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Exhibit 10.16

EMPLOYMENT AGREEMENT

        This EMPLOYMENT AGREEMENT (the "Agreement") dated as of June 1, 2006
("Agreement Date") by and between Principal Financial Group, Inc., a Delaware
corporation, (together with all successors thereto "PFGI"), Principal Financial
Services, Inc., an Iowa corporation, and Principal Life Insurance Company, an
Iowa corporation (together with all successors thereto, "Life") (each of the
foregoing referred to individually as a "Company" or collectively as
"Companies", and Larry D. Zimpleman ("Executive"), a resident of Iowa. The
parties desire to enter into this Agreement, which is intended to more fully
embody the agreement among the parties as to Executive's employment. In
consideration of the mutual agreements contained herein, and other good and
valuable consideration, the sufficiency of which is hereby acknowledged, the
Company and Executive agree as follows:

Article I.

DEFINITIONS

        The terms set forth below have the following meanings (such meanings to
be applicable to both the singular and plural forms, except where otherwise
expressly indicated):

        1.1    "Accrued Annual Bonus" means the amount of any Annual Bonus
earned but not yet paid with respect to any Fiscal Year ended prior to the Date
of Termination.

        1.2    "Accrued Base Salary" means the amount of Executive's Base
Salary, which is accrued but not yet paid as of the Date of Termination.

        1.3    "Affiliate" means any Person that directly or indirectly
controls, is controlled by, is under common control with, a Company. For the
purposes of this definition, the term "control" when used with respect to any
Person, means (a) the power to direct or cause the direction of management or
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise, or (b) for purposes of
Section 1.11 and Article VII, the power substantially to influence the direction
of strategic management policies of such Person, and provided a Company has a
direct or indirect commercial relationship with such Person, all as determined
by the Human Resources Committee of the Board or its successor.

        1.4    "Agreement"—see the introductory paragraph of this Agreement.

        1.5    "Agreement Date"—see the introductory paragraph in this
Agreement.

        1.6    "Anniversary Date"—means any annual anniversary of the Agreement
Date.

        1.7    "Annual Bonus"—see Section 4.2.

        1.8    "Base Salary"—see Section 4.1.

        1.9    "Beneficiary"—see Section 9.6.

        1.10  "Board" means the Board of Directors of PFGI unless the context
indicates otherwise.

        1.11  "Cause" means any of the following:

        (a)   Executive's conviction of, plea of guilty to, or plea of nolo
contendere to a felony or misdemeanor (other than a traffic-related felony or
misdemeanor) that involves fraud, dishonesty or moral turpitude,

        (b)   any willful action by Executive resulting in any criminal
conviction or civil or internal Company sanction or judgment under (i) any
Federal or State workplace harassment or

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discrimination laws or (ii) any internal Company workplace harassment,
discrimination or other workplace policy under which such action could be and
could reasonably be expected to be grounds for immediate termination of a member
of Senior Management (other than mere failure to meet performance goals,
objectives, or measures),

        (c)   Executive's habitual abuse of or addiction to alcohol or
controlled substances, which interferes with the performance of Executive's
duties,

        (d)   Executive's willful and intentional material breach of this
Agreement, including, but not limited to, the restrictive covenants contained in
Article VII,

        (e)   Executive's habitual neglect of duties, (other than resulting from
Executive's incapacity due to physical or mental illness) which results in
substantial financial detriment to any of the Companies or any Affiliate,

        (f)    Executive's personally engaging in such conduct as results or is
likely to result in (i) substantial damage to the reputation of any of the
Companies or any Affiliate, as a respectable business, and (ii) substantial
financial detriment (whether immediately or over time) to any of the Companies
or Affiliates,

        (g)   Executive's willful and intentional material misconduct in the
performance or gross negligence of his duties under this Agreement that results
in substantial financial detriment to a Company or any Affiliate,

        (h)   Executive's intentional failure (including a failure caused by
gross negligence) to cause any of the Companies to comply with applicable law
and regulations material to the business of such Company which results in
substantial financial detriment to any of the Companies or any Affiliate, or

        (i)    Executive's willful or intentional failure to comply in all
material respects with a specific written direction of the Board that is
consistent with normal business practice and not inconsistent with this
Agreement and Executive's responsibilities hereunder.

For purposes of clauses (d), (e), (f), (g) and (h) of the preceding sentence,
Cause shall not mean the mere existence or occurrence of any one or more of the
following, and for purposes of clause (i) of the preceding sentence, Cause shall
not mean the mere existence or occurrence of item (iv) below:

          (i)  bad judgment,

         (ii)  negligence, other than Executive's habitual neglect of duties or
gross negligence,

        (iii)  any act or omission that Executive believed in good faith to have
been in the interest of the Company (without intent of Executive to gain
therefrom, directly or indirectly, a profit to which he was not legally
entitled), or

        (iv)  failure to meet performance goals, objectives or measures;

provided, that for purposes of clauses (c), (d), (e), (f), (g), (h) and (i), any
act or omission that is curable shall not constitute Cause unless the Company
gives Executive written notice of such act or omission that specifically refers
to this Section and, within 10 days after such notice is received by Executive,
Executive fails to cure such act or omission. Notwithstanding anything to the
contrary herein, any act or omission of which any member of the Board who is not
a party to such act or omission has had actual knowledge for at least six months
shall not constitute "Cause" under any clause of this Section.

        1.12  "Code" means the Internal Revenue Code of 1986, as amended from
time to time.

        1.13  "Company"—see the introductory paragraph to this Agreement.

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        1.14  "Competitive Business" means as of any date any corporation or
other Person (and any branch, office or operation thereof) that engages in, or
proposes to engage in:

        (a)   the underwriting, reinsurance, marketing or sale of (i) any form
of insurance of any kind that any of the Companies as of such date does, or has
under active consideration a proposal to, underwrite, reinsure, market or sell
(any such form of insurance, a "Company Insurance Product" or (ii) any other
form of insurance that is marketed or sold in competition with any Company
Insurance Product, or

        (b)   the sale of financial services which involve (i) the management,
for a fee or other remuneration, of an investment account or fund (or portions
thereof or a group of investment accounts or funds), (ii) the giving of advice,
for a fee or other remuneration, with respect to the investment and/or
reinvestment of assets or funds (or any group of assets or funds), or
(iii) financial planning services, or

        (c)   the design, implementation and administration of employee benefit
plans, including plan documents, employee communications, reporting, disclosure,
financial advice, investment advice, and fiduciary services, or

        (d)   any other business that as of such date is a direct and material
competitor of a Company and its Affiliates to the extent that prior to the Date
of Termination any of the Companies or its Affiliates engaged at any time within
12 months in or had under active consideration a proposal to engage in such
competitive business;

and that is located anywhere in the Untied States or anywhere outside of the
United States where such Company or its Affiliates is then engaged in, or has
under active consideration a proposal to engage in, any of such activities.

