SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                               ------------------



                                    FORM 8-K

                                 CURRENT REPORT



                     PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                        Date of Report: FEBRUARY 28, 2005
                        (Date of earliest event reported)



                         PRINCIPAL FINANCIAL GROUP, INC.
             (Exact name of registrant as specified in its charter)


        DELAWARE                     1-16725                   42-1520346
(State or other jurisdiction    (Commission file number)    (I.R.S. Employer
   of incorporation)                                     Identification Number)


                     711 HIGH STREET, DES MOINES, IOWA 50392
                    (Address of principal executive offices)

                                 (515) 247-5111
              (Registrant's telephone number, including area code)

Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
    230.425)
[ ] Soliciting  material pursuant to Rule 14a-12 under the Exchange Act (17  CFR
    240.14a-12)
[ ] Pre-commencement  communications  pursuant  to  Rule 14d-2(b) under the
    Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
    Act (17 CFR 240.13e-4(c))

                               ------------------



<PAGE>



ITEM 1.01  ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On February 28, 2005, the Human  Resources  Committee (the  "Committee")  of the
Board of Directors of Principal  Financial Group, Inc. (the "Company")  approved
the  annual  base  salaries  (effective  as of March 5,  2005) of the  Company's
executive  officers  after a review  of  comparative  compensation  information,
individual  performance,  internal  equity and other  factors  as the  Committee
determined  important.  The  following  table sets forth the annual  base salary
levels of the Company's Named Executive Officers (which officers were determined
by reference to the  Company's  proxy  statement  dated April 1, 2004) for 2005,
compared to the actual salary paid in 2004:


<TABLE>
<CAPTION>

                    NAME AND POSITION                         YEAR                        BASE SALARY
---------------------------------------------------------- ----------- --------------------------------------------------
<S>                                                           <C>                       <C>
J. Barry Griswell, Chairman, President and Chief              2005                      $  1,000,000
Executive Officer                                             2004                         1,038,462
---------------------------------------------------------- ----------- --------------------------------------------------
John E. Aschenbrenner, President, Insurance and               2005                           530,000
Financial Services                                            2004                           521,077
---------------------------------------------------------- ----------- --------------------------------------------------
Michael H. Gersie, Executive Vice President, Global           2005                           445,000
Asset Management                                              2004                           441,231
---------------------------------------------------------- ----------- --------------------------------------------------
James P. McCaughan, President, Global Asset Management        2005                           510,000
                                                              2004                           519,231
---------------------------------------------------------- ----------- --------------------------------------------------
Larry D. Zimpleman, President, Retirement and Investor        2005                           530,000
Services                                                      2004                           507,231
---------------------------------------------------------- ----------- --------------------------------------------------
</TABLE>

Also on  February  28,  2005,  the  Committee  authorized  the payment of annual
incentive awards to each of the Company's Named Executive Officers in respect of
the year ended December 31, 2004. The annual incentive awards were made pursuant
to the Company's  broad-based  annual  incentive plan (the "PrinPay  Plan").  In
February 2004,  the Committee  approved the following  components  upon which to
base awards for senior  officers  under the PrinPay  Plan for 2004:  (1) Company
performance  and  individual  performance  in the  case of the  Chief  Executive
Officer and senior officers with service unit responsibilities,  and (2) Company
performance, business unit performance and individual performance in the case of
senior officers with business unit responsibilities.

In February 2004, the Committee  decided a single metric relating to achievement
of a  stated  level of  operating  earnings  for the  total  organization  would
determine  how the Company  performed for purposes of the PrinPay Plan for 2004.
The Committee  established a level of operating  earnings  achievement as target
performance for the Company component under the plan.  "Operating earnings" is a
non-GAAP  financial  measure used as the key financial  measure in the Company's
industry.  It is  believed to best  illustrate  the  performance  of a Company's
normal,  ongoing operations,  which is important in understanding and evaluating
financial condition and results of operations on a basis comparable to that used
by securities analysts.

In approving  the PrinPay  awards for 2004,  the Committee  determined  that the
result  obtained  for Company  performance  should be set at 120% of the target.
This determination of Company performance affected all participants.  The extent
to which the Company  performance  result  affected any  particular  participant
depended on the  relative  weight of the Company  performance  component  to any
other  business  unit  components  applicable  to  the  participant.  After  the
Committee  assessed the Company's and applicable  business unit  performance for
the year and took into account the  limitations  stated in the plan  (including,
without  limitation,  the attainment of certain  minimum  threshold  performance
objectives), a final award was approved for each senior officer. The final award
approved for each senior officer took into account the Committee's assessment of
his or her  performance  based  on the  officer's  level of  achievement  of the
individual goals the Committee  established for that officer at the beginning of
the year.  The  individual  goals for the Named  Executive  Officers  related to
achievement  of  targeted  levels  of  Company  and  applicable   business  unit
performance  with respect to operating  earnings,  as well as other  performance
measures and corresponding targets for business unit and individual  performance
the  Committee  determined  were  important  in  furthering  achievement  of the
objectives and initiatives of the organization. For 2004, the Committee approved
for eligible senior  officers,  including the Named Executive  Officers,  target
awards at ranges of 50% to 250% of base  salary  for  achieving  performance  at
target  and  maximum  awards  of  100% to 500%  of  base  salary  for  achieving
performance above target.  Attainment of individual  performance  targets varied
among Named Executive Officers.


                                       2
<PAGE>

The following table sets forth cash payments to the Named Executive  Officers in
respect of their  annual  incentive  awards  under the PrinPay Plan for 2004 and
2003:

<TABLE>
<CAPTION>

                           NAME                                 YEAR                 ANNUAL INCENTIVE AWARD
------------------------------------------------------------ ----------- ------------------------------------------------
<S>                                                             <C>                   <C>
Mr. Griswell                                                    2004                  $    1,800,000
                                                                2003                       1,318,125
------------------------------------------------------------ ----------- ------------------------------------------------
Mr. Aschenbrenner                                               2004                         624,511
                                                                2003                         359,510
------------------------------------------------------------ ----------- ------------------------------------------------
Mr. Gersie                                                      2004                         397,108
                                                                2003                         323,481
------------------------------------------------------------ ----------- ------------------------------------------------
Mr. McCaughan                                                   2004                       1,661,539
                                                                2003                       1,412,500
------------------------------------------------------------ ----------- ------------------------------------------------
Mr. Zimpleman                                                   2004                         530,310
                                                                2003                         367,015
------------------------------------------------------------ ----------- ------------------------------------------------
</TABLE>

In addition to approving  the annual  incentive  awards for the Named  Executive
Officers for 2004,  the  Committee on February 28, 2005 made  decisions  for the
performance  period of January 1, 2005 to December  31, 2005 with respect to the
Principal  Financial Group,  Inc. Annual  Incentive Plan (the "Annual  Incentive
Plan") approved by shareholders in May 2004, to be effective January 1, 2005. On
February 28, 2005, the Committee affirmed the incentive pool for the performance
period as defined in the Plan and determined  that the  participants in the plan
will  include  the Chief  Executive  Officer and each other  "covered  employee"
within the meaning of 162(m)(3) of the Internal Revenue Code. The Committee also
determined  that the  maximum  award for the  performance  period  for the Chief
Executive  Officer will be 40% of the incentive  pool, the maximum award for the
second highest  "covered  employee"  will be 20% of the incentive  pool, and the
maximum award for each of the other  participants will be 13.3% of the incentive
pool. The Committee  intends to administer the Annual Incentive Plan through the
use of negative  discretion  and subject to the  achievement  of the  applicable
performance  criteria  (without  regard to any adjustment  that may increase the
amounts  payable),  so that the actual annual awards payable to any such officer
do not  exceed  the  amount  that  would  have  been  payable  based on the same
performance  measures,  components  and weightings as those that would have been
applicable  to such  senior  officers  under the  PrinPay  Plan.  For 2005,  the
Committee  decided  that the  Company's  achievement  against a stated  level of
operating earnings would be the sole determiner of Company performance under the
PrinPay Plan.

Beginning in 2004, the Committee  determined  that the long-term  incentive plan
for senior officers would consist of stock-based  compensation  awards under the
Company's  Stock  Incentive  Plan.  Prior to 2004,  the Company also made awards
under a long-term plan that existed before the Company became  publicly-held  in
2001, the "Long-Term Performance Plan." The Company's Long-Term Performance Plan
affords  eligible  executives,  including  the  Named  Executive  Officers,  the
opportunity  to share in the  success  of the  Company if the  Company  achieves
specified performance  objectives over periods of three calendar years. The last
three-year cycle under the Long-Term Performance Plan ends on December 31, 2005.
On February  28,  2005,  the  Committee  authorized  payments  to the  Company's
executive  officers and other senior  officers  under the Long-Term  Performance
Plan for the  three-year  performance  period ended on December  31,  2004,  and
awarded stock options and restricted stock units, as described below,  under the
Company's Stock Incentive Plan.

For the 2002 - 2004 performance period under the Long-Term Performance Plan, the
Committee  used two metrics:  cumulative  operating  earnings for the three-year
period,  and  return on average  equity  for the third  year of the  performance
period.  The target set for operating  earnings  performance  was the sum of the
individual years' targets for operating earnings.  The target set for year-three
return  on  average  equity  was  based  on goals  agreed  to by the  Board  and
management for long-term growth and creation of long-term shareholder value.

In approving  awards for the  three-year  performance  period ended December 31,
2004,  the  Committee   determined  that  the  Company  achieved  its  financial
performance goals by achieving 70.59% of target levels of operating earnings and
the  year-three  average  return on  equity.  This  determination  of  financial
performance affected all participants.

The following table sets forth the long term incentive payouts to be made to the
Company's  Named  Executive  Officers in respect of the 2002 - 2004  performance
period  (which are payable in March 2005),  as well as the  long-term  incentive
payouts  made to the Named  Executive  Officers  in  respect  of the 2001 - 2003
performance period (which were paid in March 2004):


                                       3
<PAGE>


<TABLE>
<CAPTION>

                           NAME                              PERFORMANCE PERIOD         LONG-TERM INCENTIVE PAYOUT
----------------------------------------------------------- --------------------- ---------------------------------------
<S>                                                              <C>                          <C>

Mr. Griswell                                                     2002-2004                     $   499,104
                                                                 2001-2003                         996,531
----------------------------------------------------------- --------------------- ---------------------------------------
Mr. Aschenbrenner                                                2002-2004                         197,627
                                                                 2001-2003                         336,117
---------------------------------------------------------- --------------------- ----------------------------------------
Mr. Gersie                                                       2002-2004                         179,668
                                                                 2001-2003                         318,886
----------------------------------------------------------- --------------------- ---------------------------------------
Mr. McCaughan                                                    2002-2004                         249,552
                                                                 2001-2003                     Not Eligible
----------------------------------------------------------- --------------------- ---------------------------------------
Mr. Zimpleman                                                    2002-2004                         179,668
                                                                 2001-2003                         219,020
----------------------------------------------------------- --------------------- ---------------------------------------
</TABLE>


     (1)  The  amounts  shown in this  table  are  awards  under  the  Long-Term
          Performance  Plan. For the three-year  period  2001-2003,  100% of the
          long-term  performance  award  opportunity  for  the  Named  Executive
          Officers was provided  under the Long-Term  Performance  Plan. For the
          three-year period 2002-2004,  20% to 25% of the long-term  performance
          award opportunity for the Named Executive  Officers was provided under
          the  Long-Term  Performance  Plan  and  75% to  80%  of the  long-term
          performance  award  opportunity was provided under the Stock Incentive
          Plan, as described above.

