PRINCIPAL VARIABLE CONTRACTS FUNDS INC. AMENDED AND RESTATED SUB-ADVISORY AGREEMENT PRINCIPAL GLOBAL INVESTORS SUB-ADVISED ACCOUNTS

PRINCIPAL VARIABLE CONTRACTS FUNDS INC. 

AMENDED AND RESTATED SUB-ADVISORY AGREEMENT 

PRINCIPAL GLOBAL INVESTORS SUB-ADVISED ACCOUNTS 

AGREEMENT executed as of July 1, 2009, by and between PRINCIPAL MANAGEMENT CORPORATION (hereinafter called "the Manager"), and PRINCIPAL GLOBAL INVESTORS, LLC (hereinafter called "the Sub-Advisor").

W I T N E S S E T H:

WHEREAS, the Manager is the manager and investment adviser to each Account of Principal Variable Contracts Funds, Inc., (the "Fund"), an open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"); and

WHEREAS, the Manager desires to retain the Sub-Advisor to furnish it with portfolio selection and related research and statistical services in connection with the investment advisory services for each Account of the Fund identified in Appendix A hereto (hereinafter called “Account”), which the Manager has agreed to provide to the Fund, and the Sub-Advisor desires to furnish such services; and

WHEREAS, The Manager has furnished the Sub-Advisor with copies properly certified or authenticated of each of the following and will promptly provide the Sub-Advisor with copies properly certified or authenticated of any amendment or supplement thereto:

(a)	Management Agreement (the "Management Agreement") with the Fund;
(b)	The Fund's registration statement and financial statements as filed with the Securities and Exchange
	Commission; and
(c)	Policies, procedures or instructions adopted or approved by the Board of Directors of the Fund relating to
	obligations and services to be provided by the Sub-Advisor.

NOW, THEREFORE, in consideration of the premises and the terms and conditions hereinafter set forth, the parties agree as follows:

1.	Appointment of Sub-Advisor
	In accordance with and subject to the Management Agreement, the Manager hereby appoints the
	Sub-Advisor to perform the services described in Section 2 below for investment and reinvestment of the
	securities and other assets of each Account, subject to the control and direction of the Manager and the
	Fund's Board of Directors, for the period and on the terms hereinafter set forth. The Sub-Advisor accepts
	such appointment and agrees to furnish the services hereinafter set forth for the compensation herein
	provided. The Sub-Advisor shall for all purposes herein be deemed to be an independent contractor and
	shall, except as expressly provided or authorized, have no authority to act for or represent the Fund or the
	Manager in any way or otherwise be deemed an agent of the Fund or the Manager.
2.	Obligations of and Services to be Provided by the Sub-Advisor
	The Sub-Advisor will:
	(a)	Provide investment advisory services, including but not limited to research, advice and supervision for
		each Account.
	(b)	Furnish to the Board of Directors of the Fund for approval (or any appropriate committee of such
		Board), and revise from time to time as conditions require, a recommended investment program for
		each Account consistent with each Account’s investment objective and policies.
	(c)	Implement the approved investment program by placing orders for the purchase and sale of
		securities without prior consultation with the Manager and without regard to the length of time the
		securities have been held, the resulting rate of portfolio turnover or any tax considerations, subject
		always to the provisions of the Fund's registration statement, Articles of Incorporation and Bylaws and
		the requirements of the 1940 Act, as each of the same shall be from time to time in effect.

