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                                                                    EXHIBIT 10.1

                         PRINCIPAL FINANCIAL GROUP, INC.
                              STOCK INCENTIVE PLAN

                                   SECTION 1.
                                     PURPOSE

     The purpose of the "PRINCIPAL FINANCIAL GROUP, INC. STOCK INCENTIVE PLAN"
(the "Plan") is to foster and promote the long-term financial success of the
Company and its subsidiaries and materially increase shareholder value by (a)
motivating superior performance by means of performance-related incentives, (b)
encouraging and providing for the acquisition of an ownership interest in the
Company by the Company's and its Subsidiaries' employees and agents, and (c)
enabling the Company to attract and retain the services of outstanding employees
upon whose judgment, interest, and special effort the successful conduct of its
operations is largely dependent.

                                   SECTION 2.
                                   DEFINITIONS

     (a)  Definitions. Whenever used herein, the following terms shall have the
respective meanings set forth below:

          (1)  "Act" means the Securities Exchange Act of 1934, as amended.

          (2)  "Agent" means each insurance agent (whether or not a statutory
     employee) and each other individual providing personal service to the
     Company or any Subsidiary who, in either case, is not an Employee.

          (3)  "Agents Savings Plan" means The Principal Select Savings Plan
     for Individual Field.

          (4)  "Approved Retirement" means termination of a Participant's
     employment or service (i) on or after the normal retirement date or any
     early retirement date established under any defined benefit pension plan
     maintained by the Company or a Subsidiary and in which the Participant
     participates or (ii) with the approval of the Committee (which may be given
     at or after grant), on or after attaining age 50 and completing such period
     of service as the Committee shall determine from time to time.

          (5)  "Award" means an Option, SAR, award of Restricted Stock or an
     award of Restricted Stock Units.

          (6)  "Beneficial Owner" means such term as defined in Rule 13d-3
     under the Exchange Act.

          (7)  "Board" means the Board of Directors of the Company.

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          (8)  "Cause" means (i) dishonesty, fraud or misrepresentation, (ii)
     the Participant's engaging in conduct that is injurious to the Company or
     any Subsidiary in any way, including, but not limited to, by way of damage
     to its reputation or standing in the industry, (iii) the Participant's
     having been convicted of, or entered a plea of nolo contendere to, a crime
     that constitutes a felony; (iv) the breach by the Participant of any
     written covenant or agreement with the Company or any Subsidiary not to
     disclose or misuse any information pertaining to, or misuse any property
     of, the Company or any Subsidiary or not to compete or interfere with the
     Company or any Subsidiary or (v) a violation by the Participant of any
     policy of the Company or any Subsidiary.

          (9)  "Change of Control" means the occurrence of any one or more of
     the following:

               (i)  any SEC Person becomes the Beneficial Owner of 25% or more
          of the Common Stock or of Voting Securities representing 25% or more
          of the combined voting power of all Voting Securities of the Company
          (such an SEC Person, a "25% Owner"); or

               (ii) the Incumbent Directors cease for any reason to constitute
          at least a majority of the Board (other than in connection with a
          Merger of Equals); or

               (iii) consummation of a merger, reorganization, consolidation, or
          similar transaction (any of the foregoing, a "Reorganization
          Transaction") other than a Reorganization Transaction (x) following
          which the Continuity of Ownership is more than 60% or (y) which is
          (and continues to qualify as) a Merger of Equals; or

               (iv) approval by the stockholders of the Company of a plan or
          agreement for the sale or other disposition of all or substantially
          all of the consolidated assets of the Company or a plan of liquidation
          of the Company; or

               (v)  any other event or circumstance (or series of events or
          circumstances) that the Board shall determine to constitute a Change
          of Control.

     Notwithstanding the foregoing, a Change of Control shall not occur merely
     as a result of (i) the conversion of Mutual from a mutual insurance holding
     company to a stock company or (ii) an underwritten initial public offering
     of the Common Stock, unless, immediately following such conversion or such
     initial public offering, any SEC Person is a 25% Owner.

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          (10) "Change of Control Price" means the highest price per share of
     Common Stock offered in conjunction with any transaction resulting in a
     Change of Control (as determined in good faith by the Committee if any part
     of the offered price is payable other than in cash) or, in the case of a
     Change of Control occurring solely by reason of a change in the composition
     of the Board, the highest Fair Market Value of the Common Stock on any of
     the 30 trading days immediately preceding the date on which a Change of
     Control occurs.

          (11) "Code" means the Internal Revenue Code of 1986, as amended.

          (12) "Committee" means the Human Resources Committee of the Board or
     such other committee of the Board as the Board shall designate from time to
     time, which committee shall consist of two or more Non-Employee Directors
     (within the meaning of Rule 16b-3 as promulgated under the Exchange Act).

          (13) "Common Stock" means the common stock of the Company, par value
     $0.01 per share.

          (14) "Company" means Principal Financial Group, Inc., a Delaware
     corporation, and any successor thereto.

          (15) "Company Stock Plan" means any stock option plan, stock incentive
     plan, stock purchase plan and share ownership plans related to the Common
     Stock that are customary for publicly traded companies, and shall include
     the Directors Stock Plan, the Long-Term Plan, the Plan, the Savings Plans
     and the Stock Purchase Plan.

          (16) "Continuity of Ownership" of a stated percentage means that the
     SEC Persons who were the direct or indirect owners of the outstanding
     Common Stock and Voting Securities of the Company immediately before such
     Reorganization Transaction became, immediately after the consummation of
     such Reorganization Transaction, the direct or indirect owners of both the
     stated percentage of the then-outstanding common stock of the Surviving
     Corporation and Voting Securities representing the stated percentage of the
     combined voting power of the then-outstanding Voting Securities of the
     Surviving Corporation, in substantially the same respective proportions as
     such Persons' ownership of the Common Stock and Voting Securities of the
     Company immediately before such Reorganization Transaction.

          (17) "Directors Stock Plan" means the Principal Financial Group, Inc.
     Directors Stock Plan.

