<PAGE>   1
                                                                    EXHIBIT 10.6


                                   AMENDMENT NO. 3

              SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN FOR EMPLOYEES

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

Effective December 31, 1998:

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

    ASSOCIATED PLAN means The Principal Pension Plan.

Effective January 1, 1999:

By striking the last two sentences of the first paragraph in the DISTRIBUTIONS
UNDER QUALIFIED DOMESTIC RELATIONS ORDERS SECTION of Article VI and substituting
the following:

    Nothing in this section shall permit a Participant a right to receive a
    distribution at a time otherwise not permitted under the Plan. Distribution
    to an alternate payee may be made in a single sum equal to the present value
    (as determined by actuarial valuations) of the benefit payable under the
    terms of the Qualified Domestic Relations Order. This single sum payment
    must be requested within 60 days after the date the Qualified Domestic
    Relations Order is approved by the Employer. With the exception of this
    single sum benefit, nothing in this section shall permit the alternate payee
    to receive any other form of payment not permitted under the Plan. in no
    event may a single sum distribution be made to an alternate payee after the
    date the Participant ceases to be an Employee due to retirement.

Effective March 1, 1999:

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

    ELIGIBLE EMPLOYEE means any Employee of the Employer (including individuals
    who were active participants under the Principal Health Care, Inc. Pension
    Plan on April 30, 1998) who is invited to participate. in the Plan and who
    represents a select group of highly-compensated or management Employees.

Effective January 1, 2000:

By striking entirely from the ACCRUED BENEFIT SECTION of Article IV the words
"However, Accrued Benefit is modified as follows:" and the immediately following
paragraph that begins with the words "The actual dollar amount...".

Effective January 1, 2001:

By adding the following as the last sentence in the first paragraph in the
ADMINISTRATION SECTION of Article VIII:


                                       1
<PAGE>   2

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

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

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

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

Signed this 28th day of December, 2000.
            ----        --------  ----

                                             PRINCIPAL LIFE INSURANCE COMPANY

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

                                             2ND VICE PRESIDENT
                                             --------------------
                                                    Title



                                       2
<PAGE>   3

                      PLAN PAGES AFFECTED BY THIS AMENDMENT

Page 12- removal of accrued benefit modification.

Page 17 - change in QDRO language, 1st paragraph

Page 19 - change to Section 8.01, 1st paragraph





                                       3
<PAGE>   4

                                 AMENDMENT NO. 2

              SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN FOR EMPLOYEES

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

Effective January 1, 1998,

        by striking the following:

                Page 3                  Page 16
                Page 4                  Page 17
                Page 14                 Page 24
                Page 15

        and substituting the following:

                Page 3                  Page 16
                Page 4                  Page 17
                Page 14                 Page 17a
                Page 15                 Page 24

Effective July 3, 1998,

        by striking the following:

                Page 7                  Page 19

        and  substituting the following:

                Page 7                  Page 19

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

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

        Signed this 1st day of October, 1998.
                    ---        -------

        PRINCIPAL LIFE INSURANCE COMPANY        PRINCIPAL MUTUAL LIFE INSURANCE
                                                COMPANY

        By /s/ MAX F. JOHNSON                   By /s/ MAX F. JOHNSON
           -----------------------------           -----------------------------

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

<PAGE>   5

                                 AMENDMENT NO. 1

              SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN FOR EMPLOYEES

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

Effective January 1, 1997,

        by striking the following:

               Page 3
               Page 12

        and substituting the following:

               Page 3
               Page 12

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

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

        Signed this 11th day of September, 1997.
                    ----        ---------
                                                PRINCIPAL MUTUAL LIFE INSURANCE
                                                COMPANY

                                                By /s/ MAX F. JOHNSON
                                                   -----------------------------

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

<PAGE>   6


                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                                  FOR EMPLOYEES








Restated January I, 1996

<PAGE>   7

                          AMEND. NO. 2 PAGE DTD. 1-1-98
                          -----------------------------

                                TABLE OF CONTENTS

INTRODUCTION

ARTICLE I               FORMAT AND DEFINITIONS

     Section 1.01 ----  Format
     Section 1.02 ----  Definitions

ARTICLE II              PARTICIPATION

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

ARTICLE III             CONTRIBUTIONS

     Section 3.01 ----  Employer Contributions
     Section 3.02 ----  Investment of Contributions

ARTICLE IV              RETIREMENT BENEFITS

     Section 4.01 ----  Accrued Benefit
     Section 4.02 ----  Amount of Benefit at Retirement

