Document:

Exhibit 4.2.1  

AMENDMENT TO AMENDED AND RESTATED RIGHTS AGREEMENT  

        This Amendment (the "Amendment"), dated and effective as of January 17, 2005 and executed among Principal Financial Group, Inc., a Delaware
corporation (the "Company"), Mellon Investor Services, LLC, a New Jersey limited liability company ("Mellon") and Computershare Investor Services, LLC, a Delaware limited liability company
("Computershare") hereby amends the Amended and Restated Rights Agreement between the Company and Mellon dated as of December 3, 2002 and effective as of October 22, 2001 (the "Rights
Agreement"). 

W I T N E S S E T H  

        WHEREAS, the Company and Mellon previously entered into the Rights Agreement, pursuant to which Mellon was
appointed to serve as the Rights Agent; and 

        WHEREAS, Mellon desires to resign as Rights Agent and the Company desires to accept such resignation and appoint Computershare as
successor Rights Agent under the Rights Agreement, and 

        WHEREAS, in connection with the resignation of Mellon as Rights Agent and the appointment of Computershare as successor Rights Agent, the
Company, Mellon and Computershare desire to amend the Rights Agreement in certain respects. 

        NOW, THEREFORE, in consideration of the promises and the mutual agreements herein set forth, the parties agree as follows: 

        Section 1.    Resignation of Rights Agent.    Mellon hereby resigns as Rights Agent under the Rights Agreement
and the Company hereby accepts Mellon's resignation. 

        Section 2.    Appointment of the Successor Rights Agent.    The Company hereby appoints Computershare as
successor Rights Agent under the Rights Agreement and Computershare hereby accepts such appointment. 

        Section 3.    Waiver of Prior Written Notice.    The Company, Mellon and Computershare each waive any
requirements of prior written notice of a change of the Rights Agent under the Rights Agreement. 

        Section 4.    Amendment of Rights Agreement.    The Rights Agreement shall be further amended as follows: 

        (a)   "Computershare
Investor Services, LLC" shall be substituted throughout the Rights Agreement, Exhibits and other attachments for "Mellon Investor Services, LLC" including
substituting all abbreviations therefore. 

        (b)   Section 1(h)
is hereby amended by deleting the definition of "Business Day" in its entirety and substituting the following definition: 

        "Business Day" shall mean any day other than a Saturday, Sunday, or a day on which the New York Stock Exchange is closed. 

        (c)   In
Section 21, the combined capital and surplus requirement of at least $50 million shall be deleted and replaced with a combined capital and surplus
requirement of at least $30 million. 

        (d)   Section 26
of the Rights Agreement is hereby amended by deleting the address for notice or demand to be given to the Rights Agent by the Company and substituting
in lieu therefor the following: 

Computershare
Investor Services, LLC

Two North LaSalle Street

Chicago, Illinois 60602

Attention: Relationship Manager 

with
a copy to: 

Computershare
Investor Services, LLC

Two North LaSalle Street

Chicago, Illinois 60602

Attention: Director of Relationship Management 

        Section 5.    Continued Effectiveness.    The parties hereto hereby acknowledge and agree that, except as
specifically supplemented and amended, changed or modified hereby, the Rights Agreement, as previously amended to the date hereof, shall remain in full force and effect in accordance with its terms. 

        Section 6.    Execution in Counterparts.    This Amendment may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute one and the same instrument. 

        Section 7.    Terms.    Except as otherwise expressly provided herein, or unless the context otherwise
requires, all terms used herein have the meanings assigned to them in the Rights Agreement. 

        IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and effective as of the day and year above written. 

	 	 	PRINCIPAL FINANCIAL GROUP, INC.
	

 	
 	

By	

/s/  TIMOTHY E. DOHLMAN      

	 	 	Its	Assistant Treasurer
	

 	
 	

MELLON INVESTOR SERVICES, LLC
	

 	
 	

By	

/s/  JAMES J. MABLI      

	 	 	Its	Vice President
	

 	
 	

COMPUTERSHARE INVESTOR SERVICES, LLC
	

 	
 	

By	

/s/  KEITH BRADLEY      

	 	 	Its	Vice PresidentExhibit 10.5  

PRINCIPAL FINANCIAL GROUP, INC.  

 ANNUAL INCENTIVE PLAN  

SECTION 1

PURPOSE  

        The purpose of the Principal Financial Group, Inc. Annual Incentive Plan is to permit Principal Financial Group, Inc. (the "Company"), through
awards of annual incentive compensation that satisfy the requirements for performance-based compensation under Section 162(m) of the Internal Revenue Code, to attract and retain executives and
to motivate these executives to promote the profitability and growth of the Company. 

SECTION 2

DEFINITIONS  

        "Award" shall mean the amount granted to a Participant by the Committee for a Performance Period. 

        "Board" shall mean the Board of Directors of the Company, or the successor thereto. 

        "Code" shall mean the Internal Revenue Code of 1986, as amended. 

        "Committee" shall mean the Human Resources Committee of the Board or any subcommittee thereof which meets the requirements of
Section 162(m)(4)(C) of the Code. 

        "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. 

        "Executive" shall mean any "covered employee" (as defined in Section 162(m) of the Code) and, in the discretion of the Committee,
any other executive officer of the Company or its Subsidiaries. 