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          (18) "Disability" means, with respect to any Participant, long-term
     disability as defined under any long-term disability plan maintained by the
     Company or a Subsidiary in which the Participant participates. In the event
     of any question as to whether a Participant has a Disability, the plan
     administrator of the relevant long-term disability plan shall determine
     whether a disability exists, in accordance with such plan.

          (19) "Domestic Partner" means any person qualifying to be treated as a
     domestic partner of a Participant under the applicable policies, if any, of
     the Company or Subsidiary which employs the Participant.

          (20) "Employee" means any employee (including each officer) of the
     Company or any Subsidiary.

          (21) "Employees Savings Plan" means the Principal Select Savings
     Plan for Employees.

          (22) "Excess Plan" means the Principal Select Savings Excess Plan and
     the Non-Qualified Defined Contribution Plan for Designated Participants.

          (23) "Exchange Act" means the Securities Exchange Act of 1934, as
     amended.

          (24) "Executive Officer" means any officer of the Company or any
     Subsidiary who is subject to the reporting requirements under Section 16(b)
     of the Exchange Act.

          (25) "Fair Market Value" means, on any date, the price of the last
     trade, regular way, in the Common Stock on such date on the New York Stock
     Exchange or, if at the relevant time, the Common Stock is not listed to
     trade on the New York Stock Exchange, on such other recognized quotation
     system on which the trading prices of the Common Stock are then quoted (the
     "applicable exchange"); provided, however, that the Fair Market Value of
     the Common Stock on the first date that the Common Stock is offered for
     sale to the public through an underwritten public offering shall be the
     price at which the Common Stock is sold in such offering. In the event that
     (i) there are no Common Stock transactions on the applicable exchange on
     any relevant date, Fair Market Value for such date shall mean the closing
     price on the immediately preceding date on which Common Stock transactions
     were so reported and (ii) the applicable exchange adopts a trading policy
     permitting trades after 5 P.M. Eastern Standard Time ("EST"), Fair Market
     Value shall mean the last trade, regular way, reported on or before 5 P.M.
     EST (or such earlier or later time as the Committee may establish from time
     to time).

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          (26) "Family Member" means, as to a Participant, any (i) child,
     stepchild, grandchild, parent, stepparent, grandparent, spouse,
     mother-in-law, father-in-law, son-in-law or daughter-in-law (including
     adoptive relationships), or Domestic Partner of such Participant, (ii)
     trusts for the exclusive benefit of one or more such persons and/or the
     Participant and (iii) other entity owned solely by one or more such persons
     and/or the Participant.

          (27) "Imminent Control Change Period" means the period commencing on
     the date any one or more of the following events occurs (or the first of
     such events in a series of such events) and ending on the date on which a
     Change of Control or a Merger of Equals occurs:

               (i) The Company enters into an agreement the consummation of
          which would constitute a Change of Control;

               (ii) Any SEC Person attempts to become a 25% Owner, as evidenced
          by filing or other certification of notice of such intent with any
          state's governmental agency established to regulate the insurance
          industry, which, if consummated, would constitute a Change of Control;

               (iii) Any SEC Person commences a "tender offer" (as such term is
          used in Section 14(d) of the Exchange Act) or exchange offer, which,
          if consummated, would result in a Change of Control; or

               (iv) Any SEC Person files with the SEC a preliminary or
          definitive proxy solicitation or election contest to elect or remove
          one or more members of the Board, which, if consummated or effected,
          would result in a Change of Control;

     provided, however, that an Imminent Control Change Period will lapse upon
     the occurrence of any of the following:

               a) With respect to an event described in clause (i) of this
               definition, the date such agreement is terminated, cancelled or
               expires without a Change of Control or Merger of Equals
               occurring;

               b) With respect to an event described in clause (ii) of this
               definition, the date such filing or other certification is
               withdrawn, expires or is denied or otherwise rejected by the
               relevant state regulators without a Change of Control or Merger
               of Equals occurring;

               c) With respect to an event described in clause (iii) of this
               definition, the date such tender offer or exchange offer is
               withdrawn or terminates without a Change of Control or Merger of
               Equals occurring;

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               d) With respect to an event described in clause (iv) of this
               definition, (1) the date the validity of such proxy solicitation
               or election contest expires under relevant state corporate law,
               or (2) the date such proxy solicitation or election contest
               culminates in a stockholder vote, in either case without a Change
               of Control or Merger of Equals occurring; or

               e) The date a majority of the Incumbent Directors makes a good
               faith determination that any event or condition described in
               clause (i), (ii), (iii) or (iv) of this definition is no longer
               likely to result in a Change of Control, provided that such
               determination may not be made prior to the six (6) month
               anniversary of the occurrence of such event.

     Notwithstanding the foregoing, an Imminent Control Change Period shall not
     commence merely as a result of (A) planning, or filing or certifying an
     intent with any state's governmental agency established to regulate the
     insurance industry of a plan of reorganization of Mutual, or (B) the
     planned underwritten initial public offering of Common Stock, so long as
     such initial public offering is not expected to result in any SEC Person
     becoming a 25% Owner.

          (28) "Incentive Stock Option" (ISO) means an option within the meaning
     of Section 422 of the Code.

          (29) "Incumbent Directors" means, as of any date, the individuals then
     serving as members of the Board who were also members of the Board as of
     the date two years prior to the date of determination; provided that any
     member appointed or elected as a member of the Board after such prior date,
     but whose election, or nomination for election, was approved by a vote or
     written consent of at least a majority of the directors then comprising the
     Incumbent Directors shall also be considered an Incumbent Director unless
     such person's election, or nominated for election, to the Board was as a
     result of, or in connection with, a proxy contest or a Reorganization
     Transaction.

          (30) "Initial Public Offering" means the first underwritten offering
     of Common Stock to the public.

          (31) "Long-Term Plan" means the Principal Financial Group Long- Term
     Performance Plan.

