporation shall have the
following powers, preferences and rights, and qualifications, restrictions,
and limitations thereof:
(1) Assets Belonging to a Class. All consideration received by the
Corporation for the issue or sale of shares of a particular class,
together with all assets in which such consideration is invested or
reinvested, all income, earnings, profits and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation
of such assets, and any funds or payments derived from any reinvestment
of such proceeds in whatever form the same may be, shall irrevocably
belong to that class for all purposes, subject only to the rights of
creditors, and shall be so recorded upon the books and accounts of the
Corporation. Such consideration, assets, income, earnings, profits and
proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation of such assets, and any funds or payments
derived from any reinvestment of such proceeds, in whatever form the
same may be, together with any General Items allocated to that class as
provided in the following sentence, are herein referred to as "assets
belonging to" that class. In the event that there are any assets,
income, earnings, profits, proceeds thereof, funds or payments which
are not readily identifiable as belonging to any particular class
(collectively "General Items"), such General Items shall be allocated
by or under the supervision of the Board of Directors to and among any
one or more of the classes established and designated from time to time
in such manner and on such basis as the Board of Directors, in
its sole discretion, deems fair and equitable, and any General
Items so allocated to a particular class shall belong to that class.
Each such allocation by the Board of Directors shall be conclusive and
binding for all purposes.
(2) Liabilities Belonging to a Class. The assets belonging to each
particular class shall be charged with the liabilities of the
Corporation in respect of that class and all expenses, costs, charges
and reserves attributable to that class, and any general liabilities,
expenses, costs, charges or reserves of the Corporation which are not
readily identifiable as belonging to any particular class shall be
allocated and charged by or under the supervision of the Board of
Directors to and among any one or more of the classes established and
designated from time to time in such manner and on such basis as the
Board of Directors, in its sole discretion, deems fair and equitable.
The liabilities, expenses, costs, charges and reserves allocated and so
charged to a class are herein referred to as "liabilities belonging to"
that class. Expenses related to the shares of a series may be borne
solely by that series (as determined by the Board of Directors). Each
allocation of liabilities, expenses, costs, charges and reserves by the
Board of Directors shall be conclusive and binding for all purposes.
(3) Dividends. The Board of Directors may from time to time
declare and pay dividends or distributions, in stock, property or cash,
on any or all series of stock or classes of series, the amount of such
dividends and property distributions and the payment of them being
wholly in the discretion of the Board of Directors. Dividends may be
declared daily or otherwise pursuant to a standing resolution or
resolutions adopted only once or with such frequency as the Board of
Directors may determine, after providing for actual and accrued
liabilities belonging to that class. All dividends or distributions on
shares of a particular class shall be paid only out of surplus or other
lawfully available assets determined by the Board of Directors as
belonging to such class. Dividends and distributions may vary between
the classes of a series to reflect differing allocations of the expense
of each class of that series to such extent and for such purposes as
the Boards of Directors may deem appropriate. The Board of Directors
shall have the power, in its sole discretion, to distribute in any
fiscal year as dividends, including dividends designated in whole or in
part as capital gains distributions, amounts sufficient, in the opinion
of the Board of Directors, to enable the Corporation, or where
applicable each series of shares or class of a series, to qualify as a
regulated investment company under the Internal Revenue Code of 1986,
as amended, or any successor or comparable statute thereto, and
regulations promulgated thereunder, and to avoid liability for the
Corporation, or each series of shares or class of a series, for Federal
income and excise taxes in respect of that or any other year.
(4) Liquidation. In the event of the liquidation of the
Corporation or of the assets attributable to a particular series or
class, the shareholders of each series or class that has been
established and designated and is being liquidated shall be entitled to
receive, as a series or class, when and as declared by the Board of
Directors, the excess of the assets belonging to that series or class
over the liabilities belonging to that series or class. The holders of
shares of any series or class shall not be entitled thereby to any
distribution upon liquidation of any other series or class. The assets
so distributable to the shareholder of any particular series or class
shall be distributed among such shareholders according to their
respective rights taking into account the proper allocation of expenses
being borne by that series or class. The liquidation of assets
attributable to any particular series or class in which there are
shares then outstanding may be authorized by vote of a majority of the
Board of Directors then in office, subject to the approval of a
majority of the outstanding voting securities of that series or class,
as defined in the Investment Company Act of 1940, as amended. In the
event that there are any general assets not belonging to any particular
series or class of stock and available for distribution, such
distribution shall be made to holders of stock of various series or
classes in such proportion as the Board of Directors determines to be
fair and equitable, and such determination by the Board of Directors
shall be conclusive and binding for all purposes.
(5) Redemption. All shares of stock of the Corporation shall have
the redemption rights provided for in Article V, Section 5.
(d) The Corporation's shares of stock are issued and sold, and all
persons who shall acquire stock of the Corporation shall do so, subject to
the condition and understanding that the provisions of the Corporation's
Articles of Incorporation, as from time to time amended, shall be binding
upon them.
Section 2. Quorum Requirements and Voting Rights: Except as otherwise
expressly provided by the Maryland General Corporation Law, the presence in
person or by proxy of the holders of one-third of the shares of capital stock of
the Corporation outstanding and entitled to vote thereat shall constitute a
quorum at any meeting of the stockholders, except that where the holders of any
series or class are required or permitted to vote as a series or class,
one-third of the aggregate number of shares of that series or class outstanding
and entitled to vote shall constitute a quorum.
Notwithstanding any provision of Maryland General Corporation Law requiring
a greater proportion than a majority of the votes of all series or classes or of
any series or class of the Corporation's stock entitled to be cast in order to
take or authorize any action, any such action may be taken or authorized upon
the concurrence of a majority of the aggregate number of votes entitled to be
cast thereon subject to the applicable laws and regulations as from time to time
in effect or rules or orders of the Securities and Exchange Commission or any
successor thereto. All shares of stock of this Corporation shall have the voting
rights provided for in Article V, Section 1, paragraph (b).
Section 3. No Preemptive Rights: No holder of shares of capital stock of
the Corporation shall, as such holder, have any right to purchase or subscribe
for any shares of the capital stock of the Corporation which the Corporation may
issue or sell (whether consisting of shares of capital stock authorized by these
Articles of Incorporation, or shares of capital stock of the Corporation
acquired by it after the issue thereof, or other shares) other than any right
which the Board of Directors of the Corporation, in its discretion, may
determine.
Section 4. Determination of Net Asset Value: The net asset value of each
share of each series or class of each series of the Corporation shall be the
quotient obtained by dividing the value of the net assets of the Corporation, or
if applicable of the series or class (being the value of the assets of the
Corporation or of the particular series or class or attributable to the
particular series or class less its actual and accrued liabilities exclusive of
capital stock and surplus), by the total number of outstanding shares of the
Corporation or the series or class, as applicable. Such determination may be
made on a series-by-series basis or made or adjusted on a class-by-class basis,
as appropriate, and shall include any expenses allocated to a specific series or
class thereof. The Board of Directors may adopt procedures for determination of
net asset value consistent with the requirements of applicable statutes and
regulations and, so far as accounting matters are concerned, with generally
accepted accounting principles. The procedures may include, without limitation,
procedures for valuation of the Corporation's portfolio securities and other
assets, for accrual of expenses or creation of reserves and for the
determination of the number of shares issued and outstanding at any given time.
Section 5. Redemption and Repurchase of Shares of Capital Stock: Any
shareholder may redeem shares of the Corporation for the net asset value of each
series or class thereof by presentation of an appropriate request, together with
the certificates, if any, for such shares, duly endorsed, at the office or
agency designated by the Corporation. Redemptions as aforesaid, or purchases by
the Corporation of its own stock, shall be made in the manner and subject to the
conditions contained in the bylaws or approved by the Board of Directors.
Section 6. Purchase of Shares: The Corporation shall be entitled to
purchase shares of any series or class of its capital stock, to the extent that
the Corporation may lawfully effect such purchase under Maryland General
Corporation Law, upon such terms and conditions and for such consideration as
the Board of Directors shall deem advisable, by agreement with the stockholder
at a price not exceeding the net asset value per share computed in accordance
with Section 4 of this Article.
Section 7. Redemption of Minimum Amounts:
(a) If after giving effect to a request for redemption by a
stockholder, the aggregate net asset value of his remaining shares of any
series or class will be less than the Minimum Amount then in effect, the
Corporation shall be entitled to require the redemption of the remaining
shares of such series or class owned by such stockholder, upon notice given
in accordance with paragraph (c) of this Section, to the extent that the
Corporation may lawfully effect such redemption under Maryland General
Corporation Law.
(b) The term "Minimum Amount" when used herein shall mean Three Hundred
Dollars ($300) unless otherwise fixed by the Board of Directors from time
to time, provided that the Minimum Amount may not in any event exceed Five
Thousand Dollars ($5,000).
(c) If any redemption under paragraph (a) of this Section is upon
notice, the notice shall be in writing personally delivered or deposited in
the mail, at least thirty days prior to such redemption. If mailed, the
notice shall be addressed to the stockholder at his post office address as
shown on the books of the Corporation, and sent by certified or registered
mail, postage prepaid. The price for shares redeemed by the Corporation
pursuant to paragraph (a) of this Section shall be paid in cash in an
amount equal to the net asset value of such shares, computed in accordance
with Section 4 of this Article.
Section 8. Mode of Payment: Payment by the Corporation for shares of any
series or class of the capital stock of the Corporation surrendered to it for
redemption shall be made by the Corporation within three business days of such
surrender out of the funds legally available therefor, provided that the
Corporation may suspend the right of the holders of capital stock of the
Corporation to redeem shares of capital stock and may postpone the right of such
holders to receive payment for any shares when permitted or required to do so by
law. Payment of the redemption or purchase price may be made in cash or, at the
option of the Corporation, wholly or partly in such portfolio securities of the
Corporation as the Corporation may select.
Section 9. Rights of Holders of Shares Purchased or Redeemed: The right of
any holder of any series or class of capital stock of the Corporation purchased
or redeemed by the Corporation as provided in this Article to receive dividends
thereon and all other rights of such holder with respect to such shares shall
terminate at the time as of which the purchase or redemption price of such
shares is determined, except the right of such holder to receive (i) the
purchase or redemption price of such shares from the Corporation or its
designated agent and (ii) any dividend or distribution or voting rights to which
such holder has previously become entitled as the record holder of such shares
on the record date for the determination of the stockholders entitled to receive
such dividend or distribution or to vote at the meeting of stockholders.
Section 10. Status of Shares Purchased or Redeemed: In the absence of any
specification as to the purpose for which such shares of any series or class of
capital stock of the Corporation are redeemed or purchased by it, all shares so
redeemed or purchased shall be deemed to be retired in the sense contemplated by
the laws of the State of Maryland and may be reissued. The number of authorized
shares of capital stock of the Corporation shall not be reduced by the number of
any shares redeemed or purchased by it.
Section 11. Additional Limitations and Powers: The following provisions are
inserted for the purpose of defining, limiting and regulating the powers of the
Corporation and of the Board of Directors and stockholders:
(a) Any determination made in good faith and, so far as accounting
matters are involved, in accordance with generally accepted accounting
principles by or pursuant to the direction of the Board of Directors, as to
the amount of the assets, debts, obligations or liabilities of the
Corporation, as to the amount of any reserves or charges set up and the
propriety thereof, as to the time of or purpose for creating such reserves
or charges, as to the use, alteration or cancellation of any reserves or
charges (whether or not any debt, obligation or liability for which such
reserves or charges shall have been created shall have been paid or
discharged or shall be then or thereafter required to be paid or
discharged), as to the establishment or designation of procedures or
methods to be employed for valuing any investment or other assets of the
Corporation and as to the value of any investment or other asset, as to
the allocation of any asset of the Corporation to a particular series
or class or classes of the Corporation's stock, as to the funds
available for the declaration of dividends and as to the declaration of
dividends, as to the charging of any liability of the Corporation to a
particular series or class or classes of the Corporation's stock, as to
the number of shares of any series or class or classes of the Corporation's
outstanding stock, as to the estimated expense to the Corporation in
connection with purchases or redemptions of its shares, as to the ability
to liquidate investments in orderly fashion, or as to any other matters
relating to the issue, sale, purchase or redemption or other
acquisition or disposition of investments or shares of the Corporation,
or in the determination of the net asset value per share of shares of
any series or class of the Corporation's stock shall be conclusive and
binding for all purposes.
(b) Except to the extent prohibited by the Investment Company Act of
1940, as amended, or rules, regulations or orders thereunder promulgated by
the Securities and Exchange Commission or any successor thereto or by the
bylaws of the Corporation, a director, officer or employee of the
Corporation shall not be disqualified by his position from dealing or
contracting with the Corporation, nor shall any transaction or contract of
the Corporation be void or voidable by reason of the fact that any
director, officer or employee or any firm of which any director, officer or
employee is a member, or any corporation of which any director, officer or
employee is a stockholder, officer or director, is in any way interested in
such transaction or contract; provided that in case a director, or a firm
or corporation of which a director is a member, stockholder, officer or
director is so interested, such fact shall be disclosed to or shall have
been known by the Board of Directors or a majority thereof. Nor shall any
director or officer of the Corporation be liable to the Corporation or to
any stockholder or creditor thereof or to any person for any loss incurred
by it or him or for any profit realized by such director or officer under
or by reason of such contract or transaction; provided that nothing herein
shall protect any director or officer of the Corporation against any
liability to the Corporation or to its security holders to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
his office; and provided always that such contract or transaction shall
have been on terms that were not unfair to the Corporation at the time at
which it was entered into. Any director of the Corporation who is so
interested, or who is a member, stockholder, officer or director of such
firm or corporation, may be counted in determining the existence of a
quorum at any meeting of the Board of Directors of the Corporation which
shall authorize any such transaction or contract, with like force and
effect as if he were not such director, or member, stockholder, officer
or director of such firm or corporation.
(c) Specifically and without limitation of the foregoing paragraph (b)
but subject to the exception therein prescribed, the Corporation may enter
into management or advisory, underwriting, distribution and administration
contracts, custodian contracts and such other contracts as may be
appropriate.
ARTICLE VI
Directors
Section 1. Initial Board of Directors: The number of directors of the
Corporation shall be nine. The names of the directors who shall hold office
until the next annual meeting of stockholders or until their successors are duly
chosen and qualified are:
James D. Davis Roy W. Ehrle Pamela A. Ferguson
Richard W. Gilbert J. Barry Griswell Stephan L. Jones
Ronald E. Keller Barbara A. Lukavsky Richard G. Peebler
Section 2. Number of Directors: The number of directors in office may be
changed from time to time in the manner specified in the bylaws of the
Corporation, but this number shall never be less than three.
Section 3. Certain Powers of Board of Directors: The business and affairs
of the Corporation shall be managed under the direction of the Board of
Directors, which shall have and may exercise all powers of the Corporation
except those powers which are by law, by these Articles of Incorporation or by
the bylaws of the Corporation conferred upon or reserved to the stockholders. In
addition to its other powers explicitly or implicitly granted under these
Articles of Incorporation, by law or otherwise, the Board of Directors of the
Corporation (a) is expressly authorized to make, alter, amend or repeal bylaws
for the Corporation, (b) is empowered to authorize, without stockholder
approval, the issuance and sale from time to time of shares of capital stock of
the Corporation, whether now or hereafter authorized, in such amounts, for such
amount and kind of consideration and on such terms and conditions as the Board
of Directors shall determine, (c) is empowered to classify or reclassify any
unissued stock, whether now or hereafter authorized, by setting or changing the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, or terms or conditions of
redemption of such stock, and (d) shall have the power from time to time to set
apart, out of any assets of the Corporation otherwise available for
dividends, a reserve or reserves for taxes or for any other proper purposes,
and to reduce, abolish or add to any such reserve or reserves from time to
time as said Board of Directors may deem to be in the best interests of the
Corporation; and to determine in its discretion what part of the assets of the
Corporation available for dividends in excess of such reserve or reserves shall
be declared in dividends and paid to the stockholders of the Corporation.
