DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT is made this 6th day of August, 2002,
between Principal Life Insurance Company ("Principal"), a life insurance company
organized under the laws of the State of Iowa, and Princor Financial Services
Corporation ("Princor"), an affiliate of Principal organized under the laws of
the State of Iowa.
WITNESSETH
WHEREAS, Principal has established Variable Life Separate Account
("Separate Account") and registered such Separate Account as an investment
company under the Investment Company Act of 1940 to fund variable life insurance
policies issued by Principal Life Insurance Company;
WHEREAS, Princor is registered with the Securities and Exchange
Commission as a broker-dealer under the Securities Exchange Act of 1934 and is a
member of the National Association of Securities Dealers, Inc.; and
WHEREAS, Principal desires to issue certain Principal Benefit Variable
Universal Life policies ("Policies") with respect to the Separate Account which
will be sold and distributed by and through Princor, and Princor is willing to
sell and distribute such Policies under the terms and conditions stated herein;
NOW, THEREFORE, the parties agree as follows:
1. Principal hereby appoints Princor as the principal underwriter of
the Policies issued with respect to the Separate Account, and Princor agrees to
use its best efforts to sell and distribute the Policies through its registered
representatives or through other broker-dealers registered under the Securities
and Exchange Act of 1934 whose registered representatives are authorized by
applicable law to sell variable universal life insurance policies.
2. All payments and other monies payable upon the sale, distribution,
renewal or other transaction involving the Policies shall be the property of and
be paid or remitted directly to Principal, who shall retain all such payments
and monies for its own account except to the extent such payments and monies are
allocated to the Separate Account. Princor shall not be deemed to have any
interest in such payments.
3. For the administrative convenience of the parties, Principal shall
(a) pay to the registered representatives of Princor the commissions
earned on the sale, distribution, renewal or other transaction
involving the Policies as determined in the attached Commission
Schedule, and provide Princor with accurate records of all such
commissions paid on its behalf; and
(b) pay to broker-dealers with whom Princor has entered into a
Selling Agreement for the distribution of the Policies any
applicable dealer allowance or other compensation as provided in
such Selling Agreement, and provide Princor with accurate records
of all such payments paid on its behalf.
4. Principal shall pay to Princor an amount equal to the expenses
incurred by Princor in the performance of this Agreement. Princor shall provide
a statement of expenses to Principal at least semi-annually in a form and manner
agreed to by the parties.
5. Princor shall be solely responsible for the supervision and control
of the conduct and activities of its registered representatives with regard to
the sale and distribution of the Policies.
6. Principal shall assume the responsibility, including the costs
thereof, for all administrative and legal functions pertaining to the Policies
not otherwise specifically assumed by Princor in this agreement, including but
not limited to the following: the preparation, printing and filing of
prospectuses; the development, filing, and compliance with federal and state
securities laws and regulations of the Separate Account; policy development; SEC
registration; filing and compliance with state insurance laws and regulations;
underwriting; policy issue and policyowner service functions; developing sales
and promotional material; and training agents.
7. Principal will prepare and maintain all the books and records in
connection with the offer and sales of variable life insurance policies which
are required to be maintained and preserved in accordance with applicable
securities law; and all such books and records are to be maintained and held by
Principal on behalf of and as agent for the broker-dealer whose property they
are and shall remain; and all such books and records will be made available for
inspection by the Securities and Exchange Commission at all times.
8. Principal shall send to each policyowner or such other person as
appropriate a confirmation as required by law or regulation of any transaction
made with respect to the Policies which shall reflect the true facts of the
transaction and show that confirmation of the transaction is being sent on
behalf of the broker-dealer acting in the capacity of agent for the insurance
company.
9. Princor and Principal may enter into agreements with other
broker-dealers duly licensed under applicable federal and state laws and with
their affiliated general agencies, if any, for the sale and distribution of the
Policies. The commission payable to registered representatives on the sale of
Policies thereunder may not exceed the amount shown on the attached Commission
Schedule.
10. This agreement may be terminated by either party upon 60 days prior
written notice. Princor shall promptly notify the Securities and Exchange
Commission of any such termination.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed on the day and year written above.
PRINCIPAL LIFE INSURANCE COMPANY
By:/s/Robert A. Slepicka
---------------------------------------------------------
Robert A. Slepicka, Senior Vice President
PRINCOR FINANCIAL SERVICES CORPORATION
By: /s/A. S. Filean
---------------------------------------------------------
A. S. Filean, Senior Vice President
COMMISSION SCHEDULE
For Policies sold through Princor, commissions generally will be no more than
10% of premium received in the first policy year (or the first year following an
adjustment) up to the target premium. In the second through fifth years
following the policy date (or adjustment date), commissions range from 0% to 5%
of premiums received. In the sixth through tenth years following the policy date
(or adjustment date), commissions range from 0% to 1.5% of premiums received. In
policy years after year 6, an asset based fee of 0.075% of the value in the
divisions is paid. Expense allowances may be paid to agents and brokers based on
premiums received.