ARTICLE V               OTHER BENEFITS

     Section 5.01 ----  Death Benefits
     Section 5.02 ----  Vested Benefits
     Section 5.03 ----  Cost of Living Adjustment
     Section 5.04 ----  Disability Benefits

ARTICLE VI              WHEN BENEFITS START AND DISTRIBUTION OF BENEFITS

     Section 6.01 ----  When Benefits Start
     Section 6.02 ----  Automatic Forms of Distribution
     Section 6.03 ----  Optional Forms of Distribution and Distribution
                        Requirements
     Section 6.04 ----  Distributions Under Qualified Domestic Relations Orders

ARTICLE VII             TERMINATION OF PLAN


TABLE OF CONTENTS                       3

<PAGE>   8

                          AMEND. NO. 2 PAGE DTD. l-l-98
                          -----------------------------


ARTICLE VIII            ADMINISTRATION OF PLAN

     Section 8.01 ----  Administration
     Section 8.02 ----  Benefit and Pension Committee
     Section 8.03 ----  Benefit Plan Investment Committee
     Section 8.04 ----  Records
     Section 8.05 ----  Information  Available
     Section 8.06 ----  Claim and Appeal Procedures
     Section 8.07 ----  Delegation of Authority

ARTICLE IX              GENERAL PROVISIONS

     Section 9.01 ----  Amendments
     Section 9.02 ----  Provisions Relating to the Insurer and Other Parties
     Section 9.03 ----  Employment Status
     Section 9.04 ----  Rights to Plan Assets
     Section 9.05 ----  Beneficiary
     Section 9.06 ----  Nonalienation of Benefits
     Section 9.07 ----  Construction
     Section 9.08 ----  Legal Actions
     Section 9.09 ----  Word Usage
     Section 9.10 ----  Small Amounts

PLAN EXECUTION






TABLE OF CONTENTS                       4

<PAGE>   9

                                  INTRODUCTION

          The Employer previously established a nonqualified deferred
compensation plan on January 1, 1982. The plan has been designed as, and is
intended to be, an unfunded plan for purposes of the Employee Retirement Income
Security Act of 1974, as amended, and a nonqualified plan under the internal
Revenue Code of 1986, including any later amendments to the Code. The plan is
designed to provide benefits for a select group of highly compensated or
management employees.

          The Employer is of the opinion that the plan should be changed. It
believes that the best means to accomplish these changes is to completely
restate the plan's terms, provisions and conditions. The restatement, effective
January 1, 1996, is set forth in this document and is substituted in lieu of the
prior document.

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





INTRODUCTION                           5

<PAGE>   10

                                    ARTICLE I

                             FORMAT AND DEFINITIONS

SECTION 1.Ol--FORMAT.

       Words and phrases defined in the DEFINITIONS SECTION of Article I shall
have that defined meaning when used in this Plan, unless the context clearly
indicates otherwise.

       These words and phrases will have an initial capital letter to aid in
identifying them as defined terms.

SECTION 1.02--DEFINITIONS.

       ACCRUAL SERVICE means, on any date for a Participant, his accrual service
       on such date under the Associated Plan.

       ACCRUED BENEFIT means the amount of monthly retirement benefit on the
       Normal Form accrued by an Active Participant under this Plan as of any
       date. See the ACCRUED BENEFIT SECTION of Article IV.

       ACCRUED BENEFIT ADJUSTMENT means an adjustment which shall be applied to
       determine a Participant's benefit, as defined under the Associated Plan.

       ACTIVE PARTICIPANT means an Eligible Employee who is actively
       participating in the Plan according to the provisions in the ACTIVE
       PARTICIPANT SECTION of Article II.

       ACTUARIAL EQUIVALENT means, for a benefit payable on an optional form,
       that the value of such benefit is actuarially equivalent to the benefit
       payable on the Normal Form. The amount of each payment under an optional
       form shall be determined pursuant to the definition of actuarial
       equivalent in the Associated Plan.

       ADJUSTED COMPENSATION BENEFIT means an amount of monthly retirement
       benefit, determined according to Section 4.01.

       ANNUITY STARTING DATE means, for a Participant, the first day of the
       first period for which an amount is payable as an annuity or any other
       form.

       ASSOCIATED PLAN means The Principal Pension Plan For Employees.

       AVERAGE COMPENSATION means, on any given date, an Employee's average
       compensation under the Associated Plan.

       BENEFICIARY means the person or persons named by a Participant to receive
       any benefits under this Plan upon the Participant's death. See the
       BENEFICIARY SECTION of Article IX.