Also on February 28, 2005, the Committee approved grants of non-qualified  stock
options  and  restricted  stock  units to each of the Named  Executive  Officers
pursuant to the Stock  Incentive  Plan.  The Committee  determines  the level of
options and restricted stock units it could grant Named Executive Officers under
the plan by considering the percentage of total  compensation  that  competitors
award  in the  form of  options  and  other  forms of  equity  compensation  for
comparable positions, and other factors the Committee deems important. Utilizing
this  information,  the  Committee  sets target award  opportunities  for equity
compensation,  expressed as a percentage of base salary.  Actual grants may vary
from these targets based on a variety of factors such as individual  performance
and the  importance  of retaining  the senior  officer  ("Adjusted  Target Award
Opportunity").  The  Committee  administers  the  plan  so  that  actual  grants
typically do not exceed the sum of all grants if all grants were made at target.
The Committee  calculates the actual number of options it will award to a senior
officer by dividing the present value of one option, utilizing the Black-Scholes
model (but adjusting for the  possibility  of forfeitures of options),  into the
portion of the Adjusted Target Award  Opportunity to be granted in options.  The
Committee calculates the actual number of restricted stock units it will award a
senior officer by dividing the 20-day average stock price immediately  preceding
the grant date into the portion of the Adjusted  Target Award  Opportunity to be
granted in restricted  stock units.  The following table sets forth  information
regarding  grants of stock options and restricted stock unit awards to the Named
Executive Officers made on February 28, 2005 and February 24, 2004.


<TABLE>
<CAPTION>
                                                                                                          NUMBER OF
                                                             NUMBER OF STOCK       EXERCISE PRICE     RESTRICTED STOCK
                 NAME                         YEAR           OPTIONS (1)(2)         PER SHARE(3)            UNITS(4)
---------------------------------------- ---------------- ---------------------- ------------------- --------------------
<S>                                           <C>                <C>             <C>                       <C>
Mr. Griswell                                  2005               408,235            $    39.02             37,519
                                              2004               339,435                 36.30             41,736
---------------------------------------- ---------------- ---------------------- ------------------- --------------------
Mr. Aschenbrenner                             2005              108,185                  39.02              9,942
                                              2004               79,345                  36.30              9,756
---------------------------------------- ---------------- ---------------------- ------------------- --------------------
Mr. Gersie                                    2005               68,125                  39.02              6,261
                                              2004               50,850                  36.30              6,252
---------------------------------------- ---------------- ---------------------- ------------------- --------------------
Mr. McCaughan                                 2005               91,955                  39.02               8,451
                                              2004               74,960                  36.30               9,217
---------------------------------------- ---------------- ---------------------- ------------------- --------------------
Mr. Zimpleman                                 2005              108,185                  39.02              9,942
                                              2004               77,790                  36.30              9,565
---------------------------------------- ---------------- ---------------------- ------------------- --------------------
</TABLE>

                                       4
<PAGE>

(1)  Options  vest  in  three  equal  annual  installments  beginning  on  first
     anniversary of date of grant, subject to continuous employment.

(2)  Options granted to the Named  Executive  Officers under the Stock Incentive
     Plan are  exercisable  for ten years  after  the date of  grant,  generally
     subject  to the  optionee's  continued  service  with the  Company  and its
     subsidiaries.  Unvested  options  terminate  upon  termination  of service,
     except in the event of such  participant's  death,  disability  or approved
     retirement.  In the event of a participant's death,  disability or approved
     retirement,   options  granted  to  the  participant   become   immediately
     exercisable  by  the   participant,   or  participant's   beneficiary,   if
     applicable,  and may be  exercised  at any time prior to the earlier of the
     expiration of the remaining term of the option or three years from the date
     of death or termination of employment, as applicable. The Board amended the
     Stock  Incentive  Plan  effective  January  1, 2004 and  January 1, 2005 to
     provide that for all future grants, options may be exercised for up to five
     and ten years, respectively,  from approved retirement or until the options
     expire,  whichever is shorter.  The vesting of  restricted  stock units and
     options and the  exercisability of the options may also accelerate upon the
     occurrence  of a change of  control,  unless  the  options  are  honored or
     assumed  on terms  intended  to  preserve  the value of the  option for the
     optionee (including acceleration of vesting upon an involuntary termination
     following a change of control).

(3)  The per-share  option exercise price equals the closing price of the Common
     Stock on the date of grant.

(4)  Restricted stock units vest on the third anniversary of the grant date.


The Company intends to provide additional information regarding the compensation
awarded  to the Named  Executive  Officers  with  respect to and during the year
ended  December 31, 2004, in the proxy  statement for the Company's  2005 annual
meeting of  shareholders,  which is expected to be filed with the Securities and
Exchange Commission in March, 2005.


ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(c)      Exhibits

10.1.1   Form of Restricted Stock Unit Award Agreement
10.1.2   Form of Stock Option Award Agreement



                                    SIGNATURE

         Pursuant to the  requirements  of the  Securities  and  Exchange Act of
1934,  the  registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.


                                    PRINCIPAL FINANCIAL GROUP, INC.


                                    By:       /S/ JOYCE N. HOFFMAN
                                             ----------------------------------
                                    Name:     Joyce N. Hoffman
                                    Title:    Senior Vice President and
                                              Corporate Secretary

Date:    March 4, 2005


                                       5
<PAGE>

                                                                  EXHIBIT 10.1.1

                         PRINCIPAL FINANCIAL GROUP, INC.
                      RESTRICTED STOCK UNIT AWARD AGREEMENT

         This Agreement, dated as of DATE, is between Principal Financial Group,
Inc.  (the  "Company")  and  you,  <<First_Name_Middle>>   <<Last_Name>>,   (the
"Employee") a Participant under the Company's Stock Incentive Plan (the "Plan").
Capitalized  terms  that are used but not  defined  in this  Agreement  have the
meanings given to them in the Plan.

1.   AWARD.  Subject  to the all  terms  and  conditions  of the  Plan  and this
     Agreement,  the Company hereby grants to you the number of Restricted Stock
     Units listed below your name on SCHEDULE A attached to and  incorporated as
     a part of this Agreement.  The Restricted Stock Units comprising this award
     will be recorded in an unfunded  Restricted Stock Unit account in your name
     maintained by the Company or other designated administrator retained by the
     Company (the "Administrator").  You will have no rights as a stockholder of
     the Company by virtue of any  Restricted  Stock Unit  awarded to you unless
     and until such  Restricted  Stock Unit vests and a share of Common Stock is
     issued to you. Each Restricted Stock Unit will remain subject to forfeiture
     unless and until such Unit has vested in accordance  with the Plan and this
     Agreement, and will remain restricted as to transferability until such Unit
     is settled.

2.   VESTING OF RESTRICTED  STOCK UNITS.  The Restricted  Stock Units subject to
     this award will vest in the amounts and on the vesting  dates  specified in
     SCHEDULE A, so long as you have been  continuously  employed by the Company
     from the date of this  Agreement  until the applicable  vesting date.  When
     Restricted  Stock Units vest,  the risk of forfeiture  of those  Restricted
     Stock Units expires.  Settlement of Restricted Stock Units that have vested
     will be in shares of Common Stock and will occur as provided in Section 7.

3.   NO GUARANTEE OF EMPLOYMENT.  Nothing in this Agreement shall interfere with
     or limit in any way the right of the Company or a  Subsidiary  to terminate
     the  Employee's  employment  at any time,  or confer upon the  Employee any
     right to continue in the employ of the Company or a Subsidiary.

4.   TERMINATION OF EMPLOYMENT.

(a)  DEATH, DISABILITY OR APPROVED RETIREMENT.  In the event that the Employee's
     employment  with the  Company  or a  Subsidiary  terminates  by  reason  of
     Approved  Retirement,  any shares related to Restricted Stock Units held by
     such Participant shall become  non-forfeitable at the time the restrictions
     would have  naturally  lapsed.  In the event the  Employee's  employment or
     service  terminates by reason of Disability or death, any shares related to
     Restricted Stock Units held by the Employee shall become non-forfeitable on
     the date of termination.

(b)  OTHER  TERMINATION  OF  EMPLOYMENT.  Unless  otherwise  determined  by  the
     Committee at or after the time of grant,  in the event that the  Employee's
     employment  with the Company or Subsidiary  terminates for any reason other
     than one  described  above,  any  Restricted  Stock  Units  awarded  to the
     Employee  as to which the Period of  Restriction  has not  lapsed  shall be
     forfeited.

5.   NON-SOLICITATION.  For a period of 24 months after the  termination  of the
     Employee's employment, Employee shall not, directly or indirectly:

     (a)  encourage  any  employee  or agent of the Company or a  Subsidiary  to
          terminate his or her relationship with the Company;

     (b)  employ,  engage as a consultant or adviser,  or solicit the employment
          or engagement as a consultant or adviser, any employee or agent of the
          Company or a Subsidiary  (other than by the Company or a  Subsidiary),
          or cause or  encourage  any  Person  to do any of the  foregoing;


                                       6
<PAGE>

     (c)  establish (or take preliminary steps to establish) a business with, or
          encourage others to establish (or take preliminary steps to establish)
          a business with, any employee or agent of the Company or a Subsidiary;
          or

     (d)  interfere with the  relationship of the Company or a Subsidiary  with,
          or endeavor to entice away from the  Company,  any Person who or which
          at any  time  during  the  period  commencing  one  year  prior to the
          termination of the Employee's employment was or is a material customer
          or  material   supplier  of,  or   maintained   a  material   business
          relationship with, the Company or a Subsidiary.

6.   DIVIDEND EQUIVALENTS.

     (a)  During the period that a Restricted Stock Unit is outstanding, it will
          accrue dividend equivalents, which are amounts equal to cash dividends
          paid on a share of Common Stock,  as and when such cash  dividends are
          paid to holders of the Common Stock.

     (b)  Such  dividend  equivalents  shall  be  deemed  to  be  reinvested  in
          additional  Restricted  Stock  Units  on the  date of  payment  of the
          corresponding cash dividend, and each additional Restricted Stock Unit
          so acquired will be credited to your Restricted Stock Unit account and
          have  the  same  vesting  date  and be  subject  to the  same  risk of
          forfeiture  as the  underlying  Restricted  Stock  Units on which  the
          dividend  equivalents  were deemed paid.  Additional  Restricted Stock
          Units  acquired  as a result of the deemed  reinvestment  of  dividend
          equivalents  accrued after the underlying  Restricted  Stock Units are
          vested but before  they are  settled  will vest  immediately  upon the
          applicable dividend payment date. The number of Restricted Stock Units
          credited  to  your  account  on  a  dividend  payment  date  shall  be
          calculated as the product of (i) the number of outstanding  Restricted
          Stock Units in your  account  immediately  prior to the payment of the
          dividend  equivalent  (including  Restricted  Stock  Units  previously
          credited  to your  account as a result of the deemed  reinvestment  of
          dividend equivalents)  multiplied by (ii) the cash dividend amount per
          share of Common Stock,  divided by the Fair Market Value of a share of
          Common Stock on the date the cash dividend is paid.

