EX-99.c
SUMMARY PLAN DESCRIPTION
FOR THE
INTERSTATE POWER COMPANY 401(k) PLAN
TABLE OF CONTENTS
(1) General 1
(2) Identification of Plan 1
(3) Type of Plan 1
(4) Plan Administrator 1
(5) Trustee/Trust Fund 2
(6) Hours of Service 2
(7) Eligibility to Participate 2
(8) Employer's Contributions 2
(9) Employee Contributions 4
(10) Vesting in Employer Contributions 4
(11) Payments of Benefits After Termination of Employment 5
(12) Payment of Benefits Prior to Termination of Employment 7
(13) Disability Benefits 7
(14) Payment of Benefits Upon Death 7
(15) Disqualification of Participant Status - Loss or Denial
of Benefits 8
(16) Claims Procedure 8
(17) Retired Participant, Separated Participant with Vested
Benefit, Beneficiary Receiving Benefits 8
(18) Participant's Rights under ERISA 9
(19) Federal Income Taxation of Benefits Paid 9
(20) Participant Loans 10
SUMMARY PLAN DESCRIPTION
(1) General. The legal name, address and Federal employer
identification number of the Employer are -
Interstate Power Company 42-0329500
1000 Main Street
P.O. Box 769
Dubuque, IA 52004-0769
The Employer has established a retirement plan ("Plan") to supplement
your income upon retirement. In addition to retirement benefits, the
Plan may provide benefits in the event of your death or disability or in
the event of your termination of employment prior to normal retirement.
If after reading the summary you have any questions, please ask the Plan
Administrator. We emphasize this summary plan description is a highlight
of the more important provisions of the Plan. If there is conflict
between a statement in this summary plan description and in the Plan,
the terms of the Plan control.
(2) Identification of Plan. The Plan is known as -
Interstate Power Company 401(k) Plan
The Employer has assigned 004 as the Plan identification number. The
plan year is the period on which the Plan maintains its records: the 12
consecutive month period ending every December 31.
(3) Type of Plan. The Plan is commonly known as a Code Section 401(k)
Profit Sharing Plan. Section (8), "Employer's Contributions," explains
how you share in the Employer's annual contributions to the trust fund
and the extent to which the Employer has an obligation to make annual
contributions to the trust fund.
Under this Plan, there is no fixed dollar amount of retirement benefits.
Your actual retirement benefit will depend on the amount of your account
balance at the time of retirement. Your account balance will reflect the
annual allocations, the period of time you participate in the Plan and
the success of the Plan in investing and re-investing the assets of the
trust fund. A governmental agency known as the Pension Benefit Guaranty
Corporation (PBGC) insures the benefits payable under plans which
provide for fixed and determinable retirement benefits. This Plan does
not provide a fixed and determinable retirement benefit. Therefore, the
PBGC does not include this Plan within its insurance program.
(4) Plan Administrator. The Employer is the Plan Administrator. The
Employer's telephone number is 319-582-5421. The Employer has designated
Judy Thill to assist the Employer with the duties of Plan Administrator.
You may contact Judy Thill at the Employer's address. The Plan
Administrator is responsible for providing you and other participants
information regarding your rights and benefits under the Plan. The Plan
Administrator also has the primary authority for filing the various
reports, forms and returns with the Department of Labor and the Internal
Revenue Service.
The name of the person designated as agent for service of legal process
and the address where a processor may serve legal process upon the Plan
are -
Joseph McGowan
Interstate Power Company
1000 Main Street
P.O. Box 769
Dubuque, IA 52004-0769
A legal processor also may serve the Trustee of the Plan or the Plan
Administrator.
The Plan permits the Employer to appoint an Advisory Committee to assist
in the administration of the Plan. The Advisory Committee has the
responsibility for making all discretionary determinations under the
Plan and for giving distribution directions to the Trustee. If the
Employer does not appoint an Advisory Committee, the Plan Administrator
assumes these responsibilities. The members of the Advisory Committee
may change from time to time. You may obtain the names of the current
members of the Advisory Committee from the Plan Administrator.
(5) Trustee/Trust Fund. The Employer has appointed -
Dubuque Bank & Trust Co.