       CLAIMANT means any person who has made a claim for benefits under this
       Plan. See the CLAIM AND APPEAL PROCEDURES SECTION of Article VIII.




ARTICLE I                               6

<PAGE>   11

                          AMEND. NO. 2 PAGE DTD. 7-l-98
                          -----------------------------

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

       COMPENSATION means compensation as defined under the Associated Plan.
       However, the $200,000 limit prior to January 1, 1994, and the $150,000
       limit on and after January 1, 1994, (as adjusted) on Compensation
       specified in such definition shall not apply for purposes of determining
       a Participant's Supplemental Benefit under this Plan.

       CONTINGENT ANNUITANT means an individual named by the Participant to
       receive a lifetime benefit after the Participant's death according to a
       survivorship life annuity form of distribution.

       CONTRIBUTIONS means Employer Contributions as set out in Article Ill.

       EARLY RETIREMENT DATE means the Participant's early retirement date under
       the Associated Plan.

       ELIGIBLE EMPLOYEE means any Employee of the Employer who is invited to
       participate in the Plan and who represents a select group of
       highly-compensated or management employees,

       EMPLOYEE means an individual who is employed by the Employer.

       EMPLOYER means Principal Life Insurance Company,

       EMPLOYER CONTRIBUTIONS means contributions made by the Employer to fund
       this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of Article III.

       ENTRY DATE means the date an Employee first enters the Plan as an Active
       Participant. See the ACTIVE PARTICIPANT SECTION of Article II.

       EXCESS BENEFIT means an amount of monthly retirement benefit, determined
       according to Section 4.01.

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

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

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

       INACTIVE PARTICIPANT means a former Active Participant who has an Accrued
       Benefit. See the INACTIVE PARTICIPANT SECTION of Article II.

       INSURER means Principal Life Insurance Company and any other insurance
       company or companies named by the Trustee.

       INTEGRATION LEVEL means a Participant's integration level as defined
       under the Associated Plan.

       LATE RETIREMENT DATE means the late retirement date under the Associated
       Plan.



ARTICLE I                               7
<PAGE>   12


       NORMAL FORM means the Normal Form under the Associated Plan.

       NORMAL RETIREMENT AGE means a Participant's normal retirement age under
       the Associated Plan.

       NORMAL RETIREMENT DATE means a Participant's normal retirement date under
       the Associated Plan.

       PARTICIPANT means either an Active Participant or an Inactive
       Participant.

       PLAN means the deferred compensation plan of the Employer set forth in
       this document, including any later amendments to it.

       PLAN ADMINISTRATOR means the person or persons who administer the Plan.

       The Plan Administrator is the Employer.

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

       PRE-89 ACCRUED BENEFIT ADJUSTMENT means an adjustment which shall be
       applied to determine a Participant's benefit, as defined under the
       Associated Plan.

       PRESENT VALUE means the current value of a benefit payable on a specified
       form and on a specified date. Present Value is determined pursuant to the
       definition of present value under the Associated Plan.

       REENTRY DATE means the date a former Active Participant reenters the
       Plan. See the ACTIVE PARTICIPANT SECTION of Article II.

       RETIREMENT DATE means the date a retirement benefit will begin and is a
       Participant's Early, Normal or Late Retirement Date, as the case may be.

       SOCIAL SECURITY BENEFIT means the monthly payment of primary insurance
       benefits determined for a Participant.

       The benefits shall be determined by applying a salary scale, projected
       backwards, to the Participant's pay as of any date of determination. The
       salary scale used shall be the actual change in the average wages from
       year to year as determined by the Social Security Administration.

       SUPPLEMENTAL BENEFIT means an amount of monthly retirement benefit,
       determined according to Section 4.01.

       TRUST means an agreement of trust between the Employer and Trustee
       established for the purpose of holding and distributing the Trust Fund
       under the provisions of the Plan. The Trust wilt provide for the
       investment of all or any portion of the Trust Fund in the Group Contract.

       TRUST FUND means the total funds held under the Trust for the purpose of
       providing benefits for Participants. These funds result from
       Contributions made under the Plan which are forwarded to the Trustee to
       be deposited in the Trust Fund as provided in the INVESTMENT OF
       CONTRIBUTIONS SECTION of Article III. The Trust Fund shall be valued
       annually at current fair market value on the date used for


ARTICLE I                              8
<PAGE>   13

       computing plan costs for minimum funding purposes and, at the discretion
       of the Trustee, may be valued more frequently. The valuation shall take
       into consideration investment earnings credited, expenses charged,
       payments made and changes in the value of the assets held in the Trust
       Fund.