7.   SETTLEMENT OF RESTRICTED STOCK UNITS.

     (a)  The timing of the  settlement  of  Restricted  Stock Units shall be as
          follows:

          (1)  Settlement of all vested  Restricted  Stock Units as to which you
               have not made an election  pursuant to Section 8 will occur as of
               the date on which the restrictions lapse.

          (2)  Settlement of vested  Restricted Stock Units as to which you have
               made a valid  election  pursuant  to  Section 8 will occur at the
               time specified in the written  election you have submitted to the
               Company.  If, however,  your employment is terminated  before the
               specified  settlement  date,  settlement of your Restricted Stock
               Units  granted  hereunder  will  occur  as of the  date  of  your
               termination.

     (b)  At the time of  settlement  of  vested  Restricted  Stock  Units,  and
          subject  to any  withholding  obligation  under  Section  10,  you are
          entitled to receive  payment in the form of shares of Common  Stock in
          an amount  (rounded to the nearest whole share) equal to the number of
          vested  Restricted  Stock Units  (including  those deemed to have been
          acquired by the reinvestment of dividend equivalents) that are subject
          to settlement on the date in question.  The shares will be credited to
          a share account in your name  established  with the  Administrator  as
          soon as administratively practical.

8.   ELECTION TO DEFER  SETTLEMENT DATE. If the IRS determines that the value of
     the  stock or the cash  delivered  in the  future  in  connection  with the
     Restricted  Stock  Units is  subject  to the  disallowance  rule of section
     162(m)(1), your Restricted Stock Units will automatically be deferred until
     your  termination of employment.  If the IRS determines  this amount is not
     subject to the disallowance  rule of section 162(m)(1) of the Code, you may
     elect to defer settlement of your Restricted Stock Units granted hereunder,
     as set  forth  in  this  Section  8, to a  specified  future  date  that is
     different  from the settlement  date  specified in section  7(a)(1) of this
     Agreement, subject to the following terms and conditions:

     (a)  The election must be effected by signing and delivering to the Company
          a written election in the form prescribed by the Committee.

                                       7
<PAGE>

     (b)  The  election  must cover all of the  Restricted  Stock Units  granted
          hereunder (including the additional Restricted Stock Units credited to
          your  account  as a result of the  deemed  reinvestment  of  dividends
          thereon).

     (c   ) The  settlement  date  specified by such  election  must be at least
          twelve  months after the date of such election and must be on or after
          the latest vesting date for Restricted Stock Units granted  hereunder.
          (d) The election must be delivered to the Company by March 15, 2005.

9.   CHANGE OF CONTROL.

     (a)  ACCELERATED  VESTING  AND  PAYMENT.  Except as  otherwise  provided in
          Section  9(b),  in the  event  of a  Change  of  Control,  100% of the
          Restricted Stock Units shall become vested and payable.

     (b)  ALTERNATIVE  AWARD.  Notwithstanding  Section 9(a),  no  cancellation,
          acceleration  of  exercisability,  vesting,  cash  settlement or other
          payment  shall  occur with  respect to any  portion of the  Restricted
          Stock  Units if the  Committee  reasonably  determines  in good faith,
          prior to the  occurrence of a Change of Control,  that such portion of
          the Restricted Stock Units shall be honored or assumed,  or new rights
          substituted therefore (such honored, assumed or substituted Restricted
          Stock Units being hereinafter  referred to as an "Alternative  Award")
          by the Employee's employer (or an affiliate thereof) immediately after
          the Change of Control, provided that any such Alternative Award must:

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

          (2)  provide the Employee with rights and  entitlements  substantially
               equivalent  to or better  than the rights,  terms and  conditions
               applicable  under such  portion of the  Restricted  Stock  Units,
               including,  but not limited to, an identical  or better  exercise
               and vesting schedule,  and identical or better timing and methods
               of payments;

          (3)  have substantially  equivalent  economic value to such portion of
               the Restricted Stock Units  (determined at the time of the Change
               of Control); and

          (4)  provide  that,  in the event that such  Employee's  employment is
               involuntary   terminated  or   constructively   terminated,   any
               conditions on such Employee's  rights under, or any  restrictions
               on  transfer   or   exercisability   applicable   to,  each  such
               Alternative Award shall be waived or shall lapse, as the case may
               be.

     For this purpose,  a constructive  termination  shall mean a termination of
     employment by the Employee  within 120 days following a material  reduction
     in the  Employee's  base  salary or an  Employee's  incentive  compensation
     opportunity,  a material reduction in the Employee's  responsibilities,  or
     relocation of the Employee's principal place of employment is a location 35
     miles away from Employee's prior place of employment.

10.  TAX WITHHOLDING.  Unless and until you have made arrangements  satisfactory
     to the Company to pay any withholding taxes due as a result of the issuance
     of shares of Common Stock on any settlement  date, the Company may withhold
     from the total  number of shares of Common  Stock you are to  receive  on a
     settlement  date a number of  shares  that has a total  value  equal to the
     amount necessary to satisfy any such  withholding tax  obligations.  If you
     are not an officer subject to Section 16 of the Securities and Exchange Act
     of 1934 as amended and/or Rule 144 promulgated  under the Securities Act of
     1933 as  amended,  you may elect to have the  amount of taxes due  withheld
     from other cash compensation  payable to you. If you are an officer subject
     to Section 16 of the  Securities and Exchange Act of 1934 as amended and/or
     Rule 144 promulgated  under the Securities Act of 1933 as amended,  you may
     elect to pay a portion  or all of the  amount of any  required  withholding
     taxes in cash.

11.  TRANSFERABILITY.  The Restricted  Stock Units granted  hereunder may not be
     sold,   transferred,   pledged,   assigned  or  other  wise   alienated  or
     hypothecated,  other than in  accordance  with Section 8.3 of the Plan,  by
     will or by the laws of descent and distribution.  Neither the Plan nor this
     Agreement  restrict the transfer of shares of Common Stock credited to your
     share  account with the  Administrator  upon the  settlement  of Restricted
     Stock Units granted  hereunder.  Shares credited to your share account upon
     settlement may be withdrawn from that account at any time by contacting the
     Administrator.

                                       8
<PAGE>

12.  MISCELLANEOUS.

     (a)  The  Restricted  Stock Units granted  hereunder are subject to all the
          terms and conditions of the Plan and this Agreement.  If any provision
          of this Agreement is  inconsistent  with the Plan in any respect,  the
          Plan shall govern in all circumstances and such inconsistent provision
          shall be construed  so as to be  consistent  in all respects  with the
          Plan.

     (b)  Any  amendment  to the Plan will also be  deemed an  amendment  to the
          Agreement  to  the  extent  such   amendment  is  applicable  to  this
          Agreement. However, no such amendment may adversely affect your rights
          with respect to Restricted Stock Units granted  hereunder without your
          consent.

     (c)  If it is  necessary  to prevent an  increase or decrease in the rights
          you  have  been  granted  under  this  Agreement  as  a  result  of  a
          transaction or  transactions  of the type referenced in Section 4.3 of
          the Plan,  the  Committee  will make  appropriate  adjustments  in the
          number  or kind of  securities  issuable  to you upon  the  subsequent
          vesting and settlement of Restricted Stock Units granted hereunder.

This  Agreement  has been  executed by the parties as of the date first  written
above.


                                    Principal Financial Group, Inc.



                                    By:
                                       ---------------------------------------
                                    Name:   Jim DeVries
                                    Title:  Vice President - Human Resources


                                    -------------------------------------------
                                    Date


                                    --------------------------------------------
                                    <<First_Name_Middle>> <<Last_Name>>


                                    --------------------------------------------
                                    Date

                                       9
<PAGE>


                                   SCHEDULE A
                                       TO
                         PRINCIPAL FINANCIAL GROUP, INC.
                         RESTRICTED STOCK UNIT AGREEMENT
                                   DATED DATE


Name of Employee/Participant:  <<First_Name_Middle>> <<Last_NamE>>

Number of Restricted Stock Units Granted:  <<Number_of_RSUs_to_Grant>>

Date of Grant:  DATE

Vesting Dates:                                       Number of Units Vesting:

         DATE                       <<Number_of_RSUs_to_Grant>>


                                       10
<PAGE>


                                                                  EXHIBIT 10.1.2

                      STOCK INCENTIVE PLAN AWARD AGREEMENT

FOR:     EMPLOYEE NAME (the "Employee")

         STOCK OPTION AGREEMENT ("Agreement"), evidencing the grant of the stock
option described below under the Principal Financial Group, Inc. Stock Incentive
Plan (the "Plan") by Principal  Financial  Group,  Inc., a Delaware  corporation
(the  "Company") to the employee  whose name appears  above,  (the  "Employee").
Capitalized terms not defined in this Agreement shall have the meanings given to
such terms in the Plan.

TYPE OF GRANT:    Nonqualified Stock Options

NUMBER OF OPTIONS GRANTED UNDER THIS PLAN:  #,####

GRANT DATE:                GRANT DATE

EXERCISE PRICE:   $##.##

VESTING SCHEDULE: NUMBER OF SHARES          VESTING DATE

                                    #,###                     Vesting Date(s)

                                    #,###                     Vesting Date(s)

                                    #,###                     Vesting Date(s)

EXPIRATION DATE:  Expiration Date

1.   CONFIRMATION OF GRANT;  OPTION EXERCISE PRICE. The Company hereby evidences
     and confirms its grant to the  Employee,  effective on the date hereof (the
     "Grant Date") and subject to and upon the terms and conditions set forth in
     this  Agreement,  of an option (the  "Option")  to  purchase  the number of
     shares of the Company's common stock (the "Common Stock"),  set forth above
     (the  "Shares") at an option  exercise price set forth above (the "Exercise
     Price").  The Option is not intended to be an incentive  stock option under
     Internal  Revenue Code of 1986, as amended.  This  Agreement is subordinate
     to,  and the terms and  conditions  of the  Option  granted  hereunder  are
     subject to, the terms and conditions of the Plan.

2.   EXERCISE OF OPTION.  Options shall vest and become exercisable as described
     above, subject in each case to the Employee's continued employment with the
     Company or a Subsidiary  until such vesting date, and provided that 100% of
     such Option shall be  exercisable  to the extent  provided in Sections 5(a)
     and 6(a) of this Agreement.  Shares eligible for purchase may thereafter be
     purchased,  subject to the provisions  hereof, at any time and from time to
     time on or  after  the  date  they  first  become  available  for  purchase
     hereunder until the date on which the Option terminates.

3.   EXPIRATION OF OPTION. Unless an earlier expiration date applies pursuant to
     Section 5, the Option shall expire on the date specified above.

4.   METHOD OF EXERCISE  AND  PAYMENT.  The Employee may exercise any portion of
     the Option that has become  exercisable  by (i) written or verbal notice to
     the Company's broker  specifying the number of Shares the Employee wants to
     purchase and (ii)  payment in full at the time of exercise.  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 such tender,  is at least equal to such Exercise  Price required to be
     paid for the Shares being exercised.