        1.15  "Date of Termination" means the date of the receipt of the Notice
of Termination by Executive (if such Notice is given by or on behalf of PFGI) or
by PFGI (if such Notice is given by Executive), or any later date, not more than
15 days after the giving of such Notice, specified in such notice, as of which
Executive's employment with the Companies shall be terminated; provided,
however, that:

(i)if Executive's employment is terminated by reason of death, the Date of
Termination shall be the date of Executive's death; and

(ii)if Executive's employment is terminated by reason of Disability, the Date of
Termination shall be the 30th day after Executive's receipt of the physician's
certification of Disability, unless, before such date, Executive shall have
resumed the full-time performance of Executive's duties; and

(iii)if Executive terminates his employment without Good Reason, the Date of
Termination shall be the 30th day after the giving of such Notice; and

(iv)if no Notice of Termination is given, the Date of Termination shall be the
last date on which Executive is employed by the Companies.

        1.16  "Disability" means a mental or physical condition which renders
Executive unable or incompetent to carry out the material job responsibilities
which such Executive held or the material duties to which Executive was assigned
at the time the disability was incurred, which has existed for at least six
months and which in the certified opinion of a physician mutually agreed upon by
PFGI and Executive (which agreement neither party shall unreasonably withhold)
is expected to be permanent or to last for an additional duration in excess of
six months.

        1.17  "Employment Period"—see Section 3.1.

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        1.18  "Executive"—see the introductory paragraph of this Agreement.

        1.19  "Fiscal Year" means the fiscal year used in connection with the
preparation of the consolidated financial statements of PFGI.

        1.20  "Good Reason" means the occurrence of any one of the following
events unless Executive specifically agrees in writing that such event shall not
be Good Reason:

        (a)   any material breach of the Agreement by any of the Companies,
including any of the following, each of which shall be deemed material:

          (i)  any adverse change in the title, status, responsibilities,
authorities or perquisites of Executive;

         (ii)  any failure of Executive to be nominated, appointed or elected
and to continue to be nominated, re-elected, or re-appointed as President of
PFGI without Executive's prior written consent;

        (iii)  any failure of Executive to be nominated, appointed or elected
and to continue to be nominated, re-elected, or re-appointed as a member of the
Board of Directors of PFGI or the Board of Directors of Life;

        (iv)  causing or requiring Executive to report to anyone other than the
Chief Executive Officer of PFGI or the Boards of PFGI and Life;

         (v)  assignment to Executive of duties materially inconsistent with his
position and duties described in this Agreement, including status, offices, or
responsibilities as contemplated under Section 2.1 or any other action by any of
the Companies which results in an adverse change in such position, status,
offices, titles or responsibilities;

        (vi)  any reduction or failure to pay Executive's Base Salary in
violation of Section 4.1 or his Annual Bonus in violation of Section 4.2;

       (vii)  any failure to grant or pay an LTIP Award or LTIP Bonus required
under Section 4.3; or

      (viii)  any reduction in bonus or incentive (including without limitation,
the LTIP) opportunity; provided that no such reduction shall be deemed to occur
merely because the Company revises or modifies the structure of or performance
factors taken into account (or the degree to which any such performance factors
are taken into account) under any bonus or incentive (including without
limitation, the LTIP) plan or arrangement; provided further that the Executive
shall not be treated less favorably than the other members of Senior Management;

provided that the creation, existence or appointment of a president or chief
executive officer other than Executive of any subsidiary of PFGI shall not be
deemed to be Good Reason if such other chief Executive officer or president is
the Chief Executive Officer if PFGI or reports, directly or indirectly, to
Executive or the Chief Executive Officer of PFGI; and provided, further, that no
act or omission described in clauses (i) through (viii) of this Section shall
constitute Good Reason unless Executive gives PFGI written notice of such act or
omission and the Company fails to cure such act or omission within 30-days after
delivery of such notice (except that Executive shall not be required to provide
such notice in case of intentional acts or omissions by a Company or more than
once in cases of repeated acts or omissions); or

        (b)   the failure of PFGI to assign this Agreement to its successor or
the failure of a successor of PFGI, Life or the Company to expressly assume and
agree to be bound by the Agreement; or

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        (c)   relocation of the Company's executive offices or Executive's own
office location to a location that is outside the United States;

In the event of an occurrence or omission constituting Good Reason, Executive
shall not be entitled to terminate his employment for Good Reason unless within
3 months after Executive first obtains actual knowledge of such an event
constituting Good Reason, he notifies PFGI of the events constituting such Good
Reason and of his intention to terminate his employment for Good Reason by a
Notice of Termination.

Notwithstanding any provision in this Section to the contrary, no reduction in
base salary, bonus or incentive (including without limitation the LTIP) that
applies to all members of Senior Management shall constitute Good reason
pursuant to Clauses (a) (vii) or (viii) of this Section.

        1.21  "including" means including without limitation.

        1.22  "Life"—see introductory paragraph to this Agreement

        1.23  "LTIP" means, the Principal Financial Group Stock Incentive Plan,
the Principal Financial Group 2005 Stock Incentive Plan and any other successor
long-term incentive plan (other than the LTPP) established by any of the
Companies or the Surviving Corporation.

        1.24  "LTIP Award" means a grant under the LTIP.

        1.25  "LTIP Bonus" means the amount paid or earned in respect of an LTIP
Award.

        1.26  "LTIP Performance Period" means any performance period applicable
to an LTIP Award, as designated in accordance with the LTIP.

        1.27  "LTPP". means the 1999 Long-Term Performance Plan, as may be
amended from time to time.

        1.28  "PFGI"—see introductory paragraph to this Agreement.

        1.29  "Notice of Termination" means a written notice of termination of
Executive's employment given in accordance with Section 9.12 by PFGI on behalf
of the Companies, or by Executive, as the case may be, which sets forth (a) the
specific termination provision in this Agreement relied upon by the party giving
such notice, (b) in reasonable detail the specific facts and circumstances
claimed to provide a basis for such Termination of Employment, and (c) if the
Date of Termination is other than the date of receipt of such Notice of
Termination, the Date of Termination.

        1.30  "Person" means any individual, sole proprietorship, partnership,
joint venture, limited liability company, trust, unincorporated organization,
corporation, institution, public benefit corporation, entity or government
instrumentality, division, agency, body or department.

        1.31  "Prorata Annual Bonus" means the product of (i) the Target Annual
Bonus (provided that no effect shall be given to any reduction in such Target
Annual Bonus that would qualify as Good Reason if Executive were to terminate
his employment on account thereof) multiplied by (ii) a fraction of which the
numerator is the number of days which have elapsed in such Fiscal Year through
the Date of Termination and the denominator of which is 365.

        1.32  "Retirement" means any Termination of Employment after Executive
reaches age 57, other than for Cause and other than for Good Reason.

