Document:

exv10w2

GUARANTEE

     FOR VALUE RECEIVED, the sufficiency of which is hereby acknowledged, and in connection with
that certain funding agreement (the “Funding Agreement”), entered into by and between Principal
Life Insurance Company, an Iowa insurance company (“Principal Life”), and Principal Life Income
Fundings Trust 2008-61, a New York common law trust (the “Trust”), relating to the notes (the
“Notes”) issued by the Trust, Principal Financial Group, Inc., a Delaware corporation and the
indirect parent company of Principal Life (the “Guarantor”), hereby furnishes to the Trust its full
and unconditional guarantee of the Guaranteed Amounts (as hereinafter defined) as follows:

     1. Guarantee.

          (a) The Guarantor hereby fully, irrevocably, absolutely and unconditionally guarantees, as a
guarantee of payment and not merely as a guarantee of collection, immediate payment when due to the
Trust any payments required to be made by Principal Life to the Trust under the Funding Agreement
which shall become due and payable regardless of whether such payment is due at maturity, on an
interest payment date or as a result of redemption or otherwise (the “Scheduled Payments”) but
shall be unpaid by Principal Life (the “Guaranteed Amounts”). Notwithstanding anything to the
contrary contained herein, in no event shall the Guaranteed Amounts exceed the Deposit (as defined
in the Funding Agreement) of the Funding Agreement, plus accrued but unpaid interest and any other
amounts due and owing under the Funding Agreement, less any amounts paid by Principal Life to the
Trust.

          (b) In the event that Principal Life fails to make a Scheduled Payment in full when due (the
“Payment Notice Date”), then the Trust or Citibank, N.A., as indenture trustee for the benefit of
the holders of the Notes (the “Indenture Trustee”), pursuant to the indenture (the “Indenture”)
between the Trust and the Indenture Trustee, may present the Guarantor with notice (each, a
“Payment Notice”) of such failure in writing on or after the Payment Notice Date. The Payment
Notice shall identify (1) the Funding Agreement, (2) the Trust, (3) the Payment Notice Date and (4)
the amount of the Scheduled Payments not paid by Principal Life to the Trust as of the Payment
Notice Date. Upon receipt of such Payment Notice, the Guarantor will immediately pay the
Guaranteed Amounts pursuant to Section 7.

          (c) In the event that, after receipt of a Payment Notice from the Trust, the Guarantor fails
to make immediate payment to the Trust or the Indenture Trustee of the Guaranteed Amounts, then
the Trust and the Indenture Trustee may enforce the obligations of the Guarantor under this
Guarantee, including by immediately bringing suit directly against the Guarantor (without first
bringing suit against Principal Life) for the Guaranteed Amounts not paid to the Trust as of the
Payment Notice Date.

          (d) This Guarantee is an unsecured, unsubordinated and contingent obligation of the Guarantor
and ranks equally with all other unsecured and unsubordinated obligations of the Guarantor.

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     2. Termination. This Guarantee is a continuing and irrevocable guarantee of the Guaranteed
Amounts now or hereafter existing and shall terminate and be of no further force and effect with
respect to the Funding Agreement and the Notes upon the full payment of the Scheduled Payments or
upon the earlier extinguishment of the obligations of Principal Life under the Funding Agreement.

     3. Amendments. Subject to the trust agreement relating to the Trust and the Indenture, no
provision of this Guarantee may be waived, amended, supplemented or modified, except by a written
instrument executed by the Trust and the Guarantor.

     4. Assignment; Governing Law. This Guarantee shall inure to the benefit of the Trust and its
successors, assigns and pledgees. This Guarantee shall be governed by, and construed in accordance
with, the laws of the State of New York without regard to conflict of law principles.

     5. Notices. All notices given pursuant to this Guarantee shall be in writing, and shall
either be delivered, mailed or telecopied to the locations listed below or at such other address or
to the attention of such other persons as such party shall have designated for such purpose in a
written notice complying as to delivery with the terms of this Section 5. Each such notice shall
be effective (i) if given by telecopy, when transmitted to the applicable number so specified in
this Section 5 (such notice shall also be sent by mail, with first class postage prepaid), (ii) if
given by mail, three days after deposit in the mails with first class postage prepaid, or (iii) if
given by any other means, when actually delivered at such address.

If to the Guarantor:

Principal Financial Group, Inc.

