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                                                                    EXHIBIT 10.4

                         PRINCIPAL FINANCIAL GROUP, INC.
                              DIRECTORS STOCK PLAN

                                   ARTICLE I.
                                     PURPOSE

          The purposes of the "PRINCIPAL FINANCIAL GROUP, INC. DIRECTORS STOCK
PLAN" (the "Plan") are to enable the Company to attract, retain and motivate the
best qualified non-employee directors and to enhance a long-term aligning of
interests between the non-employee directors and stockholders of the Company by
granting equity-based awards as provided herein.

                                   ARTICLE II.
                                   DEFINITIONS

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

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

          b) "Award" means an Option, award of Restricted Stock or an award of
     Restricted Stock Units.

          c) "Board" means the Board of Directors of the Company.

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

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

          f) "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 Securities
     Exchange Act of 1934, as amended).

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

          h) "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 Plan, the Long-Term Plan, the Savings Plans, the Stock Incentive Plan
     and the Stock Purchase Plan.

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          i) "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.

          j) "Employees Savings Plan" means the Principal Select Savings Plan
     for Employees.

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

          l) "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"). 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) .

          m) "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.

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

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

          p) "Option" means the right to purchase one share of Common Stock at a
     stated purchase price on the terms specified in Article V of the Plan. The
     Options are nonstatutory stock options not intended to qualify under
     Section 422 of the Code.

          q) "Participant" means a member of the Board who is not an officer or
     employee of the Company or any entity controlling, controlled by, or under
     common control with the Company, and is not the beneficial owner of a
     controlling interest in the voting stock of the Company or of any entity
     that holds a controlling interest in the Company's voting stock.

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

          s) "Plan" means the Principal Financial Group, Inc. Directors Stock
     Plan, as set forth herein and as amended from time to time.

          t) "Plan of Conversion" means the Plan of Conversion of Principal
     Mutual Holding Company.

          u) "Restricted Stock" means an award of Common Stock made pursuant to
     Article VI that is forfeitable by the Participant until the completion of a
     specified period of future service as a member of the Board or until
     otherwise determined by the Committee or in accordance with the terms of
     the Plan.

          v) "Restricted Stock Unit" means a contractual right awarded pursuant
     to Article VI that entitles the holder to receive shares of Common Stock
     (or the value thereof in cash) upon the completion of a specified period of
     future service as a member of the Board or at such other time or times
     determined by the Committee or in accordance with the terms of the Plan.

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

          x) "Stock Incentive Plan" means the Principal Financial Group, Inc.
     Stock Incentive Plan.

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

                                  ARTICLE III.
                                 ADMINISTRATION

     3.1 Rules, Interpretation 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 for
carrying out the Plan, to construe the respective option agreements and to make
all other determinations and to take all other actions that it deems necessary
or advisable for administering the Plan; provided that, no Committee member may
participate in any decision with respect to such member's benefits or
entitlements under the Plan, unless such decision applies generally to all non-
employee directors. Each determination, interpretation or other action made or
taken by the Committee shall be final and binding for all purposes and upon all
persons.

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     3.2 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. The Committee may employ such legal counsel,
consultants and agents as it may deem desirable for the administration of the
Plan and may rely upon any opinion received from any such counsel or consultant
and any computation received from any such consultant or agent. 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.

     3.3 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.

                                   ARTICLE IV.
                                 SHARES ISSUABLE

     4.1 Number of Shares. Subject to the provisions of Section 4.3 hereof, the
aggregate number of shares of Common Stock issuable under the Plan pursuant to
Awards shall not exceed 500,000 shares of Common Stock. The number of shares
granted as Awards hereunder shall count against (i) the limit of 6% of the
number of shares of Common Stock outstanding immediately following the effective
date of the Plan of Conversion 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, and
(ii) the operational guideline established pursuant to the Stock Incentive Plan
limiting the maximum number of shares of Common Stock that may be awarded or
issued within 18 months of the effective date of the Plan of Conversion to 40%
of the limit set forth in subclause (i). Shares of Common Stock to be issued
under the Plan may consist, in whole or in part, of treasury shares or
authorized but unissued shares not reserved for any other purpose.

     4.2 Canceled, Terminated, or Forfeited Awards. Any shares of Common Stock
subject to an Award which for any reason is canceled or terminated or otherwise
is settled without the issuance of unrestricted shares of 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 Awards
under the Plan.

     4.3 Adjustment Due to Change in Capitalization. In the event of any Common
Stock dividend or 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 4.1 or subject to outstanding Awards and the
respective exercise 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.

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                                   ARTICLE V.
                           AWARDS AND TERMS OF OPTIONS

     5.1 Automatic Grants of Options. Unless the Committee otherwise determines,
each Participant who is then in office on (i) the six month anniversary of the
Initial Public Offering or (ii) the date of each annual meeting of the Company's
stockholders occurring after the six month anniversary of the Initial Public
Offering shall be granted Options to purchase 2,000 shares of Common Stock. In
addition, unless the Committee otherwise determines to make no grant or a
different grant, each Participant first elected to the Board after the first
grant of options pursuant to the preceding sentence shall automatically be
granted Options to purchase a number of shares of Common Stock equal to the
number of shares of Common Stock awarded to directors in office at the
immediately preceding annual meeting, multiplied by a fraction, the numerator of
which is the number of calendar months commencing after the Participant is
elected to the Board and before the date the next annual meeting of stockholders
is scheduled to occur and the denominator of which is the number of whole and
partial calendar months from the last annual meeting to the scheduled date of
the next following annual meeting.

     5.2 Discretionary Grants of Options. The Committee shall also have the
power to grant to any Participant or all Participants additional Options to
purchase such number of shares of Common Stock, and on such terms and
conditions, as it shall determine. The Committee may adopt different terms and
conditions for each Option granted under this Section 5.2 to any Participant.
Notwithstanding any other contrary provision in the Plan, (i) no Options shall
be granted prior to the six month anniversary of the Initial Public Offering and
(ii) during the 18 month period following the effective date of the Plan of
Conversion, the number of shares granted, in the aggregate, pursuant to this
Section 5.2 shall not exceed 20,000 shares of Common Stock.

     5.3 Exercise Price. The exercise price for any share of Common Stock
subject to an Option shall be not less than the Fair Market Value on the date
such Option is granted.

     5.4 Period of Exercisability. Unless otherwise determined by the Committee
at or after grant or as otherwise required to satisfy the conditions set forth
in Section 8.1 of the Plan of Conversion, the shares of Common Stock subject to
Options granted under Section 5.1 shall become exercisable in four approximately
equal installments on the three, six, nine and twelve month anniversaries of the
date on which such Options were granted. Subject to compliance with the
requirements of Section 8.1 of the Plan of Conversion, the Committee shall
determine the date or dates at which Options granted under Section 5.2 shall
become exercisable. Each Option shall, if not previously exercised in accordance
with the terms of the Plan, in all events expire upon the tenth (10th)
anniversary of the date of the grant thereof. If a Participant shall cease to
provide services to the Company, such Participant or, in the case of death, the
Participant's estate or beneficiary, may exercise any Option exercisable by the
Participant at the date his or her service terminates until the earlier of (A)
three (3) years from the date the Participant ceased to provide services to the
Company and (B) the tenth (10th) anniversary of the date the Option was granted.

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     5.5 Procedure for Exercise. A Participant electing to exercise one or more
Options shall give written notice to the Secretary of the Company of such
election and of the number of shares of Common Stock the Participant has elected
to purchase. No shares shall be delivered pursuant to any exercise of any
Options 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 owned by the
optionee (which are not the subject of any pledge or other security interest),
(iii) 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 or (iv) 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 option exercise price. The Company may
not make a loan to a Participant to facilitate such Participant's exercise of
any of his or her Options.