        1.33  "Senior Management" means Executive Vice President or higher-level
officers of PFGI in the United States.

        1.34  "Target Annual Bonus"—see Section 4.2.

        1.35  "Target Annual Goals"—see Section 4.2.

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        1.36  "Tax Gross-Up Payment" means an amount payable to Executive such
that after payment of Taxes on such amount there remains a balance sufficient to
pay the Taxes being reimbursed.

        1.37  "Taxes" means the incremental federal, state, local and foreign
income, employment, excise and other taxes payable by Executive with respect to
any applicable item of income.

        1.38  "Termination For Good Reason" means a Termination of Employment by
Executive for a Good Reason.

        1.39  "Termination of Employment" means a termination by the Companies
or Executive of Executive's employment with the Companies and their Affiliates.

        1.40  "Termination Without Cause" means a Termination of Employment by
the Companies for any reason other than Cause or Executive's death or
Disability.

Article II.
DUTIES

        2.1    Duties.    PFGI shall employ Executive during Employment Period
as its President and Chief Operating Officer, and Executive shall have the
authority, duties, and responsibilities as are commensurate and consistent with
such position and title, and as provided in, PFGI's by-laws. Executive shall
also serve as President and Chief Operating Officer of Life. It is contemplated
that the stockholders of PFGI and of Life, respectively will elect Executive to
their respective Boards. Executive shall report solely to the Chief Executive
Officer of PFGI. During the Employment Period, Executive shall follow the
directives of the Chief Executive Officer of PFGI and the Board. During the
Employment Period, Executive shall perform the duties assigned to him hereunder,
and, subject to Section 2.2, shall devote his full business time, attention and
effort, excluding any periods of disability, vacation, or sick leave to which
Executive is entitled, to the affairs of the Companies and shall use his best
efforts to promote the interests of the Companies. The Executive acknowledges
that his business time is not limited to a fixed number of hours per week.

        2.2    Other Activities.    Executive may serve on corporate, civic or
charitable boards or committees, deliver lectures, fulfill speaking engagements
or teach at educational institutions, and manage personal investments; provided
that such activities do not individually or in the aggregate significantly
interfere with the performance of Executive's duties under this Agreement.

Article III.
EMPLOYMENT PERIOD

        3.1    Employment Period.    Subject to the termination provisions
hereinafter provided, the term of Executive's employment under this Agreement
(the "Employment Period") shall begin on the Agreement Date and end on the
Anniversary Date which is three years after such date or such later date to
which the Employment Period is extended pursuant to the following sentence. At
the expiration of the initial term of this Agreement, as set forth in the
immediately preceding sentence, or the term of this Agreement as the same may
previously have been extended in accordance with this sentence, the Employment
Period shall be automatically extended for a period of one additional year
unless PFGI or Executive delivers written notice to the other party not later
than 90 days prior to the date on which the Agreement is then scheduled to
expire (an "Expiration Notice") that it or he is electing not to extend the term
of the Agreement. Notwithstanding the immediately preceding sentence, the
Employment Period shall automatically end on Executive's 65th birthday unless
PFGI delivers, any time prior to one year before such date of expiration,
written notice to Executive that it desires that the Agreement shall not so
expire, in which case, subject to the prompt consent of Executive, the

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Agreement shall expire (unless further extended by mutual consent) on the date
specified in such notice. The employment of Executive by PFGI shall not be
terminated other than in accordance with Article VI.

Article IV.
COMPENSATION

        4.1    Salary.    Executive shall be paid in accordance with normal
payroll practices (but not less frequently than monthly) an annual salary at a
rate of $600,000 per year ("Base Salary"). During the Employment Period, the
Base Salary shall be reviewed periodically and may be increased from time to
time as shall be determined by the Board, in accordance with normal Company
administrative practices for Senior Management. After any such increase, the
term "Base Salary" shall thereafter refer to the increased amount. Any increase
in Base Salary shall not limit or reduce any other obligation of the Company to
Executive under this Agreement. Base Salary shall not be reduced at any time
without the express written consent of Executive; provided that the Board may,
in its discretion restructure or alter the time of payment of Base Salary in
order to enhance the deductibility thereof, provided there is no economic
detriment to the Executive and that the Board and Executive shall cooperate in
good faith in such restructuring or alteration.

        4.2    Annual Bonus.    

        (a)   Executive shall be eligible to receive an annual bonus ("Annual
Bonus") in accordance with the terms hereof for each Fiscal Year that begins or
ends during the Employment Period. Executive shall be eligible for an Annual
Bonus based upon target performance goals (the "Target Annual Goals"), which
goals shall be determined by the Board on an annual basis, in accordance with
normal Company administrative practices for Senior Management, and which
provides for a payment opportunity of 125% of Executive's Base Salary ("Target
Annual Bonus") upon achievement of the Target Annual Goals. The parties agree
that the Annual Bonus shall be administered and shall be subject to the same
terms and conditions as are generally applicable to other members of Senior
Management in the applicable year.

        (b)   The entire Annual Bonus that is payable to Executive with respect
to a Fiscal Year shall be paid in cash, or such other medium as is generally
applicable to members of Senior Management, as soon as practicable after the
appropriate Board has determined whether and the degree to which Target Annual
Goals have been achieved following the close of such Fiscal Year. In any event,
the entire Annual Bonus that is payable to Executive with respect to a Fiscal
Year shall be paid at the same time as the Annual Bonus is paid to the other
members of Senior Management, but in any event no later than 75 days after the
end of the Fiscal Year.

        4.3    Long-Term Incentive Plan Bonus and Other Incentive
Compensation.    Executive shall have the opportunity to participate in the LTIP
(if such plan exists) and any other incentive compensation plan or program
available to Senior Management. The appropriate Board may restructure or alter
the time of payment of amounts under the LTIP or other incentive compensation
plan or program in order to enhance the deductibility thereof, provided there is
no economic detriment to the Executive and that the Board and Executive shall
cooperate in good faith in such restructuring or alteration.

        4.4    Savings and Retirement Plans.    Executive shall be eligible to
participate during the Employment Period in any Company's savings and retirement
plans, practices, policies and programs, in accordance with the terms thereof,
if any, applicable from time to time to members of Senior Management, including
any supplemental executive retirement plan.

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Article V.
OTHER BENEFITS

        5.1    Welfare Benefits.    During the Employment Period, Executive and
his family shall be eligible to participate in, and shall receive all benefits
under, any Company's welfare benefit plans, practices, policies and programs
provided or made generally available by the Company to Senior Management
(including medical, dental, vision, short and long term disability, group-term
life, accidental death and dismemberment (AD&D) insurance plans and programs),
in accordance with their terms as in effect from time to time.

        5.2    Fringe Benefits.    During the Employment Period, Executive shall
be entitled to fringe benefits generally applicable to Senior Management in
accordance with their terms as in effect from time to time.