                                       11
<PAGE>

5. TERMINATION OF EMPLOYMENT.

     (a)  DEATH,  DISABILITY  OR  APPROVED  RETIREMENT.  In the  event  that the
          Employee's  employment with the Company or a Subsidiary terminates due
          to (i) the Employee's death, or (ii) the Employee's  Disability,  then
          100%  of the  Option  shall  be  exercisable  as of the  date  of such
          termination  and  thereafter  may be  exercised by the Employee or the
          Employee's  beneficiary  as designated  in accordance  herewith at any
          time  prior  to  the  earlier  of (i)  the  third  anniversary  of the
          Employee's  termination  or (ii)  the  expiration  of the  term of the
          Option.  In the event that the Employee's  employment with the Company
          or a Subsidiary  terminates due to the Employee's Approved Retirement,
          then 100% of the Option  shall be  exercisable  as of the date of such
          termination  and  thereafter  may be  exercised by the Employee or the
          Employee's  beneficiary  as designated  in accordance  herewith at any
          time prior to the expiration of the term of the Option. Any portion of
          the Option described in the preceding  sentences that is not exercised
          within the period described above shall terminate and be canceled upon
          the expiration of such period.

     (b)  RESIGNATION  OR  TERMINATION  FOR CAUSE.  In the event of  voluntarily
          termination of employment by the Employee or the Employee's employment
          with the Company or a Subsidiary is terminated for Cause,  100% of the
          Option  (regardless of the extent to which the Option would  otherwise
          be exercisable  under Section 2 of this Agreement) shall terminate and
          be canceled immediately upon such termination of employment.

     (c)  OTHER  TERMINATION OF EMPLOYMENT.  Unless otherwise  determined by the
          Committee,  in the  event  that  the  Employee's  employment  with the
          Company or a  Subsidiary  terminates  for any reason  other than those
          listed in paragraphs  (a) or (b) of this  Section,  the portion of the
          Employee's  Option  that  is  exercisable  as  of  the  date  of  such
          termination  shall remain  exercisable  for a period of 90 days or the
          remaining  of the Option,  whichever  is shorter.  That portion of the
          Employee's  Option  that  is  not  exercisable  at  the  date  of  the
          Employee's  termination of employment  shall terminate and be canceled
          immediately, as will any exercisable portion of the Option that is not
          exercised within the period described above.

     (d)  NO GUARANTEE OF EMPLOYMENT.  Nothing in this Agreement shall interfere
          with or limit in any way the right of the Company or a  Subsidiary  to
          terminate  the  Employee's  employment at any time, or confer upon the
          Employee  any right to  continue  in the  employ of the  Company  or a
          Subsidiary.

6.   CHANGE OF CONTROL.

     (a)  ACCELERATED  EXERCISABILITY AND PAYMENT.  Except as otherwise provided
          in paragraph  6(b),  in the event of a Change of Control,  100% of the
          Option shall become exercisable  (whether or not then exercisable) and
          may, if the  Committee  so  determines,  be canceled in exchange for a
          payment in cash of an amount  equal to the  product of (x) the excess,
          if any,  of the  Change  of  Control  Price  over the  Exercise  Price
          multiplied by (y) the number of shares then covered by the Option.

     (b)  ALTERNATIVE  AWARD.  Notwithstanding  Section 6(a),  no  cancellation,
          acceleration  of  exercisability,  vesting,  cash  settlement or other
          payment  shall occur with  respect to any portion of the Option if the
          Committee reasonably determines in good faith, prior to the occurrence
          of a Change of  Control,  that such  portion  of the  Option  shall be
          honored or assumed, or new rights substituted therefore (such honored,
          assumed or  substituted  Option  being  hereinafter  referred to as an
          "Alternative  Award")  by the  Employee's  employer  (or an  affiliate
          thereof)  immediately  after the Change of Control,  provided that any
          such Alternative Award must:

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

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

                                       12
<PAGE>


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

          (4)  provide  that,  in the event that such  Employee's  employment is
               involuntary   terminated  or   constructively   terminated,   any
               conditions on such Employee's  rights under, or any  restrictions
               on  transfer   or   exercisability   applicable   to,  each  such
               Alternative Award shall be waived or shall lapse, as the case may
               be.

     For this purpose,  a constructive  termination  shall mean a termination of
     employment by the Employee  within 120 days following a material  reduction
     in the  Employee's  base  salary or an  Employee's  incentive  compensation
     opportunity,  a material reduction in the Employee's  responsibilities,  or
     relocation of the Employee's principal place of employment is a location 35
     miles away or more from Employee's prior place of employment.

7.   NON-SOLICITATION.  For a period  of 24  months  after  the  termination  of
     Employee's employment, Employee shall not, directly or indirectly:

     (a)  encourage  any  employee  or agent of the Company or a  Subsidiary  to
          terminate his or her relationship with the Company;

     (b)  employ,  engage as a consultant or adviser,  or solicit the employment
          or engagement as a consultant or adviser,  of any employee or agent of
          the  Company  or  a  Subsidiary  (other  than  by  the  Company  or  a
          Subsidiary),  or  cause  or  encourage  any  Person  to do  any of the
          foregoing;

     (c)  establish (or take preliminary steps to establish) a business with, or
          encourage others to establish (or take preliminary steps to establish)
          a business with, any employee or agent of the Company or a Subsidiary;
          or

     (d)  interfere with the  relationship of the Company or a Subsidiary  with,
          or endeavor to entice away from the  Company,  any Person who or which
          at any  time  during  the  period  commencing  one  year  prior to the
          termination of the Employee's employment was or is a material customer
          or  material   supplier  of,  or   maintained   a  material   business
          relationship with, the Company.

8.   NONTRANSFERABILITY OF AWARDS. The Option granted hereunder may not be sold,
     transferred,  pledged,  assigned,  encumbered  or  otherwise  alienated  or
     hypothecated,   other  than  by  will  or  by  the  laws  of  descent   and
     distribution.  Following the Employee's  death,  all rights with respect to
     any Option that was  exercisable at the time of such  Employee's  death and
     has not expired may be exercised by his  designated  beneficiary  or by his
     estate in accordance with, and subject to, the terms and conditions  hereof
     and of the Plan.

9.   BENEFICIARY  DESIGNATION.  The  Employee  may  from  time to time  name any
     beneficiary   or   beneficiaries   (who  may  be  named   contingently   or
     successively)  by whom any right under this Agreement is to be exercised in
     case of the Employee's  death PROVIDED THAT, if the Employee shall not have
     designated any  beneficiary  under this Plan,  the  Employee's  beneficiary
     shall be deemed to be the person designated by the Employee under the group
     life  insurance  plan of the Company or a Subsidiary in which such Employee
     participates  (unless such designated  beneficiary is not a Family Member).
     Each  designation  will revoke all prior  designations,  shall be in a form
     prescribed  by the  Committee,  and will be  effective  only when  filed in
     writing with the Committee during the Employee's  lifetime.  In the absence
     of  any  such  effective  designation,  benefits  remaining  unpaid  at the
     Employee's death shall be paid to or exercised by the Employee's  surviving
     spouse, if any, or otherwise to or by his estate.

10.  TAX  WITHHOLDING.  Whenever  Common  Stock  is to be  issued  or cash  paid
     pursuant to the  exercise of an Option  under this  Agreement,  the Company
     shall have the power to  withhold,  or require the  Employee  to remit,  an
     amount  sufficient  to satisfy  Federal,  state and local  withholding  tax
     requirements  relating  to such  transaction,  and the  Company  may  defer
     payment of cash or the issuance of Common Stock until such requirements are
     satisfied.  The Committee may permit the Employee to elect, subject to such
     conditions as the Committee may impose:

     (1)  to have  Shares  otherwise  issuable  upon the  exercise  of an Option
          withheld by the Company, or

                                       13
<PAGE>

     (2)  to deliver to the Company cash equal to all or part of the  Employee's
          Federal,   state  or  local  tax   obligation   associated   with  the
          transaction.

11.  ADJUSTMENT OF THE NUMBER OF OPTION SHARES. In the event of any Common Stock
     dividend  or  Common  Stock  split,  recapitalization  (including,  but not
     limited   to,  the   payment  of  an   extraordinary   dividend),   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  subject to this Option and the  exercise  price  applicable  to this
     Option shall be appropriately adjusted by the Committee and the Committee's
     determination shall be conclusive;  provided,  however, that any fractional
     shares resulting from any such adjustment shall be disregarded.

12.  REQUIREMENTS OF LAW. The issuance of shares of Common Stock pursuant to any
     Option 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.  No shares of Common  Stock shall be issued
     upon  exercise  of any  portion of the  Option  granted  hereunder  if such
     issuance  or  exercise  would  result in a  violation  of  applicable  law,
     including the federal  securities laws and any applicable  state or foreign
     securities laws. The Option granted  hereunder shall be offered pursuant to
     an applicable federal securities law exemption from registration.

13.  GOVERNING  LAW. This  Agreement  shall be construed in accordance  with and
     governed by the laws of the State of Delaware,  regardless  of the law that
     might be applied under principles of conflict of laws.

14.  INTERPRETATION;  CONSTRUCTION.  Any  determination or interpretation by the
     Committee under or pursuant to this Agreement shall be final and conclusive
     on all persons affected hereby. In the event of a conflict between any term
     of this  Agreement  and the terms of the Plan,  the terms of the Plan shall
     control.

15.  AMENDMENTS.  The  Committee  shall have the  exclusive  right to amend this
     Agreement,  from time to time, provided that no such amendment shall impair
     the rights of the  Employee  under this  Agreement  without the  Employee's
     consent. Upon its adoption by the Committee, any alteration or amendment of
     this Agreement shall become binding and conclusive on all persons  affected
     thereby  without any need for consent or other  action by any such  person.
     The Company shall give written notice to the Employee of any such amendment
     as promptly as practicable after the adoption thereof.

IN WITNESS  WHEREOF,  the  Company  has caused  its duly  authorized  officer to
execute,  and the Employee has  executed,  this  Agreement,  each as of the date
first written above.

By signing a copy of this  Agreement  and  returning it to the  Company,  I, the
Employee, acknowledge that I have read the Plan, and that I fully understand all
of my rights under the Plan,  as well as all of the terms and  conditions  which
may limit my  eligibility to exercise this Option Award and/or  transfer  Shares
acquired  under this  Option  Award.  Without  limiting  the  generality  of the
preceding sentence,  I understand that my right to exercise this Option Award is
conditioned  upon my  continued  employment  with the  Company.  The  terms  and
conditions  set forth in this Agreement and in the Plan will be binding upon me,
my person  representative  or the person or persons to whom my rights under this
Agreement pass by will or by the applicable laws of descent and distribution.  I
shall not have any rights of a shareholder with respect to the shares subject to
the Option until such shares have been issued to me upon proper  exercise of the
Option.

I acknowledge  that the covenants  contained in Section 7 are  reasonable in the
scope of the  activities  restricted and the duration of the  restrictions,  and
that such covenants are reasonably necessary to protect the Company's legitimate
interests in its  relationships  with its  employees,  customers and  suppliers.
Employee  further  acknowledges  such  covenants are essential  elements of this
Agreement and that, but for such  covenants,  the Company would not have entered
into this Agreement.


                                       14
<PAGE>


                                    PRINCIPAL FINANCIAL GROUP, INC.


