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 2007-103, 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: Thomas E. Tabor

Telephone: (212) 361-6184

Facsimile: (212) 809-5459

With a copy to:

Citibank, N.A.

Citibank Agency and Trust

388 Greenwich Street, 14th Floor

New York, New York 10013

Attention: Nancy Forte

Telephone: (212) 816-5685

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 March 2, 2007
	 
	 	 	 	 
	By:

	 	/s/ Diana L. Cook
	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Name:

	 	Diana L. Cook	 	 
	 
	 	 	 	 
	Title:

	 	Vice President	 	 
	 
	 	 	 	 
	Date:

	 	The Effective Date (as defined in the Funding Agreement)	 	 

4exv10w1

 

Exhibit 10.1

Form of

Terms and Conditions

Restricted Stock Unit Grant

     You have received an Award of Restricted Stock Units (the “Units”) under the Monsanto Company
2005 Long-Term Incentive Plan (the “Plan”). The Grant Date and the number of Units covered by this
Award are set forth in the document you have received entitled “Restricted Stock Units Statement.”
The Restricted Stock Units Statement and these terms and conditions collectively constitute the
Award Certificate for the Units, and describe the provisions applicable to the Units.

     1.     Definitions. Each capitalized term not otherwise defined herein has the meaning
set forth in the Plan or, if not defined in the Plan, in the attached Restricted Stock Units
Statement. The “Company” means Monsanto Company, a Delaware corporation incorporated February 9,
2000.

     2.     Nature of Units. The Units represent the right to receive, in certain
circumstances, a number of Shares determined in accordance with the Restricted Stock Units
Statement and these terms and conditions. Until such time (if any) as Shares are delivered to you,
you will not have any of the rights of a common stockholder of the Company with respect to those
Shares, your rights with respect to the Units and those Shares will be those of a general creditor
of the Company, and you may not sell, assign, transfer, pledge, hypothecate, give away, or
otherwise dispose of the Units. Any attempt on your part to dispose of the Units will result in
their being forfeited. However, you shall have the right to receive a Dividend Equivalent Payment
with respect to the Units, subject to withholding pursuant to paragraph 7 below. A “Dividend
Equivalent Payment” means a cash payment in an amount equal to the aggregate cash dividends that
would have been paid to you if you had been the record owner, on each record date for a cash
dividend during the period from the Grant Date through the Settlement Date (as defined below) for
the Units, of a number of Shares equal to the number of Units that vest under this Award. Your
Dividend Equivalent Payment, if any, will be paid to you on the date on which the Units are settled
by delivery of Shares pursuant to paragraph 6 below (the “Settlement Date”). You shall not be
entitled to receive any payments with respect to any non-cash dividends or other distributions that
may be made with respect to the Shares.

 

     3.     Vesting Schedule. If the 162(m) Performance Goal (as defined below) is not met,
then except as provided in paragraph 5 below, the Units shall be forfeited effective as of August
31, 2010. If the 162(m) Performance Goal is met, the Units shall vest on December 15, 2010,
subject to paragraphs 4 and 5 below. The “162(m) Performance Goal” is that the Company’s Net
Income, as defined in the next sentence, must exceed zero for the period September 1, 2007 through
August 31, 2010. “Net Income” means gross profit (i) minus (A) sales, general and administrative
expenses, (B) research and development expense, (C) amortization, (D) net interest expense, and (E)
income taxes and (ii) plus or minus other income and expense; all as reported in the Company’s
financial statements; but excluding positive or negative effects of (I) restructuring charges and
reversals, (II) the outcome of lawsuits, (III) research and development write-offs on acquisitions,
(IV) impact of liabilities, expenses or settlements related to Solutia, Inc. or agreements
associated with a Solutia, Inc. plan of reorganization, (V) unbudgeted business sales and
divestitures; and (VI) the cumulative effects of changes in accounting methodology made after
August 31, 2007. As soon as practicable after August 31, 2010, the Committee shall determine and
shall certify, whether the 162(m) Performance Goal has been met.