ARTICLE VII
Indemnification
The Corporation shall indemnify its directors, including any director who
serves another corporation, partnership, joint venture, trust or other
enterprise in any capacity at the request of the Corporation, to the maximum
extent permitted by the Maryland General Corporation Law and the Investment
Company Act of 1940. The Corporation shall indemnify its officers to the same
extent as its directors and to such further extent as is consistent with law.
The Corporation shall indemnify its employees and agents to the extent provided
by its Board of Directors.
ARTICLE VIII
Amendments
The Corporation reserves the right from time to time to make any amendment
of these Articles of Incorporation now or hereafter authorized by law, including
any amendment which alters the contract rights, as expressly set forth in these
Articles of Incorporation, of any outstanding capital stock. "Articles of
Incorporation" or "these Articles of Incorporation" as used herein and in the
bylaws of the Corporation shall be deemed to mean these Articles of
Incorporation as from time to time amended or restated.
ARTICLE IX
Duration
The duration of the Corporation shall be perpetual.
IN WITNESS WHEREOF, the undersigned incorporators of Principal Variable
Contracts Fund, Inc. have executed the foregoing Articles of Incorporation and
hereby acknowledge the same to be their voluntary act and deed.
Dated the 11th day of February, 1998
/s/ Arthur S. Filean
-----------------------------------
Arthur S. Filean
/s/ Michael D. Roughton
-----------------------------------
Michael D. Roughton
MANAGEMENT AGREEMENT
AGREEMENT to be effective the 1st day of July, 1997, by and between
PRINCIPAL VARIABLE CONTRACTS FUND, INC., a Maryland corporation (hereinafter
called the "Fund") and PRINCOR 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) Certificate of Incorporation of the Fund;
(b) Bylaws of the Fund as adopted by the Board of Directors;
(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
economic conditions require, a recommended investment program for
the portfolio of each Account of the Fund consistent with the
Account's 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
Certificate 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 AND OTHER ADMINISTRATIVE SERVICES AND EXPENSES
The Manager will regularly perform or assume responsibility for general
corporate and all other administrative services and expenses, except as set out
in Section 4 hereof, as follows:
(a) Furnish office space, all necessary office facilities and assume
costs of keeping books of the Fund;
(b) Furnish the services of executive and clerical personnel
necessary to perform the general corporate functions of the Fund;
(c) Compensate and pay the expenses of all officers, and employees of
the Fund, and of all directors of the Fund who are persons
affiliated with the Manager;
(d) Determine the net asset value of the shares of the Fund's Capital
Stock as frequently as the Fund shall request or as shall be
required by applicable law or regulations;
(e) Provide for the organizational expense of the Fund and expenses
incurred with the registration of the Fund and Fund shares with
the federal and state regulatory agencies, including the costs of
printing prospectuses in such number as the Fund shall need for
purposes of registration and for the sale of its shares;
(f) Be responsible for legal and auditing fees and expenses incurred
with respect to registration and continued operation of the Fund;
(g) Act as, and provide all services customarily performed by, the
transfer and paying agent of the Fund including, without
limitation, the following:
(i) issuance, registry of shares, and maintenance of open
account system;
(ii) preparation and distribution of dividend and capital gain
payments to shareholders;
(iii)preparation and distribution to shareholders of reports,
tax information, notices, proxy statements and proxies;
(iv) delivery, redemption and repurchase of shares, and
remittances to shareholders; and
(v) correspondence with shareholders concerning items (i), (ii),
(iii) and (iv) above.
(h) Prepare stock certificates, and distribute the same requested by
shareholders of the Fund; and
(i) Provide such other services as required by law or considered
reasonable or necessary in the conduct of the affairs of the Fund
in order for it to meet its business purposes.
3. RESERVED RIGHT TO DELEGATE DUTIES AND SERVICES TO OTHERS
The Manager in assuming responsibility for the various services as set
forth in 1 and 2 above, 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 Mutual Life
Insurance Company, or an affiliate thereof.
4. EXPENSES BORNE BY FUND
The Fund will pay, without reimbursement by the Manager, the following
expenses:
(a) Taxes, including in the case of redeemed shares any initial
transfer taxes, and other local, state and federal taxes,
governmental fees and other charges attributable to investment
transactions;
(b) Portfolio brokerage fees and incidental brokerage expenses;
(c) Interest;
(d) The fees and expenses of the Custodian of its assets;
(e) The fees and expenses of all directors of the Fund who are not
persons affiliated with the Manager; and
(f) The cost of meetings of shareholders.
5. COMPENSATION OF THE MANAGER BY FUND
For all services to be rendered and payments made as provided in
Sections 1 and 2 hereof, the Fund will accrue daily and pay the Manager within
five days after the end of each calendar month a fee based on the average of the
values placed on the net assets of the Accounts of the Fund as of the time of
determination of the net asset value on each trading day throughout the month in
accordance with the schedules attached hereto.
Net asset value shall be determined pursuant to applicable provisions of
the Certificate 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. ASSUMPTION OF EXPENSES BY PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
Although in no way relieving the Manager of its responsibility for the
performance of the duties and services set out in Section 2 hereof, and
regardless of any delegation thereof as permitted under Section 3 hereof, some
or all of the expenses therefore may be voluntarily assumed by Principal Mutual
Life Insurance Company and the Manager may be reimbursed therefor, or such
expenses may be paid directly by Principal Mutual Life Insurance Company.
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 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 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, if required by the 1940 Act, by a vote of a majority of the outstanding
voting securities of the Fund 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, 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 Fund, 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 material amendment of this Agreement shall be effective until
approved, if required by the 1940 Act or the rules, regulations, interpretations
or orders issued thereunder, by vote of the holders of a majority of the Fund's
outstanding voting securities and by vote of a majority of the directors who are
not interested persons of the Manager, Principal Mutual 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, Des Moines,
Iowa 50392.
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 VARIABLE CONTRACTS FUND, INC.
By /s/ Arthur S. Filean
Arthur S. Filean, Vice President
PRINCOR MANAGEMENT CORPORATION
By /s/ Stephan L. Jones
Stephan L. Jones, President
SCHEDULE 1
MANAGEMENT FEES
Aggressive Growth and
Asset Allocation Accounts
Average Daily Net Fee as a Percentage of
Assets of the Fund Average Daily Net Assets
--------------------------- ------------------------
First $100,000,000 .80%
Next 100,000,000 .75%
Next 100,000,000 .70%
Next 100,000,000 .65%
Amount Over 400,000,000 .60%
SCHEDULE 2
MANAGEMENT FEES
International Account
Average Daily Net Fee as a Percentage of
Assets of the Fund Average Daily Net Assets
--------------------------- ------------------------
First $100,000,000 .75%
Next 100,000,000 .70%
Next 100,000,000 .65%
Next 100,000,000 .60%
Amount Over 400,000,000 .55%
SCHEDULE 3
MANAGEMENT FEES
MidCap Account
Average Daily Net Fee as a Percentage of
Assets of the Fund Average Daily Net Assets
--------------------------- ------------------------
First $100,000,000 .65%
Next 100,000,000 .60%
Next 100,000,000 .55%
Next 100,000,000 .50%
Amount Over 400,000,000 .45%
SCHEDULE 4
MANAGEMENT FEES
High Yield and
Balanced Accounts
Average Daily Net Fee as a Percentage of
Assets of the Fund Average Daily Net Assets
--------------------------- ------------------------
First $100,000,000 .60%
Next 100,000,000 .55%
Next 100,000,000 .50%
Next 100,000,000 .45%
Amount Over 400,000,000 .40%
SCHEDULE 5
MANAGEMENT FEES
Bond, Capital Value, Government Securities,
Growth and Money Market Accounts
Average Daily Net Fee as a Percentage of
Assets of the Fund Average Daily Net Assets
--------------------------- ------------------------
First $100,000,000 .50%
Next 100,000,000 .45%
Next 100,000,000 .40%
Next 100,000,000 .35%
Amount Over 400,000,000 .30%
PRINCIPAL VARIABLE CONTRACTS FUND, INC.
SUB-ADVISORY AGREEMENT
AGREEMENT executed as of the 1st day of September, 1997, by and between PRINCOR
MANAGEMENT CORPORATION, an Iowa Corporation (hereinafter called "the Manager")
and MORGAN STANLEY ASSET MANAGEMENT INC. (hereinafter called "the Sub-Advisor").
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 the Sub-Advisor to furnish it with
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 the Sub-Advisor desires to furnish such services; and
WHEREAS, the Manager has furnished the Sub-Advisor with copies properly
certified or authenticated of each of the following and will promptly provide
the Sub-Advisor with copies properly certified or authenticated of any amendment
or supplement thereto:
(a) Management Agreement (the "Management Agreement") with the Fund;
(b) The Fund's registration statement as filed with the Securities
and Exchange Commission;
(c) The Fund's Articles of Incorporation and By-laws;
NOW, THEREFORE, in consideration of the premises and the terms and conditions
hereinafter set forth, the parties agree as follows:
1. Appointment of Sub-Advisor
In accordance with and subject to the Management Agreement, the Manager
hereby appoints the Sub-Advisor to perform the services described in
Section 2 below for investment and reinvestment of the securities and
other assets of certain series of the Fund (Appendix A), subject to the
control and direction of the Fund's Board of Directors, for the period
and on the terms hereinafter set forth. The Sub-Advisor accepts such
appointment and agrees to furnish the services hereinafter set forth
for the compensation herein provided. The Sub-Advisor 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 the Sub-Advisor
(a) Provide investment advisory services, including but not
limited to research, advice and supervision for the Accounts
identified in Appendix A hereto (the "Accounts").
(b) Furnish to the Board of Directors of the Fund (or any
appropriate committee of such Board), and revise from time to
time as economic conditions require, a recommended investment
program for the portfolio of each Account consistent with the
Account's investment objective and policies.
(c) Implement such of its recommended investment program as the
Board of Directors (or any appropriate committee of the Board)
shall approve, by placing orders for the purchase and sale of
securities, subject always to the provisions of the Fund's
Certificate of Incorporation and Bylaws and the requirements
of the 1940 Act, as each of the same shall be from time to
time in effect.
(d) 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.
(e) 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
Accounts are being observed.
(f) Provide determinations of the fair value of certain securities
when market quotations are not readily available for purposes
of calculating net asset value in accordance with procedures
and methods established by the Fund's Board of Directors.
(g) Furnish, at its own expense, (I) all necessary investment and
management facilities, including salaries of clerical and
other personnel required for it to execute its duties
faithfully, and (ii) administrative facilities, including
bookkeeping, clerical personnel and equipment necessary for
the efficient conduct of the investment advisory affairs of
the Accounts.
(h) Select brokers and dealers to effect all transactions for the
Accounts, place all necessary orders with brokers, dealers, or
issuers, and negotiate brokerage commissions if applicable.
(i) Maintain all accounts, books and records with respect to the
Accounts as are required of an investment advisor of a
registered investment company pursuant to the 1940 Act and
Investment Advisers Act of 1940 (the "Investment Advisers
Act") and the rules thereunder.
3. Compensation
As full compensation for all services rendered and obligations assumed
by the Sub-Advisor hereunder with respect to the Accounts, the Manager
shall pay the compensation specified in Appendix A to this Agreement.
4. Liability of Sub-Advisor
Neither the Sub-Advisor nor any of its directors, officers or employees
shall be liable to the Manager or the Fund for any loss suffered by the
Manager or the Fund resulting from any error of judgment made in the
good faith exercise of the Sub-Advisor's investment discretion in
connection with selecting Fund investments except for losses resulting
from willful misfeasance, bad faith or gross negligence of, or from
reckless disregard of, the duties of the Sub-Advisor or any of its
directors, officers or employees.
5. Supplemental Arrangements
The Sub-Advisor may enter into arrangements with other persons
affiliated with the Sub-Advisor to better enable it to fulfill its
obligations under this Agreement for the provision of certain personnel
and facilities to the Sub- Advisor.
6. Regulation
The Sub-Advisor shall submit to all regulatory and administrative
bodies having jurisdiction over the services provided pursuant to this
Agreement any information, reports or other material which any such
body may request or require pursuant to applicable laws and
regulations.
7. 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 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 Fund and in either event by a vote
of a majority of the directors of the Fund who are not interested
persons of the Manager, Principal Mutual Life Insurance Company, the
Sub-Advisor or the Fund cast in person at a meeting called for the
purpose of voting on such approval.
If the shareholders of the Fund fail to approve the Agreement or any
continuance of the Agreement, the Sub-Advisor will continue to act as
Sub-Advisor with respect to the Accounts pending the required approval
of the Agreement or its continuance or of any contract with the
Sub-Advisor or a different manager or sub-advisor or other definitive
action; provided, that the compensation received by the Sub-Advisor in
respect to the Fund during such period is in compliance with Rule 15a-4
under the Act.
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, the Sub-Advisor or the Manager or by vote of a majority of
the outstanding voting securities of the Fund. This 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 Act (particularly the definitions of "interested person,"
"assignment" and "voting security") shall be applied.
8. Amendment of this Agreement
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 Account and by vote of a majority of the Directors of the Fund
who are not interested persons of the Manager, the Sub-Advisor,
Principal Mutual Life Insurance Company or the Fund cast in person at a
meeting called for the purpose of voting on such approval.
9. 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 the Manager for this purpose
shall be The Principal Financial Group, Des Moines, Iowa
50392-0200, and the address of the Sub-Advisor shall be 1221
Avenue of the Americas, New York, NY 10020.
(c) The Sub-Advisor will promptly notify the Manager in writing of
the occurrence of any of the following events:
(1) the Sub-Advisor fails to be registered as an investment
adviser under the Investment Advisers Act or under the
laws of any jurisdiction in which the Sub-Advisor is
required to be registered as an investment advisor in
order to perform its obligations under this Agreement.
(2) the Sub-Advisor is served or otherwise receives notice
of any action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any
court, public board or body, involving the affairs of
the Fund.
(d) This Agreement contains the entire understanding and agreement
of the parties.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
date first above written.
PRINCOR MANAGEMENT CORPORATION
/s/ A. S. Filean
By ____________________________________________
A. S. Filean, Vice President
MORGAN STANLEY ASSET MANAGEMENT INC.
/s/ Harold Schaaff, Principal
By ____________________________________________
APPENDIX A
The Sub-Advisor shall serve as investment sub-advisor for the Aggressive
Growth and Asset Allocation Accounts of the Fund. With respect to such Accounts,
the Manager will pay the Sub-Advisor, as full compensation for all services
provided under this Agreement, a fee computed at an annual rate as follows (the
"Sub-Advisor Percentage Fee"):
First $ 40,000,000 of Assets........................... 0.45%
Next $160,000,000 of Assets............................ 0.30%
Next $100,000,000 of Assets............................ 0.25%
Assets above $300,000,000.............................. 0.20%
The Sub-Advisor Percentage Fee shall be accrued for each calendar day and
the sum of the daily fee accruals shall be paid monthly to the Sub-Advisor. The
daily fee accruals will be computed by multiplying the fraction of one over the
number of calendar days in the year by the applicable annual rate described
above and multiplying this product by the net assets of the Fund as determined
in accordance with the Fund's prospectus and statement of additional information
as of the close of business on the previous business day on which the Fund was
open for business.
PRINCIPAL VARIABLE CONTRACTS FUND, INC.