        5.3    Vacation.    During the Employment Period, Executive shall be
entitled to paid time under the plans, practices, policies and programs
generally applicable to members of Senior Management in accordance with their
terms as in effect from time to time.

        5.4    Expenses.    Executive shall be promptly reimbursed for all
actual and reasonable employment-related business expenses he incurs during the
Employment Period in accordance with any Company's practices, policies, and
procedures generally applicable to members of Senior Management in accordance
with their terms as in effect from time to time, including the timely submission
of required receipts and accountings.

Article VI.
TERMINATION BENEFITS

        6.1    Termination for Cause or Other than for Good Reason, etc.    

        (a)   If PFGI terminates Executive's employment with the Companies for
Cause or Executive terminates his employment other than for Good Reason, death
or Disability, the Executive shall be entitled to receive immediately after the
Date of Termination a lump sum amount equal to the sum of Executive's Accrued
Base Salary and Accrued Annual Bonus, and Executive shall not be entitled to
receive any severance or other payment, other than compensation and benefits
which relate to or derive from Executive's employment with the Companies on or
prior to the Date of Termination (including, without limitation, any deferrals
under the LTIP) and which are otherwise payable in case of termination for Cause
or other than for Good Reason, death or Disability, as applicable

        (b)   Executive's employment may be terminated for Cause only if
(i) PFGI provides Executive (before the Date of Termination) with written notice
of the Board meeting referred to in clause (ii) of this Section 6.1(b) at least
twenty days prior to such meeting and specifies in detail in writing the basis
of a claim of Cause and provides Executive, with or without counsel, at
Executive's election, an opportunity to be heard and present arguments and
evidence on Executive's behalf at such meeting, (ii) the PFGI Board, by
affirmative vote of not less than 2/3 of the entire membership of the PFGI Board
(excluding the Executive's vote from any such determination) that the acts or
omissions constitute Cause which Executive failed to cure after being given an
opportunity to cure if required by Section 1.11, and to the effect that
Executive's employment should be terminated for Cause and (iii) PFGI thereafter
provides Executive a Notice of Termination which specifies in detail the basis
of such Termination of Employment for Cause. Nothing in this Section 6.1(b)
shall preclude the Board, by majority vote, from suspending Executive from his
duties, with pay at any time.

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        6.2    Termination for Retirement, Death or Disability.    If, before
the end of the Employment Period, Executive's employment terminates due to his
Retirement, death or Disability, Executive or his Beneficiaries, as the case may
be, shall be entitled to receive immediately after the Date of Termination, a
lump sum amount which is equal to the sum of Executive's Accrued Base Salary,
Accrued Annual Bonus, and Prorata Annual Bonus. All of Executive's rights under
any non-qualified retirement plan (including any non-qualified defined
contribution plan) shall become fully vested (to the extent not previously
vested) on the Date of Termination. In calculating the amount payable under any
nonqualified defined benefit plan, Executive shall be treated as though he had
attained age 57 on the Date of Termination and shall be credited under such plan
with additional service in an amount equal to that he would have completed had
he continued to work until age 57. Any accrued benefit that is forfeited by
Executive due to his death, Disability or Retirement under a qualified plan
which is supplemented by a nonqualified plan shall be paid from the applicable
supplemental non-qualified plan.

        6.3    Termination Without Cause or for Good Reason.    In the event of
a Termination Without Cause or a Termination for Good Reason (in either case
occurring during the Employment Period), Executive shall be entitled to receive
the following:

        (a)   promptly after the Date of Termination, (but in no event later
than ten business days after the Date of Termination), a lump sum amount equal
to the sum of Executive's Accrued Base Salary, Accrued Annual Bonus and Prorata
Annual Bonus;

        (b)   ten business days or, if the amount payable hereunder is not a
short-term deferral for purposes of Section 409A of the Code, six months after
the Date of Termination a lump sum amount equal to the product of (i) the sum of
Base Salary plus Target Annual Bonus for the Fiscal Year during which the Date
of Termination occurs (provided that no effect shall be given to any reduction
in Target Annual Bonus that would qualify as Good Reason if Executive were to
terminate his employment on account thereof), and multiplied by (ii) 1.5;

        (c)   until the earlier of (i) the 18 month anniversary of the Date of
Termination or (ii) the date Executive becomes eligible to participate in any
plan, program or arrangement providing benefits of a similar nature by reason of
his employment or other provision of services, the life insurance benefit
specified in Section 5.1 to which Executive is entitled as of Date of
Termination, subject to the terms of applicable plans, programs or policies;
provided that the Executive shall pay the same amount for such benefits as
covered members of Senior Management who are actively employed would pay;

        (d)   if the Date of Termination occurs prior to the Executive's 57th
birthday, the benefits equivalent to those payable under the Principal Welfare
Benefit Plan for Employees calculated under the terms of such plan as if the
Date of Termination occurred after Executive's 57th birthday, reduced by amounts
actually payable under such plan, and if either Executive or the Company
reasonably believes it is likely that such benefits cannot be provided on a
tax-favored basis, the Company shall pay the cost of the insurance premium for
such benefits;

        (e)   if the Date of Termination occurs prior to Executive's 57th
birthday, for purposes of calculating the retirement benefits payable to
Executive under the Supplemental Executive Retirement Plan for Employees,
Executive will be treated as though the Date of Termination occurred after
Executive's 57th birthday;

        (f)    key executive level outplacement services, the provider of which
shall be selected by Executive, up to a maximum of $10,000; provided that in no
event shall any amount be payable to Executive in lieu of his receipt of such
services.

Notwithstanding anything herein to the contrary, the benefits provided in
Section 6.3 shall be provided only upon Executive's execution of a release and
waiver as described in Section 6.5. For the avoidance of doubt, Executive's
rights and entitlements with respect to any equity-based or other long-term

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incentive compensation awards (including any LTIP Award) outstanding as of the
Date of Termination shall be determined in accordance with the terms of such
awards and the governing plan documents and shall not be enhanced or otherwise
modified by the terms of this Agreement.

        6.4    Other Rights.    This Agreement shall not prevent or limit
Executive's continuing or future participation in any benefit, bonus, incentive
or other plan, program or policy provided by the Company and for which Executive
may qualify, and shall not impair the Company's rights to amend or terminate any
benefit, bonus, incentive or other plan program or policy; provided however that
no such amendment or termination shall treat Executive less favorably than other
Senior Management and Executive's benefits, bonus and incentives in the
aggregate shall not be reduced. Amounts which are vested benefits or which
Executive is otherwise entitled to receive under any plan, program or policy and
any other payment or benefit required by law at or after the Date of Termination
shall be payable in accordance with such plan, program or policy or applicable
law except as expressly modified by this Agreement.