1398 Central Avenue
P.O. Box 747
Dubuque, IA 52004-0747
to hold the office of Trustee. The Trustee will hold all amounts the
Employer contributes to it in a trust fund. Upon the direction of the
Advisory Committee, the Trustee will make all distribution and benefit
payments from the trust fund to participants and beneficiaries. The
Trustee will maintain trust fund records on a plan year basis.
(6) Hours of Service. The Plan and this summary plan description
include references to hours of service. To become eligible to
participate in the Plan, to advance on the vesting schedule or to share
in the allocation of Employer contributions for a plan year, the Plan
requires you to complete a minimum number of hours of service during a
specified period. The sections covering eligibility to participate,
vesting and employer contributions explain this aspect of the Plan in
the context of those topics. However, hour of service has the same
meaning for all purposes of the Plan.
The Department of Labor, in its regulations, has prescribed various
methods under which the Employer may credit hours of service. The
Employer has selected the "actual" method for crediting hours of
service. Under the actual method, you will receive credit for each hour
for which the Employer pays you, directly or indirectly, or for which
you are entitled to payment, for the performance of your employment
duties. You also will receive credit for certain hours during which you
do not work if the Employer pays you for those hours, such as paid
vacation.
If an employee's absence from employment is due to maternity or
paternity leave, the employee will receive credit for unpaid hours of
service related to his leave, not to exceed 501 hours. The Advisory
Committee will credit these hours of service to the first period during
which the employee otherwise would incur a 1-year break in service as a
result of the unpaid absence.
(7) Eligibility to Participate. To become a participant, an employee
must complete one year of service. You do not have to complete any form
for entry into the Plan. You will become a participant on the first day
of any calendar quarter following your completion of the service
requirement.
The Plan defines "year of service" as a 12-month eligibility service
period in which you work at least 1,000 hours for the Employer. The
first eligibility service period starts on your first day of employment
with the Employer. For example, if you begin work on February 15 and
work 1,000 hours from that February 15 through the following February
14, you would enter the Plan on the April 1 following the completion of
the one year of service. After the first 12-month eligibility service
period, the Plan will measure your eligibility service period on a plan
year basis. In the prior example, on a plan year basis, the second
12-month period would begin with the first plan year starting after your
February 15 employment date and other 12-month periods would be the
following plan years. The Plan will need to measure more than one
12-month period, for example, if you do not complete a year of service
in the first 12-month period.
If you terminate employment after becoming a participant in the Plan and
later return to employment, you will reenter the plan on your
reemployment date. Also, if you terminate employment after satisfying
the Plan's eligibility conditions but before actually becoming a
participant in the Plan, you will become a participant in the Plan on
the later of your scheduled entry date or your reemployment date.
(8) Employer's Contributions.
401(k) Arrangement. The Plan includes a "401(k) arrangement," under
which you may elect to have the Employer contribute a portion of your
compensation to the Plan. The contributions the Employer makes under
your election are "elective deferrals." The Advisory Committee will
allocate your elective deferrals to a separate account designated by the
Plan as your Deferral Contributions Account.
As a participant in the Plan, you may enter into a salary reduction
agreement with the Employer. The Advisory Committee will give you a
salary reduction agreement form which will explain your salary reduction
options. The Employer will withhold from your pay the amount you have
agreed to have the Employer contribute to the Plan as elective
deferrals.
For any calendar year, your elective deferrals may not exceed a specific
dollar amount determined by the Internal Revenue Service. If your
elective deferrals for a particular calendar year exceed the dollar
limitation in effect for that calendar year, the Plan will refund the
excess amount, plus any earnings (or loss) allocated to that excess
amount. If you participate in another "401(k) arrangement" or in similar
arrangements under which you elect to have an employer contribute on
your behalf, your total elective deferrals may not exceed the dollar
limitation in effect for that calendar year. The Form W-2 you receive
from each employer for the calendar year will report the amount of your
elective deferrals for that calendar year under that employer's plan. If
your total elective deferrals exceed the dollar limitation in effect for
that calendar year you should decide which plan you wish to designate as
the plan with the excess amount. If you designate this Plan as holding
the excess amount for a calendar year, you must notify the Advisory
Committee of that designation by March 1 of the following calendar year.