                                   ARTICLE VI.
                                RESTRICTED STOCK

     6.1 Standard Grants of Restricted Stock Units. Unless otherwise determined
by the Committee, there shall be awarded

          (i) at the six month anniversary of the Initial Public Offering, to
     each Participant then in office that number of Restricted Stock Units equal
     to the product of 1,500, multiplied by a fraction, the numerator of which
     is the number of months remaining in the term of the class of directors in
     which the Participant serves (the "Participant's Term") and the denominator
     of which is the number of months remaining in the term of that class of
     directors having the longest remaining term at the date of grant (the
     "Longest Term"),

          (ii) on the date of such Participant's election to the Board, to each
     Participant first elected to the Board after the six month anniversary of
     the Initial Public Offering that number of Restricted Stock Units equal to
     the product of 1,500, multiplied by a fraction, the numerator of which is
     the number of months remaining in the Participant's Term and the
     denominator of which is the number of months remaining in the Longest Term;
     and

          (iii) on the effective date of the re-election of any Participant to
     continued membership on the Board, 1,500 Restricted Stock Units.

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     6.2 Discretionary Grants of Restricted Stock or Restricted Stock Units.
Without limiting the generality of Section 6.1, the Committee may also grant
Restricted Stock or Restricted Stock Units to any Participant or all
Participants at such times, with respect to such number of shares of Common
Stock and on such terms and conditions (including, in the case of any grant made
in exchange for foregoing the receipt of fees otherwise payable in cash, a
discount in the value of the Common Stock subject to the award to reflect the
applicable restrictions on the Award) as the Committee shall determine.
Notwithstanding any other contrary provision in the Plan, (i) no Restricted
Stock or Restricted Stock Units shall be granted prior to the six month
anniversary of the Initial Public Offering and (ii) during the 18 month period
following the effective date of the Plan of Conversion, the number of shares
granted, in the aggregate, pursuant to this Section 6.2 shall not exceed 15,000
shares of Common Stock.

     6.3 Agreements; Restrictions on Certificates. Each grant of Restricted
Stock or Restricted Stock Units shall be evidenced by a written agreement
setting forth the terms of such Award. The Committee shall require that the
stock certificates evidencing any Restricted Stock granted under Section 6.2 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.

     6.4 Restrictions on Transferability. Except as provided in Section 8.2, no
shares of Restricted Stock or Restricted Stock Units may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated until the lapse of the
Period of Restriction. Subject to compliance with the requirements of Section
8.1 of the Plan of Conversion, the Committee shall establish the Period of
Restriction and the date or dates at which such Period of Restriction shall
lapse, in whole or in part, with respect to any award made pursuant to Section
6.2. Unless otherwise determined by the Committee at the time of grant or to
comply with the requirements of Section 8.1 of the Plan of Conversion, the
Period of Restriction with respect to any award of Restricted Stock Units
granted under Section 6.1 shall lapse in that number of installments determined
by dividing (i) the number of whole and partial months occurring (x) from and
after the date of grant and (y) on or prior to the date that the then current
term of office of the Participant's class of directors expires by (ii) three,
with any resulting period of less than three months being treated as the last
installment, which ends at the date that such term of office expires.
Notwithstanding the foregoing, unless otherwise determined by the Committee, the
Period of Restriction applicable to any Restricted Stock or Restricted Stock
Units shall not lapse, in whole or in part, at any time after the Participant
has ceased to provide service to the Company.

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     6.5 Rights as a Shareholder. Unless otherwise determined by the Committee
at the time of grant and subject to Section 6.6, 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. A
Participant receiving Restricted Stock Units shall not have any rights as a
shareholder prior to the actual issuance of such Common Stock, except that the
Participant shall be entitled to payment of dividend equivalents on such rights
equal to the dividends that would have been payable (or accumulated, pursuant to
Section 6.6) had the corresponding equity rights been actual shares of
Restricted Stock.

     6.6 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.

     6.7 Termination of Service. Unless otherwise determined by the Committee at
or after the time of grant, in the event the service of the Participant as
member of the Board shall terminate for any reason, any Restricted Stock or
Restricted Stock Units awarded to such Participant as to which the Period of
Restriction has not lapsed shall be forfeited.

                                  ARTICLE VII.
                     TERMINATION, MODIFICATION AND AMENDMENT

     The Board at any time may terminate the Plan, and, subject to Section 3.3
herein, from time to time may amend or modify the Plan; 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 may be granted or (iii) extend the maximum term for Options 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 Option theretofore granted under the Plan, without the
consent of the Participant.

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                                  ARTICLE VIII.
                               GENERAL PROVISIONS

     8.1 No Right to Remain as a Director. The Plan shall not impose any
obligations on the Company to retain any Participant as a Director nor shall it
impose any obligation on the part of any Participant to remain in service to the
Company.

     8.2 Transferability. No Awards granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than in accordance with Section 8.3 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 Awards to Family Members (including,
without limitation, transfers effected by a domestic relations order) subject to
such terms and conditions as the Committee shall determine.

     8.3 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. Each
designation will revoke all prior designations by the same Participant with
respect to all Awards previously granted, 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, 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.

     8.4 Rights as a Stockholder. No Participant nor any beneficiary thereof
shall have any rights as a stockholder with respect to any shares of Common
Stock covered by any Award until such person shall have become the holder of
record of such shares.

     8.5 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.

     8.6 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
Article VII above, until no more shares of Common Stock are available for
issuance under the Plan.

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

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     8.8 No Constraint on Corporate Action. Except as provided in Article VII
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.

     8.9 Indemnification. Each member of the Board and the Committee shall be
indemnified and held harmless by the Company (or, if applicable, any affiliate
of the Company) against and from any loss, cost, liability, or expense that may
be imposed upon or reasonably incurred by such member of the Board or the
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 (or, if appropriate, an
affiliate'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 (or, if applicable, an affiliate) 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.

     8.10 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.

     8.11 Headings and Captions. The headings and captions herein are provided
for reference and convenience only, shall not be considered part of the Plan,
and shall not be employed in the construction of the Plan.

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

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

                                       10<PAGE>   1
                                                                    EXHIBIT 10.5

                                 AMENDMENT NO. 5

                     THE PRINCIPAL SELECT SAVINGS EXCESS PLAN

The Plan named above gives the Company the right to amend it at any time.
According to that right, the Plan is amended as follows:

Effective July 1, 1998,

By striking the paragraph in the DEATH BENEFITS SECTION of Article V and
substituting the following:

     If a Participant dies before his Retirement Date, his Vested Account shall
     be distributed to his Beneficiary in a single sum.

By striking subsections (a) and (b) of the OPTIONAL FORMS OF DISTRIBUTION
SECTION of Article VI and substituting the following:

     The optional forms of retirement benefit shall be the following: a single
     life annuity with a certain period of ten years; a single life annuity with
     installment refund; survivorship life annuity with installment refund and a
     survivorship percentage of 50; and a 120-month fixed period annuity. An
     election under this paragraph may be delayed until the Participant reaches
     his required beginning date under the Associated Plan

     The following optional forms of retirement benefit are also available: a
     single sum payment; an annual distribution equal to any fixed whole
     percentage, not less than 10% and not more than 13% of his Vested Account,
     as elected by the Participant. Such amount shall be payable annually until
     his vested Account is exhausted. Once elected, the percentage will
     not, change. An election under this paragraph may be delayed until the
     Participant reaches his required beginning date under the Associated Plan.