                                    By:     ____________________________________
                                    Name:   Jim DeVries-Sr VP Human Resources


                                    ____________________________________________
                                    Date


                                    EMPLOYEE


                                    --------------------------------------------
                                    Name:  EMPLOYEE NAME


                                    --------------------------------------------
                                    Date




                                       15
<PAGE>
[{"type": "8-K", "sequence": "1", "filename": "finalneocompform8k.txt", "description": "8-K", "secsgml_size_bytes": 60620}]
{"company-data": {"conformed-name": "PRINCIPAL FINANCIAL GROUP INC", "cik": "0001126328", "assigned-sic": "6321", "irs-number": "421520346", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-16725", "film-number": "05662275"}, "business-address": {"street1": "711 HIGH STREET", "city": "DES MOINES", "state": "IA", "zip": "50392", "phone": "5152475111"}}
SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                               ------------------

                                    FORM 8-K

                                 CURRENT REPORT

                     PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                        Date of Report: FEBRUARY 28, 2005
                        (Date of earliest event reported)

                         PRINCIPAL FINANCIAL GROUP, INC.
             (Exact name of registrant as specified in its charter)

        DELAWARE                     1-16725                   42-1520346
(State or other jurisdiction    (Commission file number)    (I.R.S. Employer
   of incorporation)                                     Identification Number)

                     711 HIGH STREET, DES MOINES, IOWA 50392
                    (Address of principal executive offices)

                                 (515) 247-5111
              (Registrant's telephone number, including area code)

Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
    230.425)
[ ] Soliciting  material pursuant to Rule 14a-12 under the Exchange Act (17  CFR
    240.14a-12)
[ ] Pre-commencement  communications  pursuant  to  Rule 14d-2(b) under the
    Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
    Act (17 CFR 240.13e-4(c))

                               ------------------
ITEM 1.01  ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On February 28, 2005, the Human  Resources  Committee (the  "Committee")  of the
Board of Directors of Principal  Financial Group, Inc. (the "Company")  approved
the  annual  base  salaries  (effective  as of March 5,  2005) of the  Company's
executive  officers  after a review  of  comparative  compensation  information,
individual  performance,  internal  equity and other  factors  as the  Committee
determined  important.  The  following  table sets forth the annual  base salary
levels of the Company's Named Executive Officers (which officers were determined
by reference to the  Company's  proxy  statement  dated April 1, 2004) for 2005,
compared to the actual salary paid in 2004:
NAME AND POSITION                         YEAR                        BASE SALARY
---------------------------------------------------------- ----------- --------------------------------------------------
J. Barry Griswell, Chairman, President and Chief              2005                      $  1,000,000
Executive Officer                                             2004                         1,038,462
---------------------------------------------------------- ----------- --------------------------------------------------
John E. Aschenbrenner, President, Insurance and               2005                           530,000
Financial Services                                            2004                           521,077
---------------------------------------------------------- ----------- --------------------------------------------------
Michael H. Gersie, Executive Vice President, Global           2005                           445,000
Asset Management                                              2004                           441,231
---------------------------------------------------------- ----------- --------------------------------------------------
James P. McCaughan, President, Global Asset Management        2005                           510,000
                                                              2004                           519,231
---------------------------------------------------------- ----------- --------------------------------------------------
Larry D. Zimpleman, President, Retirement and Investor        2005                           530,000
Services                                                      2004                           507,231
---------------------------------------------------------- ----------- --------------------------------------------------
Also on  February  28,  2005,  the  Committee  authorized  the payment of annual
incentive awards to each of the Company's Named Executive Officers in respect of
the year ended December 31, 2004. The annual incentive awards were made pursuant
to the Company's  broad-based  annual  incentive plan (the "PrinPay  Plan").  In
February 2004,  the Committee  approved the following  components  upon which to
base awards for senior  officers  under the PrinPay  Plan for 2004:  (1) Company
performance  and  individual  performance  in the  case of the  Chief  Executive
Officer and senior officers with service unit responsibilities,  and (2) Company
performance, business unit performance and individual performance in the case of
senior officers with business unit responsibilities.

In February 2004, the Committee  decided a single metric relating to achievement
of a  stated  level of  operating  earnings  for the  total  organization  would
determine  how the Company  performed for purposes of the PrinPay Plan for 2004.
The Committee  established a level of operating  earnings  achievement as target
performance for the Company component under the plan.  "Operating earnings" is a
non-GAAP  financial  measure used as the key financial  measure in the Company's
industry.  It is  believed to best  illustrate  the  performance  of a Company's
normal,  ongoing operations,  which is important in understanding and evaluating
financial condition and results of operations on a basis comparable to that used
by securities analysts.

In approving  the PrinPay  awards for 2004,  the Committee  determined  that the
result  obtained  for Company  performance  should be set at 120% of the target.
This determination of Company performance affected all participants.  The extent
to which the Company  performance  result  affected any  particular  participant
depended on the  relative  weight of the Company  performance  component  to any
other  business  unit  components  applicable  to  the  participant.  After  the
Committee  assessed the Company's and applicable  business unit  performance for
the year and took into account the  limitations  stated in the plan  (including,
without  limitation,  the attainment of certain  minimum  threshold  performance
objectives), a final award was approved for each senior officer. The final award
approved for each senior officer took into account the Committee's assessment of
his or her  performance  based  on the  officer's  level of  achievement  of the
individual goals the Committee  established for that officer at the beginning of
the year.  The  individual  goals for the Named  Executive  Officers  related to
achievement  of  targeted  levels  of  Company  and  applicable   business  unit
performance  with respect to operating  earnings,  as well as other  performance
measures and corresponding targets for business unit and individual  performance
the  Committee  determined  were  important  in  furthering  achievement  of the
objectives and initiatives of the organization. For 2004, the Committee approved
for eligible senior  officers,  including the Named Executive  Officers,  target
awards at ranges of 50% to 250% of base  salary  for  achieving  performance  at
target  and  maximum  awards  of  100% to 500%  of  base  salary  for  achieving
performance above target.  Attainment of individual  performance  targets varied
among Named Executive Officers.

                                       2
The following table sets forth cash payments to the Named Executive  Officers in
respect of their  annual  incentive  awards  under the PrinPay Plan for 2004 and
2003:
NAME                                 YEAR                 ANNUAL INCENTIVE AWARD
------------------------------------------------------------ ----------- ------------------------------------------------
Mr. Griswell                                                    2004                  $    1,800,000
                                                                2003                       1,318,125
------------------------------------------------------------ ----------- ------------------------------------------------
Mr. Aschenbrenner                                               2004                         624,511
                                                                2003                         359,510
------------------------------------------------------------ ----------- ------------------------------------------------
Mr. Gersie                                                      2004                         397,108
                                                                2003                         323,481
------------------------------------------------------------ ----------- ------------------------------------------------
Mr. McCaughan                                                   2004                       1,661,539
                                                                2003                       1,412,500
------------------------------------------------------------ ----------- ------------------------------------------------
Mr. Zimpleman                                                   2004                         530,310
                                                                2003                         367,015
------------------------------------------------------------ ----------- ------------------------------------------------
In addition to approving  the annual  incentive  awards for the Named  Executive
Officers for 2004,  the  Committee on February 28, 2005 made  decisions  for the
performance  period of January 1, 2005 to December  31, 2005 with respect to the
Principal  Financial Group,  Inc. Annual  Incentive Plan (the "Annual  Incentive
Plan") approved by shareholders in May 2004, to be effective January 1, 2005. On
February 28, 2005, the Committee affirmed the incentive pool for the performance
period as defined in the Plan and determined  that the  participants in the plan
will  include  the Chief  Executive  Officer and each other  "covered  employee"
within the meaning of 162(m)(3) of the Internal Revenue Code. The Committee also
determined  that the  maximum  award for the  performance  period  for the Chief
Executive  Officer will be 40% of the incentive  pool, the maximum award for the
second highest  "covered  employee"  will be 20% of the incentive  pool, and the
maximum award for each of the other  participants will be 13.3% of the incentive
pool. The Committee  intends to administer the Annual Incentive Plan through the
use of negative  discretion  and subject to the  achievement  of the  applicable
performance  criteria  (without  regard to any adjustment  that may increase the
amounts  payable),  so that the actual annual awards payable to any such officer
do not  exceed  the  amount  that  would  have  been  payable  based on the same
performance  measures,  components  and weightings as those that would have been
applicable  to such  senior  officers  under the  PrinPay  Plan.  For 2005,  the
Committee  decided  that the  Company's  achievement  against a stated  level of
operating earnings would be the sole determiner of Company performance under the
PrinPay Plan.

Beginning in 2004, the Committee  determined  that the long-term  incentive plan
for senior officers would consist of stock-based  compensation  awards under the
Company's  Stock  Incentive  Plan.  Prior to 2004,  the Company also made awards
under a long-term plan that existed before the Company became  publicly-held  in
2001, the "Long-Term Performance Plan." The Company's Long-Term Performance Plan
affords  eligible  executives,  including  the  Named  Executive  Officers,  the
opportunity  to share in the  success  of the  Company if the  Company  achieves
specified performance  objectives over periods of three calendar years. The last
three-year cycle under the Long-Term Performance Plan ends on December 31, 2005.
On February  28,  2005,  the  Committee  authorized  payments  to the  Company's
executive  officers and other senior  officers  under the Long-Term  Performance
Plan for the  three-year  performance  period ended on December  31,  2004,  and
awarded stock options and restricted stock units, as described below,  under the
Company's Stock Incentive Plan.

For the 2002 - 2004 performance period under the Long-Term Performance Plan, the
Committee  used two metrics:  cumulative  operating  earnings for the three-year
period,  and  return on average  equity  for the third  year of the  performance
period.  The target set for operating  earnings  performance  was the sum of the
individual years' targets for operating earnings.  The target set for year-three
return  on  average  equity  was  based  on goals  agreed  to by the  Board  and
management for long-term growth and creation of long-term shareholder value.

In approving  awards for the  three-year  performance  period ended December 31,
2004,  the  Committee   determined  that  the  Company  achieved  its  financial
performance goals by achieving 70.59% of target levels of operating earnings and
the  year-three  average  return on  equity.  This  determination  of  financial
performance affected all participants.

The following table sets forth the long term incentive payouts to be made to the
Company's  Named  Executive  Officers in respect of the 2002 - 2004  performance
period  (which are payable in March 2005),  as well as the  long-term  incentive
payouts  made to the Named  Executive  Officers  in  respect  of the 2001 - 2003
performance period (which were paid in March 2004):

                                       3
NAME                              PERFORMANCE PERIOD         LONG-TERM INCENTIVE PAYOUT
----------------------------------------------------------- --------------------- ---------------------------------------
Mr. Griswell                                                     2002-2004                     $   499,104
                                                                 2001-2003                         996,531
----------------------------------------------------------- --------------------- ---------------------------------------
Mr. Aschenbrenner                                                2002-2004                         197,627
                                                                 2001-2003                         336,117
---------------------------------------------------------- --------------------- ----------------------------------------
Mr. Gersie                                                       2002-2004                         179,668
                                                                 2001-2003                         318,886
----------------------------------------------------------- --------------------- ---------------------------------------
Mr. McCaughan                                                    2002-2004                         249,552
                                                                 2001-2003                     Not Eligible
----------------------------------------------------------- --------------------- ---------------------------------------
Mr. Zimpleman                                                    2002-2004                         179,668
                                                                 2001-2003                         219,020
----------------------------------------------------------- --------------------- ---------------------------------------
(1)  The  amounts  shown in this  table  are  awards  under  the  Long-Term
          Performance  Plan. For the three-year  period  2001-2003,  100% of the
          long-term  performance  award  opportunity  for  the  Named  Executive
          Officers was provided  under the Long-Term  Performance  Plan. For the
          three-year period 2002-2004,  20% to 25% of the long-term  performance
          award opportunity for the Named Executive  Officers was provided under
          the  Long-Term  Performance  Plan  and  75% to  80%  of the  long-term
          performance  award  opportunity was provided under the Stock Incentive
          Plan, as described above.