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

       YEARLY DATE means January 1, 1982, and the same day of each following
       year.





ARTICLE I                              9
<PAGE>   14

                                   ARTICLE II

                                  PARTICIPATION

SECTION 2.01--ACTIVE PARTICIPANT.

     (a)  An Employee shall first become an Active Participant (begin active
          participation in the Plan) on the earliest date on or after January 1,
          1996, on which he is an Eligible Employee. This date is his Entry
          Date.

          Each Employee who was an Active Participant under the Plan on December
          31, 1995, shall continue to be an Active Participant if he is still an
          Eligible Employee on January 1, 1996, and his Entry Date shall not
          change.

     (b)  An Inactive Participant shall again become an Active Participant
          (resume active participation in the Plan) on the date he again
          performs an hour of service as an Eligible Employee. This date is his
          Reentry Date.

          Upon again becoming an Active Participant, he shall cease to be an
          Inactive Participant.

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

SECTION 2.02--INACTIVE PARTICIPANT.

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

     (a)  The date on which he ceases to be an Eligible Employee (on his
          Retirement Date if he ceases to be an Eligible Employee within one
          month of his Retirement Date).

     (b)  The effective date of complete termination of the Plan.

     An Employee or former Employee who was an Inactive Participant under the
Plan on December 31, 1995, shall continue to be an Inactive Participant on
January 1, 1996. Eligibility for any benefits payable to him or on his behalf
and the amount of the benefits shall be determined according to the provisions
of the prior document, unless otherwise stated in this document.

SECTION 2.03--CESSATION OF PARTICIPATION.

     A Participant, whether active or inactive, shall cease to be a Participant
on the earlier of the following:

     (a)  The date of his death.

     (b)  The date he receives a distribution of his entire benefit under the
          Plan.


ARTICLE II                             10
<PAGE>   15

                                   ARTICLE III

                                  CONTRIBUTIONS

SECTION 3.01--EMPLOYER CONTRIBUTIONS.

     The amount and time of Employer Contributions shall be determined based on
actuarial valuations and mendations as to the amounts required to fund benefits
under this Plan.

SECTION 3.02--INVESTMENT OF CONTRIBUTIONS.

     All Contributions are forwarded by the Trustee to. be deposited in the
Trust Fund. Investment of Contributions is governed by the provisions of the
Trust, Group Contract and any other funding arrangement in which the Trust is or
may be invested.

     Plan assets are not held for the exclusive benefit of Participants or their
Beneficiaries.




ARTICLE III                            11
<PAGE>   16

                         AMEND. NO. 1 PAGE DTD. 1-1-97
                         -----------------------------

                                   ARTICLE IV

                               RETIREMENT BENEFITS

SECTION 4.01--ACCRUED BENEFIT.

     An Active Participant's monthly Accrued Benefit as of any date will be
equal to the greatest of (a) reduced by (c), or (b) reduced by (c) below:

     (a)  Supplemental Benefit: For an Active Participant whose Average Monthly
          Compensation is at least 125% of the current salary minimum used in
          the definition of a highly compensated employee under an 414(q) of the
          Code, an amount equal to the sum of (1) and (2) below reduced by (3)
          below:

          (1)  An amount equal to (i) 70.5% of his Average Compensation,
               multiplied by (ii) his Pre-89 Accrued Benefit Adjustment.

          (2)  An amount equal to (i) 65% of his Average Compensation,
               multiplied by (ii) his Accrued Benefit Adjustment.

          (3)  An amount equal to (i) his Social Security Benefit multiplied by
               (ii) the sum of his Pre-89 Accrued Benefit Adjustment and his
               Accrued Benefit Adjustment.

     (b)  Excess Benefit: For any Active Participant, an amount equal to his
          accrued benefit under the Associated Plan, determined as if the limits
          of Section 415 and 401(a)(17) of the Code were not operative.

     (c)  The normal form accrued benefit expected to be paid to the Participant
          under the Associated Plan at Retirement Date.

However, Accrued Benefit is modified as follows:

     The actual dollar amount of a Participant's Accrued Benefit at retirement
     may vary depending on his Average Compensation as defined under the
     Associated Plan on any given date.

SECTION 4.02--AMOUNT OF BENEFIT AT RETIREMENT.

     An Active Participant's retirement benefit on his Retirement Date shall be
equal to his Accrued Benefit on such date.