     A form of distribution for retirement benefits shall be available to a
     Participant only if the annual distribution under such form is at least
     equal to the quotient of the Participant's Vested Account as of the date
     distribution is to begin, divided by the life expectancy of the
     Participant, Beneficiary or joint and last survivor expectancy of the
     Participant and Beneficiary, as appropriate. If distribution is in a form
     other than a life annuity, the life expectancy of the Participant may be
     recalculated after the distribution begins, but no more frequently than
     annually. In the case of a Beneficiary who is not the Participant's spouse,
     life expectancy shall be calculated when benefits start and minimum
     payments for any 12-consecutive month period will be based on such life
     expectancy minus the number of whole years since the distribution first
     began. The life expectancy or joint and last survivor expectancy shall be
     computed by use of the return multiples contained in Section 1.72-9 of the
     regulations under the Code.

By striking the first sentence of the first paragraph in the ELECTION PROCEDURES
SECTION of Article VI and substituting the following:

    The Participant shall make any election under this section in the form or
    manner provided for that purpose.

By striking subsections (a) and (b) in the ELECTION PROCEDURES SECTION of
Article VI and substituting the following:

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     A Participant may elect his Beneficiary and may elect to have retirement
     benefits distributed under any of the optional forms of retirement benefit
     described in the OPTIONAL FORMS OF DISTRIBUTION SECTION of this article.

Effective January 1, 2000,

By striking the following from the Table of Contents:

     Section 9.09 ---- Small Amounts

By striking the AGENT definition in the DEFINITIONS SECTION of Article I and
substituting the following:

     AGENT means an individual who holds a current DD 713 contract or any
     successor full-time contract with the Company and he is one of the
     following:

     -    an agent;

     -    a sales supervisor;

     -    a special marketing developer;

     -    a special brokerage developer;

     -    a special agency assistant; or

     -    an informal agency assistant.

By striking the AGENT'S CONTRACT, GENERAL MANAGER and MANAGEMENT ASSISTANT
definitions from the DEFINITIONS SECTION of Article I.

By striking the second paragraph of the COMPENSATION definition in the
DEFINITIONS SECTION of Article I and substituting the following:

     "Earnings" in this definition means earnings as defined in the definition
     of Compensation or Earnings in the Savings Plan. In determining
     eligibility, Earnings will also include an Eligible Employee's compensation
     with a prior employer if it is earned within the calendar year in which he
     is hired or his contract first becomes effective.

By striking the ELIGIBLE EMPLOYEE definition in the DEFINITIONS SECTION of
Article I and substituting the following:

     ELIGIBLE EMPLOYEE means any Employee, Agent or Field Manager.

By adding the following to the DEFINITIONS SECTION of Article I:

     FIELD MANAGER means:

     (a)  An individual who holds a current DD 713 contract or any successor
          full-time contract with the Company; and

     (b)  Such individual is in one of the following full-time field management
          positions:

          -    management assistant;

          -    management associate;

          -    manager;

          -    co-manager;

          -    assistant general manager;

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          -    associate general manager;

          -    co-general manager;

          -    general manager;

          -    brokerage manager;

          -    brokerage sales manager; or

          -    brokerage director;

By striking the PAY PERIOD definition from the DEFINITIONS SECTION of Article I.

By striking the first sentence of the first paragraph in subsection (a) of the
COMPANY CONTRIBUTIONS SECTION of Article Ill and substituting the following:

     (a)  Elective Deferral Contributions. The amount of each Elective Deferral
          Contribution for a Participant shall be equal to any percentage (not
          less than 6% nor more than 8%) of his Compensation for the pay period
          (as established by the Company) as elected in his salary deferral
          agreement.

By striking the second paragraph in subsection (a) of the COMPANY CONTRIBUTIONS
SECTION of Article Ill and substituting the following:

     The salary deferral agreement must be effective before the beginning of the
     pay period (as established by the Company) in which Elective Deferral
     Contributions are to start or stop.

By striking the first paragraph in subsection (b) of the COMPANY CONTRIBUTIONS
SECTION of Article Ill and substituting the following:

     (b)  Matching Contributions. The amount of each Matching Contribution made
          by the Company for a Participant shall be equal to 50% of the
          Participant's Elective Deferral Contributions for the pay period (as
          established by the Company). The amount of Matching Contribution made
          by the Company for a Participant shall not exceed 3% of his
          Compensation for such pay period.

By striking the words "and the SMALL AMOUNTS SECTION of Article IX," from the
DEATH BENEFITS SECTION of Article V.

By striking the first sentence of the DISABILITY BENEFITS SECTION of Article V
and substituting the following:

     If a Participant becomes totally and permanently disabled, as defined in
     the Savings Plan, his Vested Account shall be distributed to him in a
     single sum payment.

By adding the following sentence to the end of the first paragraph in Article
VIII:

     Benefits under this Plan will be paid only if the Plan Administrator
     decides, in his discretion, that the applicant is entitled to them.

By striking the SMALL AMOUNTS SECTION of Article IX in its entirety.

                                       3
<PAGE>   4

Effective January 1, 2001:

By striking the SAVINGS PLAN definition in the DEFINITIONS SECTION of Article I
and substituting the following:

     SAVINGS PLAN means the qualified plan(s) as follows:

          The Principal Select Savings Plan for Employees The Principal Select
          Savings Plan for Individual Field

This amendment is made an integral part of the aforesaid Plan and is controlling
over the terms of said Plan with respect to the particular items addressed
expressly herein. All other provisions of the Plan remain unchanged and
controlling.

Unless otherwise stated on any page of this amendment, eligibility for benefits
and the amount of any benefits payable to or on behalf of an individual who is
an Inactive Participant on the effective date(s) stated above, shall be
determined according to the provisions of the aforesaid Plan as in effect on the
day before he became an Inactive Participant.

Signing this amendment, the Company, as plan sponsor, has made the decision to
adopt this plan amendment. The Company is acting in reliance on its own
discretion and on the legal and tax advice of its own advisors, and not that of
any member of the Principal Financial Group or any representative of a member
company of the Principal Financial Group.

Signed this 28th day of December, 2000.

                                             PRINCIPAL LIFE INSURANCE COMPANY

                                             By /s/ LYNN M. GRAVES
                                                --------------------------------

                                             2nd Vice President
                                             -----------------------------------
                                                            Title

                                       4
<PAGE>   5

                      PLAN PAGES AFFECTED BY THIS AMENDMENT

1.   Page 4 - Table of Contents, deleting Small Amounts section

2.   Page 6 - Change definition of Agent and Compensation. Delete def of Agents
     Contract.

3.   Page 7 - Delete def of General Manager; change eligible employee; add Field
     Manager; delete Pay Period.

4.   Page 8 - Delete def of Management Assistant; change def of Savings Plan.

5.   Page 12 - Change to elective deferral language and Company contributions.

6.   Page 34 - Changes to death benefits section and disability benefits
     section.

7.   Page 15 - Change to optional forms of distribution section.

8.   Page 16 - Change to election procedures section.

9.   Page 20 - Delete small amounts section

                                       5
<PAGE>   6

                                 AMENDMENT NO. 4

                    THE PRINCIPAL SELECT SAVINGS EXCESS PLAN

     The Plan named above gives the Employer the right to amend it at any time.
According to that right, the Plan is amended as provided below:

Effective January 1, 2000,

     by striking the following:

          Page 7
          Page 12

     and substituting the following:

          Page 7
          Page 12

     The provisions and conditions set forth on any page of this amendment are a
part of the Plan as fully as if recited over the signature(s) below.

     Unless otherwise stated on any page of this amendment, eligibility for
benefits and the amount of such benefits payable to or on behalf of an
individual who is an inactive Participant on the effective date(s) stated above,
shall be determined according to the provisions of the Plan as in effect on the
day before he became an Inactive Participant.