          (32) "Merger of Equals" means the occurrence of a Reorganization
     Transaction that satisfies all of the following:

               (i) the consummation of such Reorganization Transaction results
          in Continuity of Ownership of at least 40%, but not more than 60%; and

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               (ii) an SEC Person does not become a 25% Owner as a result of
          such Reorganization Transaction; and

               (iii) throughout the period beginning on the effective date of
          the event and ending on the second anniversary of such effective date,
          the Incumbent Directors continue to constitute not less than

               a) a majority of the Board, if subclause (i) of this definition
               is satisfied because the Reorganization Transaction resulted in
               Continuity of Ownership of at least 50%, but not more than 60%;
               or

               b) one (1) member less than a majority of the Board, if subclause
               (i) of this definition is satisfied because the Reorganization
               Transaction resulted in Continuity of Ownership of at least 40%,
               but less than 50%; and

               (iv) the person who was the Chief Executive Officer of the
          Company immediately prior to the first to occur of (x) the day prior
          to the beginning of the Imminent Control Change Period or (y) the day
          prior to the effective date of the Reorganization Transaction shall
          serve as the Chief Executive Officer of the Surviving Corporation at
          all times during the period commencing on the effective date of the
          Reorganization Transaction and ending on the first anniversary
          thereof, provided that this condition shall not fail to be satisfied
          due to the death or Disability of the Chief Executive Officer;

     provided, however, that a Reorganization Transaction shall cease to be
     considered a Merger of Equals (and shall instead be treated as a Change of
     Control) from and after the first date:

               a) during the two year period following the date as of which such
               Reorganization Transaction occurs that any of the conditions of
               any of clause (b), (c) or (d) of this definition shall not be
               satisfied; or

               b) prior to the first anniversary of the effective date of the
               Reorganization Transaction, the Company shall make a filing with
               the Securities and Exchange Commission, issue a press release, or
               make a public announcement to the effect that the Surviving
               Corporation is seeking or intends to seek a replacement for its
               Chief Executive Officer (other than due to the death or
               Disability of such person), whether such replacement is to become
               effective before or after such first anniversary.

          (33) "Mutual" means Principal Mutual Holding Company, an Iowa mutual
     insurance holding company and any successor thereto.

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          (34) "Nonstatutory Stock Option" (NSO) means an option which is not an
     Incentive Stock Option within the meaning of Section 422 of the Code.

          (35) "Option" means the right to purchase Common Stock at a stated
     price for a specified period of time. For purposes of the Plan, an Option
     may be either (i) an "Incentive Stock Option" (ISO) within the meaning of
     Section 422 of the Code or (ii) an option which is not an Incentive Stock
     Option (a "Nonstatutory Stock Option" (NSO)).

          (36) "Participant" means any Employee or Agent designated by the
     affirmative action of the Committee (or its delegate) to participate in the
     Plan.

          (37) "Period of Restriction" means the period specified by the
     Committee or established pursuant to the Plan during which a Restricted
     Stock award is subject to forfeiture.

          (38) "Plan of Conversion" means the Plan of Conversion of Mutual.

          (39) "Reorganization Transaction" shall have the meaning ascribed
     thereto in the definition of Change of Control.

          (40) "Restricted Stock" means an award of Stock made pursuant to
     Section 6 that is forfeitable by the Participant until the completion of a
     specified period of future service, the achievement of pre-established
     performance objectives or until otherwise determined by the Committee or in
     accordance with the terms of the Plan.

          (41) "Restricted Stock Unit" means a contractual right awarded
     pursuant to Section 6 that entitled the holder to receive shares of Common
     Stock (or the value thereof in cash) upon the completion of a specified
     period of future service or the achievement of pre-established performance
     objectives or at such other time or times determined by the Committee or in
     accordance with the terms of the Plan.

          (42) "SAR" means a stock appreciation right granted under Section 7 of
     the Plan in respect of one or more shares of Common Stock that entitles the
     holder thereof to receive, in cash or Common Stock, at the discretion of
     the Committee (which discretion may be exercised at or after grant,
     including after exercise of the SAR), an amount per share of Common Stock
     equal to the excess, if any, of the Fair Market Value on the date the SAR
     is exercised over the Fair Market Value on the date the SAR is granted.

          (43) "Savings Plans" means the Employees Savings Plan, the Agents
     Savings Plan and the Excess Plan.

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          (44) "SEC Person" means any person (as such term is defined in
     Section 3(a)(9) of the Exchange Act) or group (as such term is used in Rule
     13d-5 under the Exchange Act), other than an affiliate or any employee
     benefit plan (or any related trust) of the Company or any of its
     affiliates.

          (45) "Stock Purchase Plan" means the Principal Financial Group, Inc.
     Employee Stock Purchase Plan.

          (46) "Subsidiary" means (i) any corporation in which the Company owns,
     directly or indirectly, at least 50% of the total combined voting power of
     all classes of stock of such corporation, (ii) any partnership or limited
     liability company in which the Company owns, directly or indirectly, at
     least 50% of the capital interests or profits interest of such partnership
     or limited liability company and (iii) any other business entity in which
     the Company owns at least 50% of the equity interests thereof, provided
     that, in any such case, the Company is in effective control of such
     corporation, partnership, limited liability company or other entity.

          (47) "Surviving Corporation" means the corporation resulting from a
     Reorganization Transaction or, if securities representing at least 50% of
     the aggregate voting power of such resulting corporation are directly or
     indirectly owned by another corporation, such other corporation.

          (48) "25% Owner" shall have the meaning ascribed thereto in the
     definition of Change of Control.

          (49) "Voting Securities" means, with respect to any corporation,
     securities of such corporation that are entitled to vote generally in the
     election of directors of such corporation.

                                   SECTION 3.
                           POWERS OF THE COMMITTEE

     (a) Power to Grant. The Committee shall determine those Employees and/or
Agents to whom an Award shall be granted and the terms and conditions of any and
all such Awards. The Committee may establish different terms and conditions for
different Awards and different Participants and for the same Participant for
each Award such Participant may receive, whether or not granted at different
times.

     (b) Administration.

          (1)  Rules, Interpretations and Determinations. The Plan shall be
     administered by the Committee. The Committee shall have full authority to
     interpret and administer the Plan, to establish, amend, and rescind rules
     and regulations relating to the Plan, to provide for conditions deemed
     necessary or advisable to protect the interests of the Company, to construe
     the respective Award agreements and to make all other determinations
     necessary or advisable for the administration and interpretation of the
     Plan in order to carry out its

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     provisions and purposes. Determinations, interpretations, or other actions
     made or taken by the Committee shall be final, binding, and conclusive for
     all purposes and upon all persons.