SUB-ADVISORY AGREEMENT
MICROCAP SERIES
AGREEMENT executed as of the 1st day of March, 1998, by and between PRINCIPAL
MANAGEMENT CORPORATION, an Iowa Corporation (hereinafter called "the Manager")
and GOLDMAN SACHS ASSET MANAGEMENT, a separate operating division of Goldman
Sachs & Co., a New York limited partnership (hereinafter called "the
Sub-Advisor").
W I T N E S S E T H:
WHEREAS, the Manager is the manager and investment adviser to each Series of
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 the Sub-Advisor to furnish it with
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 the Sub-Advisor desires to furnish such services; and
WHEREAS, The Manager has furnished the Sub-Advisor with copies properly
certified or authenticated of each of the following and will promptly provide
the Sub-Advisor with copies properly certified or authenticated of any amendment
or supplement thereto:
(a) Management Agreement (the "Management Agreement") with the Fund;
(b) The Fund's registration statement and financial statements as
filed with the Securities and Exchange Commission;
(c) The Fund's Articles of Incorporation and By-laws;
(d) Policies, procedures or instructions adopted or approved by the
Board of Directors of the Fund relating to obligations and
services provided by the Sub-Advisor.
NOW, THEREFORE, in consideration of the premises and the terms and conditions
hereinafter set forth, the parties agree as follows:
1. Appointment of Sub-Advisor
In accordance with and subject to the Management Agreement, the Manager
hereby appoints the Sub-Advisor to perform the services described in
Section 2 below for investment and reinvestment of the securities and
other assets of the MicroCap Series of the Fund (hereinafter called
"the Series"), subject to the control and direction of the Fund's Board
of Directors, for the period and on the terms hereinafter set forth.
The Sub-Advisor accepts such appointment and agrees to furnish the
services hereinafter set forth for the compensation herein provided.
The Sub-Advisor 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 the Sub-Advisor
(a) Provide investment advisory services, including but not
limited to research, advice and supervision for the Series.
(b) Furnish to the Board of Directors of the Fund for approval (or
any appropriate committee of such Board), and revise from time
to time as economic conditions require, a recommended
investment program for the Series consistent with the Series'
investment objective and policies.
(c) Implement the approved investment program by placing orders
for the purchase and sale of securities without prior
consultation with the Manager and without regard to the length
of time the securities have been held, the resulting rate of
portfolio turnover or any tax considerations, subject always
to the provisions of the Fund's Certificate of Incorporation
and Bylaws and the requirements of the 1940 Act, as each of
the same shall be from time to time in effect.
(d) 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 Series.
(e) Report to the Board of Directors of the Fund at such times and
in such detail as the Board of Directors may reasonably deem
appropriate in order to enable it to determine that the
investment policies, procedures and approved investment
program of the Series are being observed.
(f) Provide assistance and recommendations for the determination
of the fair value of certain securities when reliable market
quotations are not readily available for purposes of
calculating net asset value in accordance with procedures and
methods established by the Fund's Board of Directors.
(g) Furnish, at its own expense, (i) all necessary investment and
management facilities, including salaries of clerical and
other personnel required for it to execute its duties
faithfully, and (ii) administrative facilities, including
bookkeeping, clerical personnel and equipment necessary for
the efficient conduct of the investment advisory affairs of
the Series.
(h) Select brokers and dealers to effect all transactions for the
Series, place all necessary orders with brokers, dealers or
issuers (including affiliated broker-dealers), and negotiate
brokerage commissions if applicable. To the extent consistent
with applicable law, purchase or sell orders for the Series may
be aggregated with contemporaneous purchase or sell orders of
other clients of the Sub-Advisor. The Sub-Advisor shall use its
best efforts to obtain execution of transactions for the Series
at prices which are advantageous to the Series and at commission
rates that are reasonable in relation to the benefits received.
However, the Sub-Advisor may select brokers or dealers on the
basis that they provide brokerage, research or other services or
products to the Series and/or other accounts serviced by the
Sub-Advisor. To the extent consistent with applicable law, the
Sub-Advisor may pay a broker or dealer an amount of commission
for effecting a securities transaction in excess of the amount of
commission or dealer spread another broker or dealer would have
charged for effecting that transaction if the Sub-Advisor
determines in good faith that such amount of commission is
reasonable in relation to the value of the brokerage and research
products and/or services provided by such broker or dealer. This
determination, with respect to brokerage and research services or
products, may be viewed in terms of either that particular
transaction or the overall responsibilities which the Sub-Advisor
and its affiliates have with respect to the Series or to accounts
over which they exercise investment discretion. Not all such
services or products need be used by the Sub-Advisor in managing
the Series. In addition, joint repurchase or other accounts may
not be utilized by the Series except to the extent permitted
under any exemptive order obtained by the Sub-Advisor provided
that all conditions of such order are complied with.
(i) Maintain all accounts, books and records with respect to the
Series as are required of an investment advisor of a
registered investment company pursuant to the 1940 Act and
Investment Advisers Act of 1940 (the "Investment Advisors
Act") and the rules thereunder.
3. Compensation
As full compensation for all services rendered and obligations assumed
by the Sub-Advisor hereunder with respect to the Series, the Manager
shall pay the compensation specified in Appendix A to this Agreement.
4. Liability of Sub-Advisor
Neither the Sub-Advisor nor any of its managing directors, officers,
employees, agents or affiliates shall be liable to the Manager, the
Fund or its shareholders for any loss suffered by the Manager or the
Fund resulting from any error of judgment made in the good faith
exercise of the Sub-Advisor's investment discretion in connection with
selecting investments for the Series or as a result of the failure by
the Manager or any of its affiliates to comply with the terms of this
Agreement and/or any insurance laws and rules, except for losses
resulting from willful misfeasance, bad faith or gross negligence of,
or from reckless disregard of, the duties of the Sub-Advisor or any of
its directors, officers or employees.
5. Supplemental Arrangements
The Sub-Advisor may enter into arrangements with other persons
affiliated with the Sub-Advisor or with unaffiliated third parties to
better enable the Sub-Advisor to fulfill its obligations under this
Agreement for the provision of certain personnel and facilities to the
Sub- Advisor, subject to written notification to and approval of the
Manager and the Board of Directors of the Fund.
6. Regulation
The Sub-Advisor shall submit to all regulatory and administrative
bodies having jurisdiction over the services provided pursuant to this
Agreement any information, reports or other material which any such
body may request or require pursuant to applicable laws and
regulations.
7. Duration and Termination of This Agreement
This Agreement shall become effective on the latest of (i) the date of
its execution, (ii) the date of its approval by a majority of the Board
of Directors of the Fund, including approval by the vote of a majority
of the Board of Directors of the Fund who are not interested persons of
the Manager, Principal Mutual Life Insurance Company or the Fund cast
in person at a meeting called for the purpose of voting on such
approval or (iii) if required by the 1940 Act, the date of its approval
by a majority of the outstanding voting securities of the Series. 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 Fund and in either event by a vote
of a majority of the Board of Directors of the Fund who are not
interested persons of the Manager, Principal Mutual Life Insurance
Company, the Sub-Advisor or the Fund cast in person at a meeting called
for the purpose of voting on such approval.
If the shareholders of the Series fail to approve the Agreement or any
continuance of the Agreement in accordance with the requirements of the
1940 Act, the Sub-Advisor will continue to act as Sub-Advisor with
respect to the Series pending the required approval of the Agreement or
its continuance or of any contract with the Sub-Advisor or a different
manager or sub-advisor or other definitive action; provided, that the
compensation received by the Sub-Advisor in respect to the Series
during such period is in compliance with Rule 15a-4 under the 1940 Act.
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, the Sub-Advisor or the Manager or by vote of a majority of
the outstanding voting securities of the Series. This 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 1940 Act (particularly the definitions of "interested
person," "assignment" and "voting security") shall be applied.
8. Amendment of this Agreement
No material amendment of this Agreement shall be effective until
approved, if required by the 1940 Act or the rules, regulations,
interpretations or orders issued thereunder, by vote of the holders of
a majority of the outstanding voting securities of the Series and by
vote of a majority of the Board of Directors of the Fund who are not
interested persons of the Manager, the Sub-Advisor, Principal Mutual
Life Insurance Company or the Fund cast in person at a meeting called
for the purpose of voting on such approval.
9. 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 the Manager for this purpose
shall be The Principal Financial Group, Des Moines, Iowa
50392-0200, and the address of the Sub-Advisor shall be One
New York Plaza, 41st Floor, New York, New York 10004.
(c) The Sub-Advisor will promptly notify the Manager in writing of
the occurrence of any of the following events:
(1) the Sub-Advisor fails to be registered as an
investment adviser under the Investment Advisers Act
or under the laws of any jurisdiction in which the
Sub-Advisor is required to be registered as an
investment advisor in order to perform its
obligations under this Agreement.
(2) the Sub-Advisor is served or otherwise receives
notice of any action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any
court, public board or body, involving the affairs of
the Series.
(d) The Manager shall provide (or cause the Series custodian to
provide) timely information to the Sub-Advisor regarding such
matters as the composition of the assets of the Series, cash
requirements and cash available for investment in the Series, any
applicable investment restrictions imposed by state insurance
laws and regulations, reports covering the classification of
securities for purposes of Subchapter M of the Internal Revenue
Code and Treasury Regulations Section 1.817, and all other
reasonable information as may be necessary for the Sub-Advisor to
perform its duties and responsibilities hereunder.
(e) Neither the Manager, Principal Mutual Life Insurance Company, nor
the Fund will publish or distribute any information, including
but not limited to registration statements, advertising or
promotional material, regarding the provision of investment
advisory services by the Sub-Adviser pursuant to this Agreement,
or use in advertising, publicity or otherwise the name of the
Sub-Adviser or any of its affiliates, or any trade name,
trademark, trade device, service mark, symbol or any
abbreviation, contraction or simulation thereof of the
Sub-Adviser or its affiliates without the prior written consent
of the Sub-Adviser. Notwithstanding the foregoing, the Manager
may distribute information regarding the provision of investment
advisory services by the Sub-Adviser to the Fund's board of
Directors ("Board Materials") without the prior written consent
of the Sub- Adviser.
(f) The Manager shall perform quarterly and annual tax compliance
tests to ensure that the Series is in compliance with Subchapter
M of the Internal Revenue Code ("IRC") and Section 817(h) of the
IRC. In connection with such compliance tests, the Manager shall
prepare and provide reports to the Sub-Advisor within 10 business
days of a calendar quarter end relating to the diversification of
the Series under Subchapter M and Section 817(h). The Sub-Advisor
shall review such reports for purposes of determining compliance
with such diversification requirements. If it is determined that
the Series is not in compliance with the requirements noted
above, the Sub-Advisor, in consultation with the Manager, will
take prompt action to bring the Series back into compliance
within the time permitted under the IRC.
(g) This Agreement contains the entire understanding and agreement of
the parties.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
date first above written.
PRINCIPAL MANAGEMENT CORPORATION
/s/ A. S. Filean
By ____________________________________________
A.S. Filean, Vice President
GOLDMAN SACHS ASSET
MANAGEMENT, a separate
operating division of
Goldman Sachs & Co.
/s/ David B. Ford
By ____________________________________________
APPENDIX A
The Sub-Advisor shall serve as investment sub-advisor for the MicroCap
Series of the Fund. The Manager will pay the Sub-Advisor, as full compensation
for all services provided under this Agreement, a fee computed at an annual rate
as follows (the "Sub-Advisor Percentage Fee"):
First $50,000,000 of Assets.................... 0.50%
Next $150,000,000 of Assets.................... 0.45%
Assets above $200,000,000...................... 0.40%
The Sub-Advisor Percentage Fee shall be accrued for each calendar day and
the sum of the daily fee accruals shall be paid monthly to the Sub-Advisor. The
daily fee accruals will be computed by multiplying the fraction of one over the
number of calendar days in the year by the applicable annual rate described
above and multiplying this product by the net assets of the Series as determined
in accordance with the Series' prospectus and statement of additional
information as of the close of business on the previous business day on which
the Series was open for business.
If this Agreement becomes effective or terminates before the end of any
month, the fee (if any) for the period from the effective date to the end of
such month or from the beginning of such month to the date of termination, as
the case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.
PRINCIPAL VARIABLE CONTRACTS FUND, INC.
SUB-ADVISORY AGREEMENT
SMALLCAP GROWTH SERIES
AGREEMENT executed as of the 1st day of March, 1998, by and between PRINCIPAL
MANAGEMENT CORPORATION, an Iowa Corporation (hereinafter called "the Manager")
and BERGER ASSOCIATES, INC., a Delaware Corporation (hereinafter called "the
Sub-Advisor").
W I T N E S S E T H:
WHEREAS, the Manager is the manager and investment adviser to each series of
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 the Sub-Advisor to furnish it with
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 the Sub-Advisor desires to furnish such services; and
WHEREAS, The Manager has furnished the Sub-Advisor with copies properly
certified or authenticated of each of the following and will promptly provide
the Sub-Advisor with copies properly certified or authenticated of any amendment
or supplement thereto:
(a) Management Agreement (the "Management Agreement") with the Fund;
(b) The Fund's registration statement and financial statements as filed
with the Securities and Exchange Commission;
(c) The Fund's Articles of Incorporation and By-laws;
(d) Policies, procedures or instructions adopted or approved by the Board
of Directors of the Fund relating to obligations and services provided
by the Sub-Advisor.
NOW, THEREFORE, in consideration of the premises and the terms and conditions
hereinafter set forth, the parties agree as follows:
1. Appointment of Sub-Advisor
In accordance with and subject to the Management Agreement, the Manager
hereby appoints the Sub-Advisor to perform the services described in
Section 2 below for investment and reinvestment of the securities and
other assets of the SmallCap Growth Series of the Fund (hereinafter
called "the Series"), subject to the control and direction of the
Fund's Board of Directors, for the period and on the terms hereinafter
set forth. The Sub-Advisor accepts such appointment and agrees to
furnish the services hereinafter set forth for the compensation herein
provided. The Sub-Advisor 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 the Sub-Advisor
(a) Provide investment advisory services, including but not limited
to research, advice and supervision for the Series.
(b) Furnish to the Board of Directors of the Fund for approval (or
any appropriate committee of such Board), and revise from time to
time as economic conditions require, a recommended investment
program for the Series consistent with the Series' investment
objective and policies.
(c) Implement the approved investment program by placing orders for
the purchase and sale of securities without prior consultation
with the Manager and without regard to the length of time the
securities have been held, the resulting rate of portfolio
turnover or any tax considerations, subject always to the
provisions of the Fund's Certificate of Incorporation and Bylaws
and the requirements of the 1940 Act, as each of the same shall
be from time to time in effect.
(d) 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
Series.
(e) Report to the Board of Directors of the Fund at such times and in
such detail as the Board of Directors may reasonably deem
appropriate in order to enable it to determine that the
investment policies, procedures and approved investment program
of the Series are being observed.
(f) Provide assistance and recommendations for the determination of
the fair value of certain securities when reliable market
quotations are not readily available for purposes of calculating
net asset value in accordance with procedures and methods
established by the Fund's Board of Directors.
(g) Furnish, at its own expense, (i) all necessary investment and
management facilities, including salaries of clerical and other
personnel required for it to execute its duties faithfully, and
(ii) administrative facilities, including bookkeeping, clerical
personnel and equipment necessary for the efficient conduct of
the investment advisory affairs of the Series.