     By signing this amendment, the Employer acknowledges having counseled to
the extent necessary with selected legal and tax advisors regarding the
amendment's legal and tax implications.

     Signed this 21st day of December 1999.

                                                PRINCIPAL LIFE INSURANCE

                                                By  /s/ MAY F. JOHNSON
                                                    ----------------------------

                                                Vice President - Human Resources
                                                --------------------------------
                                                             Title

<PAGE>   7

                                 AMENDMENT NO. 3

                    THE PRINCIPAL SELECT SAVINGS EXCESS PLAN

     The Plan named above gives the Employer the right to amend it at any time.
According to that right, the Plan is amended as provided below:

Effective January 1, 1998,

     by striking the following:

          Page 3                 Page 8                 Page 16
          Page 6                 Page 9                 Page 20
          Page 7                 Page 14

     and substituting the following:

          Page 3                 Page 8                 Page 16
          Page 6                 Page 9                 Page 16a
          Page 7                 Page 14                Page 20

     by adding the following:

          Page 12a

Effective July 1, 1998,

     by striking the following

          Page 15

     and substituting the following:

          Page 15

     The provisions and conditions set forth on any page of this amendment are a
part of the Plan as fully as if recited over the signature(s) below.

     By signing this amendment, the Employer acknowledges having counseled to
the extent necessary with selected legal and tax advisors regarding the
amendment's legal and tax implications.

     Signed this 1st day of October, 1998.

     PRINCIPAL LIFE INSURANCE COMPANY          PRINCIPAL MUTUAL LIFE INSURANCE
                                               COMPANY

     By /s/ MAY F. JOHNSON                     By /s/ MAY F. JOHNSON
        ------------------------------            ------------------------------

        Vice President-Human Resources            Vice President-Human Resources
        ------------------------------            ------------------------------
                    Title                                      Title

<PAGE>   8

                                 AMENDMENT NO. 2

                    THE PRINCIPAL SELECT SAVINGS EXCESS PLAN

     The Plan named above gives the Employer the right to amend it at any time.
According to that right, the Plan is amended as provided below:

Effective January 1, 1996,

     by striking the following:

          Page 4
          Page 14
          Page 20

     and substituting the following:

          Page 4
          Page 14
          Page 20

Effective July 1, 1997,

     by striking the following:

          Page 12

     and substituting the following:

          Page 12

     The provisions and conditions set forth on any page of this amendment are a
part of the Plan as fully as if recited over the signature(s) below.

     By signing this amendment, the Employer acknowledges having counseled to
the extent necessary with selected legal and tax advisors regarding the
amendment's legal and tax implications.

     Signed this 11th day of September, 1997.

                                            PRINCIPAL MUTUAL LIFE INSURANCE
                                            COMPANY

                                            By  /s/ MAY F. JOHNSON
                                                --------------------------------

                                                Vice President - Human Resources
                                                --------------------------------
                                                             Title

<PAGE>   9

                                 AMENDMENT NO. 1

                    THE PRINCIPAL SELECT SAVINGS EXCESS PLAN

     The Plan named above gives the Employer the right to amend it at any time.
According to that right, the Plan is amended as provided below:

Effective January 1, 1996,

     by striking the following:

          Page 8
          Page 12
          Page 13
          Page 16

     and substituting the following:

          Page 8
          Page 12
          Page 13
          Page 16

     The provisions and conditions set forth on any page of this amendment are a
part of the Plan as fully as if recited over the signature(s) below.

     By signing this amendment, the Employer acknowledges having counseled to
the extent necessary with selected legal and tax advisors regarding the
amendment's legal and tap implications.

     Signed this 21st day of August 1996.

                                              PRINCIPAL MUTUAL LIFE INSURANCE
                                              COMPANY

                                              By /s/ MAY F. JOHNSON
                                                 -------------------------------

                                                            VP-HR
                                              ----------------------------------
                                                            Title

<PAGE>   10

                                  THE PRINCIPAL

                           SELECT SAVINGS EXCESS PLAN

Nonqualified Retirement Plan 7.5A

Restated January 1, 1994

<PAGE>   11

                          AMEND. NO. 3 PAGE DTD. l-l-98

                                TABLE OF CONTENTS

<TABLE>
<S>                              <C>
INTRODUCTION

ARTICLE I                        DEFINITIONS

ARTICLE II                       PARTICIPATION

       Section 2.01    ----      Excess Plan Active Participant
       Section 2.02    ----      Inactive Participant
       Section 2.03    ----      Cessation of Participation

 ARTICLE Ill                     CONTRIBUTIONS

       Section 3.01    ----      Company Contributions
       Section 3.02    ----      Allocation
       Section 3.03    ----      Transfers

ARTICLE IV                       INVESTMENT OF CONTRIBUTIONS

ARTICLE V                        BENEFITS

      Section 5.01     ----      Retirement Benefits
      Section 5.02     ----      Death Benefits
      Section 5.03     ----      Termination Benefits
      Section 5.04     ----      Disability Benefits

ARTICLE VI                       DISTRIBUTION OF BENEFITS

      Section 6.01     ----      Automatic Forms of Distribution
      Section 6.02     ----      Optional Forms of Distribution
      Section 6.03     ----      Election Procedures
      Section 6.04     ----      Distributions Under Qualified Domestic
                                 Relations Orders

ARTICLE VII                      TERMINATION OF PLAN

ARTICLE VIII                     ADMINISTRATION OF PLAN
</TABLE>

TABLE OF CONTENTS                      3
<PAGE>   12

                          AMEND. NO. 2 PAGE DTD, l-1-96

<TABLE>
<S>                              <C>
ARTICLE IX                       GENERAL PROVISIONS

      Section 9.01     ----      Amendments
      Section 9.02     ----      Provisions Relating to the Insurer
                                 and Other Parties
      Section 9.03     ----      Employment Status
      Section 9.04     ----      Rights to Plan Assets
      Section 9.05     ----      Nonalienation of Benefits
      Section 9.06     ----      Construction
      Section 9.07     ----      Legal Actions
      Section 9.08     ----      Word Usage
      Section 9.09     ----      Small Amounts

PLAN EXECUTION
</TABLE>

TABLE OF CONTENTS                      4
<PAGE>   13

                                  INTRODUCTION

     The Company established the nonqualified Excess Plan on September 1, 1988,
for a select group of management or highly compensated employees who, due to the
amount of their compensation from the Company, are unable to fully participate
in the Elective Deferral and Company Matching Contributions available to the
other eligible participants in the Savings Plan. The Excess Plan has been
designed as, and is intended to be, an unfunded plan for purposes of the
Employee Retirement Income Security Act of 1974, as amended, and a nonqualified
plan for purposes of ss. 401 of the Internal Revenue Code of 1986, as amended.

     The Company is of the opinion that the Excess Plan should be changed. It
believes that the best means to accomplish these changes is to completely
restate the plan's terms, provisions and conditions. The restatement, effective
January 1, 1994, is set forth in this document and is substituted in lieu of
the prior document.

     Any funds accumulated for purposes of providing benefits under this plan
are fully available to satisfy the claims of the Company's creditors.
Participants have no greater rights with regard to such fund than any other
general creditor of the Company.

INTRODUCTION                           5
<PAGE>   14

                                    ARTICLE I

                                   DEFINITIONS

ACCOUNT means, for a Participant, his share of the Investment Fund. Separate
accounting records are kept for those parts of his Account that result from:

(a)  Elective Deferral Contributions.

(b)  Matching Contributions.

(c)  Transfer Account Values

A Participant's Account shall be reduced by any distribution of his Account. A
Participant's Account will participate in the earnings credited, expenses
charged and any appreciation or depreciation of the Investment Fund. His Account
is subject to any minimum guarantees applicable under the Group Contract or
other investment arrangement.