     4.     Effect of Termination of Service. Except as otherwise provided in paragraph 5:
(a) if the 162(m) Performance Goal is met, but you have incurred a Termination of Service before
December 15, 2010, as a result of a Termination without Cause or your Disability or death, then the
Units shall become vested as to a percentage equal to (x) the number of completed months included
in the period from the Grant Date through the date of your Termination of Service, divided by (y)
39, and the balance of the Units shall immediately be forfeited; and (b) if you experience a
Termination of Service before December 15, 2010, for any other reason, all Units shall immediately
be forfeited (to the extent not previously forfeited), regardless of whether the 162(m) Performance
Goal is met.

     5.     Change of Control. Notwithstanding any other provision of this Award Certificate,
if a Change of Control occurs: (a) if you have not previously experienced a Termination of
Service, the Units shall vest in full upon the Change of Control, regardless of whether the 162(m)
Performance Goal has been met; and (b) if you have previously experienced a Termination of Service,
the Units shall vest upon the Change of Control to the extent provided in Section 4 but without
regard to whether the 162(m) Performance Goal has been met.

     6.     Delivery of Shares. As promptly as practicable after the vesting of any Units, and
in any event not later than December 31, 2010, the Company shall deliver to you a number of Shares
equal to the number of Units that have so vested, together with any Dividend Equivalent Payment, in
each case subject to withholding as provided in paragraph 7 below.

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     7.     Withholding. Notwithstanding any other provision of this Award Certificate, your
right to receive a Dividend Equivalent Payment and to receive Shares in settlement of any Units is
subject to withholding of all taxes that are required to be paid or withheld in connection with the
payment of any Dividend Equivalent Payment or the delivery of those Shares. With respect to the
delivery of Shares, you must make arrangements satisfactory to the Company for the payment of any
such taxes. While the Company reserves the right to modify the methods of tax withholding that it
deems acceptable, as of the time that this Award Certificate is being delivered to you, such tax
withholding may be satisfied by (i) cash or check, (ii) delivery of previously owned Shares, or
(iii) withholding by the Company of Shares that would otherwise be delivered to you in settlement
of such Units. No more than the minimum required withholding will be permitted under clauses (ii)
and/or (iii) of the preceding sentence.

     8.     No Right to Continued Employment or Service. This Award Certificate shall not
limit or restrict the right of the Company or any Affiliate to terminate your employment or service
at any time or for any reason.

     9.     Effect of Award Certificate; Severability. This Award Certificate shall be binding
upon and shall inure to the benefit of any successor of the Company. The invalidity or
enforceability of any provision of this Award Certificate shall not affect the validity or
enforceability of any other provision of this Award Certificate.

     10.   Amendment. The terms and conditions of this Award Certificate may not be amended
in any manner adverse to you without your consent.

     11.   Plan Interpretation. This Award Certificate is subject to the provisions of the
Plan, and all of the provisions of the Plan are hereby incorporated into this Award Certificate as
provisions of the Units. If there is a conflict between the provisions of this Award Certificate
and the Plan, the provisions of the Plan govern. If there is any ambiguity in this Award
Certificate, any term that is not defined in this Award Certificate, or any matters as to which
this Award Certificate is silent, the Plan shall govern, including, without limitation, the
provisions of the Plan addressing construction and governing law, as well as the powers of the
Committee, among others, to (a) interpret the Plan, (b) prescribe, amend and rescind rules and
regulations relating to the Plan, (c) make appropriate adjustments to the Units in the event of a
corporate transaction, and (d) make all other determinations necessary or advisable for the
administration of the Plan.

     12.   Recoupment Policy. This Award is an “incentive award” covered by the terms of the
Monsanto Company Recoupment Policy (the “Recoupment Policy”), as the Recoupment Policy may be
amended from time to time, if you are a “Specified Executive Officer” (within the meaning of said Recoupment Policy) at the relevant
time or times.

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