(d)	Advise and assist the officers of the Fund, as requested by the officers, in taking such steps as are
	necessary or appropriate to carry out the decisions of its Board of Directors, and any appropriate
	committees of such Board, regarding the general conduct of the investment business of each
	Account.
(e)	Maintain, in connection with the Sub-Advisor’s investment advisory services obligations, compliance
	with the 1940 Act and the regulations adopted by the Securities and Exchange Commission
	thereunder and the Account’s investment strategies and restrictions as stated in the Fund’s
	prospectus and statement of additional information.
(f)	Report to the Board of Directors of the Fund at such times and in such detail as the Board of
	Directors may reasonably deem appropriate in order to enable it to determine that the investment
	policies, procedures and approved investment program of each Account are being observed.
(g)	Upon request, provide assistance and recommendations for the determination of the fair value of
	certain securities when reliable market quotations are not readily available for purposes of calculating
	net asset value in accordance with procedures and methods established by the Fund's Board of
	Directors.
(h)	Furnish, at its own expense, (i) all necessary investment and management facilities, including salaries
	of clerical and other personnel required for it to execute its duties faithfully, and (ii) administrative
	facilities, including bookkeeping, clerical personnel and equipment necessary for the efficient conduct
	of the investment advisory affairs of each Account.
(i)	Open accounts with broker-dealers and futures commission merchants (“broker-dealers”), select
	broker-dealers to effect all transactions for each Account, place all necessary orders with
	broker-dealers or issuers (including affiliated broker-dealers), and negotiate commissions, if
	applicable. To the extent consistent with applicable law, purchase or sell orders for each Account may
	be aggregated with contemporaneous purchase or sell orders of other clients of the Sub-Advisor. In
	such event allocation of securities so sold or purchased, as well as the expenses incurred in the
	transaction, will be made by the Sub-Advisor in the manner the Sub-Advisor considers to be the most
	equitable and consistent with its fiduciary obligations to the Fund and to other clients. The Sub-
	Advisor will report on such allocations at the request of the Manager, the Fund or the Fund’s Board of
	Directors providing such information as the number of aggregated trades to which each Account was
	a party, the broker-dealers to whom such trades were directed and the basis for the allocation for the
	aggregated trades. The Sub-Advisor shall use its best efforts to obtain execution of transactions for
	each Account at prices which are advantageous to the Account and at commission rates that are
	reasonable in relation to the benefits received. However, the Sub-Advisor may select brokers or
	dealers on the basis that they provide brokerage, research or other services or products to the Sub-
	Advisor. To the extent consistent with applicable law, the Sub-Advisor may pay a broker or dealer an
	amount of commission for effecting a securities transaction in excess of the amount of commission or
	dealer spread another broker or dealer would have charged for effecting that transaction if the Sub-
	Advisor determines in good faith that such amount of commission is reasonable in relation to the
	value of the brokerage and research products and/or services provided by such broker or dealer. This
	determination, with respect to brokerage and research products and/or services, may be viewed in
	terms of either that particular transaction or the overall responsibilities which the Sub-Advisor and its
	affiliates have with respect to each Account as well as to accounts over which they exercise
	investment discretion. Not all such services or products need be used by the Sub-Advisor in
	managing the Account. In addition, joint repurchase or other accounts may not be utilized by the
	Account except to the extent permitted under any exemptive order obtained by the Sub-Advisor
	provided that all conditions of such order are complied with.
(j)	Maintain all accounts, books and records with respect to each Account as are required of an
	investment advisor of a registered investment company pursuant to the 1940 Act and Investment
	Advisers Act of 1940 (the “Investment Advisers Act”), and the rules thereunder, and furnish the Fund
	and the Manager with such periodic and special reports as the Fund or Manager may reasonably
	request. In compliance with the requirements of Rule 31a-3 under the 1940 Act, the Sub-Advisor
	hereby agrees that all records that it maintains for each Account are the property of the Fund, agrees
	to preserve for the periods described by Rule 31a-2 under the 1940 Act any records that it maintains
	for the Account and that are required to be maintained by Rule 31a-1 under the 1940 Act, and further
	agrees to surrender promptly to the Fund any records that it maintains for an Account upon request
	by the Fund or the Manager. The Sub-Advisor has no responsibility for the maintenance of Fund
	records except insofar as is directly related to the services the Sub-Advisor provides to an Account.

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(k)	Observe and comply with Rule 17j-1 under the 1940 Act and the Sub-Advisor’s Code of Ethics
	adopted pursuant to that Rule as the same may be amended from time to time. The Manager
	acknowledges receipt of a copy of Sub-Advisor’s current Code of Ethics. Sub-Advisor shall promptly
	forward to the Manager a copy of any material amendment to the Sub-Advisor’s Code of Ethics along
	with certification that the Sub-Advisor has implemented procedures for administering the Sub-
	Advisor’s Code of Ethics.
(l)	From time to time as the Manager or the Fund may request, furnish the requesting party reports on
	portfolio transactions and reports on investments held by an Account, all in such detail as the
	Manager or the Fund may reasonably request. The Sub-Advisor will make available its officers and
	employees to meet with the Fund’s Board of Directors at the Fund’s principal place of business on
	due notice to review the investments of an Account.
(m)	Provide such information as is customarily provided by a sub-advisor and may be required for the
	Fund or the Manager to comply with their respective obligations under applicable laws, including,
	without limitation, the Internal Revenue Code of 1986, as amended (the “Code”), the 1940 Act, the
	Investment Advisers Act, the Securities Act of 1933, as amended (the “Securities Act”), and any state
	securities laws, and any rule or regulation thereunder.
(n)	Vote proxies received on behalf of the Account in a manner consistent with Sub-Advisor's proxy
	voting policies and procedures and provide a record of votes cast containing all of the voting
	information required by Form N-PX in an electronic format to enable the Account to file Form N-PX as
	required by SEC rule.
(o)	Respond to tender offers, rights offerings and other voluntary corporate action requests affecting
	securities held by the Fund and complete and file notices of claims in connection with class action
	lawsuits concerning securities owned by the Fund.