AGENT means an individual who holds an unmodified Agent's Contract and who is
not a General Manager or Management Assistant. On and after August 1, 1998,
Agent also excludes an individual who is acting as a Brokerage General Agent.

AGENT'S CONTRACT means the DD713 contract between the Company and an Agent,
General Manager or Management Assistant. The term Agent's Contract shall also
include any successor full-time agent's contract substituted by the Company
between the Company and such individual and any predecessor full-time agent's
contract which the Company substituted with DO713 or any of its predecessors,

BENEFICIARY means the person or persons named by a Participant to receive any
benefits under this Plan upon the Participant's death. For purposes of this
Plan, Beneficiary is the same as designated by the Participant under the Savings
Plan.

BENEFIT DATE means, for a Participant, the first day of the first period for
which an amount of benefit is payable to him under this Plan. See Article V -
BENEFITS.

BROKERAGE GENERAL AGENT means an individual under the standard compensation plan
who holds an active DD714 Contract or any successor full-time contract with the
Company.

CODE means the Internal Revenue Code of 1986, as amended.

COMPANY means Principal Life Insurance Company (Principal Mutual Life Insurance
Company, before July 1, 1998).

COMPENSATION means the total earnings paid or made available to an Eligible
Employee by the Company during any specified period.

"Earnings" in this definition means earnings as defined in the definition of
Compensation or Earnings in the Savings Plan.

ARTICLE I                              6
<PAGE>   15

Earnings shall also include amounts which are contributed by the Company
according to a salary reduction agreement and which are not currently includable
in the Employee's gross income by reason of the application of Code Sections
125, 402(e)(3), 402(h)(l)(B) or 403(b), as well as Salary Deferral Contributions
under this Plan.

For the purpose of Elective Deferral and Matching Contributions, earnings means
only those amounts in excess of (1) or (2) below, whichever occurs first:

1)   $150,000, as indexed, or

2)   the Compensation determined by the maximum deferral contribution allowed
     under Code Section 402(g) to the Savings Plan divided by the maximum
     deferral percentage allowed by the outcome of the nondiscrimination test
     under the Savings Plan.

CONTRIBUTIONS means

     Elective Deferral Contributions
     Matching Contributions

as set out in Article III, unless the context clearly indicates otherwise.

ELECTIVE DEFERRAL CONTRIBUTIONS means contributions in accordance with a salary
deferral agreement as set out in Article Ill, unless the context clearly
indicates otherwise.

ELIGIBLE EMPLOYEE means any Employee, Agent, General Manager and Management
Assistant.

EMPLOYEE means an individual as defined in the Savings Plan, and will include an
individual employed by an adopting employer, as defined in the Savings Plan.

ENTRY DATE means the date an Eligible Employee first enters the Plan as an
Active Participant. See Article II - PARTICIPATION,

ERISA means the Employee Retirement Income Security Act of 1974, as amended.

EXCESS PLAN means The Principal Select Savings Excess Plan set forth in this
document, including any later amendments to it.

FISCAL YEAR means the Company's taxable year. The last day of the Fiscal Year is
December 31.

GENERAL MANAGER means an individual who is so designated by the Company and who
holds an unmodified Agent's Contract. On and after August 1, 1998, General
Manager excludes an individual who is acting as a Brokerage General Agent.

GROUP CONTRACT means the group annuity contract or contracts into which the
Trustee enters with the Insurer for the investment of Contributions and the
payment of benefits under this Plan. The term Group Contract as it is used in
this Plan is deemed to include the plural unless the context clearly indicates
otherwise.

Any funds accumulated under the Group Contract are available to the general
creditors of the Company.

ARTICLE I                              7
<PAGE>   16

INSURER means Principal Life Insurance Company (Principal Mutual Life Insurance
Company before July 1, 1998), and any other insurance company or companies named
by the Trustee or Company.

INVESTMENT FUND means the total assets held for the purpose of providing
benefits for Participants, These funds result from Contributions made under the
Plan.

The investment Fund is not held for the exclusive benefit of Participants or
their Beneficiaries.

MANAGEMENT ASSISTANT means an individual who is so designated by the Company and
who holds an unmodified Agent's Contract. On and after August 1, 1998,
Management Assistant excludes an individual who is acting as a Brokerage General
Agent.

MATCHING CONTRIBUTIONS means matching contributions as set out in Article III,
unless the context clearly indicates otherwise.

PARTICIPANT means an Eligible Employee who is actively participating in the
Plan.

PAY PERIOD means

(a)  For Agents, General Managers and Management Assistants, Pay Period as
     defined in The Principal Select Savings Plan for Agents, General Managers
     and Management Assistants.

(b)  For all other Employees, Pay Period as defined in The Principal Select
     Savings Plan for Employees.

PLAN ADMINISTRATOR means the person or persons who administer the Plan. The Plan
Administrator is the Company.

PLAN YEAR means a period beginning on a Yearly Date and ending on the day before
the next Yearly Date.

REENTRY DATE means the date a former Participant reenters the Plan. See Article
II - PARTICIPATION.

RETIREMENT DATE means the last day of the month in which a Participant's
Retirement Date occurs under the Savings Plan. This date shall be on or after
the earlier of (i) the date on which he ceases to be an Employee or (ii) the
date he becomes totally and permanently disabled as defined under the Savings
Plan.

SAVINGS PLAN means the qualified plan(s) as follows:

     The Principal Select Savings Plan for Agents, General Managers and
     Management Assistants.

     The Principal Select Savings Plan for Employees.

     TRANSFER ACCOUNT VALUE means for a Participant, the account values, if any,
     which, after a period of five years, automatically transfer to this Plan
     from the Nonqualified Defined Contribution Plan for Designated
     Participants.

     TRUST means an agreement of trust between the Company and Trustee
     established for the purpose of holding and distributing the Trust Fund
     under the provisions of the Excess Plan. The Trust may provide for the
     investment of all or any portion of the Trust Fund in the Group Contract or
     in any mutual fund arrangement available with the Insurer.

ARTICLE I                              8
<PAGE>   17

TRUST FUND means the total funds held under the Trust for the purpose of
providing benefits for Participants. These funds result from Contributions made
under the Excess Plan which are forwarded to the Trustee to be deposited in the
Trust Fund.

TRUSTEE means the trustee or trustees under the Trust. The term Trustee as it is
used in this Plan is deemed to include the plural unless the context clearly
indicates otherwise.

VESTED ACCOUNT means the part of a Participant's Account in which he has a
vested interest. The Participant's Vested Account is equal to his Account.

YEARLY DATE means September 1, 1988, and each following January 1.

ARTICLE I                              9
<PAGE>   18

                                   ARTICLE II

                                  PARTICIPATION

SECTION 2.01--EXCESS PLAN ACTIVE PARTICIPANT.

     A person shall first become a Participant (begin active participation in
the Excess Plan) on the earliest date on or after January 1, 1994, on which the
person is an Eligible Employee and has met the eligibility requirement(s) set
forth below. This date is his Entry Date.

     (1)  He is an active participant in the Savings Plan.

     (2)  He is deferring at least six percent (or the annually determined
          amount, if applicable) into the Savings Plan.

     (3)  He has the required earnings level as provided in the definition of
          Compensation in Article I.

     Each Eligible Employee who was a Participant under the Plan on December 31,
1993, shall continue to be a Participant if he is still an Eligible Employee on
January 1, 1994, and his Entry Date shall not change.

SECTION 2.02--INACTIVE PARTICIPANT.

     An Active Participant shall become an Inactive Participant (discontinue
accruing benefits under the Excess Plan) on the earliest of the following:

     (a)  The effective date of complete termination of the Excess Plan.