(h) Select brokers and dealers to effect all transactions for the
Series, place all necessary orders with brokers, dealers, or
issuers, and negotiate brokerage commissions if applicable. To
the extent consistent with applicable law, purchase or sell
orders for the Series may be aggregated with contemporaneous
purchase or sell orders of other clients of the Sub- Advisor. The
Sub-Advisor shall use its best efforts to obtain execution of
transactions for the Series at prices which are advantageous to
the Series and at commission rates that are reasonable in
relation to the benefits received. However, the Sub-Advisor may
select brokers or dealers on the basis that they provide
brokerage, research or other services or products to the Series
and/or other accounts serviced by the Sub-Advisor. To the extent
consistent with applicable law, the Sub-Advisor may pay a broker
or dealer an amount of commission for effecting a securities
transaction in excess of the amount of commission or dealer
spread another broker or dealer would have charged for effecting
that transaction if the Sub-Advisor determines in good faith that
such amount of commission is reasonable in relation to the value
of the brokerage and research products and/or services provided
by such broker or dealer. This determination, with respect to
brokerage and research services or products, may be viewed in
terms of either that particular transaction or the overall
responsibilities which the Sub-Advisor and its affiliates have
with respect to the Series or to accounts over which they
exercise investment discretion. Not all such services or products
need be used by the Sub-Advisor in managing the Series.
(i) Maintain all accounts, books and records with respect to the
Series as are required of an investment advisor of a registered
investment company pursuant to the 1940 Act and Investment
Advisers Act of 1940 (the "Investment Advisors Act") and the
rules thereunder.
3. Compensation
As full compensation for all services rendered and obligations assumed
by the Sub-Advisor hereunder with respect to the Series, the Manager
shall pay the compensation specified in Appendix A to this Agreement.
4. Liability of Sub-Advisor
Neither the Sub-Advisor nor any of its directors, officers or employees
shall be liable to the Manager, the Fund or its shareholders for any
loss suffered by the Manager or the Fund resulting from any error of
judgment made in the good faith exercise of the Sub-Advisor's
investment discretion in connection with selecting investments for the
Series except for losses resulting from willful misfeasance, bad faith
or gross negligence of, or from reckless disregard of, the duties of
the Sub-Advisor or any of its directors, officers or employees.
5. Supplemental Arrangements
The Sub-Advisor may enter into arrangements with other persons
affiliated with the Sub-Advisor or with unaffiliated third parties to
better enable the Sub-Advisor to fulfill its obligations under this
Agreement for the provision of certain personnel and facilities to the
Sub- Advisor, subject to written notification to and approval of the
Manager and the Board of Directors of the Fund.
6. Regulation
The Sub-Advisor shall submit to all regulatory and administrative
bodies having jurisdiction over the services provided pursuant to this
Agreement any information, reports or other material which any such
body may request or require pursuant to applicable laws and
regulations.
7. Duration and Termination of This Agreement
This Agreement shall become effective on the latest of (i) the date of
its execution, (ii) the date of its approval by a majority of the Board
of Directors of the Fund, including approval by the vote of a majority
of the Board of Directors of the Fund who are not interested persons of
the Manager, Principal Mutual Life Insurance Company or the Fund cast
in person at a meeting called for the purpose of voting on such
approval or (iii) if required by the 1940 Act, the date of its approval
by a majority of the outstanding voting securities of the Series. 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 Fund and in either event by a vote
of a majority of the Board of Directors of the Fund who are not
interested persons of the Manager, Principal Mutual Life Insurance
Company, the Sub-Advisor or the Fund cast in person at a meeting called
for the purpose of voting on such approval.
If the shareholders of the Series fail to approve the Agreement or any
continuance of the Agreement in accordance with the requirements of the
1940 Act, the Sub-Advisor will continue to act as Sub-Advisor with
respect to the Series pending the required approval of the Agreement or
its continuance or of any contract with the Sub-Advisor or a different
manager or sub-advisor or other definitive action; provided, that the
compensation received by the Sub-Advisor in respect to the Series
during such period is in compliance with Rule 15a-4 under the 1940 Act.
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, the Sub-Advisor or the Manager or by vote of a majority of
the outstanding voting securities of the Series. This 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 1940 Act (particularly the definitions of "interested
person," "assignment" and "voting security") shall be applied.
8. Amendment of this Agreement
No material amendment of this Agreement shall be effective until
approved, if required by the 1940 Act or the rules, regulations,
interpretations or orders issued thereunder, by vote of the holders of
a majority of the outstanding voting securities of the Series and by
vote of a majority of the Board of Directors of the Fund who are not
interested persons of the Manager, the Sub-Advisor, Principal Mutual
Life Insurance Company or the Fund cast in person at a meeting called
for the purpose of voting on such approval.
9. General Provisions
(a) Each party agrees to perform such further reasonable acts and
execute such further reasonable 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 the Manager for this purpose shall be The
Principal Financial Group, Des Moines, Iowa 50392-0200, and the
address of the Sub-Advisor shall be 210 University Blvd., Suite
900, Denver, Colorado 80206, ATTN: Kevin Fay.
(c) The Sub-Advisor will promptly notify the Manager in writing of the
occurrence of any of the following events:
(1) the Sub-Advisor fails to be registered as an investment
adviser under the Investment Advisers Act or under the laws of
any jurisdiction in which the Sub-Advisor is required to be
registered as an investment advisor in order to perform its
obligations under this Agreement.
(2) the Sub-Advisor is served or otherwise receives notice of any
action, suit, proceeding, inquiry or investigation, at law or
in equity, before or by any court, public board or body,
involving the affairs of the Series.
(d) The Manager shall provide (or cause the Series custodian to
provide) timely information to the Sub-Advisor regarding such
matters as the composition of the assets of the Series, cash
requirements and cash available for investment in the Series, and
all other reasonable information as may be necessary for the
Sub-Advisor to perform its duties and responsibilities hereunder.
(e) This Agreement contains the entire understanding and agreement of
the parties.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
date first above written.
PRINCIPAL MANAGEMENT CORPORATION
/s/ A. S. Filean
By ____________________________________________
A. S. Filean, Vice President
BERGER ASSOCIATES, INC.
/s/ Gerard M. Lavin
By ____________________________________________
Gerard M. Lavin, President
APPENDIX A
The Sub-Advisor shall serve as investment sub-advisor for the Smallcap
Growth Series of the Fund. The Manager will pay the Sub-Advisor, as full
compensation for all services provided under this Agreement, a fee computed at
an annual rate as follows (the "Sub-Advisor Percentage Fee"):
First $100,000,000 of Assets...................... 0.50%
Next $200,000,000 of Assets....................... 0.45%
Assets above $300,000,000......................... 0.40%
The Sub-Advisor Percentage Fee shall be accrued for each calendar day and
the sum of the daily fee accruals shall be paid monthly to the Sub-Advisor. The
daily fee accruals will be computed by multiplying the fraction of one over the
number of calendar days in the year by the applicable annual rate described
above and multiplying this product by the net assets of the Series as determined
in accordance with the Series' prospectus and statement of additional
information as of the close of business on the previous business day on which
the Series was open for business.
PRINCIPAL VARIABLE CONTRACTS FUND, INC.
SUB-ADVISORY AGREEMENT
MIDCAP GROWTH SERIES
AGREEMENT executed as of the 1st day of March, 1998, by and between PRINCIPAL
MANAGEMENT CORPORATION, an Iowa Corporation (hereinafter called "the Manager")
and THE DREYFUS CORPORATION, a New York Corporation (hereinafter called "the
Sub-Advisor").
W I T N E S S E T H:
WHEREAS, the Manager is the manager and investment adviser to each Series of
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 the Sub-Advisor to furnish it with
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's MidCap Growth Series (the "Series"), and the Sub-Advisor desires to
furnish such services; and
WHEREAS, The Manager has furnished the Sub-Advisor with copies properly
certified or authenticated of each of the following and will promptly provide
the Sub-Advisor with copies properly certified or authenticated of any amendment
or supplement thereto:
(a) Management Agreement (the "Management Agreement") with the Fund;
(b) The Fund's registration statement and financial statements as
filed with the Securities and Exchange Commission;
(c) The Fund's Articles of Incorporation and By-laws;
(d) Policies, procedures or instructions adopted or approved by the
Board of Directors of the Fund relating to obligations and
services provided by the Sub-Advisor.
NOW, THEREFORE, in consideration of the premises and the terms and conditions
hereinafter set forth, the parties agree as follows:
1. Appointment of Sub-Advisor
In accordance with and subject to the Management Agreement, the Manager
hereby appoints the Sub-Advisor to perform the services described in
Section 2 below for investment and reinvestment of the securities and
other assets of the Series, subject to the control and direction of the
Fund's Board of Directors, for the period and on the terms hereinafter
set forth. The Sub-Advisor accepts such appointment and agrees to
furnish the services hereinafter set forth for the compensation herein
provided. The Sub-Advisor 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 the Sub-Advisor
(a) Provide investment advisory services, including but not limited
to research, advice and supervision for the Series.
(b) Furnish to the Board of Directors of the Fund for approval (or
any appropriate committee of such Board), and revise from time to
time as economic conditions require, a recommended investment
program for the Series consistent with the Series' investment
objective and policies.
(c) Implement the approved investment program by opening accounts and
placing orders for the purchase and sale of securities without
prior consultation with the Manager and without regard to the
length of time the securities have been held, the resulting rate
of portfolio turnover or any tax considerations, subject always
to the provisions of the Fund's Certificate of Incorporation and
Bylaws and the requirements of the 1940 Act, as each of the same
shall be from time to time in effect.
(d) 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
Series.
(e) Report to the Board of Directors of the Fund at such times and in
such detail as the Board of Directors may reasonably deem
appropriate in order to enable it to determine that the
investment policies, procedures and approved investment program
of the Series are being observed.
(f) Provide assistance and recommendations for the determination of
the fair value of certain securities when reliable market
quotations are not readily available for purposes of calculating
net asset value in accordance with procedures and methods
established by the Fund's Board of Directors.
(g) Furnish, at its own expense, (i) all necessary investment and
management facilities, including salaries of clerical and other
personnel required for it to execute its duties faithfully, and
(ii) administrative facilities, including bookkeeping, clerical
personnel and equipment necessary for the efficient conduct of
the investment advisory affairs of the Series.
(h) Select brokers and dealers to effect all transactions for the
Series, place all necessary orders with brokers, dealers, or
issuers, and negotiate brokerage commissions if applicable. To
the extent consistent with applicable law, purchase or sell
orders for the Series may be aggregated with contemporaneous
purchase or sell orders of other clients of the Sub- Advisor. The
Sub-Advisor shall use its best efforts to obtain execution of
transactions for the Series at prices which are advantageous to
the Series and at commission rates that are reasonable in
relation to the benefits received. However, the Sub-Advisor may
select brokers or dealers on the basis that they provide
brokerage, research or other services or products to the Series
and/or other accounts serviced by the Sub-Advisor. To the extent
consistent with applicable law, the Sub-Advisor may pay a broker
or dealer an amount of commission for effecting a securities
transaction in excess of the amount of commission or dealer
spread another broker or dealer would have charged for effecting
that transaction if the Sub-Advisor determines in good faith that
such amount of commission is reasonable in relation to the value
of the brokerage and research products and/or services provided
by such broker or dealer. This determination, with respect to
brokerage and research services or products, may be viewed in
terms of either that particular transaction or the overall
responsibilities which the Sub-Advisor and its affiliates have
with respect to the Series or to accounts over which they
exercise investment discretion. Not all such services or products
need be used by the Sub-Advisor in managing the Series.
(i) Maintain all accounts, books and records with respect to the
Series as are required of an investment advisor of a registered
investment company pursuant to the 1940 Act and Investment
Advisers Act of 1940 (the "Investment Advisors Act") and the
rules thereunder.
3. Compensation
As full compensation for all services rendered and obligations assumed
by the Sub-Advisor hereunder with respect to the Series, the Manager
shall pay the compensation specified in Appendix A to this Agreement.
4. Liability of Sub-Advisor
Neither the Sub-Advisor nor any of its directors, officers, employees
or affiliates shall be liable to the Manager, the Fund or its
shareholders for any loss suffered by the Manager or the Fund resulting
from the Sub-Advisor's provision of services under this Agreement
except for losses resulting from willful misfeasance, bad faith or
gross negligence of, or from reckless disregard of, the duties of the
Sub-Advisor or any of its directors, officers, employees or affiliates.
5. Supplemental Arrangements
The Sub-Advisor may enter into arrangements with other persons
affiliated with the Sub-Advisor or with unaffiliated third parties to
better enable the Sub-Advisor to fulfill its obligations under this
Agreement for the provision of certain personnel and facilities to the
Sub- Advisor, subject to written notification to and approval of the
Manager and the Board of Directors of the Fund.
6. Regulation
The Sub-Advisor shall submit to all regulatory and administrative
bodies having jurisdiction over the services provided pursuant to this
Agreement any information, reports or other material which any such
body may reasonably request or require pursuant to applicable laws and
regulations.
7. Duration and Termination of This Agreement
This Agreement shall become effective on the latest of (i) the date of
its execution, (ii) the date of its approval by a majority of the Board
of Directors of the Fund, including approval by the vote of a majority
of the Board of Directors of the Fund who are not interested persons of
the Manager, Principal Mutual Life Insurance Company or the Fund cast
in person at a meeting called for the purpose of voting on such
approval or (iii) if required by the 1940 Act, the date of its approval
by a majority of the outstanding voting securities of the Series. 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 Fund and in either event by a vote
of a majority of the Board of Directors of the Fund who are not
interested persons of the Manager, Principal Mutual Life Insurance
Company, the Sub-Advisor or the Fund cast in person at a meeting called
for the purpose of voting on such approval.
If the shareholders of the Series fail to approve the Agreement or any
continuance of the Agreement in accordance with the requirements of the
1940 Act, the Sub-Advisor will continue to act as Sub-Advisor with
respect to the Series pending the required approval of the Agreement or
its continuance or of any contract with the Sub-Advisor or a different
manager or sub-advisor or other definitive action; provided, that the
compensation received by the Sub-Advisor in respect to the Series
during such period is in compliance with Rule 15a-4 under the 1940 Act.
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, the Sub-Advisor or the Manager or by vote of a majority of
the outstanding voting securities of the Series. This 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 1940 Act (particularly the definitions of "interested
person," "assignment" and "voting security") shall be applied.
8. Amendment of this Agreement
No material amendment of this Agreement shall be effective until
approved, if required by the 1940 Act or the rules, regulations,
interpretations or orders issued thereunder, by vote of the holders of
a majority of the outstanding voting securities of the Series and by
vote of a majority of the Board of Directors of the Fund who are not
interested persons of the Manager, the Sub-Advisor, Principal Mutual
Life Insurance Company or the Fund cast in person at a meeting called
for the purpose of voting on such approval.
9. 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 the Manager for this purpose shall be
The Principal Financial Group, Des Moines, Iowa 50392-0200, and
the address of the Sub-Advisor shall be 200 Park Avenue, New
York, New York 10166, ATTN: General Counsel.
(c) The Sub-Advisor will promptly notify the Manager in writing of
the occurrence of any of the following events:
(1) the Sub-Advisor fails to be registered as an investment
adviser under the Investment Advisers Act or under the
laws of any jurisdiction in which the Sub-Advisor is
required to be registered as an investment advisor in
order to perform its obligations under this Agreement.
(2) the Sub-Advisor is served or otherwise receives notice
of any action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any
court, public board or body, involving the affairs of
the Series.
(d) The Manager shall provide (or cause the Series' custodian to
provide) timely information to the Sub-Advisor regarding such
matters as the composition of the assets of the Series, cash
requirements and cash available for investment in the Series, and
all other reasonable information as may be necessary for the
Sub-Advisor to perform its duties and responsibilities hereunder.
(e) This Agreement contains the entire understanding and agreement of
the parties.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
date first above written.