The Trustee then will distribute the excess amount to you, plus earnings
(or loss) allocated to that excess amount.
Matching contributions. For each quarter in each plan year after
December 31, 1993, the Employer will contribute for each participant a
matching contribution equal to 25% of the participant's "eligible
contributions." A participant's "eligible contributions" equal the
amount of the participant's elective deferrals for the plan year which
does not exceed $1,000. For example, assume your compensation for a
quarter is $6,250 and your eligible contributions total $900. Your
matching contribution would equal $225 for that quarter. The Advisory
Committee allocates these matching contributions to your Matching
Contributions Account.
The Plan limits your matching contributions for the plan year to $250.
If your allocation of the matching contributions would exceed this
limitation, the Advisory Committee will reduce that allocation to the
limited amount.
The Employer will determine the amount of matching contribution as of
each allocation date: March 31, June 30, September 30, and December 31.
As of each allocation date during the plan year, the Advisory Committee
will allocate to your account your share of the matching contributions
made for that allocation period.
Employer's nonelective contributions. Each plan year, the Employer may
make nonelective contributions to the Plan in the amount determined by
the Employer at its discretion. The Employer may choose not to make
nonelective contributions to the Plan for a particular plan year.
For each plan year the Employer makes nonelective contributions to the
Plan, the Advisory Committee will allocate this contribution to the
separate accounts maintained for participants. The Advisory Committee
will base your allocation upon your share of the total compensation paid
during that plan year to all participants in the Plan. For example, if
your compensation for a plan year equals 10% of the total compensation
for all participants for that particular plan year, the Advisory
Committee will allocate 10% of the total Employer nonelective
contribution for the plan year to your separate account.
Allocation of forfeitures. The Plan allocates participant forfeitures as
if the forfeitures were additional Employer contributions. The Plan
treats a forfeiture as a reduction of the Employer contributions
otherwise made for the plan year following the plan year in which the
forfeiture occurs. Before allocating forfeitures to reduce the Employer
contributions, the Advisory Committee first will use the forfeitures to
pay Plan expenses. The Advisory Committee will allocate to reduce the
employer contribution only the forfeitures remaining after payment of
the Plan's administrative expenses for the Plan Year.
Compensation. The Plan defines compensation as the employee's total
amount of earnings reportable as W-2 earnings for Federal income tax
withholding purposes. With limited exceptions, the Plan includes an
employee's compensation only for the part of the plan year in which he
actually is a participant.
Conditions for allocation. With limited exceptions, to be entitled to an
allocation of Employer contributions, you must complete one hour of
service during the plan year. However, you do not have to be employed by
the Employer on the last day of the plan year to be entitled to an
allocation.
The contribution allocations described in this Section (8) may vary for
certain employees if the Plan is top heavy. Generally, the plan is top
heavy if more than 60% of the Plan's assets are allocated to the
accounts of key employees (certain owners and officers). If the Plan is
top heavy, any participant who is not a key employee and who is employed
on the last day of the plan year, may not receive a contribution
allocation which is less than a certain minimum. Usually that minimum is
3%, but if the contribution allocation for the plan year is less than 3%
for all the key employees, the top heavy minimum is the smaller
allocation rate. If you are a participant in the Plan, your allocation
described in this Section (8) in most cases will be equal to or greater
than the top heavy minimum contribution allocation. The Plan also may
vary the definition of the top heavy minimum contribution allocation to
take into account another plan maintained by the Employer.
The law limits the amount of "additions" (other than trust earnings)
which the Plan may allocate to your account under the Plan. Your
additions may never exceed 25% of your compensation for a particular
plan year, but may be less if 25% of your compensation exceeds a dollar
amount announced by the Internal Revenue Service each year. The Plan may
need to reduce this limitation if you participate (or have participated)
in any other plans maintained by the Employer. The discussion of Plan
allocations in this Section (8) is subject to this limitation.
(9) Employee Contributions. The Plan does not permit nor require you to
make employee contributions to the trust fund. "Employee contributions"
are contributions made by an employee for which the employee does not
receive an income tax deduction. The only source of contributions under
the Plan is the annual Employer contribution, including the "elective
deferrals" made at your election under the 401(k) arrangement described
in Section (8). "Elective deferrals" are not "employee contributions"
for purposes of the Plan.