Also on February 28, 2005, the Committee approved grants of non-qualified  stock
options  and  restricted  stock  units to each of the Named  Executive  Officers
pursuant to the Stock  Incentive  Plan.  The Committee  determines  the level of
options and restricted stock units it could grant Named Executive Officers under
the plan by considering the percentage of total  compensation  that  competitors
award  in the  form of  options  and  other  forms of  equity  compensation  for
comparable positions, and other factors the Committee deems important. Utilizing
this  information,  the  Committee  sets target award  opportunities  for equity
compensation,  expressed as a percentage of base salary.  Actual grants may vary
from these targets based on a variety of factors such as individual  performance
and the  importance  of retaining  the senior  officer  ("Adjusted  Target Award
Opportunity").  The  Committee  administers  the  plan  so  that  actual  grants
typically do not exceed the sum of all grants if all grants were made at target.
The Committee  calculates the actual number of options it will award to a senior
officer by dividing the present value of one option, utilizing the Black-Scholes
model (but adjusting for the  possibility  of forfeitures of options),  into the
portion of the Adjusted Target Award  Opportunity to be granted in options.  The
Committee calculates the actual number of restricted stock units it will award a
senior officer by dividing the 20-day average stock price immediately  preceding
the grant date into the portion of the Adjusted  Target Award  Opportunity to be
granted in restricted  stock units.  The following table sets forth  information
regarding  grants of stock options and restricted stock unit awards to the Named
Executive Officers made on February 28, 2005 and February 24, 2004.
NUMBER OF
                                                             NUMBER OF STOCK       EXERCISE PRICE     RESTRICTED STOCK
                 NAME                         YEAR           OPTIONS (1)(2)         PER SHARE(3)            UNITS(4)
---------------------------------------- ---------------- ---------------------- ------------------- --------------------
Mr. Griswell                                  2005               408,235            $    39.02             37,519
                                              2004               339,435                 36.30             41,736
---------------------------------------- ---------------- ---------------------- ------------------- --------------------
Mr. Aschenbrenner                             2005              108,185                  39.02              9,942
                                              2004               79,345                  36.30              9,756
---------------------------------------- ---------------- ---------------------- ------------------- --------------------
Mr. Gersie                                    2005               68,125                  39.02              6,261
                                              2004               50,850                  36.30              6,252
---------------------------------------- ---------------- ---------------------- ------------------- --------------------
Mr. McCaughan                                 2005               91,955                  39.02               8,451
                                              2004               74,960                  36.30               9,217
---------------------------------------- ---------------- ---------------------- ------------------- --------------------
Mr. Zimpleman                                 2005              108,185                  39.02              9,942
                                              2004               77,790                  36.30              9,565
---------------------------------------- ---------------- ---------------------- ------------------- --------------------
4
(1)  Options  vest  in  three  equal  annual  installments  beginning  on  first
     anniversary of date of grant, subject to continuous employment.

(2)  Options granted to the Named  Executive  Officers under the Stock Incentive
     Plan are  exercisable  for ten years  after  the date of  grant,  generally
     subject  to the  optionee's  continued  service  with the  Company  and its
     subsidiaries.  Unvested  options  terminate  upon  termination  of service,
     except in the event of such  participant's  death,  disability  or approved
     retirement.  In the event of a participant's death,  disability or approved
     retirement,   options  granted  to  the  participant   become   immediately
     exercisable  by  the   participant,   or  participant's   beneficiary,   if
     applicable,  and may be  exercised  at any time prior to the earlier of the
     expiration of the remaining term of the option or three years from the date
     of death or termination of employment, as applicable. The Board amended the
     Stock  Incentive  Plan  effective  January  1, 2004 and  January 1, 2005 to
     provide that for all future grants, options may be exercised for up to five
     and ten years, respectively,  from approved retirement or until the options
     expire,  whichever is shorter.  The vesting of  restricted  stock units and
     options and the  exercisability of the options may also accelerate upon the
     occurrence  of a change of  control,  unless  the  options  are  honored or
     assumed  on terms  intended  to  preserve  the value of the  option for the
     optionee (including acceleration of vesting upon an involuntary termination
     following a change of control).

(3)  The per-share  option exercise price equals the closing price of the Common
     Stock on the date of grant.

(4)  Restricted stock units vest on the third anniversary of the grant date.

The Company intends to provide additional information regarding the compensation
awarded  to the Named  Executive  Officers  with  respect to and during the year
ended  December 31, 2004, in the proxy  statement for the Company's  2005 annual
meeting of  shareholders,  which is expected to be filed with the Securities and
Exchange Commission in March, 2005.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(c)      Exhibits

10.1.1   Form of Restricted Stock Unit Award Agreement
10.1.2   Form of Stock Option Award Agreement

                                    SIGNATURE

         Pursuant to the  requirements  of the  Securities  and  Exchange Act of
1934,  the  registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

                                    PRINCIPAL FINANCIAL GROUP, INC.

                                    By:       /S/ JOYCE N. HOFFMAN
                                             ----------------------------------
                                    Name:     Joyce N. Hoffman
                                    Title:    Senior Vice President and
                                              Corporate Secretary

Date:    March 4, 2005

                                       5
EXHIBIT 10.1.1

                         PRINCIPAL FINANCIAL GROUP, INC.
                      RESTRICTED STOCK UNIT AWARD AGREEMENT

         This Agreement, dated as of DATE, is between Principal Financial Group,
Inc.  (the  "Company")  and  you,  <
>   <
>,   (the
"Employee") a Participant under the Company's Stock Incentive Plan (the "Plan").
Capitalized  terms  that are used but not  defined  in this  Agreement  have the
meanings given to them in the Plan.

1.   AWARD.  Subject  to the all  terms  and  conditions  of the  Plan  and this
     Agreement,  the Company hereby grants to you the number of Restricted Stock
     Units listed below your name on SCHEDULE A attached to and  incorporated as
     a part of this Agreement.  The Restricted Stock Units comprising this award
     will be recorded in an unfunded  Restricted Stock Unit account in your name
     maintained by the Company or other designated administrator retained by the
     Company (the "Administrator").  You will have no rights as a stockholder of
     the Company by virtue of any  Restricted  Stock Unit  awarded to you unless
     and until such  Restricted  Stock Unit vests and a share of Common Stock is
     issued to you. Each Restricted Stock Unit will remain subject to forfeiture
     unless and until such Unit has vested in accordance  with the Plan and this
     Agreement, and will remain restricted as to transferability until such Unit
     is settled.

2.   VESTING OF RESTRICTED  STOCK UNITS.  The Restricted  Stock Units subject to
     this award will vest in the amounts and on the vesting  dates  specified in
     SCHEDULE A, so long as you have been  continuously  employed by the Company
     from the date of this  Agreement  until the applicable  vesting date.  When
     Restricted  Stock Units vest,  the risk of forfeiture  of those  Restricted
     Stock Units expires.  Settlement of Restricted Stock Units that have vested
     will be in shares of Common Stock and will occur as provided in Section 7.

3.   NO GUARANTEE OF EMPLOYMENT.  Nothing in this Agreement shall interfere with
     or limit in any way the right of the Company or a  Subsidiary  to terminate
     the  Employee's  employment  at any time,  or confer upon the  Employee any
     right to continue in the employ of the Company or a Subsidiary.

4.   TERMINATION OF EMPLOYMENT.

(a)  DEATH, DISABILITY OR APPROVED RETIREMENT.  In the event that the Employee's
     employment  with the  Company  or a  Subsidiary  terminates  by  reason  of
     Approved  Retirement,  any shares related to Restricted Stock Units held by
     such Participant shall become  non-forfeitable at the time the restrictions
     would have  naturally  lapsed.  In the event the  Employee's  employment or
     service  terminates by reason of Disability or death, any shares related to
     Restricted Stock Units held by the Employee shall become non-forfeitable on
     the date of termination.

(b)  OTHER  TERMINATION  OF  EMPLOYMENT.  Unless  otherwise  determined  by  the
     Committee at or after the time of grant,  in the event that the  Employee's
     employment  with the Company or Subsidiary  terminates for any reason other
     than one  described  above,  any  Restricted  Stock  Units  awarded  to the
     Employee  as to which the Period of  Restriction  has not  lapsed  shall be
     forfeited.

5.   NON-SOLICITATION.  For a period of 24 months after the  termination  of the
     Employee's employment, Employee shall not, directly or indirectly:

     (a)  encourage  any  employee  or agent of the Company or a  Subsidiary  to
          terminate his or her relationship with the Company;

     (b)  employ,  engage as a consultant or adviser,  or solicit the employment
          or engagement as a consultant or adviser, any employee or agent of the
          Company or a Subsidiary  (other than by the Company or a  Subsidiary),
          or cause or  encourage  any  Person  to do any of the  foregoing;

                                       6
(c)  establish (or take preliminary steps to establish) a business with, or
          encourage others to establish (or take preliminary steps to establish)
          a business with, any employee or agent of the Company or a Subsidiary;
          or

     (d)  interfere with the  relationship of the Company or a Subsidiary  with,
          or endeavor to entice away from the  Company,  any Person who or which
          at any  time  during  the  period  commencing  one  year  prior to the
          termination of the Employee's employment was or is a material customer
          or  material   supplier  of,  or   maintained   a  material   business
          relationship with, the Company or a Subsidiary.

6.   DIVIDEND EQUIVALENTS.

     (a)  During the period that a Restricted Stock Unit is outstanding, it will
          accrue dividend equivalents, which are amounts equal to cash dividends
          paid on a share of Common Stock,  as and when such cash  dividends are
          paid to holders of the Common Stock.

     (b)  Such  dividend  equivalents  shall  be  deemed  to  be  reinvested  in
          additional  Restricted  Stock  Units  on the  date of  payment  of the
          corresponding cash dividend, and each additional Restricted Stock Unit
          so acquired will be credited to your Restricted Stock Unit account and
          have  the  same  vesting  date  and be  subject  to the  same  risk of
          forfeiture  as the  underlying  Restricted  Stock  Units on which  the
          dividend  equivalents  were deemed paid.  Additional  Restricted Stock
          Units  acquired  as a result of the deemed  reinvestment  of  dividend
          equivalents  accrued after the underlying  Restricted  Stock Units are
          vested but before  they are  settled  will vest  immediately  upon the
          applicable dividend payment date. The number of Restricted Stock Units
          credited  to  your  account  on  a  dividend  payment  date  shall  be
          calculated as the product of (i) the number of outstanding  Restricted
          Stock Units in your  account  immediately  prior to the payment of the
          dividend  equivalent  (including  Restricted  Stock  Units  previously
          credited  to your  account as a result of the deemed  reinvestment  of
          dividend equivalents)  multiplied by (ii) the cash dividend amount per
          share of Common Stock,  divided by the Fair Market Value of a share of
          Common Stock on the date the cash dividend is paid.