          (2) Agents and Expenses. The Committee may appoint agents (who may be
     officers or employees of the Company) to assist in the administration of
     the Plan and may grant authority to such persons to execute agreements or
     other documents on its behalf. All expenses incurred in the administration
     of the Plan, including, without limitation, for the engagement of any
     counsel, consultant or agent, shall be paid by the Company.

          (3) Delegation of Authority. The Committee may delegate to the
     Company's Chief Executive Officer the power and authority to make and/or
     administer Awards under the Plan with respect to individuals who are below
     the position of Senior Vice President (or any analogous title), pursuant to
     such conditions and limitations as the Committee may establish; provided
     that only the Committee or the Board may select, and grant Awards to,
     Executive Officers or exercise any other discretionary authority under the
     Plan in respect of Awards granted to such Executive Officers.

     (c)  Certain Rules Relating to Grants and Actions.

          (1)  Maximum Individual Grants. During any three year period, no
     individual Participant may be granted Awards in respect of more than 10% of
     the total shares available under the Plan; provided that, to the extent
     that SARs are granted in tandem with an Option, so that only one may be
     exercised with the other terminating upon such exercise, the number of
     shares of Common Stock subject to such tandem Option and SAR award shall
     only be taken into account once (and not as to both awards) for purposes of
     this limit.

          (2)  Broad Based Grants. Notwithstanding anything else to the contrary
     contained herein, the Committee may authorize the grant of Nonstatutory
     Stock Options to a broad based group of Employees and/or Agents, including
     all Employees and/or Agents or all Employees and/or Agents in one or more
     classes (any such broad based grant of Nonstatutory Stock Options, a "Broad
     Based Grant"). Unless the Committee shall otherwise determine, any such
     Broad Based Grant shall be made on terms and conditions that are
     substantially the same for all Employees and/or Agents (or all Employees or
     Agents in a specified classification of Employees or Agents) receiving such
     grant.

          (3) Limitations in Plan of Conversion. Notwithstanding anything else
     contained in the Plan to the contrary, no action shall be taken, and no
     Award or distribution shall be made, under the Plan which contains any term
     or condition that would violate any provision of the Plan of Conversion.

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                                   SECTION 4.
                        COMMON STOCK SUBJECT TO PLAN

     (a) Number. Subject to Section 4(c) below, during the five year period
immediately following the effective date of the Plan of Conversion (or such
longer period as the shares initially authorized for issuance hereunder remain
available for grants hereunder), unless the shareholders of the Company approve
an increase in such number by a shareholder vote, the maximum number of shares
of Common Stock that may be made issuable or distributable under all Company
Stock Plans (including, without limitation, the Plan) other than the Employees
Savings Plan, the Agents Savings Plan and the Stock Purchase Plan is 6% of the
number of shares outstanding immediately following the effective date of the
Plan of Conversion. Without limiting the generality of the foregoing, the
maximum number of shares as to which Incentive Stock Options may be granted
shall not exceed 10 million shares. When a SAR is granted in tandem with an
Option, so that only one may be exercised with the other terminating upon such
exercise, the number of shares of Common Stock subject to the tandem Option and
SAR award shall only be taken into account once (and not as to both awards) for
purposes of this limit (and for purposes of the provisions of Section 4(b)
below). The shares to be delivered under the Plan may consist, in whole or in
part, of treasury Common Stock or authorized but unissued Common Stock, not
reserved for any other purpose.

     (b) Canceled or Terminated Awards. Any shares of Common Stock subject to an
Award which for any reason expires without having been exercised, is canceled or
terminated or otherwise is settled without the issuance of any Common Stock
(including, but not limited to, shares tendered to exercise outstanding Options
or shares tendered or withheld for taxes) shall again be available for grant
under the Plan. Notwithstanding the foregoing, in the event that any SARs are
paid out in shares of Common Stock, the number of shares of Common Stock as to
which such SARs have been exercised (and not just the number of shares actually
issued) shall be deemed issued for purposes of determining the limit under
Section 4(a) above and shall not again be available for issuance pursuant to
this Section 4(b).

     (c) Adjustment Due to Change in Capitalization. In the event of any Common
Stock dividend or Common Stock split, recapitalization (including, but not
limited, to the payment of an extraordinary dividend to the stockholders of the
Company), merger, consolidation, combination, spin-off, distribution of assets
to stockholders (other than ordinary cash dividends), exchange of shares, or
other similar corporate change, the aggregate number of shares of Common Stock
available for grant under Section 4(a) or subject to outstanding Awards and the
respective exercise prices or base prices, if any, applicable to outstanding
Awards may be appropriately adjusted by the Committee, in its discretion, and
the Committee's determination shall be conclusive.

                                   SECTION 5.
                                  STOCK OPTIONS

     (a)  Grant of Options. Subject to the provisions of Section 3(c) and
Section 4 above, Options may be granted to Participants at such time or times as
shall be

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determined by the Committee. Options granted under the Plan may be of two types:
(i) Incentive Stock Options and (ii) Nonstatutory Stock Options. Except as
otherwise provided herein, the Committee shall have complete discretion in
determining the number of Options, if any, to be granted to a Participant,
except that Incentive Stock Options may only be granted to Employees. Each
Option grant shall be evidenced by an Option agreement that shall specify the
type of Option granted, the exercise price, the duration of the Option, the
number of shares of Common Stock to which the Option pertains, and such other
terms and conditions as the Committee shall determine which are not inconsistent
with the provisions of the Plan.

     (b)  Exercise Price. Nonstatutory Stock Options and Incentive Stock Options
granted pursuant to the Plan shall have an exercise price no less than the Fair
Market Value of a share of Common Stock on the date on which the Option is
granted, except that the exercise price of any Option granted to take effect at
the time of an underwritten public offering of the Common Stock shall be the
price at which such shares are offered for sale thereunder.