The Trustee may accept rollovers and direct transfers from qualified
retirement plans and Conduit IRAs. The Trustee has accepted direct
transfers of the Employee Contribution Account and Employer Contribution
Account from the now terminated Interstate Power Company Tax Credit
Employee Stock Ownership Plan. All of the above are hereafter referred
to as Rollover Contributions.
Once during each plan year, you may request and receive a return of all
or any part of your Rollover Contributions (as adjusted for gains or
losses). A portion of each withdrawal may be includible in your gross
income and, if you are under age 59 1/2, may be subject to a 10% penalty
on the amount of the distribution you must include in your gross income.
The Trustee will pay you the balance of your Rollover Contribution
Account at the same time it pays you the vested portion of your interest
in the Employer's contributions made to the Plan for your benefit.
(10) Vesting in Employer Contributions. Your interest in the
contributions the employer makes to the Plan for your benefit become
100% vested when you attain normal retirement age (as defined in Section
(11)). Prior to normal retirement age, your interest in the
contributions the employer makes on your behalf become vested in
accordance with the following schedule:
VESTING SCHEDULE
Years of Nonforfeitable
Service Percentage
Less than 1 0%
1 20%
2 40%
3 60%
4 80%
5 or more 100%
100% vesting for Deferral Contributions Account. The vesting schedule
does not apply to your Deferral Contributions Account described in
Section (8). Instead, you are 100% vested at all times in your Deferral
Contributions Account.
Special vesting rule for death or disability. If you die or become
disabled while still employed by the Employer, your entire Plan interest
becomes 100% vested, even if you otherwise would have a vested interest
less than 100%.
Year of service. To determine your percentage under a vesting schedule,
a year of service means a 12-month vesting service period in which you
complete at least 1,000 hours of service. The Plan measures the vesting
service period as the plan year. If you complete at least 1,000 hours
during a plan year, you will receive credit for a year of service even
though you are not employed by the Employer on the last day of that plan
year. You will receive credit for all years of service with the
Employer, except any service prior to the time you attain age 18.
The Plan provides two methods of vesting forfeiture which may apply
before a participant becomes 100% vested in his entire interest under
the Plan. The primary method of vesting forfeiture is the "forfeiture
break in service" rule. The secondary method of forfeiture is the "cash
out" rule. Also see Section (15) relating to loss or denial of benefits.
Forfeiture Break in Service Rule. Termination of employment alone will
not result in a forfeiture under the Plan unless you do not return to
employment with the Employer before incurring a "forfeiture break in
service." A "forfeiture break in service" is a period of 5 consecutive
vesting service periods in which you do not work more than 500 hours in
each vesting service period comprising the 5 year period.
Example. Assume you are 60% vested in your account balance. After
working less than 500 hours during a particular vesting service period,
you terminate employment and perform no further service for the Employer
during the next 4 vesting service periods. Under this example, you would
have a "forfeiture break in service" during the fourth vesting service
period following the vesting service period in which you terminated
employment because you did not work more than 500 hours during each
vesting service period of 5 consecutive vesting service periods.
Consequently, you would forfeit the 40% non-vested portion of your
account. If you had returned to employment with the Employer at any time
during the 5 consecutive vesting service periods and worked more than
500 hours during any vesting service period within that 5-year period,
you would not incur a forfeiture under the "forfeiture break in service"
rule.
Cash Out Rule. The cash out rule applies if you terminate employment and
receive a total distribution of the vested portion of your account
balance before you incur a forfeiture break in service. For example,
assume you terminated employment during a particular vesting service
period after completing 800 hours of service. Assume further the total
value of your account balance is $6,000 in which you have a 60% vested
interest. Before you incur a forfeiture break in service, you receive a
distribution of the $3,600 vested portion of your account balance. Upon
payment of the $3,600 vested portion of your account balance, you would
forfeit the $2,400 nonvested portion. If you return to employment before
you incur a "forfeiture break in service," you may have the Plan restore
your "cash out" forfeiture by repaying the amount of the distribution
you received attributable to Employer contributions. This repayment
right applies only if you do not incur a "forfeiture break in service."