7.   SETTLEMENT OF RESTRICTED STOCK UNITS.

     (a)  The timing of the  settlement  of  Restricted  Stock Units shall be as
          follows:

          (1)  Settlement of all vested  Restricted  Stock Units as to which you
               have not made an election  pursuant to Section 8 will occur as of
               the date on which the restrictions lapse.

          (2)  Settlement of vested  Restricted Stock Units as to which you have
               made a valid  election  pursuant  to  Section 8 will occur at the
               time specified in the written  election you have submitted to the
               Company.  If, however,  your employment is terminated  before the
               specified  settlement  date,  settlement of your Restricted Stock
               Units  granted  hereunder  will  occur  as of the  date  of  your
               termination.

     (b)  At the time of  settlement  of  vested  Restricted  Stock  Units,  and
          subject  to any  withholding  obligation  under  Section  10,  you are
          entitled to receive  payment in the form of shares of Common  Stock in
          an amount  (rounded to the nearest whole share) equal to the number of
          vested  Restricted  Stock Units  (including  those deemed to have been
          acquired by the reinvestment of dividend equivalents) that are subject
          to settlement on the date in question.  The shares will be credited to
          a share account in your name  established  with the  Administrator  as
          soon as administratively practical.

8.   ELECTION TO DEFER  SETTLEMENT DATE. If the IRS determines that the value of
     the  stock or the cash  delivered  in the  future  in  connection  with the
     Restricted  Stock  Units is  subject  to the  disallowance  rule of section
     162(m)(1), your Restricted Stock Units will automatically be deferred until
     your  termination of employment.  If the IRS determines  this amount is not
     subject to the disallowance  rule of section 162(m)(1) of the Code, you may
     elect to defer settlement of your Restricted Stock Units granted hereunder,
     as set  forth  in  this  Section  8, to a  specified  future  date  that is
     different  from the settlement  date  specified in section  7(a)(1) of this
     Agreement, subject to the following terms and conditions:

     (a)  The election must be effected by signing and delivering to the Company
          a written election in the form prescribed by the Committee.

                                       7
(b)  The  election  must cover all of the  Restricted  Stock Units  granted
          hereunder (including the additional Restricted Stock Units credited to
          your  account  as a result of the  deemed  reinvestment  of  dividends
          thereon).

     (c   ) The  settlement  date  specified by such  election  must be at least
          twelve  months after the date of such election and must be on or after
          the latest vesting date for Restricted Stock Units granted  hereunder.
          (d) The election must be delivered to the Company by March 15, 2005.

9.   CHANGE OF CONTROL.

     (a)  ACCELERATED  VESTING  AND  PAYMENT.  Except as  otherwise  provided in
          Section  9(b),  in the  event  of a  Change  of  Control,  100% of the
          Restricted Stock Units shall become vested and payable.

     (b)  ALTERNATIVE  AWARD.  Notwithstanding  Section 9(a),  no  cancellation,
          acceleration  of  exercisability,  vesting,  cash  settlement or other
          payment  shall  occur with  respect to any  portion of the  Restricted
          Stock  Units if the  Committee  reasonably  determines  in good faith,
          prior to the  occurrence of a Change of Control,  that such portion of
          the Restricted Stock Units shall be honored or assumed,  or new rights
          substituted therefore (such honored, assumed or substituted Restricted
          Stock Units being hereinafter  referred to as an "Alternative  Award")
          by the Employee's employer (or an affiliate thereof) immediately after
          the Change of Control, provided that any such Alternative Award must:

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

          (2)  provide the Employee with rights and  entitlements  substantially
               equivalent  to or better  than the rights,  terms and  conditions
               applicable  under such  portion of the  Restricted  Stock  Units,
               including,  but not limited to, an identical  or better  exercise
               and vesting schedule,  and identical or better timing and methods
               of payments;

          (3)  have substantially  equivalent  economic value to such portion of
               the Restricted Stock Units  (determined at the time of the Change
               of Control); and

          (4)  provide  that,  in the event that such  Employee's  employment is
               involuntary   terminated  or   constructively   terminated,   any
               conditions on such Employee's  rights under, or any  restrictions
               on  transfer   or   exercisability   applicable   to,  each  such
               Alternative Award shall be waived or shall lapse, as the case may
               be.

     For this purpose,  a constructive  termination  shall mean a termination of
     employment by the Employee  within 120 days following a material  reduction
     in the  Employee's  base  salary or an  Employee's  incentive  compensation
     opportunity,  a material reduction in the Employee's  responsibilities,  or
     relocation of the Employee's principal place of employment is a location 35
     miles away from Employee's prior place of employment.

10.  TAX WITHHOLDING.  Unless and until you have made arrangements  satisfactory
     to the Company to pay any withholding taxes due as a result of the issuance
     of shares of Common Stock on any settlement  date, the Company may withhold
     from the total  number of shares of Common  Stock you are to  receive  on a
     settlement  date a number of  shares  that has a total  value  equal to the
     amount necessary to satisfy any such  withholding tax  obligations.  If you
     are not an officer subject to Section 16 of the Securities and Exchange Act
     of 1934 as amended and/or Rule 144 promulgated  under the Securities Act of
     1933 as  amended,  you may elect to have the  amount of taxes due  withheld
     from other cash compensation  payable to you. If you are an officer subject
     to Section 16 of the  Securities and Exchange Act of 1934 as amended and/or
     Rule 144 promulgated  under the Securities Act of 1933 as amended,  you may
     elect to pay a portion  or all of the  amount of any  required  withholding
     taxes in cash.

11.  TRANSFERABILITY.  The Restricted  Stock Units granted  hereunder may not be
     sold,   transferred,   pledged,   assigned  or  other  wise   alienated  or
     hypothecated,  other than in  accordance  with Section 8.3 of the Plan,  by
     will or by the laws of descent and distribution.  Neither the Plan nor this
     Agreement  restrict the transfer of shares of Common Stock credited to your
     share  account with the  Administrator  upon the  settlement  of Restricted
     Stock Units granted  hereunder.  Shares credited to your share account upon
     settlement may be withdrawn from that account at any time by contacting the
     Administrator.

                                       8
12.  MISCELLANEOUS.

     (a)  The  Restricted  Stock Units granted  hereunder are subject to all the
          terms and conditions of the Plan and this Agreement.  If any provision
          of this Agreement is  inconsistent  with the Plan in any respect,  the
          Plan shall govern in all circumstances and such inconsistent provision
          shall be construed  so as to be  consistent  in all respects  with the
          Plan.

     (b)  Any  amendment  to the Plan will also be  deemed an  amendment  to the
          Agreement  to  the  extent  such   amendment  is  applicable  to  this
          Agreement. However, no such amendment may adversely affect your rights
          with respect to Restricted Stock Units granted  hereunder without your
          consent.

     (c)  If it is  necessary  to prevent an  increase or decrease in the rights
          you  have  been  granted  under  this  Agreement  as  a  result  of  a
          transaction or  transactions  of the type referenced in Section 4.3 of
          the Plan,  the  Committee  will make  appropriate  adjustments  in the
          number  or kind of  securities  issuable  to you upon  the  subsequent
          vesting and settlement of Restricted Stock Units granted hereunder.

This  Agreement  has been  executed by the parties as of the date first  written
above.

                                    Principal Financial Group, Inc.

                                    By:
                                       ---------------------------------------
                                    Name:   Jim DeVries
                                    Title:  Vice President - Human Resources

                                    -------------------------------------------
                                    Date

                                    --------------------------------------------
                                    <
> <
>

                                    --------------------------------------------
                                    Date

                                       9
SCHEDULE A
                                       TO
                         PRINCIPAL FINANCIAL GROUP, INC.
                         RESTRICTED STOCK UNIT AGREEMENT
                                   DATED DATE

Name of Employee/Participant:  <
> <
>

Number of Restricted Stock Units Granted:  <
>

Date of Grant:  DATE

Vesting Dates:                                       Number of Units Vesting:

         DATE                       <
>

                                       10
EXHIBIT 10.1.2

                      STOCK INCENTIVE PLAN AWARD AGREEMENT

FOR:     EMPLOYEE NAME (the "Employee")

         STOCK OPTION AGREEMENT ("Agreement"), evidencing the grant of the stock
option described below under the Principal Financial Group, Inc. Stock Incentive
Plan (the "Plan") by Principal  Financial  Group,  Inc., a Delaware  corporation
(the  "Company") to the employee  whose name appears  above,  (the  "Employee").
Capitalized terms not defined in this Agreement shall have the meanings given to
such terms in the Plan.

TYPE OF GRANT:    Nonqualified Stock Options

NUMBER OF OPTIONS GRANTED UNDER THIS PLAN:  #,####

GRANT DATE:                GRANT DATE

EXERCISE PRICE:   $##.##

VESTING SCHEDULE: NUMBER OF SHARES          VESTING DATE

                                    #,###                     Vesting Date(s)

                                    #,###                     Vesting Date(s)

                                    #,###                     Vesting Date(s)

EXPIRATION DATE:  Expiration Date

1.   CONFIRMATION OF GRANT;  OPTION EXERCISE PRICE. The Company hereby evidences
     and confirms its grant to the  Employee,  effective on the date hereof (the
     "Grant Date") and subject to and upon the terms and conditions set forth in
     this  Agreement,  of an option (the  "Option")  to  purchase  the number of
     shares of the Company's common stock (the "Common Stock"),  set forth above
     (the  "Shares") at an option  exercise price set forth above (the "Exercise
     Price").  The Option is not intended to be an incentive  stock option under
     Internal  Revenue Code of 1986, as amended.  This  Agreement is subordinate
     to,  and the terms and  conditions  of the  Option  granted  hereunder  are
     subject to, the terms and conditions of the Plan.

2.   EXERCISE OF OPTION.  Options shall vest and become exercisable as described
     above, subject in each case to the Employee's continued employment with the
     Company or a Subsidiary  until such vesting date, and provided that 100% of
     such Option shall be  exercisable  to the extent  provided in Sections 5(a)
     and 6(a) of this Agreement.  Shares eligible for purchase may thereafter be
     purchased,  subject to the provisions  hereof, at any time and from time to
     time on or  after  the  date  they  first  become  available  for  purchase
     hereunder until the date on which the Option terminates.

3.   EXPIRATION OF OPTION. Unless an earlier expiration date applies pursuant to
     Section 5, the Option shall expire on the date specified above.

4.   METHOD OF EXERCISE  AND  PAYMENT.  The Employee may exercise any portion of
     the Option that has become  exercisable  by (i) written or verbal notice to
     the Company's broker  specifying the number of Shares the Employee wants to
     purchase and (ii)  payment in full at the time of exercise.  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 such tender,  is at least equal to such Exercise  Price required to be
     paid for the Shares being exercised.

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5. TERMINATION OF EMPLOYMENT.