     (c)  Exercise of Options. Unless the Committee shall impose a different
schedule requiring a longer or shorter period of service to exercise in full any
Option granted hereunder and subject to Section 3(c)(3) hereof, one-third of
each Nonstatutory Stock Option or Incentive Stock Option granted pursuant to the
Plan shall become exercisable on each of the first three (3) anniversaries of
the date such Option is granted; provided, however, that each Nonstatutory Stock
Option granted pursuant to the Plan in a Broad Based Grant shall become
exercisable on the third (3(rd)) anniversary of the date such Option is granted
and not before such time; and provided further that the Committee may establish
performance-based criteria for exercisability that can accelerate the
exercisability of all or any portion of any Option. Subject to the provisions of
this Section 5, once any portion of any Option has become exercisable it shall
remain exercisable for its full term. The Committee shall determine the term of
each Nonstatutory Stock Option or Incentive Stock Option granted, but, except as
expressly provided below, in no event shall any such Option be exercisable for
more than ten (10) years after the date on which it is granted.

     (d)  Payment. The Committee shall establish procedures governing the
exercise of Options. No shares shall be delivered pursuant to any exercise of an
Option unless arrangements satisfactory to the Committee have been made to
assure full payment of the exercise price therefor. Without limiting the
generality of the foregoing, payment of the exercise price may be made (i) in
cash or its equivalent, (ii) by exchanging shares of Common Stock (which are not
the subject of any pledge or other security interest) which have been owned by
the person exercising the Option for at least six (6) months at the time of
exercise, (iii) by any combination of the foregoing; provided that the combined
value of all cash and cash equivalents paid and the Fair Market Value of any
such Common Stock so tendered to the Company, valued as of the date of such
tender, is at least equal to such exercise price or (iv) through an arrangement
with a broker approved by the Company whereby payment of the exercise price is
accomplished with the proceeds of the sale of Common Stock.

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     (e)  Incentive Stock Options. Notwithstanding anything in the Plan to the
contrary, no Option that is intended to be an Incentive Stock Option may be
granted after the tenth (10th) anniversary of the effective date of the Plan and
no term of this Plan relating to Incentive Stock Options shall be interpreted,
amended or altered, nor shall any discretion or authority granted under the Plan
be so exercised, so as to disqualify the Plan under Section 422 of the Code, or,
without the consent of any Participant affected thereby, to disqualify any
Incentive Stock Option under such Section 422.

     (f)  Termination of Employment or Service.

          (1) Due to Death. In the event a Participant's employment or service
     terminates by reason of death, any Options granted to such Participant
     shall become immediately exercisable in full and may be exercised by the
     Participant's designated beneficiary or, if none is named, by the person
     determined in accordance with Section 10(b) below, at any time prior to the
     earlier to occur of (i) the expiration of the term of the Options or (ii)
     the third (3rd) anniversary (or such earlier date as the Committee shall
     determine at the time of grant) of the Participant's death.

          (2) Due to Disability. In the event a Participant's employment or
     service is terminated by reason of Disability, any Options granted to such
     Participant shall become immediately exercisable in full and may be
     exercised by the Participant (or, in the event of the Participant's death
     after termination of employment or service when the Option is exercisable
     pursuant to its terms, by the Participant's designated beneficiary or, if
     none is named, by the person determined in accordance with Section 10(b)
     below), at any time prior to the earlier to occur of (i) the expiration of
     the term of the Options or (ii) the third (3rd) anniversary (or such
     earlier date as the Committee shall determine at the time of grant) of the
     Participant's termination of employment or service.

          (3) Approved Retirement. In the event a Participant's employment or
     service terminates by reason of Approved Retirement, any Options granted to
     such Participant shall become immediately exercisable in full and may be
     exercised by the Participant (or, in the event of the Participant's death
     after termination of employment or service when the Option is exercisable
     pursuant to its terms, by the Participant's designated beneficiary or, if
     none is named, by the person determined in accordance with Section 10(b)
     below), at any time prior to the expiration date of the term of the Options
     or within three (3) years (or such shorter period as the Committee shall
     determine at the time of grant) following the Participant's Approved
     Retirement, whichever period is shorter.

          (4) Termination of Employment For Cause or Resignation. In the event a
     Participant's employment or service is terminated by the Company or any
     Subsidiary for Cause or by the Participant other than due to the
     Participant's death, Disability or Approved Retirement, any Options granted
     to such Participant that have not yet been exercised shall expire at the
     time of such termination and shall not be exercisable thereafter.

                                       13
<PAGE>   14

          (5) Termination of Employment for Any Other Reason. Unless otherwise
     determined by the Committee at or following the time of grant, in the event
     the employment or service of the Participant shall terminate for any reason
     other than one described in Section 5(f)(1), (2), (3), or (4) above, any
     Options granted to such Participant which are exercisable at the date of
     the Participant's termination of employment or service may be exercised by
     the Participant (or, in the event of the Participant's death after
     termination of employment or service when the Option is exercisable
     pursuant to its terms, by the Participant's designated beneficiary, or, if
     none is named, by the person determined in accordance with Section 10(b)),
     at any time prior to the expiration of the term of the Options or the
     ninetieth (90th) day following the Participant's termination of employment
     or service, whichever period is shorter, and any Options that are not
     exercisable at the time of termination of employment or service shall
     expire at the time of such termination and shall not be exercisable
     thereafter.

     (g) Restrictive Covenants and Other Conditions. Without limiting the
generality of the foregoing, the Committee may condition the grant of any Option
under the Plan upon the Employee or Agent to whom such Option would be granted
agreeing in writing to certain conditions in addition to the provisions
regarding exercisability of the Option (such as restrictions on the ability to
transfer the underlying shares of Common Stock) or covenants in favor of the
Company and/or one or more Subsidiaries (including, without limitation,
covenants not to compete, not to solicit employees and customers and not to
disclose confidential information, that may have effect following the
termination of the Employee's employment or the Agent's service with the Company
and its Subsidiaries and after the Option has been exercised, including, without
limitation, the requirement that the Employee or Agent disgorge any profit, gain
or other benefit received in respect of the exercise of the Option prior to any
breach of any such covenant by the Employee or Agent). Notwithstanding the
foregoing, no grant of any Options in a Broad Based Grant shall contain any such
restrictions or covenants.