3.	Prohibited Conduct
	In providing the services described in this agreement, the Sub-Advisor will not consult with any other
	investment advisory firm that provides investment advisory services to any investment company sponsored
	by Principal Life Insurance Company regarding transactions for the Fund in securities or other assets.
4.	Compensation
	As full compensation for all services rendered and obligations assumed by the Sub-Advisor hereunder with
	respect to each Account, the Manager shall pay the compensation specified in Appendix A to this
	Agreement.
5.	Liability of Sub-Advisor
	Neither the Sub-Advisor nor any of its directors, officers, employees, agents or affiliates shall be liable to
	the Manager, the Fund or its shareholders for any loss suffered by the Manager or the Fund resulting from
	any error of judgment made in the good faith exercise of the Sub-Advisor's investment discretion in
	connection with selecting investments for an Account or as a result of the failure by the Manager or any of
	its affiliates to comply with the terms of this Agreement, except for losses resulting from willful
	misfeasance, bad faith or gross negligence of, or from reckless disregard of, the duties of the Sub-Advisor
	or any of its directors, officers, employees, agents, or affiliates.
6.	Supplemental Arrangements
	The Sub-Advisor may enter into arrangements with other persons affiliated with the Sub-Advisor or with
	unaffiliated third parties to better enable the Sub-Advisor to fulfill its obligations under this Agreement for
	the provision of certain personnel and facilities to the Sub- Advisor, subject to written notification to and
	approval of the Manager and, where required by applicable law, the Board of Directors of the Fund.
7.	Regulation
	The Sub-Advisor shall submit to all regulatory and administrative bodies having jurisdiction over the
	services provided pursuant to this Agreement any information, reports or other material which any such
	body may request or require pursuant to applicable laws and regulations.

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8.	Duration and Termination of This Agreement
	This Agreement shall become effective on the latest of (i) the date of its execution, (ii) the date of its
	approval by a majority of the Board of Directors of the Fund, including approval by the vote of a majority of
	the Board of Directors of the Fund who are not interested persons of the Manager, the Sub-Advisor,
	Principal Life Insurance Company or the Fund cast in person at a meeting called for the purpose of voting
	on such approval or (iii) if required by the 1940 Act, the date of its approval by a majority of the outstanding
	voting securities of the Account. It shall continue in effect thereafter from year to year provided that the
	continuance is specifically approved at least annually either by the Board of Directors of the Fund or by a
	vote of a majority of the outstanding voting securities of the Account and in either event by a vote of a
	majority of the Board of Directors of the Fund who are not interested persons of the Manager, Principal Life
	Insurance Company, the Sub-Advisor or the Fund cast in person at a meeting called for the purpose of
	voting on such approval.
	If the shareholders of an Account fail to approve the Agreement or any continuance of the Agreement in
	accordance with the requirements of the 1940 Act, the Sub-Advisor will continue to act as Sub-Advisor with
	respect to the Account pending the required approval of the Agreement or its continuance or of any
	contract with the Sub-Advisor or a different manager or sub-advisor or other definitive action; provided, that
	the compensation received by the Sub-Advisor in respect to the Account during such period is in
	compliance with Rule 15a-4 under the 1940 Act.
	This Agreement may be terminated at any time without the payment of any penalty by the Board of
	Directors of the Fund or by the Sub-Advisor, the Manager or by vote of a majority of the outstanding voting
	securities of the Account on sixty days written notice. This Agreement shall automatically terminate in the
	event of its assignment. In interpreting the provisions of this Section 8, the definitions contained in Section
	2(a) of the 1940 Act (particularly the definitions of "interested person," "assignment" and "voting security")
	shall be applied.
9.	Amendment of this Agreement
	No material amendment of this Agreement shall be effective until approved, if required by the 1940 Act or
	the rules, regulations, interpretations or orders issued thereunder, by vote of the holders of a majority of the
	outstanding voting securities of the Account and by vote of a majority of the Board of Directors of the Fund
	who are not interested persons of the Manager, the Sub-Advisor, Principal Life Insurance Company or the
	Fund cast in person at a meeting called for the purpose of voting on such approval.
10. General Provisions
	(a)	Each party agrees to perform such further acts and execute such further documents as are necessary
		to effectuate the purposes hereof. This Agreement shall be construed and enforced in accordance with
		and governed by the laws of the State of Iowa. The captions in this Agreement are included for
		convenience only and in no way define or delimit any of the provisions hereof or otherwise affect their
		construction or effect.
	(b)	Any notice under this Agreement shall be in writing, addressed and delivered or mailed postage
		pre-paid to the other party at such address as such other party may designate for the receipt of
		such notices. Until further notice to the other party, it is agreed that the address of the Manager
		and the Sub-Advisor for this purpose shall be Principal Financial Group, Xxx Xxxxxx, Xxxx
		00000-0000.
	(c)	The Sub-Advisor will promptly notify the Manager in writing of the occurrence of any of the following
		events:
		(1)	the Sub-Advisor fails to be registered as an investment adviser under the Investment Advisers Act
			or under the laws of any jurisdiction in which the Sub-Advisor is required to be registered as an
			investment advisor in order to perform its obligations under this Agreement.
		(2)	the Sub-Advisor is served or otherwise receives notice of any action, suit, proceeding, inquiry or
			investigation, at law or in equity, before or by any court, public board or body, involving the affairs
			of an Account.

