PRINCIPAL VARIABLE CONTRACTS FUNDS, INC. AMENDED DISTRIBUTION PLAN AND AGREEMENT CLASS 2 SHARES

PRINCIPAL VARIABLE CONTRACTS FUNDS, INC. 

AMENDED DISTRIBUTION PLAN AND AGREEMENT 

CLASS 2 SHARES

     DISTRIBUTION PLAN AND AGREEMENT made as of July 21, 2009, by and between PRINCIPAL VARIABLE CONTRACTS FUNDS, INC., a Maryland corporation (the "Fund"), and PRINCIPAL FUNDS DISTRIBUTOR, INC., a Washington corporation (the "Underwriter").

1.	This Distribution and Service Plan (the “Plan”), when effective in accordance with its terms, shall
	be the written plan contemplated by Securities and Exchange Commission Rule 12b-1 under the
	Investment Company Act of 1940, as amended (the “Act”) for the Class 2 shares of each Series
	identified in Appendix A, attached hereto (the “Series”), a class of shares of Principal Variable
	Contracts Funds, Inc. (the “Fund”).
2.	The Fund has entered into a Distribution Agreement on behalf of the Fund with Principal Funds
	Distributor, Inc. (the “Distributor”), under which the Distributor uses all reasonable efforts,
	consistent with its other business, to secure purchasers of shares of each Series of the Fund
	(the “Shares”). Such efforts may include, but neither are required to include nor are limited to,
	the following: (1) formulation and implementation of marketing and promotional activities, such
	as mail promotions and television, radio, newspaper, magazine and other mass media
	advertising; (2) preparation, printing and distribution of sales literature provided to the Fund’s
	shareholders and prospective shareholders; (3) preparation, printing and distribution of
	prospectuses and statements of additional information of the Fund and reports to recipients
	other than existing shareholders of the Fund; (4) obtaining such information, analyses and
	reports with respect to marketing and promotional activities as the Distributor may, from time to
	time, deem advisable; (5) making payment of sales commission, ongoing commissions and
	other payments to brokers, dealers, financial institutions or others who sell Shares pursuant to
	Selling Agreements; (6) paying compensation to registered representatives or other employees
	of the Distributor who engage in or support distribution of the Fund’s Shares; (7) paying
	compensation to, and expenses (including overhead and telephone expenses) of, the
	Distributor; (8) providing training, marketing and support to dealers and others with respect to
	the sale of Shares; (9) receiving and answering correspondence from prospective shareholders
	including distributing prospectuses, statements of additional information, and shareholder
	reports; (10) providing of facilities to answer questions from prospective investors about Shares;
	(11) complying with federal and state securities laws pertaining to the sale of Shares; (12)
	providing of other reasonable assistance in connection with the distribution of the Fund’s shares;
	(13) organizing and conducting of sales seminars and making payments in the form of
	transactional compensation or promotional incentives; and (14) such other distribution and
	services activities as the Fund determines may be paid for by the Fund pursuant to the terms of
	this Plan and in accordance with Rule 12b-1 of the Act.
3.	The Distribution Agreement also authorizes the Distributor to enter into Service Agreements with
	other selling dealers and with banks or other financial institutions to provide shareholder
	services to existing Class 2 shareholders, including without limitation, services such as
	furnishing information as to the status of shareholder accounts, responding to telephone and
	written inquiries of shareholders, and assisting shareholders with tax information.
4.	In consideration for the services provided and the expenses incurred by the Distributor pursuant
	to the Distribution Agreement and Paragraphs 2 and 3 hereof, all with respect to Class 2 shares
	of a Series of the Fund, Class 2 shares of each Series shall pay to the Distributor a fee at the
	annual rate of 0.25%, (or such lesser amount as the Fund Directors may, from time to time,
	determine) of the average daily net assets of Class 2 shares of such Series. This fee shall be