                                   SECTION 6.
                                RESTRICTED STOCK

     (a) Grant of Restricted Stock. The Committee may grant Restricted Stock or
Restricted Stock Units to Participants at such times and in such amounts, and
subject to such other terms and conditions not inconsistent with the Plan
(including, without limitation, Section 3(c)(3)) as it shall determine. The
Committee shall require that the stock certificates evidencing any Restricted
Stock be held in the custody of the Secretary of the Company until the Period of
Restriction lapses, and that, as a condition of any Restricted Stock award, the
Participant shall have delivered a stock power, endorsed in blank, relating to
the Common Stock covered by such award. Each grant of Restricted Stock or
Restricted Stock Units shall be evidenced by a written agreement setting forth
the terms of such Award.

     (b) Restrictions on Transferability. Except as provided in Section 10(a),
no Restricted Stock may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated until the lapse of the Period of Restriction. Unless
otherwise determined by

                                       14
<PAGE>   15

the Committee, the Period of Restriction shall last for four years in total, but
shall lapse as to one quarter of the related shares of Restricted Stock on each
of the first four anniversaries of the date of grant.

     (c) Rights as a Shareholder. Unless otherwise determined by the Committee
at the time of grant and subject to Section 6(d), Participants holding shares of
Restricted Stock may exercise full voting rights and other rights as a
shareholder with respect to those shares during the Period of Restriction.

     (d) Dividends and Other Distributions. Unless otherwise determined by the
Committee at the time of grant, Participants holding outstanding shares of
Restricted Stock shall be entitled to receive all dividends and other
distributions paid with respect to those shares, provided that if any such
dividends or distributions are paid in shares of Common Stock, such shares shall
be subject to the same forfeiture restrictions and restrictions on
transferability as apply to the Restricted Stock with respect to which they were
paid. Notwithstanding the foregoing, the Committee may specify at the date of
grant that any cash dividends on shares of Restricted Stock not be paid
currently, but rather be credited to an account established for the Participant
and invested in shares of Common Stock on the distribution date of such
dividend. Any additional shares credited in respect of dividends shall become
vested and nonforfeitable, if at all, on the same terms and conditions as are
applicable in respect of the Restricted Stock with respect to which such
dividends were payable.

     (e) Termination of Employment Due to Approved Retirement or Death. Unless
otherwise determined by the Committee at the time of grant or otherwise required
pursuant to Section 3(c)(3), in the event a Participant's employment or service
terminates by reason of Approved Retirement, Disability or death, a pro rata
portion of any shares related to Restricted Stock held by such Participant shall
become non-forfeitable, based upon that portion of the Period of Restriction
which expired prior to the Participant's Approved Retirement or death and, where
vesting of such an award is otherwise contingent on the achievement of
performance objectives, the extent to which such performance objectives are
achieved.

     (f) Termination of Employment for Any Other Reason. Unless otherwise
determined by the Committee at or after the time of grant, in the event the
employment or service of the Participant shall terminate for any reason other
than one described in Section 6(e), any Restricted Stock awarded to such
Participant as to which the Period of Restriction has not lapsed shall be
forfeited.

     (g) Restricted Stock Units. The Committee may elect to grant any
Participant a contractual right to receive shares of Common Stock (or, if so
elected by the Committee at the time of grant, the cash value of shares of
Common Stock) in the future, after the satisfaction of specified vesting
conditions. Any such contractual right shall be intended to be the economic
equivalent of an award of Restricted Stock. Any such award of contractual rights
shall be in substantially the same terms as an award of Restricted Stock, except
that a Participant receiving such award shall not have any rights as a
shareholder prior to the actual issuance of such Common Stock (although the
Committee

                                       15
<PAGE>   16

may authorize, in the applicable award agreement, the payment of dividend
equivalents on such rights equal to the dividends that would have been payable
(or accumulated, pursuant to Section 6(d)) had the corresponding equity rights
been actual shares of Restricted Stock).

                                   SECTION 7.
                          STOCK APPRECIATION RIGHTS

     (a) Grant of SARs. SARs may be granted to any Participants, all
Participants or any class of Participants at such time or times as shall be
determined by the Committee. SARs may be granted in tandem with an Option, or
may granted on a freestanding basis, not related to any Option. A grant of a SAR
shall be evidenced in writing, whether as part of the agreement governing the
terms of the Option, if any, to which such SARs relate or pursuant to a separate
written agreement with respect to freestanding SARs, in each case containing
such provisions not inconsistent with the Plan as the Committee shall approve.

     (b) Terms and Conditions of SARs. Unless the Committee shall otherwise
determine, the terms and conditions (including, without limitation, the exercise
period of the SAR, the vesting schedule applicable thereto and the impact of any
termination of service on the Participant's rights with respect to the SAR)
applicable with respect to (i) SARs granted in tandem with an Option shall be
substantially identical (to the extent possible taking into account the
differences related to the character of the SAR) to the terms and conditions
applicable to the tandem Options and (ii) freestanding SARs shall be
substantially identical (to the extent possible taking into account the
differences related to the character of the SAR) to the terms and conditions
that would have been applicable under Section 5 above were the grant of the SARs
a grant of an Option.

     (c) Exercise of Tandem SARs. SARs which are granted in tandem with an
Option may only be exercised upon the surrender of the right to exercise such
Option for an equivalent number of shares and may be exercised only with respect
to the shares of Common Stock for which the related Option is then exercisable.

     (d) Payment of SAR Amount. Upon exercise of a SAR, the holder shall be
entitled to receive payment, in cash, in shares of Common Stock or in a
combination thereof, as determined by the Committee, of an amount determined by
multiplying:

          (1) the excess, if any, of the Fair Market Value of a share of Common
     Stock at the date of exercise over the Fair Market Value of a share of
     Common Stock on the date of grant, by

          (2) the number of shares of Common Stock with respect to which the
     SARs are then being exercised.