     An Active Participant's retirement benefit on his Early or Late Retirement
Date for (a), (b) and (c) in Section 4.01 above shall be equal to his Accrued
Benefit on such specified date, multiplied by the early or late retirement
factor derived from the table in Section 4.03.of the Associated Plan.

     An Active Participant's retirement benefit on the Normal Form shall not be
less than the greatest amount of benefit that would have been provided for him
had he retired on an earlier Retirement Date.



ARTICLE IV                             12
<PAGE>   17

     The Participant's retirement benefits shall be distributed to the
Participant according to the distribution of benefits provisions of Article VI.
The amount of payment under any form (other than the Normal Form) shall be
determined as provided under the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS SECTION of Article VI.





ARTICLE IV                             13
<PAGE>   18

                          AMEND. NO. 2 PAGE DTD. 1-l-98
                          -----------------------------

                                    ARTICLE V

                                 OTHER BENEFITS

SECTION 5.01--DEATH BENEFITS.

     If a Participant dies before his Normal Retirement Date, monthly payments
shall be payable to the Participant's spouse in an amount equal to the
preretirement survivor annuity which would have been determined under the
Associated Plan, based on his Accrued Benefit under this Plan. The distribution
of death benefits shall be subject to the distribution of benefits provisions of
Article VI.

     Any death benefit after Normal Retirement Date will be determined by the
form of retirement benefit in effect on such date.

SECTION 5.02--VESTED BENEFITS.

     A Participant who becomes an Inactive Participant before retirement or
death will be entitled to a deferred monthly retirement benefit on the Normal
Form to begin on his Retirement Date. The deferred retirement benefit will be
equal to the Participant's Accrued Benefit from this Plan on the day before he
became an Inactive Participant.

     The amount of payment under any form (other than the Normal Form) shall be
determined as provided under the OPTIONAL FORMS OF DISTRIBUTION SECTION of
Article VI.

     If the Participant dies before his Normal Retirement Date, death benefits
shall be distributed according to the provisions of the DEATH BENEFITS SECTION
of Article V.

SECTION 5.03--COST OF LIVING ADJUSTMENT.

     For purposes of this Section, the following terms are defined:

     PAYEE means

     (a)  A Participant whose Retirement Date has occurred.

     (b)  A spouse who is entitled to payments under the DEATH BENEFITS SECTION
          of this Article.

     (c)  A Contingent Annuitant who is entitled to payments under a
          survivorship optional form on account of the death of the Participant.

     (d)  A Beneficiary who is entitled to payments under a certain and life
          optional form on account of the death of the Participant.

     PRICE INDEX means as of each January 1 the average of the Consumer Price
     Index (U.S. city average for all urban consumers, all items) for the
     immediately preceding calendar year, as published by the United States
     Department of Labor.



ARTICLE V                              14
<PAGE>   19


                            AMEND. NO. 2 PAGE DTD, 1-1-98

     ADJUSTMENT DATE means each March 1.

     ADJUSTMENT FACTOR means a number based on the quotient of (a) divided by
     (b) as shown in the following table:

     (a)  The Price Index as of such Adjustment Date.

     (b)  The Price Index as of the last previous Adjustment Date.

                  Quotient                        Adjustment Factor
                  --------                        -----------------
                 Less than 1                               1
                  1 to 1.10                    1 plus 75% of the excess
               1.l0 or greater                           1.075

     If the Adjustment Factor on any Adjustment Date is between 1 and 1.01, no
adjustment will be made on that Adjustment Date. However, on the next following
Adjustment Date the Adjustment Factor will be the product of the Adjustment
Factor normally determined for the current Adjustment Date and the immediately
preceding Adjustment Date.

     As of each Adjustment Date, the amount of the monthly payment derived from
his Accrued Benefit shall be changed to the amount determined by multiplying
such payment by the Adjustment Factor as of such Adjustment Date subject to the
following provisions:

     (a)  No decrease shall become effective which would reduce the monthly
          payment for a Payee to an amount which would be less than the amount
          (called the Floor) he would have received had the provisions of this
          Section never been in effect except that a new Floor shall be created
          (1) at the Participant's Normal Retirement Date or (2) on the date of
          such Participant's death before his Normal Retirement Date.

     (b)  A Participant or a Participant's spouse will have the amount of any
          increase in the amount of monthly payment for him on his first
          Adjustment Date multiplied by the ratio of (1) to (2) below:

          (1)  The number of complete months he has been a Payee prior to such
               Adjustment Date.

          (2)  12.

SECTION 5.04--DISABILITY BENEFITS.