        6.5    Waiver and Release.    Notwithstanding anything herein to the
contrary, upon any Termination of Employment (other than due to death)

        (a)   the Executive shall execute a release and waiver in form mutually
agreed by Executive and the Board of PFGI (which agreement neither party shall
unreasonably withhold) which releases, waives, and forever discharges the
Companies, their Affiliates, and their respective subsidiaries, affiliates,
employees, officers, shareholders, members, partners, directors, agents,
attorneys, predecessors, successors and assigns, from and against any and all
claims, liabilities, demands, causes of action, costs, expenses, attorneys'
fees, damages and obligations of every kind and nature in law, equity, or
otherwise, known and unknown suspected and unsuspected, disclosed and
undisclosed, including but not limited to any and all such claims and demands
directly or indirectly arising out of or in any way connected with the
Executive's employment with and services as a director of the Companies and
their Affiliates; claims or demands related to compensation or other amounts
under any compensatory arrangement, stock, stock options, or any other ownership
interests in any of the Companies or any Affiliate, vacation pay, fringe
benefits, expense reimbursements, severance benefits, or any other form of
compensation or equity; claims pursuant to any federal, state, local law,
statute of cause of action including, but not limited to, the federal Civil
Rights Act of 1964, as amended; the federal Age Discrimination in Employment Act
of 1967, as amended; the federal Americans with Disabilities Act of 1990; tort
law, contract law; wrongful discharge, discrimination; defamation; harassment;
or emotional distress; provided that Executive's waiver and release shall not
relieve the Companies from any of the following obligations, to the extent they
are to be performed after the date of the release and waiver: (i) payment of
amounts due under Sections 6.1, 6.2 or 6.3, as applicable, (ii) any obligations
under the second sentence of Section 6.4, and (iii) payment of any gross-up
amount due under Article VIII; and provided further that (x) neither party shall
release the other from his or its obligations under Article IX of this
agreement, to the extent such obligations are to be performed after the Date of
Termination, and (y) Executive shall not be precluded from defending against
Cause Claims (as defined in Section 6.5(b)); and

        (b)   the Company shall execute a release and waiver in form mutually
agreed by Executive and the Board of PFGI (which agreement neither party shall
unreasonably withhold) which releases, waives, and forever discharges the
Executive and his executors, administrators, successors and assigns, from and
against any and all claims, liabilities, demands, causes of action, costs,
expenses, attorneys' fees, damages and obligations of every kind and nature in
law, equity, or otherwise, known and unknown, suspected and unsuspected,
disclosed and undisclosed, including but not limited to any and all such claims
and demands directly or indirectly arising out of or in any way connected with
the Executive's employment with and services as a director of the Companies and
their Affiliates, but excluding any such claims liabilities, demands, causes of
action,

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costs, expenses, attorneys' fees, damages or obligations arising out of or in
any way connected with events, acts or conduct giving rise to or in any way
connected with Executive's Termination of Employment for Cause ("Cause Claims"),
provided, however, that (i) neither party shall release the other from his or
its obligations under Article IX of this agreement, to the extent such
obligations are to be preformed after the Date of Termination, (ii) the Company
shall not release Executive from his obligation under Article VII and
(iii) Executive shall not be precluded from defending against Cause Claims.

        (c)   Executive hereby agrees that the execution of this Agreement is
adequate consideration for the execution of such a release, and hereby
acknowledges that the Companies would not have executed this Agreement had
Executive not agreed to execute such a release.

Article VII.
RESTRICTIVE COVENTANTS

        7.1    Non-Competition.    Executive shall not at any time during the
period beginning on the Agreement Date and ending 18 months following the Date
of Termination (whether or not during the Term), regardless of the reasons for
such termination, directly or indirectly, in any capacity:

        (a)   engage or participate in, become employed by, serve as a director
of, or render advisory or consulting or other services in connection with, any
Competitive Business; provided, however, that after the Date of Termination this
Section 7.1(a) shall not preclude Executive from being an employee of, or
consultant to, any business unit of a Competitive Business if (i) such business
unit does not qualify as a Competitive Business in its own right and
(ii) Executive does not have any direct or indirect involvement in, or
responsibility for, any operations of such Competitive Business that cause it to
qualify as a Competitive Business; or

        (b)   make or retain any financial investment, whether in the form of
equity or debt, or own any interest, in any Competitive Business; provided,
however, that nothing in this subsection shall restrict Executive from making an
investment in any Competitive Business if such investment (i) represents no more
than 1% of the aggregate market value of the outstanding capital stock or debt
(as applicable) of such Competitive Business, (ii) does not give Executive any
right or ability, directly or indirectly, to control or influence the policy
decisions or management of such Competitive Business, and (iii) does not create
a conflict of interest between Executive's duties under this Agreement and his
interest in such investment.

        7.2    Non-Solicitation.    Executive shall not at any time during the
period beginning on the Agreement Date and ending 18 months following the Date
of Termination (whether or not during the Term), regardless of the reasons for
such termination, directly or indirectly:

        (a)   other than in connection with the good-faith performance of his
duties as an officer of any of the Companies, encourage any employee or agent of
the Companies or any Affiliate to terminate his relationship with any of the
Companies or any Affiliate;

        (b)   solicit the employment of or the engagement as a consultant or
advisor of, any employee or agent of any of the Companies or any Affiliate
(other than by the Company or an Affiliate), 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 any Affiliate; or

        (d)   interfere with the relationship of any of the Companies with, or
endeavor to entice away from any of the Companies, any Person who or which at
any time during the period commencing

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one year prior to the Agreement Date was or is a material client or material
supplier of, or maintained a material business relationship with, any of the
Companies or an Affiliate.

        7.3    Confidentiality.    The Executive acknowledges that in the course
of performing services for the Companies and Affiliates, he may create, develop,
learn of, receive or contribute non-public information, ideas, processes,
methods, designs, devices, inventions, data, models and other information
relating to the Companies and their Affiliates or their products, services,
businesses, operations, employees or customers, whether in tangible or
intangible form, and that the Companies or their Affiliates desire to protect
and keep secret and confidential, including trade secrets and information from
third parties that the Companies or their Affiliates are obligated to keep
confidential ("Confidential Information"). Confidential Information shall not
include: (i) information that is or becomes generally known through no fault of
Executive; (ii) information received from a third party outside of the Company
that was disclosed without a breach of any confidentiality obligation; or
(iii) information approved for release by written authorization of the Company.
The Executive recognizes that all such Confidential Information is the sole and
exclusive property of the Companies and their Affiliates, and that disclosure of
Confidential Information would cause damage to the Companies and their
Affiliates. Except as required by the duties of his employment with any of the
Companies or any of their and/or its Affiliates; (ii)with the consent of PFGI,
or (iii) in connection with enforcing the Executive's rights under this
Agreement or if compelled by a court or governmental agency(provided that this
subclause (iii) shall not apply unless Executive has provided PFGI with
reasonable prior written notice of any such proposed disclosure in connection
with any enforcement action or compelled testimony), the Executive agrees that
he will not willfully disseminate or otherwise disclose, directly or indirectly,
any Confidential Information obtained during his employment with any of the
Companies or their Affiliates, and will take all necessary precautions to
prevent disclosure, to any unauthorized individual or entity inside or outside
the Company, and will not use the Confidential Information or permit its use for
the benefit of Executive or any other person or entity other than the Companies
or the Affiliates. These obligations shall continue during and after the
termination of Executive's employment (whether or not during the Employment
Period).

