Exhibit 10.5
PRINCIPAL FINANCIAL
GROUP, INC.
ANNUAL INCENTIVE PLAN
SECTION 1
PURPOSE
The
purpose of the Principal Financial Group, Inc. Annual
Incentive Plan is to permit Principal Financial Group, Inc.
(the "Company"), through awards of annual incentive compensation
that satisfy the requirements for performance-based compensation
under Section 162(m) of the Internal Revenue Code, to attract
and retain executives and to motivate these executives to promote
the profitability and growth of the Company.
SECTION 2
DEFINITIONS
"Award" shall mean the amount granted to a Participant by
the Committee for a Performance Period.
"Board" shall mean the Board of Directors of the Company, or
the successor thereto.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Committee" shall mean the Human Resources Committee of the
Board or any subcommittee thereof which meets the requirements of
Section 162(m)(4)(C) of the Code.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"Executive" shall mean any "covered employee" (as defined in
Section 162(m) of the Code) and, in the discretion of the
Committee, any other executive officer of the Company or its
Subsidiaries.
"Operating Income" shall mean, for each Performance Period,
the income from continuing operations of the Company before income
taxes, minus net realized/unrealized capital gains/(losses), in
each case as reported in the Company's audited consolidated
financial statements for the Performance Period, prepared in
accordance with accounting principles generally accepted in the
United States (U.S. GAAP).
"Participant" shall mean, for each Performance Period, each
Executive who has been selected by the Committee to participate in
the Plan.
"Performance Period" shall mean the Company's fiscal year or
any other period designated by the Committee with respect to which
an Award may be granted. Performance Periods may not
overlap.
"Plan" shall mean this Principal Financial Group, Inc.
Annual Incentive Plan, as amended from time to time.
"Stock Plans" shall mean the Principal Financial
Group, Inc. Stock Incentive Plan and any future equity
compensation plans approved by the shareholders of the
Company.
SECTION 3
ADMINISTRATION
The
Plan shall be administered by the Committee, which shall have full
authority to interpret the Plan, to establish rules and regulations
relating to the operation of the Plan, to select Participants, to
determine the maximum Awards and the amounts of any Awards and to
make all determinations and take all other actions necessary or
appropriate for the proper administration of the Plan. The
Committee's interpretation of the Plan, and all actions taken
within the scope of its authority, shall be
final and binding on the Company,
its stockholders and Participants, Executives, former Executives
and their respective successors and assigns. No member of the
Committee shall be eligible to participate in the Plan.
SECTION 4
DETERMINATION OF AWARDS
(a) Prior
to the beginning of each Performance Period, or at such later time
as may be permitted by applicable provisions of the Code, the
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