     An Active Participant shall continue to accrue benefits under the Plan if
he becomes Totally and Permanently Disabled as described in the Associated Plan
before his Retirement Date (Normal Retirement Date, if earlier). An Active
Participant who becomes Totally and Permanently Disabled on or after September
1, 1990, shall not continue to accrue benefits unless such disability (1)
continues uninterruptedly for at least one year and (2) he will have completed
10 or more years of Vesting Service under the Associated Plan at the end of that
one- year period.

     Accrual Service for a Participant who is continuing to accrue benefits
shall be credited as one day of service for each day (without regard to the one
year. limitation) he is Totally and Permanently Disabled to the extent it has
not already been credited.



ARTICLE V                              15
<PAGE>   20

                          AMEND. NO. 2 PAGE DTD. 1-1-98
                          -----------------------------

     For purposes of determining Vesting Service under the Associated Plan,
Severance from Service Date shall not occur during any period when he is Totally
and Permanently Disabled.

     Compensation for a Participant who is continuing to accrue benefits shall
be deemed to be the greater of (1) his Compensation for the calendar year prior
to the calendar year in which he became Totally and Permanently Disabled subject
to the adjustment described in the COST OF LIVING ADJUSTMENT SECTION of Article
V, or (2) his compensation for the current calendar year.




ARTICLE V                              16
<PAGE>   21

                          AMEND. NO. 2 PAGE DTD. l-1-98
                          -----------------------------

                                   ARTICLE VI

                WHEN BENEFITS START AND DISTRIBUTION OF BENEFITS

     Any benefit distributed according to the provisions of this article will be
paid from the general assets of the Employer. Participants have no greater
rights with regard to such benefit than any other general creditor of the
Employer.

SECTION 6.01--WHEN BENEFITS START.

     Benefits under the Plan begin when a Participant starts benefits under the
Associated Plan.

SECTION 6.02--AUTOMATIC FORMS OF DISTRIBUTION.

     The automatic form of retirement benefit payable to or on behalf of a
Participant shall be the same as the form of benefit being paid under the
Associated Plan.

SECTION 6.03--OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS.

     The optional forms of retirement benefit shall be the optional forms
available under the Associated Plan. If an optional form is chosen under the
Associated Plan, that optional form will also be in effect under this Plan. The
benefit payable on any optional annuity form available (other than the Normal
Form) shall be the Actuarial Equivalent of the benefit that would otherwise be
payable on the Normal Form.

SECTION 6.04--DISTRIBUTIONS UNDER QUALIFIED DOMESTIC RELATIONS ORDERS.

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

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

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

Nothing in this section shall permit a Participant a right to receive a
distribution at a time otherwise not permitted under the Plan nor shall it
permit the alternate payee to receive a form of payment not permitted under the
Plan. Provided, however, in addition to the optional forms of retirement benefit
described in Section 6.03, a distribution required to be made under this section
may also be made in a single sum payment.

     The Plan Administrator shall establish reasonable procedures to determine
the qualified status of a domestic relations order. Upon receiving a domestic
relations order, the Plan Administrator promptly shall notify the Participant
and an alternate payee named in the order, in writing, of the receipt of the
order and the Plan's procedures for determining the qualified status of the
order. Within a reasonable period of time after receiving


ARTICLE VI                             17
<PAGE>   22

                          AMEND. NO. 2 PAGE DTD. l-1-98
                          -----------------------------

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

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

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

ARTICLE VI                             17a
<PAGE>   23

                                   ARTICLE VII

                               TERMINATION OF PLAN

     The Employer expects to continue the Plan indefinitely but reserves the
right to terminate the Plan in whole or in part at any time upon giving written
notice to all parties concerned.

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




ARTICLE VII                            18
<PAGE>   24

                          AMEND. NO. 2 PAGE DTD. 7-1-98
                          -----------------------------

                                  ARTICLE VIII

                             ADMINISTRATION OF PLAN

SECTION 8.01--ADMINISTRATION.

     The Plan Administrator has complete discretion to construe or interpret the
provisions of the Plan, including ambiguous provisions, if any, to determine
eligibility for benefits, and to determine the type and extent of benefits, if
any, to be provided. The Plan Administrator's decisions in such matters shall be
controlling, binding, and final. In any action to review any decision by the
Plan Administrator, the Plan Administrator shall be deemed to have exercised
discretion properly unless it is proven duly that the Plan Administrator has
acted arbitrarily and capriciously.

