PRINCIPAL FUNDS, INC. CONTRACTUAL FEE LIMIT/WAIVER AGREEMENT
PRINCIPAL FUNDS, INC.
CONTRACTUAL FEE LIMIT/WAIVER AGREEMENT
AGREEMENT made this 1st day of March, 2012 by and between Principal Funds, Inc. (the “Fund”) and Principal Management Corporation (the “Advisor”) (together, the “Parties”).
The Advisor has contractually agreed to limit the Fund’s expenses (excluding interest the Funds incur in connection with investments they make) on certain share classes of certain of the Funds. The reductions and reimbursements are in amounts that maintain total operating expenses at or below certain limits. The limits are expressed as a percentage of average daily net assets attributable to each respective class on an annualized basis. The expenses borne by the Advisor are subject to reimbursement by the Funds through the Expiration Date, provided no reimbursement will be made if it would result in the Funds’ exceeding the total operating expense limits. The operating expense limits are attached as Appendix A.
The Advisor has contractually agreed to waive a portion of the management fee it receives from certain Funds through the Date of Expiration. The waiver is expressed as a percentage of average daily net assets. The management fee waivers are attached as Appendix B.
The Agreement embodies the entire agreement of the Parties relating to the subject matter hereof. This Agreement supersedes all prior agreement and understandings, and all rights and obligations thereunder are hereby cancelled and terminated. No amendment or modification of this Agreement will be valid or binding unless it is in writing by the Parties
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the day and year first written above.
| PRINCIPAL FUNDS, INC | PRINCIPAL MANAGEMENT CORPORATION | |||
| By | /s/ Xxxx X. Xxxxxx | By: | /s/ Xxxxxxx X. Beer | |
| Name: | Xxxx X. Xxxxxx | Name: | Xxxxxxx X. Beer | |
| Title: | Vice President & Secretary | Title: |
Executive Vice President | |
| APPENDIX A | |||||||||||
| Series | Class A | Class B | Class C | Class J | Institutional Class |
Expiration | |||||
| Bond & Mortgage Securities Fund | 0.94% | 1.60% | 1.75% | N/A | N/A | 02/28/2013 | |||||
| California Municipal Fund | N/A | 1.82% | N/A | N/A | N/A | 02/28/2013 | |||||
| Diversified International Fund | N/A | 2.47% | 2.08% | N/A | N/A | 02/28/2013 | |||||
| Equity Income Fund | N/A | 1.97% | N/A | N/A | N/A | 02/28/2013 | |||||
| Global Diversified Income Fund | 1.25% | N/A | 2.00% | N/A | 0.90% | 02/28/2013 | |||||
| Global Real Estate Securities Fund | 1.45% | N/A | 2.20% | N/A | 0.95% | 02/28/2013 | |||||
| Government & High Quality Bond Fund | 0.88% | 1.65% | 1.63% | 1.00% | N/A | 02/28/2013 | |||||
| High Yield Fund | N/A | 1.92% | N/A | N/A | N/A | 02/28/2013 | |||||
| Income Fund | N/A | 1.90% | N/A | 1.10% | N/A | 02/28/2013 | |||||
| Inflation Protection Fund | 0.90% | N/A | 1.65% | 1.15% | N/A | 02/28/2013 | |||||
| International Emerging Markets Fund | N/A | 2.78% | 2.80% | N/A | N/A | 02/28/2013 | |||||
| International Value Fund I | N/A | N/A | N/A | N/A | 1.10% | 02/28/2013 | |||||
| LargeCap Growth Fund | N/A | 2.25% | N/A | N/A | N/A | 02/28/2013 | |||||
| LargeCap S&P 500 Index Fund | 0.70% | N/A | 1.30% | N/A | N/A | 02/28/2013 | |||||
| LargeCap Value Fund | N/A | 2.00% | 1.70% | N/A | N/A | 02/28/2013 | |||||
| MidCap Blend Fund | N/A | 2.09% | 1.95% | N/A | N/A | 02/28/2013 | |||||
| MidCap Value Fund III | N/A | N/A | N/A | N/A | 0.69% | 02/28/2013 | |||||
| Money Market Fund | N/A | 1.55% | 1.79% | N/A | N/A | 02/28/2013 | |||||
| Principal Capital Appreciation | N/A | 1.99% | 1.82% | N/A | N/A | 02/28/2013 | |||||
| Principal LifeTime 2010 Fund | 0.41% | N/A | N/A | N/A | N/A | 02/28/2013 | |||||
| Principal LifeTime 0000 Xxxx | X/X | X/X | X/X | X/X | 0.08% | 02/28/2013 | |||||
| Principal LifeTime 2020 Fund | 0.41% | 1.16% | N/A | N/A | N/A | 02/28/2013 | |||||