     (b)  The date of termination of his agent's contract DD713 (as such
          contract may be amended from time to time, or successor contracts to
          it).

     (c)  The date the Company sends written notice to the Participant of
          cancellation of his agent's contract DD713 (as such contract may be
          amended from time to time, or successor contracts to it).

     (d)  The date the Participant otherwise no longer meets the definition of
          Eligible Employee as set forth in the DEFINITIONS SECTION of Article
          I.

     (e)  The date the Participant no longer meets the terms and conditions set
          forth in the EXCESS PLAN ACTIVE PARTICIPANT SECTION of Article II.

     (f)  The date the Participant revokes his salary deferral agreement.

     A former Participant shall again become a Participant (resume active
participation in the Excess Plan) on the date he again performs an hour of
service as an Eligible Employee. This date is his Reentry Date.

ARTICLE II                             10
<PAGE>   19

SECTION 2.03--CESSATION OF PARTICIPATION.

        A Participant shall cease to be a Participant on the date he is no
longer an Eligible Employee and the value of his Account is zero.

ARTICLE II                             11
<PAGE>   20

                                   ARTICLE III

                                  CONTRIBUTIONS

SECTION 3.01--COMPANY CONTRIBUTIONS.

     Company Contributions for each Plan Year will be equal to the Company
     Contributions as described below.

     (a)  Elective Deferral Contributions. The amount of each Elective Deferral
          Contribution for a Participant shall be equal to any percentage (not
          less than 6% nor more than 8%) of his Compensation for the Pay Period
          as elected in his or her salary deferral agreement. This percentage
          will be adjusted at any time the elective deferral contribution
          percentage under the Savings Plan is increased or decreased. A person
          who is eligible to participate in the Excess Plan may file a salary
          deferral agreement with the Company. The salary deferral agreement to
          start Elective Deferral Contributions may be effective on a
          Participant's Entry Date (Reentry Date, if applicable) or any
          following date. The Participant shall make any change or terminate the
          salary deferral agreement by filing a new salary deferral agreement. A
          Participant's salary deferral agreement making a change may be
          effective on any date a salary deferral agreement to start Elective
          Deferral Contributions could be effective. A Participant's salary
          deferral agreement to stop Elective Deferral Contributions may be
          effective on any date.

          The salary deferral agreement must be effective before the beginning
          of the Pay Period in which Elective Deferral Contributions are to
          start or stop.

          Elective Deferral Contributions may include contributions the person
          would have made to the Savings Plan under its contribution formula but
          for the additional restrictions imposed by such plan to meet the
          qualification requirements of the Internal Revenue Code.

     (b)  Matching Contributions. The amount of each Matching Contribution made
          by the Company for a Participant shall be equal to 50% of the
          Participant's Elective Deferral Contributions for the Pay Period. The
          amount of Matching Contribution made by the Company for a Participant
          shall not exceed three percent of his Compensation for the Pay Period.

          Matching Contributions may include contributions the Company would
          have made to the Savings Plan under its contribution formula but for
          the additional restrictions imposed by such plan to meet the
          qualification requirements of the Internal Revenue Code.

SECTION 3.02--ALLOCATION.

     The following Contributions for each Plan Year shall be allocated to each
Participant for whom such Contributions were made under the COMPANY
CONTRIBUTIONS SECTION of Article III:

     Elective Deferral Contributions
     Matching  Contributions

These Contributions shall be allocated when made and credited to the
Participant's Account.

ARTICLE III                            12
<PAGE>   21

SECTION 3.03--TRANSFERS.

     Each Plan Year, Contributions made on behalf of a Participant due to his
participation in the Nonqualified Defined Contribution Plan for Designated
Participants may be automatically transferred from such other nonqualified plan
to this Plan. Any such transfer shall occur on or after the date which is five
years after the contribution was made to such other nonqualified plan.

     These contributions are allocated to the Participant upon transfer to this
Plan. This is his Transfer Account Value.

ARTICLE III                           12a
<PAGE>   22

                                   ARTICLE IV

                          INVESTMENT OF CONTRIBUTIONS

     Contributions made under the Excess Plan shall be deposited with the
Trustee to be invested in the Trust Fund. Investment of such Contributions will
be in accordance with the provisions of the Trust which will include, but not be
limited to, investments under the provisions of any applicable group contract or
any mutual fund I arrangement with the Insurer. The amounts in the Trust are
subject to the claims of the Company's creditors, in the event of the Company's
insolvency.

     To the extent permitted by the Trust, the Participant shall direct the
Contributions to any of the investments available under the Trust. If no
investment direction is given, Contributions will be invested according to the
provisions of any applicable group contract. (A change in investment direction
or a transfer to) or from an account of a Participant may be made at any time,
according to such terms and conditions as the Trustee may specify and subject to
the provisions of the investments available under the Trust.

ARTICLE IV                             13
<PAGE>   23

                                    ARTICLE V

                                    BENEFITS

SECTION 5.01--RETIREMENT BENEFITS.

     On a Participant's Retirement Date, his Vested Account shall be distributed
to him according to the distribution of benefits provisions of Article VI. I

SECTION 5.02--DEATH BENEFITS.

     If a Participant dies before his Retirement Date, his Vested Account shall
be distributed according to the distribution of benefits provisions of Article
VI and the SMALL AMOUNTS SECTION of Article IX.

SECTION 5.03--TERMINATION BENEFITS.

     A Participant will receive a distribution of his Vested Account if he
ceases to be an Eligible Employee before his Retirement Date, provided he has
not again become an Eligible Employee.

SECTION 5.04--DISABILITY BENEFITS.

     If a Participant becomes totally and permanently disabled, as defined in
the Associated Plan, his Vested Account shall be distributed to him in a single
sum payment. Such payment shall be made after the Participant has been totally
and permanently disabled for one year.

ARTICLE V                              14
<PAGE>   24

                                   ARTICLE VI

                            DISTRIBUTION OF BENEFITS

SECTION 6.01--AUTOMATIC FORMS OF DISTRIBUTION.

     The automatic form of benefit payable to or on behalf of a Participant is
determined as follows:

     (a)  The automatic form of retirement benefit shall be a single sum
          payment.

     (b)  The automatic form of death, disability and termination benefit shall
          be a single sum payment to the Participant or his Beneficiary.

SECTION 6.02--OPTIONAL FORMS OF DISTRIBUTION.

     An election of an optional form of benefit may be made by the Participant
(see the ELECTION PROCEDURES SECTION of Article VI).

     (a)  The optional forms of retirement benefit shall be the following:
          single life annuity with a certain period of ten years; a single life
          annuity with installment refund; survivorship life annuity with
          installment refund and a survivorship percentage of 50; and fixed
          period annuities for any period of whole months which is not less than
          120 and does not exceed the life expectancy of the Participant and the
          named Beneficiary.

          The following optional forms of retirement benefit are also available:
          a single sum payment; an annual distribution equal to any fixed whole
          percentage, not less than 10% and not more than 13%, as elected by the
          Participant, of his Vested Account. Such amount shall be payable
          annually until his Vested Account is exhausted. Once elected, the
          percentage will not change, An election under this paragraph may be
          delayed until the Participant reaches his required beginning date
          under the Associated Plan.

     If the Participant dies before beginning to receive a distribution of his
     retirement benefits, any form of distribution for a death benefit must meet
     the following limitations:

     (b)  If the Participant did not name an individual as his Beneficiary to
          receive any death benefit payable under the DEATH BENEFITS SECTION of
          Article V, such death benefit shall be distributed within five years
          of the Participant's death.