     Unless otherwise set out in the Plan or Group Contract, the Plan
Administrator may delegate recordkeeping and other duties which are necessary
for the administration of the Plan to any person or firm which agrees to accept
such duties. The Plan Administrator shall be entitled to rely upon all tables,
valuations, certificates and reports furnished by the consultant or actuary
appointed by the Plan Administrator and upon all opinions given by any counsel
selected or approved by the Plan Administrator.

     The Plan Administrator shall receive all claims for benefits by
Participants, former Participants, Beneficiaries, spouses, and Contingent
Annuitants. The Plan Administrator shall determine all facts necessary to
establish the right of any Claimant to benefits and the amount of those benefits
under the provisions of the Plan. The Plan Administrator may establish rules and
procedures to be followed by Claimants in filing claims for benefits, in
furnishing and verifying proofs necessary to determine age, and in any other
matters required to administer the Plan.

SECTION 8.02--PENSION PLAN INVESTMENT COMMITTEE.

     The Pension Plan Investment Committee of Principal Life Insurance Company
shall consist of a chairperson and other members appointed by the Chief
Executive Officer who shall serve until appointment of a successor or
resignation and without compensation for services as such.

     All expenses incurred shall be paid by the Employer.

     The Committee shall establish and periodically review the investment policy
with respect to Plan assets, and shall periodically report to the Management
Resources Committee.

     All acts and determinations of the Committee shall be duly recorded and all
such records shall be preserved in its custody.

SECTION 8.03--RECORDS.

     All acts and determinations of the Plan Administrator shall be duly
recorded. All these records, together with other documents necessary for the
administration of the Plan, shall be preserved in the Plan Administrator's
custody.


ARTICLE VIII                           19
<PAGE>   25

     Writing (handwriting, typing, printing), photostating, photographing,
microfilming, magnetic impulse, mechanical or electrical recording or other
forms of data compilation shall be acceptable means of keeping records.

SECTION 8.04--INFORMATION AVAILABLE.

     Any Participant in the Plan or any Beneficiary may examine copies of the
Plan description, latest annual report, any bargaining agreement, this Plan, the
Group Contract or any other instrument under which the Plan was established or
is operated. The Plan Administrator shall maintain all of the items listed in
this section in its office, or in such other place or places as it may designate
in order to comply with governmental regulations. These items may be examined
during reasonable business hours. Upon the written request of a Participant or
Beneficiary receiving benefits under the Plan, the Plan Administrator will
furnish him with a copy of any of these items. The Plan Administrator may make a
reasonable charge to the requesting person for the copy.

SECTION 8.05--CLAIM AND APPEAL PROCEDURES.

     A Claimant must submit any required forms and pertinent information when
making a claim for benefits under the Plan.

     If a claim for benefits under the Plan is denied, the Plan Administrator
shall provide adequate written notice to the Claimant whose claim for benefits
under the Plan has been denied. The notice must be furnished within 90 days of
the date that the claim is received by the Plan Administrator. The Claimant
shall be notified in writing within this initial 90-day period if special
circumstances require an extension of time needed to process the claim and the
date by which the Plan Administrator's decision is expected to be rendered. The
written notice shall be furnished no later than 180 days after the date the
claim was received by the Plan Administrator.

     The Plan Administrator's notice to the Claimant shall specify the reason
for the denial; specify references to pertinent Plan provisions on which denial
is based; describe any additional material and information needed for the
Claimant to perfect his claim for benefits; explain why the material and
information is needed; inform the Claimant that any appeal he wishes to make
must be in writing to the Plan Administrator within 60 days after receipt of the
Plan Administrator's notice of denial of benefits and that failure to make the
written appeal within such 60-day period shall render the Plan Administrator's
determination of such denial final, binding and conclusive.

     If the Claimant appeals to the Plan Administrator, the Claimant, or his
authorized representative, may submit in writing whatever issues and comments
the Claimant, or his representative, feels are pertinent. The Claimant, or his
authorized representative may review pertinent Plan documents. The Plan
Administrator shall reexamine ail facts related to the appeal and make a final
determination as to whether the denial of benefits is justified under the
circumstances. The Plan Administrator shall advise the Claimant of its decision
within 60 days of his written request for review, unless special circumstances
(such as a hearing) would make rendering a decision within the 60.day limit
unfeasible. The Claimant must be notified within the 60-day limit if an
extension is necessary. The Plan Administrator shall render a decision on a
claim for benefits no later than 120 days after the request for review is
received.


ARTICLE VIII                           20
<PAGE>   26

SECTION 8.06--DELEGATION OF AUTHORITY.