You must make this repayment no later than the date 5 years after you
return to employment with the Employer. Upon your re-employment with the
Employer, you may request the Advisory Committee to provide you a full
explanation of your rights regarding this repayment option. If the
vested portion of your account balance does not exceed $3,500, the Plan
will distribute that vested portion to you in a lump sum, without your
consent. This involuntary cash-out distribution will result in the
forfeiture of your nonvested account balance, in the same manner as an
employee who voluntarily elects a cash-out distribution. Also, upon
re-employment you would have the same repayment option as an employee
who elected a cash-out distribution, if you return to employment before
incurring a "forfeiture break in service". If you are 0% vested in your
entire interest in the Plan, the Plan will treat you as having received
a cash-out distribution of $0. This "distribution" results in a
forfeiture of your entire Plan interest. Normally, this forfeiture
occurs on the date you terminate employment with the Employer. However,
if you are entitled to an allocation of Employer contributions for the
plan year in which you terminate employment with the Employer, this
forfeiture occurs as of the first day of the next plan year. If you
return to employment before you incur a forfeiture break in service, the
Plan will restore this forfeiture, as if you repayed a cash-out
distribution.
(11) Payment of Benefits After Termination of Employment. After you
terminate employment with the Employer, the time at which the Plan will
commence distribution to you and the form of that distribution depends
on whether or not your vested account balance exceeds $3,500. If you
receive a distribution from the Plan before you attain age 59 1/2, the
law imposes a 10% penalty on the amount of the distribution you must
include in your gross income, unless you qualify for an exception from
this penalty. You should consult a tax advisor regarding this 10%
penalty. This summary makes references to your normal retirement age.
Normal retirement age under the Plan is 65.
If your vested account balance does not exceed $3,500, the Plan will
distribute that portion to you, in lump sum, at the beginning of the
quarter after you terminate employment with the Employer, or as soon as
administratively practicable following that date. If you already have
attained normal retirement age when you terminate employment, the Plan
must make this distribution no later than the 60th day following the
close of the plan year in which your employment terminates, even if the
normal distribution date would occur later. The Plan does not permit you
to receive distribution in any form other than a lump sum if your vested
account balance does not exceed $3,500.
If your vested account balance exceeds $3,500, the Plan will commence
distribution to you at the time you elect to commence distribution. The
Plan permits you to elect distribution as of any distribution date
following your termination of employment with the Employer. A
"distribution date" under the Plan means the first of any calendar
quarter. You may not actually receive distribution on the distribution
date you elect. The Plan provides the Trustee an administratively
reasonable time following a particular distribution date to make actual
distribution to a participant.
No later than 30 days prior to your earliest possible distribution date,
the Advisory Committee will provide you a notice explaining your right
to elect distribution from the Plan and the forms necessary to make your
election. If you do not make a distribution election, the Plan will
commence distribution to you on the 60th day following the close of the
plan year in which the latest of three events occurs: (1) your
attainment of normal retirement age; (2) your attainment of age 62; or
(3) your termination of employment with the Employer. To determine
whether your vested account balance exceeds $3,500, the Plan looks to
the last valuation of your account prior to the scheduled distribution
date.
With limited exceptions, you may not commence distribution of your
vested account balance later than April 1 of the calendar year following
the calendar year in which you attain age 70 1/2, even if you have not
terminated employment with the Employer. This required distribution date
overrides any contrary distribution date described in this summary. If
the Employer terminates the Plan before you receive complete
distribution of your vested benefits, the Plan might make distribution
to you before you otherwise would elect distribution. Upon Plan
termination, if your vested account balance exceeds $3,500, you will
receive an explanation of your distribution rights.
For purposes of making a distribution of any portion of your vested
account balance, the Plan refers to the latest valuation of your account
balance. The Plan requires valuation of the trust fund, and adjustment
of participant accounts, as of the last day of the plan year and every
March 31, June 30, and September 30. The Advisory Committee also may
require a valuation on any other date. You will not receive any
adjustment to your account balance for trust fund earnings after the
latest valuation date. In general, the Plan allocates trust fund
earnings, gains or losses for a valuation period on the basis of each
participant's opening account balance at the beginning of the valuation
period, less any distributions and charges to each participant's account
during the valuation period.