        7.4    Intellectual Property.    During the employment period, Executive
shall disclose immediately to the Company all ideas, inventions and business
plans that he makes, conceives, discovers or develops alone or with others
during the course of his employment with the Company, including any inventions,
modifications, discoveries, developments, improvements, computer programs,
processes, products or procedures (whether or not protectable upon application
by copyright, patent, trademark, trade secret or other proprietary rights)
("Work Product") that: (i) relate to the business of the Company or any customer
or supplier to the Company or any of the products or services being developed,
manufactured, sold or otherwise provided by the Company or that may be used in
relation therewith; or (ii) result from tasks assigned to Executive by the
Company; or (iii) result from the use of the premises or personal property
(whether tangible or intangible) owned, leased or contracted for by the Company.
Executive agrees that any Work Product shall be the property of the Company and,
if subject to copyright, shall be considered a "work made for hire" within the
meaning of the Copyright Act of 1976, as amended (the "Act"). If an to the
extent that any such Work Product is found as a matter of law not to be a "work
made for hire" within the meaning of the Act, Executive expressly assigns to the
Company all right, title and interest in and to the Work Product, and all copies
thereof, and the copyright, patent, trademark, trade secret and all their
proprietary rights in the Work Product, without further consideration, free from
any claim, lien for balance due or rights of retention thereto on the part of
Executive.

        (a)   The Company hereby notifies Executive that the preceding paragraph
does not apply to any inventions for which no equipment, supplies, facility, or
trade secret information of the Company was used and which was developed
entirely on the Executive's own time, unless: (i) the invention relates (a) to
the Company's business, or (b) to the Company's actual or demonstrably

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anticipated research or development, or (ii) the invention results form any work
performed by the Executive for the Company.

        (b)   Executive agrees that upon disclosure of Work Product to the
Company, Executive will, during his employment and at any time thereafter, at
the request and cost of the Company, execute all such documents and perform all
such acts as the Company or its duly authorized agents may reasonably require:
(i) to apply for, obtain and vest in the name of the Company alone (unless the
Company otherwise directs) letters patent, copyrights or other analogous
protection in any country throughout the world, and when so obtained or vested
to renew and restore the same; and (ii) to defend any opposition proceedings in
respect of such applications and any opposition proceedings or petitions or
applications for revocation of such letters patent, copyright or other analogous
protection.

        (c)   In the event that the Company is unable, after reasonable effort,
to secure Executive's signature on any letters patents, copyright or other
analogous protection relating to Work Product, whether because of Executive's
physical or mental incapacity or for any other reason whatsoever, Executive
hereby irrevocably designates and appoints the Company and its duly authorized
officers and agents as his agent and attorney-in-fact, to act for and on his
behalf to executive and file any such application or applications and to do all
other lawfully permitted acts to further the prosecution and issuance of letters
patent, copyright and other analogous protection with the same legal force and
effect as if personally executed by Executive.

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        7.5    Reasonableness of Restrictive Covenants.    

        (a)   Executive acknowledges that the covenants contained in
Sections 7.1, 7.2, 7.3 and 7.4 are reasonable in the scope of the activities
restricted, the geographic area covered by the restrictions, and the duration of
the restrictions, and that such covenants are reasonably necessary to protect
the Companies' relationships with their employees, clients and suppliers.
Executive further acknowledges such covenants are essential elements of this
Agreement and that, but for such covenants, the Companies would not have entered
into this Agreement.

        (b)   The Companies and Executive have each consulted with their
respective legal counsel and have been advised concerning the reasonableness and
propriety of such covenants. Executive acknowledges that his observance of the
covenants contained in Sections 7.1, 7.2, 7.3 and 7.4 will not deprive him of
the ability to earn a livelihood or to support his dependents.

        7.6    Rights to Injunction; Survival of Undertakings.    

        (a)   In recognition of the necessity of the limited restrictions
imposed by Sections 7.1, 7.2, 7.3 and 7.4, the parties agree that it would be
impossible to measure solely in money the damages that any of the Companies
would suffer if Executive were to breach any of his obligations under such
Sections. Executive acknowledges that any breach of any provision of such
Sections would irreparably injure the Companies. Accordingly, Executive agrees
that any of the Companies shall be entitled, in addition to any other remedies
to which such Company may be entitled under this Agreement or otherwise, to an
injunction to be issued by a court of competent jurisdiction, to restrain any
actual breach, or threatened breach, of such provisions, and Executive hereby
waives any right to assert any defense that any of the Companies has an adequate
remedy at law for any such breach.

        (b)   If a court determines that any of the covenants included in this
Article VII are unenforceable in whole or in part because of such covenant's
duration or geographical or other scope, such court may modify the duration or
scope of such provision, as the case may be, so as to cause such covenant as so
modified to be enforceable.

        (c)   All of the provisions of this Article VII shall survive any
Termination of Employment without regard to (i) the reasons for such termination
or (ii) the expiration of the Employment Period.

        (d)   No Company shall have any further obligation to pay or provide
severance or benefits under Section 6.3 if a court determines that the Executive
has breached any covenant in this Article VII.

Article VIII.
CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY

        8.1    Tax Gross-Up Payment.    If at any time or from time to time it
shall be determined that any payment to Executive pursuant to this Agreement or
any other payment or benefit ("Potential Parachute Payment") hereunder or
otherwise would be subject to the excise tax imposed by Section 4999 of the Code
or any similar tax payable under any United States federal, state, local,
foreign or other law ("Excise Tax"), then Executive shall receive and PFGI shall
pay or cause to be paid a Tax Gross-Up Payment with respect to all such excise
taxes and other Taxes; provided, however, that this Article VIII shall be
subject in its entirety to any Change of Control agreement with Executive
entered after the Agreement Date by the Company. The Tax Gross-Up Payment is
intended to compensate Executive for all such excise taxes and any federal,
state, local, foreign or other income, employment, or excise taxes or other
taxes payable by Executive with respect to the Tax Gross-Up Payment. For
purposes of this Agreement, a "Tax Gross-Up Payment" shall mean an amount
sufficient to enable the Executive to pay (a) any Excise Tax imposed on the
Executive by reason of receipt of the Potential Parachute Payments

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and (b) all incremental federal, state, local and foreign income, employment,
excise and other taxes payable by Executive by reason of receipt of the Tax
Gross-Up payment.

