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 2006-30, 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 February 16, 2006
	 
	 	 
	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

May 31, 2006

Paul W. Fiddick

c/o Emmis Operating Company

40 Monument Circle, Suite 700

Indianapolis, IN 46204

     Re: Amendment to Employment Agreement

Dear Paul:

     This letter shall confirm our agreement to amend your employment agreement with Emmis
Operating Company dated March 1, 2003 (the “Agreement”), upon the terms and subject to the
conditions set forth in this letter (the “Amendment”). Any capitalized words or phrases used and
not defined in this Amendment shall have the meanings ascribed to them in the Agreement. This
shall confirm that the parties have agreed as follows:

1. The Term of the Agreement has been extended for a period of three (3) years beginning on March
1, 2006 and ending on February 28, 2009. The term “FYE 07” shall refer to the Contract Year
beginning on March 1, 2006 and ending on February 28, 2007; the term “FYE 08” shall refer to the
Contract Year beginning on March 1, 2007 and ending on February 29, 2008; the term “FYE 09” shall
refer to the Contract Year beginning on March 1, 2008 and ending on February 28, 2009 (each, a
“Contract Year”).

2. The Base Salary shall be increased as follows:

	 	 	 	 	 	 	 
	 

	 	FYE 07
	 	$	340,000	 
	 

	 	FYE 08
	 	$	350,000	 
	 

	 	FYE 09
	 	$	360,000	 

3. After payment of any Contract Year Bonus earned for the period ending February 28, 2006,
Section 6.2 shall be modified to reflect the following: Commencing with FYE 07, the target
amount of the Contract Year Bonus shall be increased as follows:

	 	 	 	 	 	 	 
	 

	 	FYE 07
	 	$	200,000	 
	 

	 	FYE 08
	 	$	205,000	 
	 

	 	FYE 09
	 	$	210,000	 

Exhibit B and Exhibit C, and all references to such exhibits, shall be deleted from
the Agreement and of no further force and effect. Commencing with FYE 07, the performance goals
and all other terms and conditions related to the award of any Contract Year Bonus shall be
determined by the Compensation Committee. The third and fourth sentences of Section 6.2
shall be deleted and replaced with the following language:

     “Employer may pay all or a portion of any Contract Year Bonus in Shares in the same manner
utilized for other senior management level employees.”

 

4. Section 6.3 shall be deleted in its entirety and replaced with the following language:

     “6.3 Equity Incentive Compensation. Each Contract Year during the Term, beginning
with FYE 07, at such time or times as Employer generally awards equity incentive compensation to
members of Employer’s senior management team, Executive shall receive Four Thousand Five Hundred
(4,500) Shares (as defined below) and an option (“Option”) to acquire Fifteen Thousand (15,000)
Shares. As used herein, “Shares” shall mean shares of Class A Common Stock of Emmis Communications
Corporation. The grants of Options and Shares shall be pursuant to the terms and subject to the
conditions of the applicable equity compensation plan of Employer, the Option agreements evidencing
the Option grants and the restricted stock agreements evidencing the grants of Shares. In the
event of any change in the outstanding Shares by reason of any reorganization, recapitalization,
reclassification, merger, stock split, reverse stock split, stock dividend, asset spinoff, share
combination, consolidation or similar event, including without limitation a Separation Event, the
number and class of all Shares awarded pursuant to this Agreement or covered by an Option granted
pursuant to this Agreement (and any applicable Option exercise price) shall be adjusted by the
Compensation Committee in its sole discretion and in accordance with the terms of the applicable
equity compensation plan of Employer, the Option agreement evidencing the grant of the Option, and
the restricted stock agreement evidencing the grant of Shares. The determination of the
Compensation Committee shall be conclusive and binding.”

5. Section 6.4 shall be renumbered as Section 6.5. Section 6.4 shall read
as follows:

     “6.4 Completion Bonus. On or about February 28, 2009, Executive shall receive Ten
Thousand (10,000) Shares (the “Completion Shares”); provided, that (i) this Agreement is in effect
on February 28, 2009 and has not been terminated for any reason (other than a breach of this
Agreement by Employer); and (ii) Executive has fully performed all of Executive’s duties and
obligations under this Agreement throughout the Term and is not in breach of any of the material
terms and conditions of this Agreement. Notwithstanding the foregoing, the Compensation Committee
may, but shall have no obligation to, increase the number of Completion Shares by an additional Ten
Thousand (10,000) Shares based on the Compensation Committee’s subjective evaluation of Executive’s
performance throughout the Term. The Completion Shares shall be freely transferable when delivered
to Executive subject to Employer’s securities trading policy and applicable federal and state law.
Employer shall have the right, in its sole and absolute discretion, to pay Executive the value of
the Completion Shares (in the same manner applied to other senior management level employees) in
cash in lieu of granting Executive the Completion Shares.”

6. The word “Argentina” shall be deleted from Section 10.2 and shall be replaced with the
phrase “Slovakia, Bulgaria”.

7. In the third sentence of Section 11.4, the following language shall be deleted and shall
be of no further force and effect:

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     “or the transaction or transactions described in the definition of Change of Control in
Exhibit A”

8. Effective March 1, 2006, Section 15.9 shall be deleted in its entirety and shall be of
no further force and effect.

All of the terms and conditions set forth in the Agreement shall remain unchanged and in full force
and effect unless specifically modified in this Amendment. All references to the Term or its
expiration or termination shall be adjusted to properly reflect the language set forth above. This
Amendment shall be incorporated by reference into the Agreement and made a part thereof. In the
event of any conflict between any provision of this Amendment and any provision of the Agreement,
this Amendment shall govern and control.

Please sign below where indicated to signify your acceptance of the terms and conditions set forth
in this Amendment. Should you have any questions about this Amendment, please let me know. I
look forward to much continued success together.

	 	 	 	 	 
	Sincerely,

 	 
	/s/ Jeffrey H. Smulyan
 	 
	Jeffrey H. Smulyan 	 
	Chairman and Chief Executive Officer

Emmis Operating Company 	 
	 
	ACCEPTED AND AGREED:

 	 
	/s/    Paul W. Fiddick
 	 
	Paul W. Fiddick 	 
	 	 
	 

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