Forms of Benefit Payment. If your vested account balance exceeds $3,500,
the Plan permits you to elect distribution under any one of the
following methods.
(a) Lump sum
(b) Part lump sum and part installments, as described in (c).
(c) Installments payments (annually, quarterly or monthly) over a
specified period of time, not exceeding your life expectancy or the
joint life expectancy of you and your beneficiary.
Under an installment distribution, the Advisory Committee may direct to
have the Plan segregate the amount owed to you in a separate account
apart from other trust fund assets. Your separate account will continue
to draw interest during the period the Plan is making retirement
payments to you. If the Plan does not segregate the amount owed to you
in a separate account, your retirement account will remain a part of the
trust fund and continue to share in trust fund earnings, gains or
losses. Funds to be distributed from the Interstate Power Stock Fund
may, at the request of the participant, be distributed in kind (i.e.,
distribute in a stock certificate).
The benefit payment rules described in Sections (11) through (14)
reflect the current Plan provisions. If an Employer amends its Plan to
change benefit payment options, some options may continue for those
participants or beneficiaries who have account balances at the time of
the change. If an eliminated option continues to apply to you, the
information you receive from the Advisory Committee at the time you
first are eligible for distribution from the Plan will include an
explanation of that option.
(12) Payment of Benefits Prior to Termination of Employment.
Distributions from your Employer Contributions Account and Matching
Contributions Account. Prior to your termination of employment with the
Employer, you may elect to withdraw all or any portion of your Employer
Contributions Account and Matching Contributions Account if: (1) you
have attained age 59 1/2; and (2) you are 100% vested in your account
balance.
Distributions from your Deferral Contributions Account. Prior to your
termination of employment with the Employer, you may elect to withdraw
all or any portion of your Deferral Contributions Account if: (1) you
have attained age 59 1/2; or (2) you incur a hardship. A hardship
distribution is available only from your Deferral Contributions Account.
A hardship distribution must be on account of any of the following: (1)
deductible medical expenses incurred by the participant, by the
participant's spouse, or by any of the participant's dependents; (2) the
purchase (excluding mortgage payments) of a principal residence for the
participant; (3) the payment of post-secondary education tuition, for
the next semester or for the next quarter, for the participant, for the
participant's spouse, or for any of the participant's dependents; or (4)
to prevent the eviction of the participant from his principal residence
or the foreclosure on the mortgage of the participant's principal
residence. To qualify for this hardship distribution, the participant
may not make elective deferrals or employee contributions to the Plan
for the 12-month period following the date of his hardship distribution,
the participant first must obtain all other available distributions and
all nontaxable loans currently available under the Plan and all other
qualified plans maintained by the Employer, and a special limitation may
apply to the participant's elective deferrals in the following taxable
year.
The Advisory Committee will provide you a withdrawal election form.
Other than the withdrawal rights described in this Section (12) and the
post-age 70 1/2 distribution requirement described in Section (11), the
Plan does not permit you to receive payment of any portion of your
account balance for any other reason, unless you terminate employment
with the Employer.
(13) Disability Benefits. If you terminate employment because of
disability, the Plan will pay your vested account balance to you in lump
sum at the same time as it would pay your vested account balance for any
other termination of employment. However, if your vested account balance
exceeds $3,500, the disability distribution rules are subject to any
election requirements described in Section (11). In general, disability
under the Plan means because of a physical or mental disability you are
unable to perform the duties of your customary position of employment
for an indefinite period which, in the opinion of the Advisory
Committee, will be of long continued duration. The Advisory Committee
also considers you disabled if you terminate employment because of a
permanent loss or loss of use of a member or function of your body or a
permanent disfigurement. The Advisory Committee may require a physical
examination in order to confirm the disability.
(14) Payment of Benefits upon Death. If you die prior to receiving all
of your benefits under the Plan, the Plan will pay the balance of your
account to your beneficiary. If the Employer permits the Plan to
purchase life insurance on your life with a portion of your account
balance, your account balance also will receive any life insurance
proceeds payable by reason of your death.