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(d)	The Manager shall provide (or cause the Account custodian to provide) timely information to the Sub-
	Advisor regarding such matters as the composition of the assets of an Account, cash requirements
	and cash available for investment in an Account, and all other reasonable information as may be
	necessary for the Sub-Advisor to perform its duties and responsibilities hereunder.
(e)	This Agreement contains the entire understanding and agreement of the parties.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date first above written.

PRINCIPAL MANAGEMENT CORPORATION 

By  /s/ Xxxxxxx X. Beer

         Xxxxxxx X. Beer, Executive Vice President and Chief 

         Operating Officer 

PRINCIPAL GLOBAL INVESTORS, LLC 

By /s/ Xxxxxxx X XxXxxxxx

     X. X. XxXxxxxx, Chief Operating Officer and 

     Chief Compliance Officer 

APPENDIX A

PGI shall serve as investment sub-advisor for each Account identified below. The Manager will pay PGI, as full compensation for all services provided under this Agreement, a fee, computed and paid monthly, at an annual rate as shown below of the Account’s net assets as of the first day of each month allocated to PGI’s management.

In calculating the fee for an Account included in Table A, assets of all other Accounts included in Table A as well as assets of any unregistered separate account of Principal Life Insurance Company and any investment company sponsored by Principal Life Insurance Company to which PGI provides investment advisory services and which invests primarily in fixed-income securities (except money market separate accounts or investment companies, and excluding assets of all such separate accounts or investment companies for which advisory services are provided directly or indirectly by employees of Post Advisory Group, LLC) , will be combined with the assets of the Account to arrive at net assets.

In calculating the fee for an Account included in Table B, assets of any unregistered separate account of Principal Life Insurance Company and any investment company sponsored by Principal Life Insurance Company to which PGI provides investment advisory services and which have the same investment mandate (e.g. MidCap Value) as the Account for which the fee is calculated, will be combined with the assets of the Account to arrive at net assets.

The fee for assets of any fund for which advisory services are provided directly or indirectly by employees of Post Advisory Group, LLC is equal to an annual rate of 0.2937% of the portion of the net assets of such fund with regard to which employees of Post Advisory Group, LLC provide investment advisory services.

If this Agreement becomes effective or terminates before the end of any month, the fee (if any) for the period from the effective date to the end of such month or from the beginning of such month to the date of termination, as the case may be, shall be prorated according to the proportion which such period bears to the full month in which such effectiveness or termination occurs.

Table A
Net Asset Value of Account
	First	Next	Next	Over
Account	$5 billion	$1 billion	$4 billion	$10 billion
Balanced Account, Bond &
Mortgage Securities Account,
Government & High Quality Bond
Account
and Short-Term Bond Account	0.1126%	0.0979%	0.0930%	0.0881%

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Table B
Net Asset Value of Account
	First	Next	Next	Next	Next	Next	Over
Account	$50 million	$50 million	$100 million	$200 million	$350 million	$750 million	$1.5 billion
LargeCap Value Account
and Equity Income Account	0.2643%	0.2448%	0.2154%	0.1762%	0.1273%	0.0881%	0.0587%
Diversified International Account	0.3427%	0.2741%	0.1958%	0.1566%	0.1175%	0.0979%	0.0783%

Net Asset Value of Account
	First	Next	Next	Next	Next	Next	Over
Account	$25 million	$75 million	$100 million	$300 million	$500 million	$500 million	$1.5 billion
MidCap Blend Account	0.3916%	0.3133%	0.2643%	0.2252%	0.1762%	0.1273%	0.0783%
SmallCap Blend Account	0.4699%	0.3524%	0.2643%	0.2448%	0.2154%	0.1762%	0.1175%

Table C
	Sub-Advisor
Account	Percentage Fee
International Emerging Markets Account	0.4895%
International SmallCap Account	0.4895%
LargeCap S&P 500 Index Account	0.0147%
Money Market Account	0.0734%
Principal LifeTime 2010 Account	0.03%
Principal LifeTime 2020 Account	0.03%
Principal LifeTime 2030 Account	0.03%
Principal LifeTime 2040 Account	0.03%
Principal LifeTime 2050 Account	0.03%
Principal LifeTime Strategic Income Account	0.03%

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