PRINCIPAL MANAGEMENT CORPORATION
/s/ A. S. Filean
By ____________________________________________
A. S. Filean, Vice President
THE DREYFUS CORPORATION
/s/ Lawrence S. Kash
By ____________________________________________
APPENDIX A
The Sub-Advisor shall serve as investment sub-advisor for the MidCap Growth
Series of the Fund. The Manager will pay the Sub-Advisor, as full compensation
for all services provided under this Agreement, a fee computed at an annual rate
as follows (the "Sub-Advisor Percentage Fee"):
First $50,000,000 of Assets........................ 0.40%
Assets above $50,000,000........................... 0.35%
The Sub-Advisor Percentage Fee shall be accrued for each calendar day and
the sum of the daily fee accruals shall be paid monthly to the Sub-Advisor. The
daily fee accruals will be computed by multiplying the fraction of one over the
number of calendar days in the year by the applicable annual rate described
above and multiplying this product by the net assets of the Series as determined
in accordance with the Series' prospectus and statement of additional
information as of the close of business on the previous business day on which
the Series was open for business.
If this Agreement becomes effective or terminates before the end of any
month, the fee (if any) for the period from the effective date to the end of
such month or from the beginning of such month to the date of termination, as
the case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.
PRINCIPAL VARIABLE CONTRACTS FUND, INC.
SUB-ADVISORY AGREEMENT
SMALLCAP VALUE SERIES
AGREEMENT executed as of the 1st day of March, 1998, by and between PRINCIPAL
MANAGEMENT CORPORATION, an Iowa Corporation (hereinafter called "the Manager")
and J.P. MORGAN INVESTMENT MANAGEMENT INC., a Delaware Corporation (hereinafter
called "the Sub-Advisor").
W I T N E S S E T H:
WHEREAS, the Manager is the manager and investment adviser to each Series of
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 the Sub-Advisor to furnish it with
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 the Sub-Advisor desires to furnish such services; and
WHEREAS, The Manager has furnished the Sub-Advisor with copies properly
certified or authenticated of each of the following and will promptly provide
the Sub-Advisor with copies properly certified or authenticated of any amendment
or supplement thereto:
(a) Management Agreement (the "Management Agreement") with the Fund;
(b) The Fund's registration statement and financial statements as
filed with the Securities and Exchange Commission;
(c) The Fund's Articles of Incorporation and By-laws;
(d) Policies, procedures or instructions adopted or approved by the
Board of Directors of the Fund relating to obligations and
services provided by the Sub-Advisor.
NOW, THEREFORE, in consideration of the premises and the terms and conditions
hereinafter set forth, the parties agree as follows:
1. Appointment of Sub-Advisor
In accordance with and subject to the Management Agreement, the Manager
hereby appoints the Sub-Advisor to perform the services described in
Section 2 below for investment and reinvestment of the securities and
other assets of the SmallCap Value Series of the Fund (hereinafter
called "the Series"), subject to the control and direction of the
Fund's Board of Directors, for the period and on the terms hereinafter
set forth. The Sub-Advisor accepts such appointment and agrees to
furnish the services hereinafter set forth for the compensation herein
provided. The Sub-Advisor 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 the Sub-Advisor
(a) Provide investment advisory services, including but not limited
to research, advice and supervision of the investments of the
Series.
(b) Furnish to the Board of Directors of the Fund for approval (or
any appropriate committee of such Board), and revise from time to
time as economic conditions require, a recommended investment
program that describes the broad strategy for the Series
consistent with the Series' investment objective and policies.
(c) Implement the approved investment program by placing orders for
the purchase and sale of securities without prior consultation
with the Manager and without regard to the length of time the
securities have been held, the resulting rate of portfolio
turnover or any tax considerations, subject always to the
provisions of the Fund's Certificate of Incorporation and Bylaws
and the requirements of the 1940 Act, as each of the same shall
be from time to time in effect.
(d) 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
Series.
(e) Report to the Board of Directors of the Fund at such times and in
such detail as the Board of Directors may reasonably deem
appropriate in order to enable it to determine that the
investment policies, procedures and approved investment program
of the Series are being observed.
(f) Provide assistance in the determination of the fair value of
certain securities when reliable market quotations are not
readily available for purposes of calculating net asset value in
accordance with procedures and methods established by the Fund's
Board of Directors.
(g) Furnish, at its own expense, (I) all necessary investment and
management facilities, including salaries of clerical and other
personnel required for it to execute its duties faithfully, and
(ii) administrative facilities, including bookkeeping, clerical
personnel and equipment necessary for the efficient conduct of
its duties under this Agreement.
(h) Select brokers and dealers to effect all transactions for the
Series, place all necessary orders with brokers, dealers, or
issuers, and negotiate brokerage commissions if applicable. To
the extent consistent with applicable law, purchase or sell
orders for the Series may be aggregated with contemporaneous
purchase or sell orders of other clients of the Sub- Advisor. The
Manager recognizes that, in some cases, this procedure may limit
the size of the position that may be acquired or sold for the
Series. The Sub-Advisor shall use its best efforts to obtain
execution of transactions for the Series at prices which are
advantageous to the Series and at commission rates that are
reasonable in relation to the benefits received. However, the
Sub-Advisor may select brokers or dealers on the basis that they
provide brokerage, research or other services or products to the
Series and/or other accounts serviced by the Sub-Advisor. To the
extent consistent with applicable law, the Sub-Advisor may pay a
broker or dealer an amount of commission for effecting a
securities transaction in excess of the amount of commission or
dealer spread another broker or dealer would have charged for
effecting that transaction if the Sub-Advisor determines in good
faith that such amount of commission is reasonable in relation to
the value of the brokerage and research products and/or services
provided by such broker or dealer. This determination, with
respect to brokerage and research services or products, may be
viewed in terms of either that particular transaction or the
overall responsibilities which the Sub- Advisor and its
affiliates have with respect to the Series or to accounts over
which they exercise investment discretion. Not all such services
or products need be used by the Sub- Advisor in managing the
Series.
(i) Maintain all accounts, books and records with respect to the
Series as are required of an investment advisor of a registered
investment company pursuant to the 1940 Act and Investment
Advisers Act of 1940 (the "Investment Advisors Act") and the
rules thereunder.
3. Compensation
As full compensation for all services rendered and obligations assumed
by the Sub-Advisor hereunder with respect to the Series, the Manager
shall pay the compensation specified in Appendix A to this Agreement.
4. Liability of Sub-Advisor
Neither the Sub-Advisor nor any of its directors, officers or employees
shall be liable to the Manager, the Fund or its shareholders for any
loss suffered by the Manager or the Fund resulting from any error of
judgment made in the good faith exercise of the Sub-Advisor's duties
under this Agreement except for losses resulting from willful
misfeasance, bad faith or gross negligence of, or from reckless
disregard of, the duties of the Sub-Advisor or any of its directors,
officers or employees under this Agreement.
5. Indemnification
The Manager agrees to indemnify and hold harmless the Sub-Adviser from
and against any and all claims, losses, liabilities or damages
(including reasonable attorneys' fees and other related expenses),
("Losses") howsoever arising, from or in connection with this Agreement
or the performance by the Sub-Adviser of its duties hereunder, so long
as the Sub-Advisor shall, after receipt of notice of any claim or
commencement of any action, promptly notify the Manager in writing of
the claim or commencement of such action. The Manager shall not be
liable for any settlement of any claim or action effected without its
written consent. Nothing contained herein shall require the Manager to
indemnify the Sub-Advisor for Losses resulting from the Sub-Advisor's
willful misfeasance, bad faith or gross negligence in the performance
of its duties or from its reckless disregard of its obligations and
duties under this Agreement.
6. Disclosure
Neither the Fund nor the Manager shall, without the prior written
consent of the Sub-Adviser, make representations regarding or reference
to the Sub-Adviser or any affiliates in any disclosure document,
advertisement, sales literature or other promotional materials.
7. Supplemental Arrangements
The Sub-Advisor may enter into arrangements with other persons
affiliated with the Sub-Advisor or with unaffiliated third parties to
better enable the Sub-Advisor to fulfill its obligations under this
Agreement for the provision of certain personnel and facilities to the
Sub- Advisor, subject to written notification to and approval of the
Manager and the Board of Directors of the Fund.
8. Regulation
The Sub-Advisor shall submit to all regulatory and administrative
bodies having jurisdiction over the services provided pursuant to this
Agreement any information, reports or other material which any such
body may request or require pursuant to applicable laws and
regulations.
9. Duration and Termination of This Agreement
This Agreement shall become effective on the latest of (i) the date of
its execution, (ii) the date of its approval by a majority of the Board
of Directors of the Fund, including approval by the vote of a majority
of the Board of Directors of the Fund who are not interested persons of
the Manager, Principal Mutual Life Insurance Company or the Fund cast
in person at a meeting called for the purpose of voting on such
approval or (iii) if required by the 1940 Act, the date of its approval
by a majority of the outstanding voting securities of the Series. 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 Fund and in either event by a vote
of a majority of the Board of Directors of the Fund who are not
interested persons of the Manager, Principal Mutual Life Insurance
Company, the Sub-Advisor or the Fund cast in person at a meeting called
for the purpose of voting on such approval.
If the shareholders of the Series fail to approve the Agreement or any
continuance of the Agreement in accordance with requirements of the
1940 Act, the Sub-Advisor will continue to act as Sub-Advisor with
respect to the Series pending the required approval of the Agreement or
its continuance or of any contract with the Sub-Advisor or a different
manager or sub-advisor or other definitive action; provided, that the
compensation received by the Sub-Advisor in respect to the Series
during such period is in compliance with Rule 15a-4 under the 1940 Act.
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, the Sub-Advisor or the Manager or by vote of a majority of
the outstanding voting securities of the Series. This 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 1940 Act (particularly the definitions of "interested
person," "assignment" and "voting security") shall be applied.
10. Amendment of this Agreement
No material amendment of this Agreement shall be effective until
approved, if required by the 1940 Act or the rules, regulations,
interpretations or orders issued thereunder, by vote of the holders of
a majority of the outstanding voting securities of the Series and by
vote of a majority of the Board of Directors of the Fund who are not
interested persons of the Manager, the Sub-Advisor, Principal Mutual
Life Insurance Company or the Fund cast in person at a meeting called
for the purpose of voting on such approval.
11. 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 the Manager for this purpose shall be
The Principal Financial Group, Des Moines, Iowa 50392-0200, and
the address of the Sub-Advisor shall be 530 Fifth Avenue, Eighth
Floor, New York, New York 10036.
(c) The Sub-Advisor will promptly notify the Manager in writing of
the occurrence of any of the following events:
(1) the Sub-Advisor fails to be registered as an investment
adviser under the Investment Advisers Act or under the laws
of any jurisdiction in which the Sub-Advisor is required to
be registered as an investment advisor in order to perform
its obligations under this Agreement.
(2) the Sub-Advisor is served or otherwise receives notice of
any action, suit, proceeding, inquiry or investigation, at
law or in equity, before or by any court, public board or
body, involving the affairs of the Series.
(d) The Manager shall provide (or cause the Series custodian to
provide) timely information to the Sub-Advisor regarding such
matters as the composition of the assets of the Series, cash
requirements and cash available for investment in the Series, and
all other reasonable information as may be necessary for the
Sub-Advisor to perform its duties and responsibilities hereunder.
(e) This Agreement contains the entire understanding and agreement of
the parties.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
date first above written.
PRINCIPAL MANAGEMENT CORPORATION
/s/ A. S. Filean
By ____________________________________________
A. S. Filean, Vice President
J.P. MORGAN INVESTMENT MANAGEMENT INC.
/s/ Diane J. Minardi
By ____________________________________________
APPENDIX A
The Sub-Advisor shall serve as investment sub-advisor for the SmallCap
Value Series of the Fund. The Manager will pay the Sub-Advisor, as full
compensation for all services provided under this Agreement, a fee computed at
an annual rate as follows (the "Sub-Advisor Percentage Fee"):
First $50,000,000 of Assets............................ 0.60%
Next $250,000,000 of Assets............................ 0.55%
Assets above $300,000,000.............................. 0.50%
The Sub-Advisor Percentage Fee shall be accrued for each calendar day and
the sum of the daily fee accruals shall be paid monthly to the Sub-Advisor. The
daily fee accruals will be computed by multiplying the fraction of one over the
number of calendar days in the year by the applicable annual rate described
above and multiplying this product by the net assets of the Series as determined
in accordance with the Series' prospectus and statement of additional
information as of the close of business on the previous business day on which
the Series was open for business.
If this Agreement becomes effective or terminates before the end of any
month, the fee (if any) for the period from the effective date to the end of
such month or from the beginning of such month to the date of termination, as
the case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
SUB-ADVISORY AGREEMENT
AGREEMENT executed as of the July 1, 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 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 the Fund, 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 the Fund 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
Fund 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 Fund, 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 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 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 Fund 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 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, 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 shall be effective until approved by vote of
the holders of a majority of the outstanding voting securities 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, Des Moines, Iowa
50392-0200.
(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
/s/ Stephan L. Jones
By __________________________________________
Stephan L. Jones, President
INVISTA CAPITAL MANAGEMENT, INC.
/s/ C. R. Barnes
By __________________________________________
C. R. Barnes, President
FIRST AMENDMENT TO THE
PRINCIPAL VARIABLE CONTRACTS FUND, INC.
SUB-ADVISORY AGREEMENT
The Sub-Advisory Agreement executed and entered into by and between Principal
Management Corporation (formerly known as Princor Management Corporation), an
Iowa corporation, and Invista Capital Management, Inc., an Iowa corporation,
on the 1st day of July, 1997, is hereby amended to add certain series of the
Corporation to the Agreement. Appendix A therefore now reads as follows:
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
SUB-ADVISORY AGREEMENT - APPENDIX A
Invista Capital Management, Inc. serves as Sub-Advisor for:
Balanced Account
Capital Value Account
Government Securities Account
Growth Account
International Account
International SmallCap Account
MidCap Account
SmallCap Account
Utilities Account
Executed this 27th day of February, 1998
Principal Management Corporation
/s/ Stephan L. Jones
by:_________________________________
Invista Capital Management, Inc.
/s/ C. R. Barnes
by:_________________________________
ARTICLES OF DISSOLUTION
OF
PRINCIPAL AGGRESSIVE GROWTH FUND, INC.
We the undersigned, as a majority of the Board of Directors of Principal
Aggressive Growth Fund, Inc., in accordance with the requirements of the General
Corporation Law of the State of Maryland and in order to obtain the dissolution
of said corporation, as provided in said law, do hereby state as follows:
1. That the name of the Corporation is Principal Aggressive Growth Fund,
Inc., its principal office is located at 32 South Street, Baltimore,
Maryland 21202 and its mailing address is 711 High Street, Des Moines,
Iowa 50392-0200.
2. That the registered office of the Corporation in the State of Maryland
is The Corporation Trust Incorporated, whose business address is First
Maryland Building, 32 South Street, Baltimore, Maryland 21202. The
Corporation consents that service of process upon said The Corporation
Trust Incorporated shall be taken and held to be as valid as if served
upon the Corporation.
3. That the following is a list of the names and addresses of the
directors of said corporation:
James D. Davis 4940 Center Court. Bettendorf, Iowa
Roy W. Ehrle 2424 Jordan Trail, West Des Moines, Iowa
Pamela A. Ferguson P.O. Box 805, Grinnell, Iowa
Richard W. Gilbert 1357 Asbury Avenue, Winnetka, Illinois
J. Barry Griswell 711 High Street, Des Moines, Iowa 50392
Stephan L. Jones 711 High Street, Des Moines, Iowa 50392
Ronald E. Keller 711 High Street, Des Moines, Iowa 50392
Barbara A. Lukavsky 3920 Grand Avenue, Des Moines, Iowa
Richard G. Peebler 1916 79th Street, Des Moines, Iowa
4. That the following is a list of the names of the officers of said
corporation. All mailing addresses are Principal Financial Group, Des
Moines, Iowa 50392-0200.