                                       16
<PAGE>   17

                                   SECTION 8.
                                CHANGE OF CONTROL

     (a) Accelerated Vesting and Payment. Subject to Section 3(c)(3) herein and
the provisions of Section 8(b) below, in the event of a Change of Control each
Option and SAR then outstanding shall be fully exercisable regardless of the
exercise schedule otherwise applicable to such Option and/or SAR , the Period of
Restriction shall lapse as to each share of Restricted Stock then outstanding,
each outstanding Restricted Stock

     Unit shall become fully vested and payable and, in connection with such a
Change of Control, the Committee may, in its discretion, provide that each
Option and/or SAR shall, upon the occurrence of such Change of Control, be
canceled in exchange for a payment per share (the "Settlement Payment") in an
amount equal to the excess, if any, of the Change of Control Price over the
exercise price for such Option or the base price of such SAR. Such Settlement
Payment shall be in the form of cash, unless the transaction which constitutes
the Change of Control is intended to qualify for treatment as a "Pooling of
Interests" under APB No. 16 (or any successor thereto), in which case such
Settlement Payment shall be in registered stock of the same class as is
otherwise provided to the shareholders of the Company.

     (b) Alternative Awards. Notwithstanding Section 8(a), no cancellation,
acceleration of exercisability, vesting, cash settlement or other payment shall
occur with respect to any Award if the Committee reasonably determines in good
faith prior to the occurrence of a Change of Control that such Award shall be
honored or assumed, or new rights substituted therefor (such honored, assumed or
substituted award hereinafter called an "Alternative Award"), by a Participant's
employer (or the parent or an affiliate of such employer) immediately following
the Change of Control; provided that any such Alternative Award must:

          (1) be based on stock which is traded on an established securities
     market;

          (2) provide such Participant with rights and entitlements
     substantially equivalent to or better than the rights, terms and conditions
     applicable under such Award, including, but not limited to, an identical or
     better exercise or vesting schedule and identical or better timing and
     methods of payment;

          (3) have substantially equivalent economic value to such Award
     (determined at the time of the Change in Control); and

          (4) have terms and conditions which provide that in the event that the
     Participant's employment or service is involuntarily terminated for any
     reason (including, but not limited to a termination due to death,
     Disability or for Cause) or Constructively Terminated (as defined below),
     all of such Participant's Option and/or SARs shall be deemed immediately
     and fully exercisable, the Period of Restriction shall lapse as to each of
     the Participant's outstanding Restricted Stock awards, each of the
     Participant's outstanding Restricted Stock Unit awards shall

                                       17
<PAGE>   18

     be payable in full and each such Alternative Award shall be settled for a
     payment per each share of stock subject to the Alternative Award in cash,
     in immediately transferable, publicly traded securities or in a combination
     thereof, in an amount equal to, in the case of an Option or SAR, the excess
     of the Fair Market Value of such stock on the date of the Participant's
     termination over the corresponding exercise or base price per share and, in
     the case of any Restricted Stock or Restricted Stock Unit award, the Fair
     Market Value of the number of shares of Common Stock subject or related
     thereto.

For this purpose, participant's employment or service shall be deemed to have
been Constructively Terminated if, without the Participant's written consent,
the Participant terminates employment or service within 120 days following
either (x) a material reduction in the Participant's base salary or a
Participant's incentive compensation opportunity, or (y) the relocation of the
Participant's principal place of employment or service to a location more than
35 miles away from the Participant's prior principal place of employment or
service.

     (c) Accounting Issues. In applying the provisions of this Section 8 to a
Pooling of Interests, the provisions related to business combinations under FASB
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation - an Interpretation of APB Opinion No. 25" (including any
interpretations and modifications thereof) shall be taken into account.

                                   SECTION 9.
         AMENDMENT, MODIFICATION, AND TERMINATION OF PLAN

     The Board may, at any time and from time to time amend, modify, suspend, or
terminate this Plan, in whole or in part, without notice to or the consent of
any Participant, Employee or Agent; provided, however, that any amendment which
would (i) increase the number of shares available for issuance under the Plan,
(ii) lower the minimum exercise price at which an Option (or the base price at
which a SAR) may be granted or (iii) extend the maximum term for Options or SARs
granted hereunder shall be subject to the approval of the Company's
shareholders. No amendment, modification, or termination of the Plan shall in
any manner adversely affect any Award theretofore granted under the Plan,
without the consent of the Participant.

                                   SECTION 10.
                           MISCELLANEOUS PROVISIONS

     (a) Transferability. No Award granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than in accordance with Section 10(b) below, by will or by the laws of descent
and distribution; provided that the Committee may, in the appropriate award
agreement or otherwise, permit transfers of Nonstatutory Stock Options with or
without tandem SARs, freestanding SARs and Restricted Stock or Restricted Stock
Units to Family Members (including, without limitation, transfers effected by a
domestic relations order) subject to such terms and conditions as the Committee
shall determine.

                                       18
<PAGE>   19

     (b) Beneficiary Designation. Each Participant under the Plan may from time
to time name any beneficiary or beneficiaries (who may be named contingently or
successively) to whom any benefit under the Plan is to be paid or by whom any
right under the Plan is to be exercised in case of the Participant's death;
provided that, if the Participant shall not have designated any beneficiary
under this Plan, the Participant's beneficiary shall be deemed to be the person
designated by the Participant under the group life insurance plan of the Company
or a Subsidiary in which such Participant participates (unless such designated
beneficiary is not a Family Member). Each designation made hereunder will revoke
all prior designations by the same Participant with respect to all Awards
previously granted (including, solely for purposes of this Plan, any deemed
designation), shall be in a form prescribed by the Committee, and will be
effective only when received by the Committee in writing during the
Participant's lifetime. In the absence of any such effective designation
(including a deemed designation), benefits remaining unpaid at the Participant's
death shall be paid to or exercised by the Participant's surviving spouse, if
any, or otherwise to or by the Participant's estate. Except as otherwise
expressly provided herein, nothing in this Plan is intended or may be construed
to give any person other than Participants any rights or remedies under this
Plan.

     (c) Deferral of Payment. The Committee may, in the Award agreement or
otherwise, permit a Participant to elect, upon such terms and conditions as the
Committee may establish, to defer receipt of shares of Common Stock that would
otherwise be issued in connection with an Award.