ARTICLE VI                             15
<PAGE>   25

          A form of distribution for retirement or death benefits shall be
          available to a Participant or Beneficiary only if the annual
          distribution under such form is at least equal to the quotient of the
          Participant's Vested Account as of the date distribution is to begin,
          divided by the life expectancy of the Participant, Beneficiary or
          joint and last survivor expectancy of the Participant and Beneficiary,
          as appropriate. If distribution is in a form other than a life
          annuity, the life expectancy of the Participant (and/or Beneficiary,
          if the spouse is the Beneficiary) may be recalculated after
          distribution begins, but no more frequently than annually. In the case
          of a Beneficiary who is not the Participant's spouse, life expectancy
          shall be calculated when benefits start and minimum payments for any
          12-consecutive month period will be based on such life expectancy
          minus the number of whole years since the distribution first began.
          The life expectancy or joint and last survivor expectancy shall be
          computed by use of the return multiplies contained in Section 1.72-9
          of the regulations under the Code.

SECTION 6.03--ELECTION PROCEDURES.

     The Participant or Beneficiary shall make any election under this section
in the form or manner provided for that purpose. The Plan Administrator may
require such individual to complete any necessary documents as to the provisions
to be made. Effective July 1, 1998, any election made as to a Participant whose
Retirement Date occurs on and after January 1, 1999, must be made no later than
the date one-year prior to his Retirement Date. In the absence of such election,
benefits shall be paid in a single sum payment.

     (a)  Retirement Benefits. A Participant may elect his Beneficiary and may
          elect to have retirement benefits distributed under any of the
          optional forms of retirement benefit described in the OPTIONAL FORMS
          OF DISTRIBUTION SECTION of Article VI.

     (b)  Death Benefits. A Participant may elect his Beneficiary and may elect
          to have death benefits distributed under any of the optional forms of
          death benefit described in the OPTIONAL FORMS OF DISTRIBUTION SECTION
          of Article VI.

          If the Participant has not elected an optional form of distribution
          for the death benefit payable to his Beneficiary, the Beneficiary may,
          for his own benefit, elect the form of distribution, in like manner as
          a Participant.

SECTION 6.04--DISTRIBUTIONS UNDER QUALIFIED DOMESTIC RELATIONS ORDERS.

     The Plan specifically permits distributions to an alternate payee under a
qualified domestic relations order, as defined in Code Section 414(p), at any
time, irrespective of whether the Participant has attained his earliest
retirement age, as defined in Code Section 414(p), under the Plan. A
distribution to an alternate payee before the Participant's attainment of
earliest retirement age, as defined in Code Section 414(p), is available only
if:

     (a)  the order specifies distributions at that time or permits an agreement
          between the Plan and the alternate payee to authorize an earlier
          distribution; and

     (b)  if the present value of the alternate payee's benefits under the Plan
          exceeds $5,000, and the order requires, the alternate payee consents
          to any distribution occurring before the Participant's attainment of
          earliest retirement age, as defined in Code Section 414(p).

Nothing in this section shall permit a Participant a right to receive a
distribution at a time otherwise not permitted under the Plan nor shall it
permit the alternate payee to receive a form of payment not permitted under the
Plan.

ARTICLE VI                             16
<PAGE>   26

     The Plan Administrator shall establish reasonable procedures to determine
the qualified status of a domestic relations order. Upon receiving a domestic
relations order, the Plan Administrator promptly shall notify the Participant
and an alternate payee named in the order, in writing, of the receipt of the
order and the Plan's procedures for determining the qualified status of the
order. Within a reasonable period of time after receiving the domestic relations
order, the Plan Administrator shall determine the qualified status of the order
and shall notify the Participant and each alternate payee, in writing, of its
determination. The Plan Administrator shall provide notice under this paragraph
by mailing to the individual's address specified in the domestic relations
order, or in a manner consistent with Department of Labor regulations. The Plan
Administrator may treat as qualified any domestic relations order entered before
January 1, 1985, irrespective of whether it satisfies all the requirements
described in Code Section 414(p).

     If any portion of the Participant's Account is payable during the period
the Plan Administrator is making its determination of the qualified status of
the domestic relations order, a separate accounting shall be made of the amount
payable. If the Plan Administrator determines the order is a qualified domestic
relations order within 18 months of the date amounts are first payable following
receipt of the order, the payable amounts shall be distributed in accordance
with the order, If the Plan Administrator does not make its determination of the
qualified status of the order within the 4 8 month determination period, the
payable amounts shall be distributed in the manner the Plan would distribute if
the order did not exist and the order shall apply prospectively if the Plan
Administrator later determines the order is a qualified domestic relations
order.

     The Plan shall make payments or distributions required under this section
by separate benefit checks or other separate distribution to the alternate
payee(s).

ARTICLE VI                            16a
<PAGE>   27

                                  ARTICLE VII

                               TERMINATION OF PLAN

     The Company expects to continue the Plan indefinitely but reserves the
right to terminate the Plan at any time upon giving written notice to all
parties concerned. Complete discontinuance of Contributions under the Plan
constitutes termination of the Plan.

     The Participant's Account shall continue to participate in the investment
earnings credited, expenses charged and any appreciation or depreciation of the
Investment Fund until the Account is distributed.

     A Participant's Account may be distributed to the Participant after the
effective date of the Plan termination.

     Upon termination of the Plan, no more Eligible Employees shall become
Participants and no more Contributions shall be made.

     Amounts in this Plan shall not be paid to the Company at any time, except
that, after the satisfaction of all liabilities under the Plan, any amounts
remaining may be paid to the Company. The payment may not be made if it would
contravene any provision of law.

ARTICLE VII                            17
<PAGE>   28

                                  ARTICLE VIII

                             ADMINISTRATION OF PLAN

       The administrative provisions contained in Article VIII of the Savings
Plan, except for Section 8.07, are hereby incorporated by reference into this
Plan.

ARTICLE VIII                           18
<PAGE>   29

                                   ARTICLE IX

                             GENERAL PROVISIONS

SECTION 9.01--AMENDMENTS.

     By resolution of its Management Resources Committee, the Company may amend
this Excess Plan at any time, including any remedial retroactive changes (within
the specified period of time as may be determined by Internal Revenue Service
regulations) to comply with the requirements of any law or regulation issued by
any governmental agency to which the Company is subject.

     Effective August 15, 1994, the Management Resources Committee is the
Corporate Management Committee.

SECTION 9.02--PROVISIONS RELATING TO THE INSURER AND OTHER PARTIES.

     The obligations of an Insurer shall be governed solely by the provisions of
the Group Contract. The Insurer shall not be required to perform any act not
provided in or contrary to the provisions of the Group Contract. See the
CONSTRUCTION SECTION of this article.

     Any issuer or distributor of investment contracts or securities is governed
solely by the terms of its policies, written investment contract, prospectuses,
security instruments, and any other written agreements entered into with the
Trustee.

     Such Insurer, issuer or distributor is not a party to the Excess Plan, nor
bound in any way by the Excess Plan provisions. Such parties shall not be
required to look to the terms of this Excess Plan, nor to determine whether the
Company, the Plan Administrator or the Trustee have the authority to act in any
particular manner or to make any contract or agreement.

     Until notice of any amendment or termination of this Excess Plan or a
change in Trustee has been received by the Insurer at its home office or an
issuer or distributor at their principal address, they are and shall be fully
protected in assuming that the Excess Plan has not been amended or terminated
and in dealing with any party acting as Trustee according to the latest
information which they have received at their home office or principal address.

SECTION 9.03.--EMPLOYMENT STATUS.

     Nothing contained in this Excess Plan gives an Eligible Employee the right
to be retained in the Company's employ or to interfere with the Company's right
to discharge any Eligible Employee.

SECTION 9.04-RIGHTS TO PLAN ASSETS.

