SECOND AMENDMENT TO THE PRINCIPAL VARIABLE CONTRACTS FUND, INC. SUB-ADVISORY AGREEMENT Agreement executed as of the 10th day of December, 2001, to amend the Sub-Advisory Agreement executed as of October 20, 2000 (and including any subsequent...

                             SECOND AMENDMENT TO THE
                     PRINCIPAL VARIABLE CONTRACTS FUND, INC.
                             SUB-ADVISORY AGREEMENT

Agreement  executed  as of  the  10th  day  of  December,  2001,  to  amend  the
Sub-Advisory  Agreement  executed  as of October  20,  2000 (and  including  any
subsequent   amendments   thereafter)  by  and  between   Principal   Management
Corporation  (hereinafter  called the  "Manager")  and Principal  Capital Income
Investors, LLC (hereinafter called "PCII").

WHEREAS, in the Sub-Advisory Agreement, Manager retained PCII 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 Principal Variable Contracts Fund, Inc. (hereinafter called the "Fund"); and

WHEREAS, the Manager and PCII now wish to amend the Sub-Advisory Agreement;

NOW,  THEREFORE,  in  consideration  of  the  terms  and  conditions  set  forth
hereinafter,  the parties agree that  effective  January 1, 2002 Schedule A will
read as follows:

                                   SCHEDULE A
         Balanced Account (Fixed-Income Securities Only)               0.10%
         Government Securities Account                                 0.10%



                                         Principal Management Corporation

                                                /s/ Xxxxx X. Xxxxxx
                                         by:____________________________________


                                         Principal Capital Income Investors, LLC

                                                /s/ xxxxxxx X. Xxxxx
                                         by:____________________________________