     (d) No Guarantee of Employment or Participation. The existence of this
Plan, as in effect at any time or from time to time, or any grant of Award under
the Plan shall not interfere with or limit in any way the rights of the Company
or any Subsidiary to terminate any Participant's employment or other service
provider relationship at any time, nor confer upon any Participant any rights to
continue in the employ or service of the Company or any Subsidiary or any other
affiliate of the Company. Except to the extent expressly selected by the
Committee to be a Participant, no person (whether or not an Employee, an Agent
or a Participant) shall at anytime have a right to be selected for participation
in the Plan or, having been selected as a Participant, to receive any additional
awards hereunder, despite having previously participated in an incentive or
bonus plan of the Company or an affiliate. The existence of the Plan shall not
be deemed to constitute a contract of employment between the Company or any
affiliate and any Employee, Agent or Participant, nor shall it constitute a
right to remain in the employ or service of the Company or any affiliate. Except
as may be provided in a separate written agreement, employment with or service
for the Company or any affiliate is at-will and either party may terminate the
participant's employment or other service provider relationship at any time, for
any reason, with or without cause or notice.

     (e) Tax Withholding. The Company or an affiliate shall have the right to
deduct from all payments or distributions hereunder any federal, state, foreign
or local taxes or other obligations required by law to be withheld with respect
thereto. The Company may defer issuance of Common Stock upon the exercise of an
Option or a SAR until such requirements are satisfied. The Committee may, in its
discretion, permit a

                                       19
<PAGE>   20

Participant to elect, subject to such conditions as the Committee shall impose,
(i) to have shares of Common Stock otherwise to be issued under the Plan
withheld by the Company or (ii) to deliver to the Company previously acquired
shares of Common Stock, in either case for the greatest number of whole shares
having a Fair Market Value on the date immediately preceding the date of
exercise not in excess of the minimum amount required to satisfy the statutory
withholding tax obligations upon the corresponding exercise of an Option or a
SAR settled in Common Stock.

     (f) No Limitation on Compensation; Scope of Liabilities. Nothing in the
Plan shall be construed to limit the right of the Company to establish other
plans if and to the extent permitted by applicable law. The liability of the
Company or any affiliate under this Plan is limited to the obligations expressly
set forth in the Plan, and no term or provision of this Plan may be construed to
impose any further or additional duties, obligations, or costs on the Company or
any affiliate thereof or the Committee not expressly set forth in the Plan.

     (g) Requirements of Law. The granting of Awards and the issuance of shares
of Common Stock shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required.

     (h) Term of Plan. The Plan shall be effective upon its adoption by the
Board. The Plan shall continue in effect, unless sooner terminated pursuant to
Section 9 above, until no more shares are available for issuance under the Plan.

     (i) Governing Law. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of Iowa,
without regard to principles of conflict of laws.

     (j) No Impact On Benefits. Except as may otherwise be specifically stated
under any employee benefit plan, policy or program, Awards shall not be treated
as compensation for purposes of calculating an Employee's or Agent's right or
benefits under any such plan, policy or program.

     (k) No Constraint on Corporate Action. Except as provided in Section 9
above, nothing contained in this Plan shall be construed to prevent the Company,
or any affiliate, from taking any corporate action (including, but not limited
to, the Company's right or power to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, or to merge or
consolidate, or dissolve, liquidate, sell, or transfer all or any part of its
business or assets) which is deemed by it to be appropriate, or in its best
interest, whether or not such action would have an adverse effect on this Plan,
or any awards made under this Plan. No director, beneficiary, or other person
shall have any claim against the Company, or any of its affiliates, as a result
of any such action.

     (l) Indemnification. Each member of the Board and each member of the
Committee shall be indemnified and held harmless by the Company and each
Employer

                                       20
<PAGE>   21

against and from any loss, cost, liability, or expense that may be imposed upon
or reasonably incurred by such member of the Board or Committee in connection
with or resulting from any claim, action, suit, or proceeding to which such
member may be made a party or in which such member may be involved by reason of
any action taken or failure to act under the Plan (in the absence of bad faith)
and against and from any and all amounts paid by such member in settlement
thereof, with the Company's approval, or paid by such member in satisfaction of
any judgment in any such action, suit, or proceeding against such member,
provided that such member shall give the Company an opportunity, at its own
expense, to handle and defend the same before such member undertakes to handle
and defend it individually. The foregoing right of indemnification shall not be
exclusive and shall be independent of any other rights of indemnification to
which any such person may be entitled under the Company's Certificate of
Incorporation or By-Laws, by contract, as a matter of law, or otherwise.

     (m) Rights as a Stockholder. A Participant shall have no rights as a
stockholder with respect to any shares of Common Stock covered by any Award
until the Participant shall have become the holder of record of such shares.

     (n) Captions. The headings and captions appearing herein are inserted only
as a matter of convenience. They do not define, limit, construe, or describe the
scope or intent of the provisions of the Plan.

                                       21
<PAGE>   22

            GUIDELINES FOR THE OPERATION OF THE STOCK INCENTIVE PLAN

     Section 3(a). Notwithstanding anything in the Stock Incentive Plan to the
contrary, in no event shall the number of shares of Common Stock that may be
made issuable or distributable under all Company Stock Plans (including, without
limitation, the Stock Incentive Plan) other than the Employees Savings Plan, the
Agents Savings Plan and the Stock Purchase Plan within 18 months of the
effective date of the Plan of Conversion exceed 40% of the total number of
shares available for grant under Section 4(a).

     Section 3(b)(3). Notwithstanding anything in the Stock Incentive Plan to
the contrary, in no event shall the number of shares of Common Stock awarded by
the Chief Executive Officer pursuant to Section 3(b)(3) within 18 months of the
effective date of the Plan of Conversion exceed 5% of the total number of shares
available for grant under Section 4(a).

On behalf of the Board of Directors of the Company, this Stock Incentive Plan
has been executed this day of June, 2001.



By:
   ---------------------------------
C. Daniel Gelatt, Jr.





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