        8.2    Limitations on Gross-Up Payments.    

        (a)   Notwithstanding any other provision of this Article VIII, if the
aggregate After-Tax Amount (as defined below) of the Potential Parachute
Payments and Tax Gross-Up Payment that, but for this Section 8.2, would be
payable to Executive, does not exceed 110% of After-Tax Floor Amount (as defined
below), then no Tax Gross-Up Payment shall be made to Executive and the
aggregate amount of Potential Parachute Payments payable to Executive shall be
reduced (but not below the Floor Amount) to the largest amount which would both
(i) not cause any Excise Tax to be payable by Executive and (ii) not cause any
Potential Parachute Payments to be come nondeductible by the Company by reason
of Section 280G of the Code (or any successor provision). For purposes of the
preceding sentence, Executive shall be deemed to be subject to the highest
effective after-tax marginal rate of Taxes.

        (b)   For purposes of this Agreement:

          (i)  "After-Tax Amount" means the portion of a specified amount that
would remain after payment of all Taxes paid or payable by Executive in respect
of such specified amount; and

         (ii)  "Floor Amount" means the greatest pre-tax amount of Potential
Parachute Payments that could be paid to Executive without causing Executive to
become liable for any Excise Taxes in connection therewith; and

        (iii)  "After-Tax Floor Amount" means the After-Tax Amount of the Floor
Amount.

Article IX.
MISCELLANEOUS

        9.1    Approvals.    The Companies represent and warrant to Executive
they have taken all corporate action necessary to authorize this Agreement.

        9.2    No Mitigation.    In no event shall Executive be obligated to
seek other employment or take any other action to mitigate the amounts payable
to Executive under any of the provisions of this Agreement, nor shall the amount
of any payment hereunder be reduced by any compensation earned as a result of
Executive's employment by another employer, except that any continued welfare
benefits provided for by Section 6.3(c).

        The Companies' obligation to make the payments provided for in this
Agreement and otherwise perform the obligations hereunder shall not (unless
Executive is terminated for Cause) be affected by any circumstances, including
set-off, counterclaim, recoupment, defense or other claim, right or action,
which the Companies may have against Executive.

        9.3    Enforcement.    

        (a)   The Company shall promptly reimburse Executive for all attorneys'
fees, costs and expenses incurred by Executive in connection with the
negotiation, execution and delivery of this agreement, up to a maximum of
$10,000. If Executive incurs legal, accounting, expert witness or other fees,
costs or expenses (including arbitration fees, costs or expenses) in an effort
to secure, preserve, establish entitlement to, or obtain compensation or
benefits under this Agreement, the Company shall promptly reimburse Executive
for such fees, costs and expenses whether or not Executive is successful;
provided, however, that no reimbursement shall be made of such expenses if
Executive's assertion of rights was in bad faith and Executive does not prevail
(after exhaustion of all available judicial remedies).

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        (b)   If the Companies fail to pay any amount provided under any
provision of this Agreement when due, the Executive shall be entitled to
interest, compounded monthly, on such amount at a rate equal to the lesser of
(i) (A) the highest rate of interest charged by the relevant Company's principal
lender on its revolving credit agreements, or (B) in the absence of such a
lender, the prime commercial lending rate announced The Wall Street Journal in
effect from time to time during the period of such nonpayment, or (ii) the
highest legally-permissible interest rate allowed to be charged under applicable
law.

        9.4    Indemnification and Insurance.    The Executive shall be
indemnified and held harmless by the Companies to the greatest extent permitted
under applicable Iowa law as the same now exists or may hereafter be amended
(but, in the case of any such amendment, only to the extent that such amendment
permits a Company to provide broader indemnification that was permitted prior to
such amendment) and the Companies' respective by-laws as such exist on the
Agreement Date if the Executive was, is, or is threatened to be, made a party to
any pending, completed or threatened action, suit, arbitration, alternate
dispute resolution mechanism, investigation, administrative hearing or any other
proceeding whether civil, criminal, administrative or investigative, and whether
formal or informal, by reason of the fact that the Executive is or was, or had
agreed to become, a director, officer, employee, agent, or fiduciary of a
Company or any other entity which the Executive is or was serving at the request
of a Company ("Proceeding"), against all expenses (including all reasonable
attorneys' fees) and all claims, damages, liabilities and losses incurred or
suffered by the Executive or to which the Executive may become subject for any
reason. A Proceeding shall not include any proceeding to the extent it concerns
or relates to a matter described in Section 9.3(a). Upon receipt from Executive
of (i) a written request for an advancement of expenses, which Executive
reasonably believes will be subject to indemnification hereunder and (ii) a
written undertaking by Executive to repay any such amounts if it shall
ultimately be determined that Executive is not entitled to indemnification under
this Agreement or otherwise, the Companies shall advance such expenses to
Executive or pay such expenses for Executive, all in advance of the final
disposition of any such matter. During Executive's employment and thereafter,
Companies shall provide Executive with coverage under a director's and officer's
liability insurance policy in amounts no less than, and on terms no less
favorable than, those provide to senior executive officers and directors of the
Companies on the Agreement Date and in amounts no less than, and on terms no
less favorable than those, as provided to senior executive officers and
directors of the Companies from time to time.

        9.5    Cooperation With Regard to Litigation.    The Executive agrees to
cooperate with the Companies during his employment with any of the Companies
(whether or not during the Employment Period) and thereafter (including
following Executive's termination of employment for any reason, whether or not
pursuant to this Agreement) by making himself reasonably available to testify on
behalf of the Companies or their Affiliates, in any action, suit or proceeding,
whether civil, criminal, administrative, or investigative and to assist each
Company or any of its Affiliates in any such action, suit, or proceeding by
providing information and meeting and consulting with the Board of such Company
or Affiliate or counsel or representatives or counsel to the Company or its
Affiliates, as reasonably requested by the Board or such counsel. The Executive
shall be entitled to reimbursement for any expenses (including legal fees)
reasonably incurred by the Executive in connection with his compliance with the
foregoing covenant; provided, however, that during the Employment Period the
Executive shall not be reimbursed for his time spent in connection with his
compliance with the foregoing covenant. The Companies agree to pay Executive a
per diem of $3,500 per day for each day of service (including travel days)
performed by Executive in accordance with this Section after Executive is no
longer employed by the Companies.

        9.6    Beneficiary.    If Executive dies prior to receiving all of the
amounts payable to him in accordance with the terms and conditions of this
Agreement, such amounts shall be paid to the beneficiary ("Beneficiary")
designated by Executive in writing to the Company during his lifetime, or if no
such Beneficiary is designated, to Executive's estate. Such payments shall be
made in a lump sum to

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the extent so payable and, to the extent not payable in a lump sum, in
accordance with the terms of this Agreement. Such payments shall not be less
than the amount payable to Executive as if Executive had lived to the date of
payment and were the payee. Executive, without the consent of any prior
Beneficiary, may change his designation of Beneficiary or Beneficiaries at any
time or from time to time by submitting to the Company a new designation in
writing.

