SECOND AMENDMENT TO THE PRINCIPAL VARIABLE CONTRACTS FUND, INC. MANAGEMENT AGREEMENT

                             SECOND AMENDMENT TO THE
                     PRINCIPAL VARIABLE CONTRACTS FUND, INC.
                              MANAGEMENT AGREEMENT


The  Management  Agreement  executed and entered  into by and between  Principal
Variable Contracts Fund, Inc., a Maryland corporation,  and Principal Management
Corporation,  an Iowa  corporation,  on the 1st day of  July,  1997,  is  hereby
amended to including the following:

                                   SCHEDULE 12
                                 Management Fees
                                Blue Chip Account

         Average Daily Net                           Fee as a Percentage of
         Assets of the Fund                          Average Daily Net Assets
         ------------------                          ------------------------
         First $250 Million                                   0.60%
         Next $250 Million                                    0.55%
         Next $250 Million                                    0.50%
         Next $250 Million                                    0.45%
         Thereafter                                           0.40%

                                   SCHEDULE 13
                                 Management Fees
                             LargeCap Growth Account

         Average Daily Net                          Fee as a Percentage of
         Assets of the Fund                         Average Daily Net Assets
         ------------------                         ------------------------
         First $250 Million                                  1.10%
         Next $250 Million                                   1.05%
         Next $250 Million                                   1.00%
         Next $250 Million                                   0.95%
         Thereafter                                          0.90%

                                   SCHEDULE 14
                                 Management Fees
                              MidCap Value Account

         Average Daily Net                          Fee as a Percentage of
         Assets of the Fund                         Average Daily Net Assets
         ------------------                         ------------------------
         First $250 Million                                  1.05%
         Next $250 Million                                   1.00%
         Next $250 Million                                   0.95%
         Next $250 Million                                   0.90%
         Thereafter                                          0.85%

                                   SCHEDULE 15

                                 Management Fees
                             Stock Index 500 Account

         Average Daily Net                           Fee as a Percentage of
         Assets of the Fund                         Average Daily Net Assets
         ------------------                         ------------------------
                  Overall Fee                               0.35%


Executed this 17th day of March, 1999

Principal Management Corporation         Principal Variable Contracts Fund, Inc.

    /s/ Xxxxxx X. Xxxxxx                    /s/ A. S. Filean
by:________________________________      by:________________________________