President Stephan L. Jones
Vice President Arthur S. Filean
Secretary Arthur S. Filean
Treasurer Craig L. Bassett
Financial Officer Michael J. Beer
Counsel Michael D. Roughton
Assistant Counsel David J. Brown
Assistant Counsel Michael W. Cumings
Assistant Secretary Ernest H. Gillum
Assistant Treasurer Jane E. Karli
5. That the dissolution has been approved in the manner and by vote as
required by the provisions of Chapter 311, Section 3-403 of the General
Corporation Law of the State of Maryland and of the Charter of the
Corporation. On June 9, 1997, the Board of Directors, by unanimous
vote, duly authorized the dissolution of the Corporation.
6. That at a Special Meeting of Shareholders held on September 16, 1997 ,
the dissolution of said Corporation was approved by an affirmative vote
of two-thirds of all the votes entitled to be cast on the matter.
7. That the corporation has no known creditors.
8. That the Principal Aggressive Growth Fund, Inc. is dissolved effective
11:59 PM on December 31, 1997.
PRINCIPAL AGGRESSIVE GROWTH FUND, INC.
By: ____________________________ Date: ______________
James D. Davis, Director
/s/ Roy W. Ehrle 12/22/97
By: ____________________________ Date: ______________
Roy W. Ehrle, Director
By: ____________________________ Date: ______________
Pamela A. Ferguson, Director
By: ____________________________ Date: ______________
Richard W. Gilbert, Director
/s/ J. Barry Griswell 12/19/97
By: ____________________________ Date: ______________
J. Barry Griswell, Director
/s/ S. L. Jones 12/19/97
By: ____________________________ Date: ______________
Stephan L. Jones,
President and Director
/s/ Ronald E. Keller 12/19/97
By: ____________________________ Date: ______________
Ronald E. Keller, Director
By: ____________________________ Date: ______________
Barbara A. Lukavsky, Director
/s/ Richard G. Peebler 12/23/97
By: ____________________________ Date: ______________
Richard G. Peebler, Director
The undersigned, President and Director of Principal Aggressive Growth Fund,
Inc., who executed on behalf of said corporation the foregoing Articles of
Dissolution, of which this certificate is made a part, hereby acknowledges, in
the name and on behalf of said corporation, the foregoing Articles of
Dissolution to be the corporate act of said corporation and further certifies
that, to the best of his knowledge and belief, the matters and facts set forth
therein with respect to the approval thereof are true in all material respects,
under the penalties of perjury.
Principal Aggressive Growth Fund, Inc.
Stephan L. Jones
by: __________________________
Stephan L. Jones,
President and Director
Attest:
/s/ E. H. Gillum
- ----------------------------
E. H. Gillum,
Assistant Secretary
ARTICLES OF DISSOLUTION
OF
PRINCIPAL ASSET ALLOCATION FUND, INC.
We the undersigned, as a majority of the Board of Directors of Principal Asset
Allocation Fund, Inc., in accordance with the requirements of the General
Corporation Law of the State of Maryland and in order to obtain the dissolution
of said corporation, as provided in said law, do hereby state as follows:
1. That the name of the Corporation is Principal Asset Allocation Fund,
Inc., its principal office is located at 32 South Street, Baltimore,
Maryland 21202 and its mailing address is 711 High Street, Des Moines,
Iowa 50392-0200.
2. That the registered office of the Corporation in the State of Maryland
is The Corporation Trust Incorporated, whose business address is First
Maryland Building, 32 South Street, Baltimore, Maryland 21202. The
Corporation consents that service of process upon said The Corporation
Trust Incorporated shall be taken and held to be as valid as if served
upon the Corporation.
3. That the following is a list of the names and addresses of the
directors of said corporation:
James D. Davis 4940 Center Court. Bettendorf, Iowa
Roy W. Ehrle 2424 Jordan Trail, West Des Moines, Iowa
Pamela A. Ferguson P.O. Box 805, Grinnell, Iowa
Richard W. Gilbert 1357 Asbury Avenue, Winnetka, Illinois
J. Barry Griswell 711 High Street, Des Moines, Iowa 50392
Stephan L. Jones 711 High Street, Des Moines, Iowa 50392
Ronald E. Keller 711 High Street, Des Moines, Iowa 50392
Barbara A. Lukavsky 3920 Grand Avenue, Des Moines, Iowa
Richard G. Peebler 1916 79th Street, Des Moines, Iowa
4. That the following is a list of the names of the officers of said
corporation. All mailing addresses are Principal Financial Group, Des
Moines, Iowa 50392-0200.
President Stephan L. Jones
Vice President Arthur S. Filean
Secretary Arthur S. Filean
Treasurer Craig L. Bassett
Financial Officer Michael J. Beer
Counsel Michael D. Roughton
Assistant Counsel David J. Brown
Assistant Counsel Michael W. Cumings
Assistant Secretary Ernest H. Gillum
Assistant Treasurer Jane E. Karli
5. That the dissolution has been approved in the manner and by vote as
required by the provisions of Chapter 311, Section 3-403 of the General
Corporation Law of the State of Maryland and of the Charter of the
Corporation. On June 9, 1997, the Board of Directors, by unanimous
vote, duly authorized the dissolution of the Corporation.
6. That at a Special Meeting of Shareholders held on September 16, 1997 ,
the dissolution of said Corporation was approved by an affirmative vote
of two-thirds of all the votes entitled to be cast on the matter.
7. That the corporation has no known creditors.
8. That the Principal Asset Allocation Fund, Inc. is dissolved effective
11:59 PM on December 31, 1997.
PRINCIPAL ASSET ALLOCATION FUND, INC.
By: ____________________________ Date: ______________
James D. Davis, Director
/s/ Roy W. Ehrle 12/22/97
By: ____________________________ Date: ______________
Roy W. Ehrle, Director
By: ____________________________ Date: ______________
Pamela A. Ferguson, Director
By: ____________________________ Date: ______________
Richard W. Gilbert, Director
/s/ J. Barry Griswell 12/19/97
By: ____________________________ Date: ______________
J. Barry Griswell, Director
/s/ S. L. Jones 12/19/97
By: ____________________________ Date: ______________
Stephan L. Jones,
President and Director
/s/ Ronald E. Keller 12/19/97
By: ____________________________ Date: ______________
Ronald E. Keller, Director
By: ____________________________ Date: ______________
Barbara A. Lukavsky, Director
/s/ Richard G. Peebler 12/23/97
By: ____________________________ Date: ______________
Richard G. Peebler, Director
The undersigned, President and Director of Principal Asset Allocation Fund,
Inc., who executed on behalf of said corporation the foregoing Articles of
Dissolution, of which this certificate is made a part, hereby acknowledges, in
the name and on behalf of said corporation, the foregoing Articles of
Dissolution to be the corporate act of said corporation and further certifies
that, to the best of his knowledge and belief, the matters and facts set forth
therein with respect to the approval thereof are true in all material respects,
under the penalties of perjury.
Principal Asset Allocation Fund, Inc.
/s/ Stephan L. Jones
by: __________________________
Stephan L. Jones,
President and Director
Attest:
/s/ E. H. Gillum
- ----------------------------
E. H. Gillum,
Assistant Secretary
ARTICLES OF DISSOLUTION
OF
PRINCIPAL BALANCED FUND, INC.
We the undersigned, as a majority of the Board of Directors of Principal
Balanced Fund, Inc., in accordance with the requirements of the General
Corporation Law of the State of Maryland and in order to obtain the dissolution
of said corporation, as provided in said law, do hereby state as follows:
1. That the name of the Corporation is Principal Balanced Fund, Inc. and
its principal office is located at 32 South Street, Baltimore, Maryland
21202 and its mailing address is 711 High Street, Des Moines, Iowa
50392-0200.
2. That the registered office of the Corporation in the State of Maryland
is The Corporation Trust Incorporated, whose business address is First
Maryland Building, 32 South Street, Baltimore, Maryland 21202. The
Corporation consents that service of process upon said The Corporation
Trust Incorporated shall be taken and held to be as valid as if served
upon the Corporation.
3. That the following is a list of the names and addresses of the
directors of said corporation:
James D. Davis 4940 Center Court. Bettendorf, Iowa
Roy W. Ehrle 2424 Jordan Trail, West Des Moines, Iowa
Pamela A. Ferguson P.O. Box 805, Grinnell, Iowa
Richard W. Gilbert 1357 Asbury Avenue, Winnetka, Illinois
J. Barry Griswell 711 High Street, Des Moines, Iowa 50392
Stephan L. Jones 711 High Street, Des Moines, Iowa 50392
Ronald E. Keller 711 High Street, Des Moines, Iowa 50392
Barbara A. Lukavsky 3920 Grand Avenue, Des Moines, Iowa
Richard G. Peebler 1916 79th Street, Des Moines, Iowa
4. That the following is a list of the names of the officers of said
corporation. All mailing addresses are Principal Financial Group, Des
Moines, Iowa 50392-0200.
President Stephan L. Jones
Vice President Arthur S. Filean
Secretary Arthur S. Filean
Treasurer Craig L. Bassett
Financial Officer Michael J. Beer
Counsel Michael D. Roughton
Assistant Counsel David J. Brown
Assistant Counsel Michael W. Cumings
Assistant Secretary Ernest H. Gillum
Assistant Treasurer Jane E. Karli
5. That the dissolution has been approved in the manner and by vote as
required by the provisions of Chapter 311, Section 3-403 of the General
Corporation Law of the State of Maryland and of the Charter of the
Corporation. On June 9, 1997, the Board of Directors, by unanimous
vote, duly authorized the dissolution of the Corporation.
6. That at a Special Meeting of Shareholders held on September 16, 1997 ,
the dissolution of said Corporation was approved by an affirmative vote
of two-thirds of all the votes entitled to be cast on the matter.
7. That the corporation has no known creditors.
8. That the Principal Balanced Fund, Inc. is dissolved effective 11:59 PM
on December 31, 1997.
PRINCIPAL BALANCED FUND, INC.
By: ____________________________ Date: ______________
James D. Davis, Director
/s/ Roy W. Ehrle 12/22/97
By: ____________________________ Date: ______________
Roy W. Ehrle, Director
By: ____________________________ Date: ______________
Pamela A. Ferguson, Director
By: ____________________________ Date: ______________
Richard W. Gilbert, Director
/s/ J. Barry Griswell 12/19/97
By: ____________________________ Date: ______________
J. Barry Griswell, Director
/s/ S. L. Jones 12/19/97
By: ____________________________ Date: ______________
Stephan L. Jones,
President and Director
/s/ Ronald E. Keller 12/19/97
By: ____________________________ Date: ______________
Ronald E. Keller, Director
By: ____________________________ Date: ______________
Barbara A. Lukavsky, Director
/s/ Richard G. Peebler 12/23/97
By: ____________________________ Date: ______________
Richard G. Peebler, Director
The undersigned, President and Director of Principal Balanced Fund, Inc., who
executed on behalf of said corporation the foregoing Articles of Dissolution, of
which this certificate is made a part, hereby acknowledges, in the name and on
behalf of said corporation, the foregoing Articles of Dissolution to be the
corporate act of said corporation and further certifies that, to the best of his
knowledge and belief, the matters and facts set forth therein with respect to
the approval thereof are true in all material respects, under the penalties of
perjury.
Principal Balanced Fund, Inc.
/s/ Stephan L. Jones
by: __________________________
Stephan L. Jones,
President and Director
Attest:
/s/ E. H. Gillum
- ----------------------------
E. H. Gillum,
Assistant Secretary
ARTICLES OF DISSOLUTION
OF
PRINCIPAL BOND FUND, INC.
We the undersigned, as a majority of the Board of Directors of Principal Bond
Fund, Inc., in accordance with the requirements of the General Corporation Law
of the State of Maryland and in order to obtain the dissolution of said
corporation, as provided in said law, do hereby state as follows:
1. That the name of the Corporation is Principal Bond Fund, Inc. and its
principal office is located at 32 South Street, Baltimore, Maryland
21202 and its mailing address is 711 High Street, Des Moines, Iowa
50392-0200.
2. That the registered office of the Corporation in the State of Maryland
is The Corporation Trust Incorporated, whose business address is First
Maryland Building, 32 South Street, Baltimore, Maryland 21202. The
Corporation consents that service of process upon said The Corporation
Trust Incorporated shall be taken and held to be as valid as if served
upon the Corporation.
3. That the following is a list of the names and addresses of the
directors of said corporation:
James D. Davis 4940 Center Court. Bettendorf, Iowa
Roy W. Ehrle 2424 Jordan Trail, West Des Moines, Iowa
Pamela A. Ferguson P.O. Box 805, Grinnell, Iowa
Richard W. Gilbert 1357 Asbury Avenue, Winnetka, Illinois
J. Barry Griswell 711 High Street, Des Moines, Iowa 50392
Stephan L. Jones 711 High Street, Des Moines, Iowa 50392
Ronald E. Keller 711 High Street, Des Moines, Iowa 50392
Barbara A. Lukavsky 3920 Grand Avenue, Des Moines, Iowa
Richard G. Peebler 1916 79th Street, Des Moines, Iowa
4. That the following is a list of the names of the officers of said
corporation. All mailing addresses are Principal Financial Group, Des
Moines, Iowa 50392-0200.
President Stephan L. Jones
Vice President Arthur S. Filean
Secretary Arthur S. Filean
Treasurer Craig L. Bassett
Financial Officer Michael J. Beer
Counsel Michael D. Roughton
Assistant Counsel David J. Brown
Assistant Counsel Michael W. Cumings
Assistant Secretary Ernest H. Gillum
Assistant Treasurer Jane E. Karli
5. That the dissolution has been approved in the manner and by vote as
required by the provisions of Chapter 311, Section 3-403 of the General
Corporation Law of the State of Maryland and of the Charter of the
Corporation. On June 9, 1997, the Board of Directors, by unanimous
vote, duly authorized the dissolution of the Corporation.
6. That at a Special Meeting of Shareholders held on September 16, 1997 ,
the dissolution of said Corporation was approved by an affirmative vote
of two-thirds of all the votes entitled to be cast on the matter.
7. That the corporation has no known creditors.
8. That the Principal Bond Fund, Inc. is dissolved effective 11:59 PM on
December 31, 1997.
PRINCIPAL BOND FUND, INC.
By: ____________________________ Date: ______________
James D. Davis, Director
/s/ Roy W. Ehrle 12/22/97
By: ____________________________ Date: ______________
Roy W. Ehrle, Director
By: ____________________________ Date: ______________
Pamela A. Ferguson, Director
By: ____________________________ Date: ______________
Richard W. Gilbert, Director
/s/ J. Barry Griswell 12/19/97
By: ____________________________ Date: ______________
J. Barry Griswell, Director
/s/ S. L. Jones 12/19/97
By: ____________________________ Date: ______________
Stephan L. Jones,
President and Director
/s/ Ronald E. Keller 12/19/97
By: ____________________________ Date: ______________
Ronald E. Keller, Director
By: ____________________________ Date: ______________
Barbara A. Lukavsky, Director
/s/ Richard G. Peebler 12/23/97
By: ____________________________ Date: ______________
Richard G. Peebler, Director
The undersigned, President and Director of Principal Bond Fund, Inc., who
executed on behalf of said corporation the foregoing Articles of Dissolution, of
which this certificate is made a part, hereby acknowledges, in the name and on
behalf of said corporation, the foregoing Articles of Dissolution to be the
corporate act of said corporation and further certifies that, to the best of his
knowledge and belief, the matters and facts set forth therein with respect to
the approval thereof are true in all material respects, under the penalties of
perjury.