        9.7    Assignment; Successors.    This Agreement is personal to
Executive and he may not assign his duties or obligations under it. No Company
may assign its respective rights and obligations under this Agreement without
the prior written consent of Executive, except to a successor to the Company's
business, which expressly assumes the Company's obligations hereunder in
writing. This Agreement shall be binding upon and inure to the benefit of
Executive, his estate and Beneficiaries, the Companies and their successors and
permitted assigns. Each Company shall require any successor to all or
substantially all of the business and/or assets of such Company, whether direct
or indirect, by purchase, merger, consolidation, acquisition of stock, or
otherwise, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent as such Company would be required to perform if no
such succession had taken place.

        9.8    Non-alienation.    Except as is otherwise expressly provided
herein, benefits payable under this Agreement shall not be subject in any manner
to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
charge, garnishment, execution or levy of any kind, either voluntary or
involuntary, prior to actually being received by Executive, and any such attempt
to dispose of any right to benefits payable hereunder shall be void.

        9.9    Severability.    If all or any part of this Agreement is declared
to be unlawful or invalid, such unlawfulness or invalidity shall not serve to
invalidate any portion of this Agreement not declared to be unlawful or invalid.
Any provision so declared to be unlawful or invalid shall, if possible, be
construed in a manner which will give effect to the terms of such provision to
the fullest extent possible while remaining lawful and valid.

        9.10    Amendment; Waiver.    This Agreement shall not be amended or
modified except by written instrument executed by PFGI and Executive. A waiver
of any term, covenant or condition contained in this Agreement shall not be
deemed a waiver of any other term, covenant or condition, and any waiver of any
default in any such term, covenant or condition shall not be deemed a waiver of
any later default thereof or of any other term, covenant or condition.

        9.11    Arbitration.    Any dispute, controversy or claim arising out of
or in connection with or relating to this Agreement or any breach or alleged
breach thereof shall be submitted to and settled by binding arbitration in Des
Moines, Iowa, in accordance with the Commercial Arbitration Rules of the
American Arbitration Association (or at any other place or under any other form
of arbitration mutually acceptable to the parties so involved). Any dispute,
controversy or claim submitted for resolution shall be submitted to three
(3) arbitrators, each of whom is a nationally recognized executive compensation
specialist. The Company involved in the dispute, controversy or claim, or PFGI
if more than one Company is so involved, shall select one arbitrator, the
Executive shall select one arbitrator and the third arbitrator shall be selected
by the first two arbitrators. The arbitrators shall be required to render their
award in a written statement setting forth their findings of fact and the bases
for their conclusions. Any award rendered shall be final and conclusive upon the
parties and a judgment thereon may be entered in the highest court of a forum,
state or federal, having jurisdiction. The expenses of the arbitration shall be
borne according to Section 9.3, except that in the discretion of the arbitrators
any award may include the fees and costs of a party's attorneys if the
arbitrator expressly determines that the party against whom such award is
entered has caused the dispute, controversy or claim to be submitted to
arbitration in bad faith or as a dilatory tactic. No arbitration shall be
commenced after the date when institution of legal or equitable proceedings
based upon such subject matter would be barred by the applicable statute of
limitations. Notwithstanding anything to the contrary contained in this
Section 9.11 or elsewhere in this Agreement, either party may bring an action in
the Iowa District

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Court for Polk County, or the United State District Court for the Southern
District of Iowa, if jurisdiction there lies, in order to maintain the status
quo ante of the parties. The "status quo ante" is defined as the last peaceable,
uncontested status between the parties. However, neither the party bringing the
action nor the party defending the action thereby waives its right to
arbitration of any dispute, controversy or claim arising out of or in connection
or relating to this Agreement. Notwithstanding anything to the contrary
contained in this Section 9.11 or elsewhere in this Agreement, either party may
seek relief in the form of specific performance, injunctive or other equitable
relief in order to enforce the decision of the arbitrator. The parties agree
that in any arbitration commenced pursuant to this Agreement, the parties shall
be entitled to such discovery (including depositions, requests for the
production of documents and interrogatories) as would be available in a federal
district court pursuant to Rules 26 through 37 of the Federal Rules of Civil
Procedure. In the event that either party fails to comply with its discovery
obligations hereunder, the arbitrator(s) shall have full power and authority to
compel disclosure or impose sanctions to the full extent of Rule 37, Fed. R.
Civ. P.

        9.12    Notices.    All notices hereunder shall be in writing and
delivered by hand, by nationally-recognized delivery service that guarantees
overnight delivery, or by first-class, registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:

 
   
If to a Company, to:   Principal Financial Group, Inc.
711 High Street
Des Moines, Iowa 50392
Attention: Karen E. Shaff
Executive Vice President and General Counsel
Facsimile No.: (515) 235-9852
If to Executive, to:
 
at his most recent home address or facsimile
number on file with the Company.

Either party may from time to time designate a new address by notice given in
accordance with this Section. Notice shall be effective when actually received
by the addressee.

        9.13    Counterparts.    This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same instrument.

        9.14    Captions.    The captions of this Agreement are not a part of
the provisions hereof and shall have no force or effect.

        9.15    Entire Agreement.    This Agreement forms the entire agreement
between the parties hereto with respect to the subject matter contained in the
Agreement and shall supersede all prior agreements, promises and representations
regarding employment, compensation, severance or other payments contingent upon
termination of employment, whether in writing or otherwise.

        9.16    Applicable Law.    This Agreement shall be interpreted and
construed in accordance with the laws of the State of Iowa, without regard to
its choice of law principles.

        9.17    Survival of Executive's Rights.    All of Executive's rights
hereunder, including his rights to compensation and benefits, and his
obligations under Article VIII hereof, shall survive the termination of
Executive's employment or the termination of this Agreement.

        9.18    Joint and Several Liability.    The obligations of the Companies
to Executive under this Agreement shall be joint and several.

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        IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.

    EXECUTIVE
 
 
 
/s/  LARRY D. ZIMPLEMAN      

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      Larry D. Zimpleman
 
 
PRINCIPAL FINANCIAL GROUP, INC.
 
 
By:
/s/  J. BARRY GRISWELL      

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J. Barry Griswell     Its: Chairman and Chief Executive Officer
 
 
PRINCIPAL LIFE INSURANCE COMPANY
 
 
By:
/s/  J. BARRY GRISWELL      

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J. Barry Griswell     Its: Chairman and Chief Executive Officer
 
 
PRINCIPAL FINANCIAL SERVICES, INC.
 
 
By:
/s/  J. BARRY GRISWELL      

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J. Barry Griswell     Its: Chairman and Chief Executive Officer

242

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EMPLOYMENT AGREEMENT
Article I. DEFINITIONS