	accrued daily and paid monthly or at such other intervals as the Fund Directors shall determine.
	The determination of daily net assets shall be made at the close of business each day
	throughout the month and computed in the manner specified in the Fund’s then current
	Prospectus for the determination of the net asset value of the Fund’s Class 2 shares. The
	Distributor may use all or any portion of the fee received pursuant to this Plan to compensate
	securities dealers or other persons who have engaged in the sale of Class 2 shares or to pay
	any of the expenses associated with other activities authorized under Paragraphs 2 and 3
	hereof.
5.	The Fund presently pays, and will continue to pay, a management fee to Principal Management
	Corporation (the “Manager”) pursuant to a Management Agreement between the Fund and the
	Manager (the “Management Agreement”). It is recognized that the Manager may use its
	management fee revenue, as well as its past profits or its resources from any other source, to
	make payment to the Distributor with respect to any expenses incurred in connection with the
	distribution of Class 2 shares, including the activities referred to in Paragraph 2 hereof. To the
	extent that the payment of management fees by the Fund to the Manager should be deemed to
	be indirect financing of any activity primarily intended to result in the sale of Class 2 shares
	within the meaning of Rule 12b-1, then such payment shall be deemed to be authorized by this
	Plan.
6.	This Plan shall not take effect until it has been approved (a) by a vote of at least a majority (as
	defined in the Act) of the outstanding Class 2 shares of the Series of the Fund and (b) by votes
	of the majority of both (i) the Board of Directors of the Fund, and (ii) those Directors of the Fund
	who are not "interested persons" (as defined in the Act) of the Fund and who have no direct or
	indirect financial interest in the operation of this Plan or any agreements related to this Plan (the
	"Disinterested Directors"), cast in person at a meeting called for the purpose of voting on this
	Plan or such agreements.
7.	Unless sooner terminated pursuant to Paragraph 6, this Plan shall continue in effect for a period
	of twelve months from the date it takes effect and thereafter shall continue in effect so long as
	such continuance is specifically approved at least annually in the manner provided for approval
	of this Plan in Paragraph 6(b).
8.	A representative of the Underwriter shall provide to the Board and the Board shall review at least
	quarterly a written report of the amounts so expended and the purposes for which such
	expenditures were made.
9.	This Plan may be terminated at any time by vote of a majority of the Disinterested Directors, or
	by vote of a majority (as defined in the Act) of the outstanding Class 2 shares of the Series of
	the Fund.
10. Any agreement of the Fund related to this Plan shall be in writing and shall provide:
	A.	That such agreement may be terminated at any time, without payment of any penalty, by
		vote of a majority of the Disinterested Directors or by a vote of a majority (as defined in the
		Act) of the outstanding Class 2 shares of the Series of the Fund on not more than sixty (60)
		days' written notice to any other party to the agreement); and
	B.	That such agreement shall terminate automatically in the event of its assignment.
11. While the Plan is in effect, the Fund’s board of directors shall satisfy the fund governance
	standards as defined in Securities and Exchange Commission Rule 0-1(a)(7).

12.	This Plan does not require the Manager or Distributor to perform any specific type or level of distribution activities or to incur any specific level of expenses for activities primarily intended to result in the sale of Class 2 shares.
13.	The Fund shall preserve copies of this Plan and any related agreements and all reports made pursuant to Paragraph 8, for a period of not less than six years from the date of the Plan, or the agreements or such report, as the case may be, the first two years in an easily accessible place.
14.	This Plan may not be amended to increase materially the amount of Fees provided for in Paragraph 4 hereof unless such amendment is approved in the manner provided for initial approval in Paragraph 6 hereof and no other material amendment to this Plan shall be made unless approved in the manner provided for initial approval in Paragraph 6(b) hereof.

     IN WITNESS WHEREOF, the parties hereto have executed and delivered this Plan as of the first date written above.

PRINCIPAL VARIABLE CONTRACTS FUNDS, INC. 

BY:     /s/ Xxxx X. Xxxxxx

           XXXX X. XXXXXX, VICE PRESIDENT & SECRETARY 

PRINCIPAL FUNDS DISTRIBUTOR, INC. 

BY:    /s/ Xxxxxxx X. Beer

           XXXXXXX X. BEER, EXECUTIVE VICE-PRESIDENT 

PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.

APPENDIX A

		Series
Diversified International Account Equity Income Account Income Account LargeCap Blend Account II LargeCap Growth Account MidCap Blend Account MidCap Stock Account Money Market Account Mortgage Securities Account Principal Capital Appreciation Account		Real Estate Securities Account XXX Balanced Portfolio XXX Conservative Balanced Portfolio XXX Conservative Growth Portfolio XXX Flexible Income Portfolio XXX Strategic Growth Portfolio Short-Term Income Account SmallCap Growth Account II SmallCap Value Account I