Principal Bond Fund, Inc.
/s/ Stephan L. Jones
by: __________________________
Stephan L. Jones,
President and Director
Attest:
/s/ E. H. Gillum
- ----------------------------
E. H. Gillum,
Assistant Secretary
ARTICLES OF DISSOLUTION
OF
PRINCIPAL CAPITAL ACCUMULATION FUND, INC.
We the undersigned, as a majority of the Board of Directors of Principal Capital
Accumulation Fund, Inc., in accordance with the requirements of the General
Corporation Law of the State of Maryland and in order to obtain the dissolution
of said corporation, as provided in said law, do hereby state as follows:
1. That the name of the Corporation is Principal Capital Accumulation
Fund, Inc. and its principal office is located at 32 South Street,
Baltimore, Maryland 21202 and its mailing address is 711 High Street,
Des Moines, Iowa 50392-0200.
2. That the registered office of the Corporation in the State of Maryland
is The Corporation Trust Incorporated, whose business address is First
Maryland Building, 32 South Street, Baltimore, Maryland 21202. The
Corporation consents that service of process upon said The Corporation
Trust Incorporated shall be taken and held to be as valid as if served
upon the Corporation.
3. That the following is a list of the names and addresses of the
directors of said corporation:
James D. Davis 4940 Center Court. Bettendorf, Iowa
Roy W. Ehrle 2424 Jordan Trail, West Des Moines, Iowa
Pamela A. Ferguson P.O. Box 805, Grinnell, Iowa
Richard W. Gilbert 1357 Asbury Avenue, Winnetka, Illinois
J. Barry Griswell 711 High Street, Des Moines, Iowa 50392
Stephan L. Jones 711 High Street, Des Moines, Iowa 50392
Ronald E. Keller 711 High Street, Des Moines, Iowa 50392
Barbara A. Lukavsky 3920 Grand Avenue, Des Moines, Iowa
Richard G. Peebler 1916 79th Street, Des Moines, Iowa
4. That the following is a list of the names of the officers of said
corporation. All mailing addresses are Principal Financial Group, Des
Moines, Iowa 50392-0200.
President Stephan L. Jones
Vice President Arthur S. Filean
Secretary Arthur S. Filean
Treasurer Craig L. Bassett
Financial Officer Michael J. Beer
Counsel Michael D. Roughton
Assistant Counsel David J. Brown
Assistant Counsel Michael W. Cumings
Assistant Secretary Ernest H. Gillum
Assistant Treasurer Jane E. Karli
5. That the dissolution has been approved in the manner and by vote as
required by the provisions of Chapter 311, Section 3-403 of the General
Corporation Law of the State of Maryland and of the Charter of the
Corporation. On June 9, 1997, the Board of Directors, by unanimous
vote, duly authorized the dissolution of the Corporation.
6. That at a Special Meeting of Shareholders held on September 16, 1997 ,
the dissolution of said Corporation was approved by an affirmative vote
of two-thirds of all the votes entitled to be cast on the matter.
7. That the corporation has no known creditors.
8. That the Principal Capital Accumulation Fund, Inc. is dissolved
effective 11:59 PM on December 31, 1997.
PRINCIPAL CAPITAL ACCUMULATION FUND, INC.
By: ____________________________ Date: ______________
James D. Davis, Director
/s/ Roy W. Ehrle 12/22/97
By: ____________________________ Date: ______________
Roy W. Ehrle, Director
By: ____________________________ Date: ______________
Pamela A. Ferguson, Director
By: ____________________________ Date: ______________
Richard W. Gilbert, Director
/s/ J. Barry Griswell 12/19/97
By: ____________________________ Date: ______________
J. Barry Griswell, Director
/s/ S. L. Jones 12/19/97
By: ____________________________ Date: ______________
Stephan L. Jones,
President and Director
/s/ Ronald E. Keller 12/19/97
By: ____________________________ Date: ______________
Ronald E. Keller, Director
By: ____________________________ Date: ______________
Barbara A. Lukavsky, Director
/s/ Richard G. Peebler 12/23/97
By: ____________________________ Date: ______________
Richard G. Peebler, Director
The undersigned, President and Director of Principal Capital Accumulation Fund,
Inc., who executed on behalf of said corporation the foregoing Articles of
Dissolution, of which this certificate is made a part, hereby acknowledges, in
the name and on behalf of said corporation, the foregoing Articles of
Dissolution to be the corporate act of said corporation and further certifies
that, to the best of his knowledge and belief, the matters and facts set forth
therein with respect to the approval thereof are true in all material respects,
under the penalties of perjury.
Principal Capital Accumulation Fund, Inc.
/s/ Stephan L. Jones
by: __________________________
Stephan L. Jones,
President and Director
Attest:
/s/ E. H. Gillum
- ----------------------------
E. H. Gillum,
Assistant Secretary
ARTICLES OF DISSOLUTION
OF
PRINCIPAL EMERGING GROWTH FUND, INC.
We the undersigned, as a majority of the Board of Directors of Principal
Emerging Growth Fund, Inc., in accordance with the requirements of the General
Corporation Law of the State of Maryland and in order to obtain the dissolution
of said corporation, as provided in said law, do hereby state as follows:
1. That the name of the Corporation is Principal Emerging Growth Fund,
Inc. and its principal office is located at 32 South Street, Baltimore,
Maryland 21202 and its mailing address is 711 High Street, Des Moines,
Iowa 50392-0200.
2. That the registered office of the Corporation in the State of Maryland
is The Corporation Trust Incorporated, whose business address is First
Maryland Building, 32 South Street, Baltimore, Maryland 21202. The
Corporation consents that service of process upon said The Corporation
Trust Incorporated shall be taken and held to be as valid as if served
upon the Corporation.
3. That the following is a list of the names and addresses of the
directors of said corporation:
James D. Davis 4940 Center Court. Bettendorf, Iowa
Roy W. Ehrle 2424 Jordan Trail, West Des Moines, Iowa
Pamela A. Ferguson P.O. Box 805, Grinnell, Iowa
Richard W. Gilbert 1357 Asbury Avenue, Winnetka, Illinois
J. Barry Griswell 711 High Street, Des Moines, Iowa 50392
Stephan L. Jones 711 High Street, Des Moines, Iowa 50392
Ronald E. Keller 711 High Street, Des Moines, Iowa 50392
Barbara A. Lukavsky 3920 Grand Avenue, Des Moines, Iowa
Richard G. Peebler 1916 79th Street, Des Moines, Iowa
4. That the following is a list of the names of the officers of said
corporation. All mailing addresses are Principal Financial Group, Des
Moines, Iowa 50392-0200.
President Stephan L. Jones
Vice President Arthur S. Filean
Secretary Arthur S. Filean
Treasurer Craig L. Bassett
Financial Officer Michael J. Beer
Counsel Michael D. Roughton
Assistant Counsel David J. Brown
Assistant Counsel Michael W. Cumings
Assistant Secretary Ernest H. Gillum
Assistant Treasurer Jane E. Karli
5. That the dissolution has been approved in the manner and by vote as
required by the provisions of Chapter 311, Section 3-403 of the General
Corporation Law of the State of Maryland and of the Charter of the
Corporation. On June 9, 1997, the Board of Directors, by unanimous
vote, duly authorized the dissolution of the Corporation.
6. That at a Special Meeting of Shareholders held on September 16, 1997 ,
the dissolution of said Corporation was approved by an affirmative vote
of two-thirds of all the votes entitled to be cast on the matter.
7. That the corporation has no known creditors.
8. That the Principal Emerging Growth Fund, Inc. is dissolved effective
11:59 PM on December 31, 1997.
PRINCIPAL EMERGING GROWTH FUND, INC.
By: ____________________________ Date: ______________
James D. Davis, Director
/s/ Roy W. Ehrle 12/22/97
By: ____________________________ Date: ______________
Roy W. Ehrle, Director
By: ____________________________ Date: ______________
Pamela A. Ferguson, Director
By: ____________________________ Date: ______________
Richard W. Gilbert, Director
/s/ J. Barry Griswell 12/19/97
By: ____________________________ Date: ______________
J. Barry Griswell, Director
/s/ S. L. Jones 12/19/97
By: ____________________________ Date: ______________
Stephan L. Jones,
President and Director
/s/ Ronald E. Keller 12/19/97
By: ____________________________ Date: ______________
Ronald E. Keller, Director
By: ____________________________ Date: ______________
Barbara A. Lukavsky, Director
/s/ Richard G. Peebler 12/23/97
By: ____________________________ Date: ______________
Richard G. Peebler, Director
The undersigned, President and Director of Principal Emerging Growth Fund, Inc.,
who executed on behalf of said corporation the foregoing Articles of
Dissolution, of which this certificate is made a part, hereby acknowledges, in
the name and on behalf of said corporation, the foregoing Articles of
Dissolution to be the corporate act of said corporation and further certifies
that, to the best of his knowledge and belief, the matters and facts set forth
therein with respect to the approval thereof are true in all material respects,
under the penalties of perjury.
Principal Emerging Growth Fund, Inc.
/s/ Stephan L. Jones
by: __________________________
Stephan L. Jones,
President and Director
Attest:
/s/ E. H. Gillum
- ----------------------------
E. H. Gillum,
Assistant Secretary
ARTICLES OF DISSOLUTION
OF
PRINCIPAL GOVERNMENT SECURITIES FUND, INC.
We the undersigned, as a majority of the Board of Directors of Principal
Government Securities Fund, Inc., in accordance with the requirements of the
General Corporation Law of the State of Maryland and in order to obtain the
dissolution of said corporation, as provided in said law, do hereby state as
follows:
1. That the name of the Corporation is Principal Government Securities
Fund, Inc. and its principal office is located at 32 South Street,
Baltimore, Maryland 21202 and its mailing address is 711 High Street,
Des Moines, Iowa 50392-0200.
2. That the registered office of the Corporation in the State of Maryland
is The Corporation Trust Incorporated, whose business address is First
Maryland Building, 32 South Street, Baltimore, Maryland 21202. The
Corporation consents that service of process upon said The Corporation
Trust Incorporated shall be taken and held to be as valid as if served
upon the Corporation.
3. That the following is a list of the names and addresses of the
directors of said corporation:
James D. Davis 4940 Center Court. Bettendorf, Iowa
Roy W. Ehrle 2424 Jordan Trail, West Des Moines, Iowa
Pamela A. Ferguson P.O. Box 805, Grinnell, Iowa
Richard W. Gilbert 1357 Asbury Avenue, Winnetka, Illinois
J. Barry Griswell 711 High Street, Des Moines, Iowa 50392
Stephan L. Jones 711 High Street, Des Moines, Iowa 50392
Ronald E. Keller 711 High Street, Des Moines, Iowa 50392
Barbara A. Lukavsky 3920 Grand Avenue, Des Moines, Iowa
Richard G. Peebler 1916 79th Street, Des Moines, Iowa
4. That the following is a list of the names of the officers of said
corporation. All mailing addresses are Principal Financial Group, Des
Moines, Iowa 50392-0200.
President Stephan L. Jones
Vice President Arthur S. Filean
Secretary Arthur S. Filean
Treasurer Craig L. Bassett
Financial Officer Michael J. Beer
Counsel Michael D. Roughton
Assistant Counsel David J. Brown
Assistant Counsel Michael W. Cumings
Assistant Secretary Ernest H. Gillum
Assistant Treasurer Jane E. Karli
5. That the dissolution has been approved in the manner and by vote as
required by the provisions of Chapter 311, Section 3-403 of the General
Corporation Law of the State of Maryland and of the Charter of the
Corporation. On June 9, 1997, the Board of Directors, by unanimous
vote, duly authorized the dissolution of the Corporation.
6. That at a Special Meeting of Shareholders held on September 16, 1997 ,
the dissolution of said Corporation was approved by an affirmative vote
of two-thirds of all the votes entitled to be cast on the matter.
7. That the corporation has no known creditors.
8. That the Principal Government Securities Fund, Inc. is dissolved
effective 11:59 PM on December 31, 1997.
PRINCIPAL GOVERNMENT SECURITIES FUND, INC.
By: ____________________________ Date: ______________
James D. Davis, Director
/s/ Roy W. Ehrle 12/22/97
By: ____________________________ Date: ______________
Roy W. Ehrle, Director
By: ____________________________ Date: ______________
Pamela A. Ferguson, Director
By: ____________________________ Date: ______________
Richard W. Gilbert, Director
/s/ J. Barry Griswell 12/19/97
By: ____________________________ Date: ______________
J. Barry Griswell, Director
/s/ S. L. Jones 12/19/97
By: ____________________________ Date: ______________
Stephan L. Jones,
President and Director
/s/ Ronald E. Keller 12/19/97
By: ____________________________ Date: ______________
Ronald E. Keller, Director
By: ____________________________ Date: ______________
Barbara A. Lukavsky, Director
/s/ Richard G. Peebler 12/23/97
By: ____________________________ Date: ______________
Richard G. Peebler, Director
The undersigned, President and Director of Principal Government Securities Fund,
Inc., who executed on behalf of said corporation the foregoing Articles of
Dissolution, of which this certificate is made a part, hereby acknowledges, in
the name and on behalf of said corporation, the foregoing Articles of
Dissolution to be the corporate act of said corporation and further certifies
that, to the best of his knowledge and belief, the matters and facts set forth
therein with respect to the approval thereof are true in all material respects,
under the penalties of perjury.
Principal Government Securities Fund, Inc.
/s/ Stephan L. Jones
by: __________________________
Stephan L. Jones,
President and Director
Attest:
/s/ E. H. Gillum
- ----------------------------
E. H. Gillum,
Assistant Secretary
ARTICLES OF DISSOLUTION
OF
PRINCIPAL GROWTH FUND, INC.
We the undersigned, as a majority of the Board of Directors of Principal Growth
Fund, Inc., in accordance with the requirements of the General Corporation Law
of the State of Maryland and in order to obtain the dissolution of said
corporation, as provided in said law, do hereby state as follows:
1. That the name of the Corporation is Principal Growth Fund, Inc. and its
principal office is located at 32 South Street, Baltimore, Maryland
21202 and its mailing address is 711 High Street, Des Moines, Iowa
50392-0200.
2. That the registered office of the Corporation in the State of Maryland
is The Corporation Trust Incorporated, whose business address is First
Maryland Building, 32 South Street, Baltimore, Maryland 21202. The
Corporation consents that service of process upon said The Corporation
Trust Incorporated shall be taken and held to be as valid as if served
upon the Corporation.
3. That the following is a list of the names and addresses of the
directors of said corporation:
James D. Davis 4940 Center Court. Bettendorf, Iowa
Roy W. Ehrle 2424 Jordan Trail, West Des Moines, Iowa
Pamela A. Ferguson P.O. Box 805, Grinnell, Iowa
Richard W. Gilbert 1357 Asbury Avenue, Winnetka, Illinois
J. Barry Griswell 711 High Street, Des Moines, Iowa 50392
Stephan L. Jones 711 High Street, Des Moines, Iowa 50392
Ronald E. Keller 711 High Street, Des Moines, Iowa 50392
Barbara A. Lukavsky 3920 Grand Avenue, Des Moines, Iowa
Richard G. Peebler 1916 79th Street, Des Moines, Iowa
4. That the following is a list of the names of the officers of said
corporation. All mailing addresses are Principal Financial Group, Des
Moines, Iowa 50392-0200.