711 High Street

Des Moines, Iowa 50392

Attention: General Counsel

Telephone: (515) 247-5111

Facsimile: (515) 248-3011

With a copy to:

Principal Life Insurance Company

711 High Street

Des Moines, Iowa 50392

Attention: Jim Fifield

Telephone: (515) 248-9196

Facsimile: (866) 496-6527

If to the Trust:

Principal Life Income Fundings Trust (followed by the number of the Trust specified in this Guarantee)

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c/o U.S. Bank Trust National Association

100 Wall Street, 16th Floor

New York, New York 10005

Attention: Janet P. O’Hara

Telephone: (212) 361-2527

Facsimile: (212) 809-5459

With a copy to:

Citibank, N.A.

Corporate and Investment Banking

388 Greenwich Street, 14th Floor

New York, New York 10013

Attention: Jennifer H. McCourt

Telephone: (212) 816-5680

Facsimile: (212) 816-5527

     6. Representations and Warranties. The Guarantor represents and warrants that: (i) it is duly
organized and in good standing under the laws of the jurisdiction of its organization and has full
capacity and right to make and perform this Guarantee, and all necessary authority has been
obtained; (ii) this Guarantee constitutes a legal, valid and binding obligation of the Guarantor
enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency and similar
laws affecting creditors’ rights and general principles of equity, regardless of whether
enforcement is sought in a proceeding in equity or at law; (iii) the making and performance of this
Guarantee does not and will not violate the provisions of any applicable law, regulation or order,
and does not and will not result in the breach of, or constitute a default under, any material
agreement, instrument or document to which it is a party or by which it or any of its property may
be bound or affected, except to the extent disclosed in the registration statement registering the
issuance of this Guarantee and the Funding Agreement, as amended, supplemented or modified from
time to time (the “Registration Statement”), and to the extent that any such violation, breach or
default does not result in a material adverse effect on the Guarantor; and (iv) all consents,
approvals, licenses and authorizations of, and filings and registrations with, any governmental
authority required under applicable law and regulations for the making and performance of this
Guarantee have been obtained or made and are in full force and effect, except to the extent
disclosed in the Registration Statement and to the extent that the failure to acquire any such
consent, approval, license, authorization, filing or registration does not result in a material
adverse effect on the Guarantor.

     7. Notice of, and Consent to, Security Interest. The Trust hereby notifies the Guarantor that
it has granted to the Indenture Trustee, on behalf of the holders of the Notes, a security interest
in the Collateral (as defined in the Indenture), including, but not limited to, any and all payment
to be made by the Guarantor to the Trust under this Guarantee. The Trust hereby notifies the
Guarantor that it has collaterally assigned to the Indenture Trustee, for the benefit of the
holders of the Notes, this Guarantee. The Guarantor, by executing this Guarantee, hereby (i)
affirms that it has made or simultaneously will make changes to its books and records to reflect
such security interest and collateral assignment, (ii) consents to the security interest

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granted, and collateral assignment made, by the Trust to the Indenture Trustee of this Guarantee,
(iii) agrees to make all payments due under this Guarantee to the Collection Account (as defined in
the Indenture) or any other account designated in writing to the Guarantor by the Indenture Trustee
and (iv) agrees to comply with all orders of the Indenture Trustee with respect to this Guarantee
without any further consent from the Trust.

     8. WAIVER OF JURY TRIAL; FINAL AGREEMENT. TO THE EXTENT ALLOWED BY APPLICABLE LAW, THE
GUARANTOR WAIVES TRIAL BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING ON OR ARISING
OUT OF THIS GUARANTEE. THIS GUARANTEE REPRESENTS THE FINAL AGREEMENT BETWEEN THE GUARANTOR AND THE
TRUST AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS AMONG SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH PARTIES.

	 	 	 	 	 
	 	PRINCIPAL FINANCIAL GROUP, INC.

 	 
	 	By:  	/s/ Elizabeth D. Swanson
 	 
	 
	 	Name:  Elizabeth D. Swanson 	 
	 
	 	Title:  Counsel	 
	 
	 	Date: The Effective Date (as defined in the Funding
Agreement) 	 
	 

Acknowledged and Agreed:

THE PRINCIPAL LIFE INCOME FUNDINGS

TRUST DESIGNATED IN THIS GUARANTEE

	 	 	 
	By:    

	 	U.S. Bank Trust National Association,

not in its individual capacity, but solely in its
capacity as trustee
	 
	 	 
	By:    

	 	Bankers Trust Company, N.A.,

under Limited Power of Attorney, dated November 21, 2007

	 	 	 	 	 
	By:

	 	/s/ Rick Greene
 

	 	 
	 
	Name: Rick Greene

	 	 
	 
	Title:

	 	Vice President	 	 
	 
	Date:

	 	The Effective Date (as defined in
the Funding Agreement)	 	 

4EX-10.1

	 	 	 	 	 

EXHIBIT
10.1

PAYCHEX, INC.