        "Operating Income" shall mean, for each Performance Period, the income from continuing operations of the Company before income taxes,
minus net realized/unrealized capital gains/(losses), in each case as reported in the Company's audited consolidated financial statements for the Performance Period, prepared in accordance with
accounting principles generally accepted in the United States (U.S. GAAP). 

        "Participant" shall mean, for each Performance Period, each Executive who has been selected by the Committee to participate in the Plan. 

        "Performance Period" shall mean the Company's fiscal year or any other period designated by the Committee with respect to which an Award
may be granted. Performance Periods may not overlap. 

        "Plan" shall mean this Principal Financial Group, Inc. Annual Incentive Plan, as amended from time to time. 

        "Stock Plans" shall mean the Principal Financial Group, Inc. Stock Incentive Plan and any future equity compensation plans approved
by the shareholders of the Company. 

SECTION 3

ADMINISTRATION  

        The Plan shall be administered by the Committee, which shall have full authority to interpret the Plan, to establish rules and regulations relating to the
operation of the Plan, to select Participants, to determine the maximum Awards and the amounts of any Awards and to make all determinations and take all other actions necessary or appropriate for the
proper administration of the Plan. The Committee's interpretation of the Plan, and all actions taken within the scope of its authority, shall be 

final
and binding on the Company, its stockholders and Participants, Executives, former Executives and their respective successors and assigns. No member of the Committee shall be eligible to
participate in the Plan. 

SECTION 4

DETERMINATION OF AWARDS  

        (a)   Prior
to the beginning of each Performance Period, or at such later time as may be permitted by applicable provisions of the Code, the Committee shall establish:
(1) the Executives or class of Executives who will be Participants in the Plan; and (2) for each Participant a maximum Award, expressed as a percentage of the incentive pool for the
Performance Period provided for in paragraph (b) of this section. The total of all such maximum percentages shall not exceed 100%, and the maximum percentage for any single Participant shall
not exceed 40%. 

        (b)   The
incentive pool for the Performance Period shall be equal to 2% of Operating Income. The Committee shall affirm the formula for determining the size of the incentive
pool prior to the beginning of each Performance Period, or at such later time as may be permitted by applicable provisions of the Code. 

        (c)   Following
the end of each Performance Period, and before any payments are made under the Plan, the Committee shall certify in writing (i) that the Company has
positive Operating Income for such Performance Period and (ii) the size of the incentive pool provided for in paragraph (b) of this section. 

        (d)   Following
the end of each Performance Period, the Committee may determine to grant to any Participant an Award, which may not exceed the maximum amount specified in
paragraph (a) of this section for such Participant. The Committee may reduce or eliminate the Award granted to any Participant based on factors determined by the Committee, including but not
limited to, performance against budgeted financial goals and the Participant's personal performance. 

SECTION 5

PAYMENT OF AWARDS  

        Each Participant shall be eligible to receive, as soon as practicable after the amount of such Participant's Award for a Performance Period has been determined,
payment of the Award in cash, stock, restricted stock, options, other stock-based or stock-denominated units or any combination thereof determined by the Committee. Equity or equity-based awards shall
be granted under the terms and conditions of one or more of the Company's Stock Plans. Payment of the award may be deferred in accordance with a written election by the Participant pursuant to
procedures established by the Committee. 

SECTION 6

AMENDMENTS  

        The Committee may amend the Plan at any time and from time to time, provided that no such amendment that would require the consent of the stockholders of the
Company pursuant to Section 162(m) of the Code, NYSE listing rules or the Exchange Act, or any other applicable law, rule or regulation, shall be effective without such consent. No amendment
which adversely affects a Participant's rights to, or interest in, an Award granted prior to the date of the amendment shall be effective unless the Participant shall have agreed thereto in writing. 

SECTION 7

TERMINATION  

        The Committee may terminate this Plan at any time but in no event shall the termination of the Plan adversely affect the rights of any Participant to a previously
granted Award without such Participant's written consent. 

SECTION 8

OTHER PROVISIONS  

        (a)   No
Executive or other person shall have any claim or right to be granted an Award under this Plan until such Award is actually granted. Neither the establishment of this
Plan, nor any action taken hereunder, shall be construed as giving any Executive any right to be retained in the employ of the Company. Nothing contained in this Plan shall limit the ability of the
Company to make payments or awards to Executives under any other plan, agreement or arrangement. 

        (b)   The
rights and benefits of a Participant hereunder are personal to the Participant and, except for payments made following a Participant's death, shall not be subject to
any voluntary or involuntary alienation, assignment, pledge, transfer, encumbrance, attachment, garnishment or other disposition. 

        (c)   Awards
under this Plan shall not constitute compensation for the purpose of determining participation or benefits under any other plan of the Company unless specifically
included as compensation in such plan. 

        (d)   The
Company shall have the right to deduct from Awards any taxes or other amounts required to be withheld by law. 

        (e)   All
questions pertaining to the construction, regulation, validity and effect of the provisions of the Plan shall be determined in accordance with the laws of the State
of Iowa without regard to principles of conflict of laws. 

        (f)    No
member of the Committee or the Board, and no officer, employee or agent of the Company shall be liable for any act or action hereunder, whether of commission or
omission, taken by any other member, or by any officer, agent, or employee, or, except in circumstances involving bad faith, for anything done or omitted to be done in the administration of the Plan. 

SECTION 9

EFFECTIVE DATE  

        The Plan shall be effective as of January 1, 2005, subject to approval by the stockholders of the Company in accordance with Section 162(m) of the
Code.

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