     (a)  DEATH,  DISABILITY  OR  APPROVED  RETIREMENT.  In the  event  that the
          Employee's  employment with the Company or a Subsidiary terminates due
          to (i) the Employee's death, or (ii) the Employee's  Disability,  then
          100%  of the  Option  shall  be  exercisable  as of the  date  of such
          termination  and  thereafter  may be  exercised by the Employee or the
          Employee's  beneficiary  as designated  in accordance  herewith at any
          time  prior  to  the  earlier  of (i)  the  third  anniversary  of the
          Employee's  termination  or (ii)  the  expiration  of the  term of the
          Option.  In the event that the Employee's  employment with the Company
          or a Subsidiary  terminates due to the Employee's Approved Retirement,
          then 100% of the Option  shall be  exercisable  as of the date of such
          termination  and  thereafter  may be  exercised by the Employee or the
          Employee's  beneficiary  as designated  in accordance  herewith at any
          time prior to the expiration of the term of the Option. Any portion of
          the Option described in the preceding  sentences that is not exercised
          within the period described above shall terminate and be canceled upon
          the expiration of such period.

     (b)  RESIGNATION  OR  TERMINATION  FOR CAUSE.  In the event of  voluntarily
          termination of employment by the Employee or the Employee's employment
          with the Company or a Subsidiary is terminated for Cause,  100% of the
          Option  (regardless of the extent to which the Option would  otherwise
          be exercisable  under Section 2 of this Agreement) shall terminate and
          be canceled immediately upon such termination of employment.

     (c)  OTHER  TERMINATION OF EMPLOYMENT.  Unless otherwise  determined by the
          Committee,  in the  event  that  the  Employee's  employment  with the
          Company or a  Subsidiary  terminates  for any reason  other than those
          listed in paragraphs  (a) or (b) of this  Section,  the portion of the
          Employee's  Option  that  is  exercisable  as  of  the  date  of  such
          termination  shall remain  exercisable  for a period of 90 days or the
          remaining  of the Option,  whichever  is shorter.  That portion of the
          Employee's  Option  that  is  not  exercisable  at  the  date  of  the
          Employee's  termination of employment  shall terminate and be canceled
          immediately, as will any exercisable portion of the Option that is not
          exercised within the period described above.

     (d)  NO GUARANTEE OF EMPLOYMENT.  Nothing in this Agreement shall interfere
          with or limit in any way the right of the Company or a  Subsidiary  to
          terminate  the  Employee's  employment at any time, or confer upon the
          Employee  any right to  continue  in the  employ of the  Company  or a
          Subsidiary.

6.   CHANGE OF CONTROL.

     (a)  ACCELERATED  EXERCISABILITY AND PAYMENT.  Except as otherwise provided
          in paragraph  6(b),  in the event of a Change of Control,  100% of the
          Option shall become exercisable  (whether or not then exercisable) and
          may, if the  Committee  so  determines,  be canceled in exchange for a
          payment in cash of an amount  equal to the  product of (x) the excess,
          if any,  of the  Change  of  Control  Price  over the  Exercise  Price
          multiplied by (y) the number of shares then covered by the Option.

     (b)  ALTERNATIVE  AWARD.  Notwithstanding  Section 6(a),  no  cancellation,
          acceleration  of  exercisability,  vesting,  cash  settlement or other
          payment  shall occur with  respect to any portion of the Option if the
          Committee reasonably determines in good faith, prior to the occurrence
          of a Change of  Control,  that such  portion  of the  Option  shall be
          honored or assumed, or new rights substituted therefore (such honored,
          assumed or  substituted  Option  being  hereinafter  referred to as an
          "Alternative  Award")  by the  Employee's  employer  (or an  affiliate
          thereof)  immediately  after the Change of Control,  provided that any
          such Alternative Award must:

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

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

                                       12
(3)  have substantially  equivalent  economic value to such portion of
               the Option (determined at the time of the Change of Control); and

          (4)  provide  that,  in the event that such  Employee's  employment is
               involuntary   terminated  or   constructively   terminated,   any
               conditions on such Employee's  rights under, or any  restrictions
               on  transfer   or   exercisability   applicable   to,  each  such
               Alternative Award shall be waived or shall lapse, as the case may
               be.

     For this purpose,  a constructive  termination  shall mean a termination of
     employment by the Employee  within 120 days following a material  reduction
     in the  Employee's  base  salary or an  Employee's  incentive  compensation
     opportunity,  a material reduction in the Employee's  responsibilities,  or
     relocation of the Employee's principal place of employment is a location 35
     miles away or more from Employee's prior place of employment.

7.   NON-SOLICITATION.  For a period  of 24  months  after  the  termination  of
     Employee's employment, Employee shall not, directly or indirectly:

     (a)  encourage  any  employee  or agent of the Company or a  Subsidiary  to
          terminate his or her relationship with the Company;

     (b)  employ,  engage as a consultant or adviser,  or solicit the employment
          or engagement as a consultant or adviser,  of any employee or agent of
          the  Company  or  a  Subsidiary  (other  than  by  the  Company  or  a
          Subsidiary),  or  cause  or  encourage  any  Person  to do  any of the
          foregoing;

     (c)  establish (or take preliminary steps to establish) a business with, or
          encourage others to establish (or take preliminary steps to establish)
          a business with, any employee or agent of the Company or a Subsidiary;
          or

     (d)  interfere with the  relationship of the Company or a Subsidiary  with,
          or endeavor to entice away from the  Company,  any Person who or which
          at any  time  during  the  period  commencing  one  year  prior to the
          termination of the Employee's employment was or is a material customer
          or  material   supplier  of,  or   maintained   a  material   business
          relationship with, the Company.

8.   NONTRANSFERABILITY OF AWARDS. The Option granted hereunder may not be sold,
     transferred,  pledged,  assigned,  encumbered  or  otherwise  alienated  or
     hypothecated,   other  than  by  will  or  by  the  laws  of  descent   and
     distribution.  Following the Employee's  death,  all rights with respect to
     any Option that was  exercisable at the time of such  Employee's  death and
     has not expired may be exercised by his  designated  beneficiary  or by his
     estate in accordance with, and subject to, the terms and conditions  hereof
     and of the Plan.

9.   BENEFICIARY  DESIGNATION.  The  Employee  may  from  time to time  name any
     beneficiary   or   beneficiaries   (who  may  be  named   contingently   or
     successively)  by whom any right under this Agreement is to be exercised in
     case of the Employee's  death PROVIDED THAT, if the Employee shall not have
     designated any  beneficiary  under this Plan,  the  Employee's  beneficiary
     shall be deemed to be the person designated by the Employee under the group
     life  insurance  plan of the Company or a Subsidiary in which such Employee
     participates  (unless such designated  beneficiary is not a Family Member).
     Each  designation  will revoke all prior  designations,  shall be in a form
     prescribed  by the  Committee,  and will be  effective  only when  filed in
     writing with the Committee during the Employee's  lifetime.  In the absence
     of  any  such  effective  designation,  benefits  remaining  unpaid  at the
     Employee's death shall be paid to or exercised by the Employee's  surviving
     spouse, if any, or otherwise to or by his estate.

10.  TAX  WITHHOLDING.  Whenever  Common  Stock  is to be  issued  or cash  paid
     pursuant to the  exercise of an Option  under this  Agreement,  the Company
     shall have the power to  withhold,  or require the  Employee  to remit,  an
     amount  sufficient  to satisfy  Federal,  state and local  withholding  tax
     requirements  relating  to such  transaction,  and the  Company  may  defer
     payment of cash or the issuance of Common Stock until such requirements are
     satisfied.  The Committee may permit the Employee to elect, subject to such
     conditions as the Committee may impose:

     (1)  to have  Shares  otherwise  issuable  upon the  exercise  of an Option
          withheld by the Company, or

                                       13
(2)  to deliver to the Company cash equal to all or part of the  Employee's
          Federal,   state  or  local  tax   obligation   associated   with  the
          transaction.

11.  ADJUSTMENT OF THE NUMBER OF OPTION SHARES. In the event of any Common Stock
     dividend  or  Common  Stock  split,  recapitalization  (including,  but not
     limited   to,  the   payment  of  an   extraordinary   dividend),   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  subject to this Option and the  exercise  price  applicable  to this
     Option shall be appropriately adjusted by the Committee and the Committee's
     determination shall be conclusive;  provided,  however, that any fractional
     shares resulting from any such adjustment shall be disregarded.

12.  REQUIREMENTS OF LAW. The issuance of shares of Common Stock pursuant to any
     Option 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.  No shares of Common  Stock shall be issued
     upon  exercise  of any  portion of the  Option  granted  hereunder  if such
     issuance  or  exercise  would  result in a  violation  of  applicable  law,
     including the federal  securities laws and any applicable  state or foreign
     securities laws. The Option granted  hereunder shall be offered pursuant to
     an applicable federal securities law exemption from registration.

13.  GOVERNING  LAW. This  Agreement  shall be construed in accordance  with and
     governed by the laws of the State of Delaware,  regardless  of the law that
     might be applied under principles of conflict of laws.

14.  INTERPRETATION;  CONSTRUCTION.  Any  determination or interpretation by the
     Committee under or pursuant to this Agreement shall be final and conclusive
     on all persons affected hereby. In the event of a conflict between any term
     of this  Agreement  and the terms of the Plan,  the terms of the Plan shall
     control.

15.  AMENDMENTS.  The  Committee  shall have the  exclusive  right to amend this
     Agreement,  from time to time, provided that no such amendment shall impair
     the rights of the  Employee  under this  Agreement  without the  Employee's
     consent. Upon its adoption by the Committee, any alteration or amendment of
     this Agreement shall become binding and conclusive on all persons  affected
     thereby  without any need for consent or other  action by any such  person.
     The Company shall give written notice to the Employee of any such amendment
     as promptly as practicable after the adoption thereof.

IN WITNESS  WHEREOF,  the  Company  has caused  its duly  authorized  officer to
execute,  and the Employee has  executed,  this  Agreement,  each as of the date
first written above.

By signing a copy of this  Agreement  and  returning it to the  Company,  I, the
Employee, acknowledge that I have read the Plan, and that I fully understand all
of my rights under the Plan,  as well as all of the terms and  conditions  which
may limit my  eligibility to exercise this Option Award and/or  transfer  Shares
acquired  under this  Option  Award.  Without  limiting  the  generality  of the
preceding sentence,  I understand that my right to exercise this Option Award is
conditioned  upon my  continued  employment  with the  Company.  The  terms  and
conditions  set forth in this Agreement and in the Plan will be binding upon me,
my person  representative  or the person or persons to whom my rights under this
Agreement pass by will or by the applicable laws of descent and distribution.  I
shall not have any rights of a shareholder with respect to the shares subject to
the Option until such shares have been issued to me upon proper  exercise of the
Option.

I acknowledge  that the covenants  contained in Section 7 are  reasonable in the
scope of the  activities  restricted and the duration of the  restrictions,  and
that such covenants are reasonably necessary to protect the Company's legitimate
interests in its  relationships  with its  employees,  customers and  suppliers.
Employee  further  acknowledges  such  covenants are essential  elements of this
Agreement and that, but for such  covenants,  the Company would not have entered
into this Agreement.

                                       14
PRINCIPAL FINANCIAL GROUP, INC.

                                    By:     ____________________________________
                                    Name:   Jim DeVries-Sr VP Human Resources

                                    ____________________________________________
                                    Date

                                    EMPLOYEE

                                    --------------------------------------------
                                    Name:  EMPLOYEE NAME

                                    --------------------------------------------
                                    Date

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