2002 STOCK INCENTIVE PLAN

(as amended and restated effective October 12, 2005)

RESTRICTED STOCK AWARD AGREEMENT

     1. Grant of Restricted Stock. This Restricted Stock Award Agreement (the “Award
Agreement”), dated July 10, 2008, sets forth the terms and conditions of the Restricted Stock (the
“Award”) granted to you by the Governance and Compensation Committee (the “Committee”) of the Board
of Directors of Paychex, Inc. (the “Company”) under the Company’s 2002 Stock Incentive Plan, as
amended and restated effective October 12, 2005 (the “Plan”), as described on your Award Notice.
The Award is subject to all of the provisions of the Plan, which is hereby incorporated by
reference and made a part of this Award Agreement. The capitalized terms used in this Award
Agreement are defined in the Plan.

     2. Restriction and Vesting.

          (a) Subject to the terms set forth in this Award Agreement and the Plan, unless earlier vested
under Section 2(b) of this Award Agreement, provided you are still a full-time employee of the
Company at that time, all of the Shares represented by the Award will vest on the fifth anniversary
of the date of grant set forth on your Award Notice (a “Vesting Date”).

          (b) Notwithstanding Section 2(a) of this Award Agreement, for each of the following fiscal
years of the Company, if the Company’s operating income, excluding interest on funds held for
clients (“Operating Income”), for such fiscal year equals or exceeds the following target for such
fiscal year, then, provided you are still a full-time employee of the Company, one-third of the
total number of Shares represented by the Award shall vest upon the confirmation by the Committee
of such fiscal year’s Operating Income (also a “Vesting Date”):

	 	 	 	 	 	 	 
	Fiscal Year	 	Target Operating Income
	 
	2009	 	 	$	787,022,000	 
	 
	2010	 	 	$	905,075,000	 
	 
	2011	 	 	$	1,040,836,000	 
	 
	2012	 	 	$	1,196,961,000	 

          (c) Except in the event of your death or Disability, if your employment terminates before a
Vesting Date for any reason, including, but not limited to, Retirement, then the unvested portion
of the Award shall be forfeited and cancelled immediately. If your employment terminates due to
death or Disability, your Award shall immediately become 100% vested.

     3. Book-Entry Registration. The Award initially will be evidenced by book-entry
registration only, without the issuance of a certificate representing the Shares underlying the
Award.

     4. Issuance of Shares. The Company shall, when the conditions to vesting specified in
Section 2 of this Award Agreement are satisfied, issue a certificate or certificates representing
the
Shares underlying the Award that have vested as promptly as practicable following the Vesting Date of such Shares.

 

 

     5. Rights as a Stockholder. Except as otherwise provided by this Section, you will
have the rights of a stockholder with respect to the Shares underlying the Award, including, but
not limited to, the right to receive such cash dividends, if any, as may be declared on such Shares
from time to time and the right to vote (in person or by proxy) such Shares at any meeting of
stockholders of the Company. Notwithstanding the foregoing, the dividends paid on any unvested
Shares shall be retained by the Company and held in escrow, trust or similar manner, and shall only
be paid to you upon the vesting of the underlying Shares to which the dividends relate; upon the
forfeiture of any Shares represented by the Award, your right to the dividends paid on the
underlying Shares which are forfeited shall also be forfeited.

     6. Restrictions on Transfer of Shares. The Award, and the right to vote the Shares
underlying the Award and to receive dividends thereon, may not, except as otherwise provided in the
Plan, be sold, assigned, transferred, pledged or encumbered in any way prior to the vesting of such
Shares, whether by operation of law or otherwise, except by will or the laws of descent and
distribution. After a Vesting Date, the vested Shares may be issued during your lifetime only to
you, or after your death to your designated beneficiary, or, in the absence of such beneficiary, to
your duly qualified personal representative.