     No Eligible Employee shall have any right to or interest in any assets of
the Excess Plan upon termination of his employment or otherwise except as
specifically provided under this Excess Plan, and then only to the extent of the
benefits payable to such Eligible Employee in accordance with the Excess Plan
provisions.

ARTICLE IX                             19
<PAGE>   30

     Any final payment or distribution to a Participant or his legal
representative or to any Beneficiaries or spouse of such Participant under the
Excess Plan provisions shall be in full satisfaction of all claims against the
Excess Plan, the Plan Administrator, the Trustee, the Insurer, and the Company
arising under or by virtue of the Excess Plan.

SECTION 9.05--NONALIENATION OF BENEFITS.

     Benefits payable under the Excess Plan are not subject to the claims of any
creditor of any Participant, Beneficiary or spouse. A Participant, Beneficiary
or spouse does not have any rights to alienate, anticipate, commute, pledge,
encumber or assign any of such benefits. The preceding sentences shall also
apply to the creation, assignment, or recognition of a right to any benefit
payable with respect to a Participant according to a domestic relations order,
unless such order is determined by the Plan Administrator to be a qualified
domestic relations order, as defined in ERISA Act Section 206(d), or any
domestic relations order entered before January 1, 1985.

SECTION 9.06--CONSTRUCTION.

     The validity of the Excess Plan or any of its provisions is determined
under and construed according to Federal law and, to the extent permissible,
according to the laws of the state in which the Company has its principal
office. In case any provision of this Excess Plan is held illegal or invalid for
any reason, such determination shall not affect the remaining provisions of this
Excess Plan, and the Excess Plan shall be construed and enforced as if the
illegal or invalid provision had never been included.

     In the event of any conflict between the provisions of the Excess Plan and
the terms of any contract or policy issued hereunder, the provisions of the
Excess Plan control the operation and administration of the Excess Plan.

SECTION 9.07--LEGAL ACTIONS.

     The Plan, the Plan Administrator and the Trustee are the necessary parties
to any action or proceeding involving the assets held with respect to the Plan
or administration of the Plan or Trust. No person employed by the Company, no
Participant, former Participant or their Beneficiaries or any other person
having or claiming to have an interest in the Plan is entitled to any notice of
process. A final judgment entered in any such action or proceeding shall be
binding and conclusive on all persons having or claiming to have an interest in
the Plan.

SECTION 9.08--WORD USAGE.

     The masculine gender, where used in this Plan, shall include the feminine
gender and the singular words as used in this Plan may include the plural,
unless the context indicates otherwise.

SECTION 9.09--SMALL AMOUNTS.

     If the Vested Account of a Participant does not exceed $5,000, the entire
Vested Account shall be payable in a single sum as of the earliest of his
Retirement Date, the date he dies, or the date he ceases to be an Employee. This
is a small amounts payment. If a small amount is payable as of the date the
Participant dies, the small amounts payment shall be made to the Participant's
Beneficiary. If a small amount is payable while the Participant is living, the
small amounts payment shall be made to the Participant. The small amounts
payment is in full settlement of all benefits otherwise payable.

     No other small amounts payments shall be made.

ARTICLE IX                             20
<PAGE>   31
     By executing this Plan, the Company acknowledges having counseled to the
extent necessary with selected legal and tax advisors regarding the Plan's
legal and tax implications.

     Executed this 6th day of November, 1995.
                   ---        --------    --

                                    PRINCIPAL MUTUAL LIFE INSURANCE COMPANY

                                    By: /s/ THOMAS J. GAARD
                                        -----------------------------------

                                        Sr. Vice President
                                        -----------------------------------
                                                       Title

PLAN EXECUTION                         21
<PAGE>   32
              AMENDMENT TO THE PRINCIPAL SELECT SAVINGS EXCESS PLAN

                                       AND

     THE NONQUALIFIED DEFINED CONTRIBUTION PLAN FOR DESIGNATED PARTICIPANTS

                    (Hereinafter referred to as the "Plans")

The Plans named above give the Company the right to amend them at any time.

WHEREAS, in furtherance of the proposed demutualization of Principal Mutual
Holding Company, the Board of Directors of Principal Mutual Holding Company, on
March 3 1,2001, adopted a Plan of Conversion which contains certain provisions
applicable to the above plans, collectively defined as the "Excess Plans" in
such Plan of Conversion; and

WHEREAS, in order to reflect the provisions of Section 8.1 of the Plan of
Conversion as they relate to the above Plans, the following definitions are
adopted for purposes of this Amendment which relates specifically to provisions
and limitations reflected in Section 8.1 of the Plan of Conversion and for no
other purpose.

NOW THEREFORE, effective as of the effective date of the Plan of Conversion of
Principal Mutual Holding Company, the Plans are hereby amended as follows:

By adding the following definitions, in correct alphabetical order, to Article I
of such Plans:

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

     "Common Stock" means the common stock, par value $0.01 per share, of the
     Principal Financial Group, Inc., a Delaware corporation, and any successor
     thereto.

     "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, the
     Stock Incentive Plan and the Stock Purchase Plan.

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

     "Employees Savings Plan" means The Principal Select Savings Plan for
     Employees.

     "Excess Plan" for purposes of the Amendment to the Principal Select Savings
     Excess Plan and the Non-Qualified Defined Contribution Plan for Designated
     Participants relating to the Plan of Conversion, adopted as of May 21,2001,
     means the Principal Select Savings Excess Plan and the Non-Qualified
     Defined Contribution Plan for Designated Participants.

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

     "Plan of Conversion" means the Plan of Conversion of Principal Mutual
     Holding Company.

<PAGE>   33

     "Plans" for purposes of the Amendment to the Principal Select Savings
     Excess Plan and the Non- Qualified Defined Contribution Plan for Designated
     Participants relating to the Plan of Conversion, adopted as of May 21,2001,
     means the Principal Select Savings Excess Plan and the Non-Qualified
     Defined Contribution Plan for Designated Participants.

     "Savings Plans" for purposes of the Amendment to the Principal Select
     Savings Excess Plan and the Non-Qualified Defined Contribution Plan for
     Designated Participants relating to the Plan of Conversion, adopted as of
     May 2 1,2001, means the Employees Savings Plan, the Agents Savings Plan and
     the Excess Plan.

     "Stock Incentive Plan" means the Principal Financial Group, Inc. Stock
     Incentive Plan.

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

By adding a new Section 9.09 to Article IX, to read as follows:

     Section 9.09. -- Limitations.

     Notwithstanding anything else contained in the Plans to the contrary, no
     action shall be taken, and no award or distribution shall be made, under
     the Plans, which contains any term or condition that would violate any
     provision of the Plan of Conversion. To the extent that shares of Common
     Stock are made available for distribution hereunder, the number of such
     shares distributed hereunder shall count against (i) the limit of 6% of the
     number of shares of Corm-non Stock outstanding immediately following the
     effective date of the Plan of Conversion that may be made issuable or
     distributable under all Company Stock Plans (including, without limitation,
     the Plans) other than the Employees Savings Plan, the Agents Savings Plan
     and the Stock Purchase Plan, and (ii) the guideline set forth in the Stock
     Incentive Plan limiting the maximum number of shares of Common Stock that
     may be awarded or issued within 18 months of the effective date of the Plan
     of Conversion to 40% of the limit set forth in subclause (i).

By signing this amendment, the Company, as plan sponsor, has made the decision
to adopt this plan amendment as of May 21, 2001.

Signed this    21    day of           May          , 2001.
            --------        -----------------------

                                        PRINCIPAL LIFE INSURANCE COMPANY

                                        By: /s/ Jim DeVries
                                            ------------------------

                                        Title: Vice President -- HR
                                            ------------------------

                                       2

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