| Principal LifeTime 0000 Xxxx | X/X | X/X | X/X | X/X | 0.08% | 02/28/2013 | |||||
| Principal LifeTime 2030 Fund | 0.41% | 1.16% | N/A | N/A | N/A | 02/28/2013 | |||||
| Principal LifeTime 0000 Xxxx | X/X | X/X | X/X | X/X | 0.08% | 02/28/2013 | |||||
| Principal LifeTime 2040 Fund | 0.41% | 1.16% | N/A | N/A | N/A | 02/28/2013 | |||||
| Principal LifeTime 0000 Xxxx | X/X | X/X | X/X | X/X | 0.08% | 02/28/2013 | |||||
| Principal LifeTime 2050 Fund | 0.41% | 1.16% | N/A | N/A | N/A | 02/28/2013 | |||||
| Principal LifeTime 0000 Xxxx | X/X | X/X | X/X | X/X | 0.08% | 02/28/2013 | |||||
| Principal LifeTime Strategic Income Fund | 0.41% | 1.16% | N/A | N/A | N/A | 02/28/2013 | |||||
| Real Estate Securities Fund | 1.45% | 2.20% | 2.20% | N/A | N/A | 02/28/2013 | |||||
| XXX Balanced Portfolio | N/A | 1.70% | N/A | N/A | N/A | 02/28/2013 | |||||
| XXX Conservative Balanced Portfolio | N/A | 1.69% | N/A | N/A | N/A | 02/28/2013 | |||||
| XXX Conservative Growth Portfolio | N/A | 1.71% | N/A | N/A | N/A | 02/28/2013 | |||||
| XXX Flexible Income Portfolio | N/A | 1.69% | N/A | N/A | N/A | 02/28/2013 | |||||
| XXX Strategic Growth Portfolio | N/A | 1.75% | N/A | N/A | N/A | 02/28/2013 | |||||
| Short-Term Income Fund | N/A | N/A | 1.67% | 1.07% | N/A | 02/28/2013 | |||||
| SmallCap Blend Fund | 1.35% | 2.29% | 2.08% | N/A | 0.80% | 02/28/2014 | |||||
| SmallCap Growth Fund II | N/A | N/A | N/A | 1.58% | N/A | 02/28/2013 | |||||
| SmallCap Value Fund II | N/A | N/A | N/A | 1.926% | N/A | 02/28/2013 | |||||
| Tax-Exempt Bond Fund | 0.85% | 1.60% | 1.60% | N/A | N/A | 02/28/2013 | |||||
| R-1 | R-2 | R-3 | R-4 | R-5 | |||||||
| Government & High Quality Bond Fund | 1.29% | 1.16% | 0.98% | 0.79% | 0.67% | 02/28/2013 | |||||
| Principal LifeTime 2055 Fund | 0.96% | 0.83% | 0.65% | 0.46% | 0.34% | 02/28/2013 | |||||
| Short-Term Income Fund | 1.30% | 1.18% | 0.99% | 0.79% | 0.68% | 02/28/2013 |
| Principal Management Corporation ("Principal"), the investment advisor has contractually agreed to limit Other Expenses for the Bond & Mortgage Securities Fund that are attributable to the Institutional class shares and, if necessary, pay expenses normally payable by the Fund, excluding interest expense, through the period ending February 28, 2013. It is expected that the expense limit will continue through the period disclosed; however, Principal Funds, Inc. and Principal, the parties to the agreement, may agree to terminate the expense limit prior to the end of the period. | ||||||
| In addition, Principal Management Corp. has contractually agreed to limit the expenses identified as "Other Expenses" related to Class P shares and, if necessary, pay expenses normally payable by the Fund, excluding interest expense, through the period ending February 28, 2013. The expense limit will maintain "Other Expenses" (expressed as a percent of average net assets on an annualized basis) not to exceed 0.20%. | ||||||
| APPENDIX B | |||||
| Principal Management Corporation ("Principal"), the investment advisor has contractually agreed to limit certain of the Funds' management fees. The expense limit will reduce the Fund's Management Fees by the amounts listed below: | |||||
| Series | Waiver | Expiration | |||
| International Fund I | 0.026% | 02/28/2013 | |||
| International Value Fund I | 0.03% | 02/28/2013 | |||
| LargeCap Blend Fund II | 0.018% | 02/28/2013 | |||
| LargeCap Growth Fund I | 0.016% | 02/28/2013 | |||
| LargeCap Growth Fund II | 0.014% | 02/28/2013 | |||
| LargeCap Value Fund I | 0.014% | 02/28/2013 | |||
| LargeCap Value Fund III | 0.012% | 02/28/2013 | |||
| MidCap Growth Fund III | 0.022% | 02/28/2013 | |||
| MidCap Value Fund I | 0.02% | 02/28/2013 | |||
| MidCap Value Fund III | 0.014% | 02/28/2013 | |||
| SmallCap Growth Fund I | 0.022% | 02/28/2013 | |||
| SmallCap Growth Fund II | 0.02% | 02/28/2013 | |||
| SmallCap Value Fund II | 0.024% | 02/28/2013 | |||