     All or any part of the administrative duties and responsibilities under
this article may be delegated by the Plan Administrator. The duties and
responsibilities delegated shall be set out here or in a separate written
agreement.




ARTICLE VIII                           21
<PAGE>   27

                                   ARTICLE IX

                               GENERAL PROVISIONS

SECTION 9.01--AMENDMENTS.

     The Board of Directors of the Employer reserves the right and authority to
amend the Plan provisions from time to time. In most instances this authority
has been delegated to the Employer who may amend this Plan at any period of time
as may be determined by Internal Revenue Service regulations) governmental
agency to which the Plan is subject.

SECTION 9.02--PROVISIONS RELATING TO THE INSURER.

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

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

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

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

SECTION 9.03--EMPLOYMENT STATUS.

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

SECTION 9.04--RIGHTS TO PLAN ASSETS.

     No Employee shall have any right to or interest in any assets of the Plan
upon termination of his employment or otherwise except as specifically provided
under this Plan, and then only to the extent of the benefits payable to such
Employee in accordance with Plan provisions. Any benefit payable will be
distributed from the general assets of the Employer. Participants have no
greater rights with regard to such benefit than any other general creditor of
the Employer.

     Any final payment or distribution to a Participant or his legal
representative or to any Beneficiaries, spouse or Contingent Annuitant of such
Participant under the Plan provisions shall be in full satisfaction of all
claims

ARTICLE IX                             22
<PAGE>   28

against the Plan, the Plan Administrator, the Trustee, the Insurer, and the
Employer arising under or by virtue of the Plan.

SECTION 9.05--BENEFICIARY.

     Each Participant may name a Beneficiary to receive any death benefit (other
than any income payable to a Contingent Annuitant) that may arise out of his
participation in the Plan, The Participant may change his Beneficiary from time
to time. The Participant's Beneficiary designation and any change of Beneficiary
shall be the same as under the Associated Plan. It is the responsibility of the
Participant to give written notice to the Insurer of the name of the Beneficiary
on a form furnished for that purpose.

     With the Employer's consent, the Plan Administrator may maintain records of
Beneficiary designations for Participants before their Retirement Dates. In that
event, the written designations made by Participants shall be filed with the
Plan Administrator. If a Participant dies before his Retirement Date, the Plan
Administrator shall certify to the Insurer the Beneficiary designation on its
records for the Participant.

     If, at the death of a Participant, there is no Beneficiary named or
surviving, any death benefit under the Group Contract shall be paid under the
applicable provisions of the Group Contract.

SECTION 9.06--NONALIENATION OF BENEFITS.

     Benefits payable under the Plan are not subject to the claims of any
creditor of any Participant, Beneficiary, spouse or Contingent Annuitant. A
Participant, Beneficiary, spouse or Contingent Annuitant does not have any
rights to alienate, anticipate, commute, pledge, encumber or assign any of such
benefits.

SECTION 9.07--CONSTRUCTION.

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

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

SECTION 9.08--LEGAL ACTIONS.

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


ARTICLE IX                             23
<PAGE>   29

                          AMEND. NO. 2 PAGE DTD. l-l-98
                          -----------------------------

SECTION 9.09--WORD USAGE.

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

SECTION 9.1O--SMALL AMOUNTS.

     If the Present Value of the Participant's deferred Accrued Benefit does not
exceed $5,000, such Present Value shall be payable in a single sum as of the
Participant's Retirement Date or the date he ceases to be an Active Participant
for any reason other than death. If the Participant's deferred Accrued Benefit
is zero on the date he ceases to be an Active Participant for any reason other
than death, he shall be deemed to have received a single-sum payment of the
Present Value of his deferred Accrued Benefit on such date. This is a small
amounts payment. Such small amounts payment shall be made to the Participant.
Such small amounts payment shall be in full settlement of all benefits otherwise
payable. If the Present Value of the Preretirement Survivor Annuity does not
exceed $5,000, the Present Value of any death benefit shall be payable in a
single sum as of the date the Participant dies if such Present Value is not more
than $5,000. This is a small amounts payment. Such small amounts payment shall
be made to the Participant's Beneficiary (Spouse, if the death benefit is
payable to the Spouse). Such small amounts payment is in full settlement of the
death benefit otherwise payable.



ARTICLE IX                             24
<PAGE>   30

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

     Executed this 21st day of August, 1996.
                   ----        ------    --

                                      PRINCIPAL MUTUAL LIFE INSURANCE COMPANY

                                      By: /s/ MAX F. JOHNSON
                                          -----------------------------------

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




PLAN EXECUTION                         25