     7. Withholding. The grant and the vesting of the Award is conditioned upon your
making arrangements satisfactory to the Company for the payment to the Company of the amount of all
taxes required by any governmental authority to be withheld and paid over by the Company or any
Affiliate to the governmental authority on account of such grant or vesting. The payment of such
withholding taxes to the Company may be made (i) by you in cash or by check, (ii) subject to the
consent of the Company and in accordance with any guidelines established by the Committee, by the
Company retaining the number of the Shares that would otherwise be delivered to you upon vesting
that have an aggregate Fair Market Value (at the time retained by the Company) equal to the amount
of withholding taxes (using your minimum required tax withholding rate or such other rate that the
Company determines will not trigger a negative accounting impact to the Company) required to be
paid, or (ii) by the Company or any Affiliate withholding such taxes from any other compensation
owed to you by the Company or any Affiliate. Unless you make arrangements prior to vesting to pay
withholdings taxes in cash or by check, or to have such withholding taxes withheld from other
compensation owed to you by the Company or any Affiliate, then at the time of vesting, the Company
shall have the right to retain the number of the Shares that would otherwise be delivered to you
upon vesting that have an aggregate Fair Market Value (at the time retained by the Company) equal
to the amount of withholding taxes (using your minimum required tax withholding rate or such other
rate that the Company determines will not trigger a negative accounting impact to the Company)
required to be paid.

     8. Limitation of Rights. Neither the Plan, the granting of the Award, the Award
Notice nor this Award Agreement gives you any right to remain in the employment of the Company or
any Affiliate.

     9. Non-competition, Non-solicitation, Confidentiality, and Detrimental Conduct.
In
 consideration for the Award, you agree that during your employment and for a period of twelve (12)
months following termination of employment for any reason,  you will not, directly or indirectly, either
as an employee, employer, consultant, agent, principal, partner, stockholder, corporate officer, board
member, director, or in any other individual or representative capacity, engage or attempt to engage in
any activity that is competitive to the business of the Company within the geographic and substantive
area or areas of responsibility assigned to the you during the last 24 months of employment.  In
addition, you agree that for a period of eighteen (18) months following the termination of employment

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for any reason, you will not directly or indirectly by assisting others, solicit Company clients, prospects
 or referral resources; nor will you recruit or hire, or attempt to recruit or hire any other employee of
Company or its affiliates, or induce or attempt to induce any employee of Company to terminate
 employment with Company. You also agree and acknowledge that during the course of your
employment with the Company, you will obtain, have access and be privy to nonpublic information
important to the Company’s business solely as a result of employment with the Company, which
information you hereby acknowledge and agree to be confidential (“Confidential Information”).  You
agree that during and after employment, you shall not divulge or make use of any Confidential
 Information, directly or indirectly, personally or on behalf of any other person, business, corporation,
or entity without prior written consent of the Company.  You further agree that you will not, during
your employment, engage in conduct which is detrimental to the Company, including violation of the
Company’s Code of Business Ethics and Conduct, criminal conduct, fraud, or willful misconduct.
 These covenants are not intended to, and do not, limit in any way the rights and remedies provided to
the Company under the Plan, other agreements with you, or under common or statutory law.

10. Repayment of Financial Gain.

          (a) If you fail to comply with Section 9 of this Award Agreement, the Company may cancel any
unvested portion of this Award and recover from you the total number or Vesting Date value of
Shares whose Vesting Date occurred pursuant to this Award during the 24-month period preceding your
breach of any covenant in Section 9 of this Award Agreement. The total number or value of the
vested Shares shall include the amount of any dividends paid to you during the 24-month period
specified above and shall not be reduced for the payment of applicable taxes or other amounts.

          (b) If you fail to comply with Section 9 of this Award Agreement, upon demand by the Company,
you will repay the Company in accordance with the terms of Section 10(a), and the Company shall be
entitled to offset the amount of any such repayment obligation against any amount owed to you by
the Company. The remedies set forth in this Section are in addition to any other remedies the
Company may have, at law or equity, for your violation of the terms of this Award Agreement.

     11. Rights of Company and Affiliates. This Award Agreement does not affect the right
of the Company or any Affiliate to take any corporate action whatsoever, including without
limitation its right to recapitalize, reorganize or make other changes in its capital structure or
business, merge or consolidate, issue bonds, notes, Shares or other securities, including preferred
stock, or options therefor, dissolve or liquidate, or sell or transfer any part of its assets or
business.

     12. Plan Controls. In the event of any conflict among the provisions of the Plan and
this Award Agreement, the provisions of the Plan will be controlling and determinative.

     13. Amendment. Except as otherwise provided by the Plan, the Company may only alter,
amend or terminate the Award with your consent.

     14. Governing Law. This Award Agreement shall be governed by and construed in
accordance with the laws of the State of New York, except as superseded by applicable federal law,
without giving effect to its conflicts of law provisions. All parties consent to exclusive
personal jurisdiction in New York courts and agree that venue shall be New York State Supreme
Court, Monroe County.

* * * * *

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