President Stephan L. Jones
Vice President Arthur S. Filean
Secretary Arthur S. Filean
Treasurer Craig L. Bassett
Financial Officer Michael J. Beer
Counsel Michael D. Roughton
Assistant Counsel David J. Brown
Assistant Counsel Michael W. Cumings
Assistant Secretary Ernest H. Gillum
Assistant Treasurer Jane E. Karli
5. That the dissolution has been approved in the manner and by vote as
required by the provisions of Chapter 311, Section 3-403 of the General
Corporation Law of the State of Maryland and of the Charter of the
Corporation. On June 9, 1997, the Board of Directors, by unanimous
vote, duly authorized the dissolution of the Corporation.
6. That at a Special Meeting of Shareholders held on September 16, 1997 ,
the dissolution of said Corporation was approved by an affirmative vote
of two-thirds of all the votes entitled to be cast on the matter.
7. That the corporation has no known creditors.
8. That the Principal Growth Fund, Inc. is dissolved effective 11:59 PM on
December 31, 1997.
PRINCIPAL GROWTH FUND, INC.
By: ____________________________ Date: ______________
James D. Davis, Director
/s/ Roy W. Ehrle 12/22/97
By: ____________________________ Date: ______________
Roy W. Ehrle, Director
By: ____________________________ Date: ______________
Pamela A. Ferguson, Director
By: ____________________________ Date: ______________
Richard W. Gilbert, Director
/s/ J. Barry Griswell 12/19/97
By: ____________________________ Date: ______________
J. Barry Griswell, Director
/s/ S. L. Jones 12/19/97
By: ____________________________ Date: ______________
Stephan L. Jones,
President and Director
/s/ Ronald E. Keller 12/19/97
By: ____________________________ Date: ______________
Ronald E. Keller, Director
By: ____________________________ Date: ______________
Barbara A. Lukavsky, Director
/s/ Richard G. Peebler 12/23/97
By: ____________________________ Date: ______________
Richard G. Peebler, Director
The undersigned, President and Director of Principal Growth Fund, Inc., who
executed on behalf of said corporation the foregoing Articles of Dissolution, of
which this certificate is made a part, hereby acknowledges, in the name and on
behalf of said corporation, the foregoing Articles of Dissolution to be the
corporate act of said corporation and further certifies that, to the best of his
knowledge and belief, the matters and facts set forth therein with respect to
the approval thereof are true in all material respects, under the penalties of
perjury.
Principal Growth Fund, Inc.
/s/ Stephan L. Jones
by: __________________________
Stephan L. Jones,
President and Director
Attest:
/s/ E. H. Gillum
- ----------------------------
E. H. Gillum,
Assistant Secretary
ARTICLES OF DISSOLUTION
OF
PRINCIPAL HIGH YIELD FUND, INC.
We the undersigned, as a majority of the Board of Directors of Principal High
Yield Fund, Inc., in accordance with the requirements of the General Corporation
Law of the State of Maryland and in order to obtain the dissolution of said
corporation, as provided in said law, do hereby state as follows:
1. That the name of the Corporation is Principal High Yield Fund, Inc. and
its principal office is located at 32 South Street, Baltimore, Maryland
21202 and its mailing address is 711 High Street, Des Moines, Iowa
50392-0200.
2. That the registered office of the Corporation in the State of Maryland
is The Corporation Trust Incorporated, whose business address is First
Maryland Building, 32 South Street, Baltimore, Maryland 21202. The
Corporation consents that service of process upon said The Corporation
Trust Incorporated shall be taken and held to be as valid as if served
upon the Corporation.
3. That the following is a list of the names and addresses of the
directors of said corporation:
James D. Davis 4940 Center Court. Bettendorf, Iowa
Roy W. Ehrle 2424 Jordan Trail, West Des Moines, Iowa
Pamela A. Ferguson P.O. Box 805, Grinnell, Iowa
Richard W. Gilbert 1357 Asbury Avenue, Winnetka, Illinois
J. Barry Griswell 711 High Street, Des Moines, Iowa 50392
Stephan L. Jones 711 High Street, Des Moines, Iowa 50392
Ronald E. Keller 711 High Street, Des Moines, Iowa 50392
Barbara A. Lukavsky 3920 Grand Avenue, Des Moines, Iowa
Richard G. Peebler 1916 79th Street, Des Moines, Iowa
4. That the following is a list of the names of the officers of said
corporation. All mailing addresses are Principal Financial Group, Des
Moines, Iowa 50392-0200.
President Stephan L. Jones
Vice President Arthur S. Filean
Secretary Arthur S. Filean
Treasurer Craig L. Bassett
Financial Officer Michael J. Beer
Counsel Michael D. Roughton
Assistant Counsel David J. Brown
Assistant Counsel Michael W. Cumings
Assistant Secretary Ernest H. Gillum
Assistant Treasurer Jane E. Karli
5. That the dissolution has been approved in the manner and by vote as
required by the provisions of Chapter 311, Section 3-403 of the General
Corporation Law of the State of Maryland and of the Charter of the
Corporation. On June 9, 1997, the Board of Directors, by unanimous
vote, duly authorized the dissolution of the Corporation.
6. That at a Special Meeting of Shareholders held on September 16, 1997 ,
the dissolution of said Corporation was approved by an affirmative vote
of two-thirds of all the votes entitled to be cast on the matter.
7. That the corporation has no known creditors.
8. That the Principal High Yield Fund, Inc. is dissolved effective 11:59
PM on December 31, 1997.
PRINCIPAL HIGH YIELD FUND, INC.
By: ____________________________ Date: ______________
James D. Davis, Director
/s/ Roy W. Ehrle 12/22/97
By: ____________________________ Date: ______________
Roy W. Ehrle, Director
By: ____________________________ Date: ______________
Pamela A. Ferguson, Director
By: ____________________________ Date: ______________
Richard W. Gilbert, Director
/s/ J. Barry Griswell 12/19/97
By: ____________________________ Date: ______________
J. Barry Griswell, Director
/s/ S. L. Jones 12/19/97
By: ____________________________ Date: ______________
Stephan L. Jones,
President and Director
/s/ Ronald E. Keller 12/19/97
By: ____________________________ Date: ______________
Ronald E. Keller, Director
By: ____________________________ Date: ______________
Barbara A. Lukavsky, Director
/s/ Richard G. Peebler 12/23/97
By: ____________________________ Date: ______________
Richard G. Peebler, Director
The undersigned, President and Director of Principal High Yield Fund, Inc., who
executed on behalf of said corporation the foregoing Articles of Dissolution, of
which this certificate is made a part, hereby acknowledges, in the name and on
behalf of said corporation, the foregoing Articles of Dissolution to be the
corporate act of said corporation and further certifies that, to the best of his
knowledge and belief, the matters and facts set forth therein with respect to
the approval thereof are true in all material respects, under the penalties of
perjury.
Principal High Yield Fund, Inc.
/s/ Stephan L. Jones
by: __________________________
Stephan L. Jones,
President and Director
Attest:
/s/ E. H. Gillum
- ----------------------------
E. H. Gillum,
Assistant Secretary
ARTICLES OF DISSOLUTION
OF
PRINCIPAL MONEY MARKET FUND, INC.
We the undersigned, as a majority of the Board of Directors of Principal Money
Market Fund, Inc., in accordance with the requirements of the General
Corporation Law of the State of Maryland and in order to obtain the dissolution
of said corporation, as provided in said law, do hereby state as follows:
1. That the name of the Corporation is Principal Money Market Fund, Inc.
and its principal office is located at 32 South Street, Baltimore,
Maryland 21202 and its mailing address is 711 High Street, Des Moines,
Iowa 50392-0200.
2. That the registered office of the Corporation in the State of Maryland
is The Corporation Trust Incorporated, whose business address is First
Maryland Building, 32 South Street, Baltimore, Maryland 21202. The
Corporation consents that service of process upon said The Corporation
Trust Incorporated shall be taken and held to be as valid as if served
upon the Corporation.
3. That the following is a list of the names and addresses of the
directors of said corporation:
James D. Davis 4940 Center Court. Bettendorf, Iowa
Roy W. Ehrle 2424 Jordan Trail, West Des Moines, Iowa
Pamela A. Ferguson P.O. Box 805, Grinnell, Iowa
Richard W. Gilbert 1357 Asbury Avenue, Winnetka, Illinois
J. Barry Griswell 711 High Street, Des Moines, Iowa 50392
Stephan L. Jones 711 High Street, Des Moines, Iowa 50392
Ronald E. Keller 711 High Street, Des Moines, Iowa 50392
Barbara A. Lukavsky 3920 Grand Avenue, Des Moines, Iowa
Richard G. Peebler 1916 79th Street, Des Moines, Iowa
4. That the following is a list of the names of the officers of said
corporation. All mailing addresses are Principal Financial Group, Des
Moines, Iowa 50392-0200.
President Stephan L. Jones
Vice President Arthur S. Filean
Secretary Arthur S. Filean
Treasurer Craig L. Bassett
Financial Officer Michael J. Beer
Counsel Michael D. Roughton
Assistant Counsel David J. Brown
Assistant Counsel Michael W. Cumings
Assistant Secretary Ernest H. Gillum
Assistant Treasurer Jane E. Karli
5. That the dissolution has been approved in the manner and by vote as
required by the provisions of Chapter 311, Section 3-403 of the General
Corporation Law of the State of Maryland and of the Charter of the
Corporation. On June 9, 1997, the Board of Directors, by unanimous
vote, duly authorized the dissolution of the Corporation.
6. That at a Special Meeting of Shareholders held on September 16, 1997 ,
the dissolution of said Corporation was approved by an affirmative vote
of two-thirds of all the votes entitled to be cast on the matter.
7. That the corporation has no known creditors.
8. That the Principal Money Market Fund, Inc. is dissolved effective 11:59
PM on December 31, 1997.
PRINCIPAL MONEY MARKET FUND, INC.
By: ____________________________ Date: ______________
James D. Davis, Director
/s/ Roy W. Ehrle 12/22/97
By: ____________________________ Date: ______________
Roy W. Ehrle, Director
By: ____________________________ Date: ______________
Pamela A. Ferguson, Director
By: ____________________________ Date: ______________
Richard W. Gilbert, Director
/s/ J. Barry Griswell 12/19/97
By: ____________________________ Date: ______________
J. Barry Griswell, Director
/s/ S. L. Jones 12/19/97
By: ____________________________ Date: ______________
Stephan L. Jones,
President and Director
/s/ Ronald E. Keller 12/19/97
By: ____________________________ Date: ______________
Ronald E. Keller, Director
By: ____________________________ Date: ______________
Barbara A. Lukavsky, Director
/s/ Richard G. Peebler 12/23/97
By: ____________________________ Date: ______________
Richard G. Peebler, Director
The undersigned, President and Director of Principal Money Market Fund, Inc.,
who executed on behalf of said corporation the foregoing Articles of
Dissolution, of which this certificate is made a part, hereby acknowledges, in
the name and on behalf of said corporation, the foregoing Articles of
Dissolution to be the corporate act of said corporation and further certifies
that, to the best of his knowledge and belief, the matters and facts set forth
therein with respect to the approval thereof are true in all material respects,
under the penalties of perjury.
Principal Money Market Fund, Inc.
/s/ Stephan L. Jones
by: __________________________
Stephan L. Jones,
President and Director
Attest:
/s/ E. H. Gillum
- ----------------------------
E. H. Gillum,
Assistant Secretary
ARTICLES OF DISSOLUTION
OF
PRINCIPAL WORLD FUND, INC.
We the undersigned, as a majority of the Board of Directors of Principal World
Fund, Inc., in accordance with the requirements of the General Corporation Law
of the State of Maryland and in order to obtain the dissolution of said
corporation, as provided in said law, do hereby state as follows:
1. That the name of the Corporation is Principal World Fund, Inc. and its
principal office is located at 32 South Street, Baltimore, Maryland
21202 and its mailing address is 711 High Street, Des Moines, Iowa
50392-0200.
2. That the registered office of the Corporation in the State of Maryland
is The Corporation Trust Incorporated, whose business address is First
Maryland Building, 32 South Street, Baltimore, Maryland 21202. The
Corporation consents that service of process upon said The Corporation
Trust Incorporated shall be taken and held to be as valid as if served
upon the Corporation.
3. That the following is a list of the names and addresses of the
directors of said corporation:
James D. Davis 4940 Center Court. Bettendorf, Iowa
Roy W. Ehrle 2424 Jordan Trail, West Des Moines, Iowa
Pamela A. Ferguson P.O. Box 805, Grinnell, Iowa
Richard W. Gilbert 1357 Asbury Avenue, Winnetka, Illinois
J. Barry Griswell 711 High Street, Des Moines, Iowa 50392
Stephan L. Jones 711 High Street, Des Moines, Iowa 50392
Ronald E. Keller 711 High Street, Des Moines, Iowa 50392
Barbara A. Lukavsky 3920 Grand Avenue, Des Moines, Iowa
Richard G. Peebler 1916 79th Street, Des Moines, Iowa
4. That the following is a list of the names of the officers of said
corporation. All mailing addresses are Principal Financial Group, Des
Moines, Iowa 50392-0200.
President Stephan L. Jones
Vice President Arthur S. Filean
Secretary Arthur S. Filean
Treasurer Craig L. Bassett
Financial Officer Michael J. Beer
Counsel Michael D. Roughton
Assistant Counsel David J. Brown
Assistant Counsel Michael W. Cumings
Assistant Secretary Ernest H. Gillum
Assistant Treasurer Jane E. Karli
5. That the dissolution has been approved in the manner and by vote as
required by the provisions of Chapter 311, Section 3-403 of the General
Corporation Law of the State of Maryland and of the Charter of the
Corporation. On June 9, 1997, the Board of Directors, by unanimous
vote, duly authorized the dissolution of the Corporation.
6. That at a Special Meeting of Shareholders held on September 16, 1997 ,
the dissolution of said Corporation was approved by an affirmative vote
of two-thirds of all the votes entitled to be cast on the matter.
7. That the corporation has no known creditors.
8. That the Principal World Fund, Inc. is dissolved effective 11:59 PM on
December 31, 1997.
PRINCIPAL WORLD FUND, INC.
By: ____________________________ Date: ______________
James D. Davis, Director
/s/ Roy W. Ehrle 12/22/97
By: ____________________________ Date: ______________
Roy W. Ehrle, Director
By: ____________________________ Date: ______________
Pamela A. Ferguson, Director
By: ____________________________ Date: ______________
Richard W. Gilbert, Director
/s/ J. Barry Griswell 12/19/97
By: ____________________________ Date: ______________
J. Barry Griswell, Director
/s/ S. L. Jones 12/19/97
By: ____________________________ Date: ______________
Stephan L. Jones,
President and Director
/s/ Ronald E. Keller 12/19/97
By: ____________________________ Date: ______________
Ronald E. Keller, Director
By: ____________________________ Date: ______________
Barbara A. Lukavsky, Director
/s/ Richard G. Peebler 12/23/97
By: ____________________________ Date: ______________
Richard G. Peebler, Director
The undersigned, President and Director of Principal World Fund, Inc., who
executed on behalf of said corporation the foregoing Articles of Dissolution, of
which this certificate is made a part, hereby acknowledges, in the name and on
behalf of said corporation, the foregoing Articles of Dissolution to be the
corporate act of said corporation and further certifies that, to the best of his
knowledge and belief, the matters and facts set forth therein with respect to
the approval thereof are true in all material respects, under the penalties of
perjury.
Principal World Fund, Inc.
/s/ Stephan L. Jones
by: __________________________
Stephan L. Jones,
President and Director
Attest:
/s/ E. H. Gillum
- ----------------------------
E. H. Gillum,
Assistant Secretary