The Advisory Committee will provide you with an appropriate form for
naming a beneficiary. If you are married, your spouse must consent to
the designation of any nonspouse beneficiary. If your vested account
balance payable to your designated beneficiary does not exceed $3,500,
the Plan will pay the benefit, in lump sum, to your designated
beneficiary as soon as administratively practicable after your death. If
your vested account balance payable to your designated beneficiary
exceeds $3,500, the Plan will pay the benefit to your designated
beneficiary, in the form and at the time elected by the beneficiary,
unless, prior to your death, you specify the timing and form of the
beneficiary's distribution. The benefit payment election generally must
complete distribution of your account balance within five years of your
death, unless distribution commences within one year of your death to
your designated beneficiary or unless benefits had commenced prior to
your death under the mandatory post-age 70 1/2 distribution requirements
described in Section (11).
(15) Disqualification of Participant Status - Loss or Denial of
Benefits. There are no specific Plan provisions which disqualify you as
a participant or which cause you to lose plan benefits, except as
provided in Sections (7) and (10). However, if you become disabled and
do not receive compensation from the Employer, you will not receive an
allocation of the Employer's contribution to the Plan during the period
of disability. In addition, if your Plan benefits become payable after
termination of employment and the Advisory Committee is unable to locate
you at your last address of record, you may forfeit your benefits under
the Plan. Therefore, it is very important that you keep the Employer
apprised of your mailing address even after you have terminated
employment. Finally, if the Employer terminates the Plan, which it has
the right to do, you would receive benefits under the Plan based on your
account balance accumulated to the date of the termination of the Plan.
Termination of the Plan could occur before you attain normal retirement
age. If the Employer terminates the Plan, your account will become 100%
vested, if not already 100% vested, unless you forfeited the nonvested
portion prior to the termination date.
The termination of the Plan does not permit you to receive a
distribution from your Deferral Contributions account unless: (1) you
otherwise have the right to a distribution, as described in Sections
(11) and (12); or (2) the Employer does not maintain a successor defined
contribution plan. If you are able to receive a distribution only
because the Employer does not maintain a successor defined contribution
plan, you must agree to take that distribution as part of a lump sum
payment of your entire account balance under the Plan. The Trustee will
transfer to the successor defined contribution plan any portion of your
interest the Plan is unable to distribute to you.
The fact that the Employer has established this Plan does not confer any
right to future employment with the Employer. Furthermore, you may not
assign your interest in the Plan to another person or use your Plan
interest as collateral for a loan from a commercial lender.
(16) Claims Procedure. You need not file a formal claim with the
Advisory Committee in order to receive your benefits under the Plan.
When an event occurs which entitles you to a distribution of your
benefits under the Plan, the Advisory Committee automatically will
notify you regarding your distribution rights. However, if you disagree
with the Advisory Committee's determination of the amount of your
benefits or with any other decision the Advisory Committee may make
regarding your interest in the Plan, the Plan contains the appeal
procedure you should follow. In brief, if the Advisory Committee of the
Plan determines it should deny benefits to you, the Plan Administrator
will give you written notice of the specific reasons for the denial. The
notice will refer you to the pertinent provisions of the Plan supporting
the Advisory Committee's decision. If you disagree with the Advisory
Committee, you, or a duly authorized representative, must appeal the
adverse determination in writing to the Advisory Committee within 75
days after the receipt of the notice of denial of benefits. If you fail
to appeal a denial within the 75-day period, the Advisory Committee's
determination will be final and binding.
If you appeal to the Advisory Committee, you, or your duly authorized
representative, must submit the issues and comments you feel are
pertinent to permit the Advisory Committee to re-examine all facts and
make a final determination with respect to the denial. The Advisory
Committee, in most cases, will make a decision within 60 days of a
request on appeal unless special circumstances would make the rendering
of a decision within the 60-day period unfeasible. In any event, the
Advisory Committee must render a decision within 120 days after its
receipt of a request for review. The same procedures apply if, after
your death, your beneficiary makes a claim for benefits under the Plan.
(17) Retired Participant, Separated Participant with Vested Benefit,
Beneficiary Receiving Benefits. If you are a retired participant or
beneficiary receiving benefits, the benefits you presently are receiving
will continue in the same amount and for the same period provided in the
mode of settlement selected at retirement. If you are a separated
participant with a vested benefit, you may obtain a statement of the
dollar amount of your vested benefit upon request to the Plan
Administrator. There is no Plan provision which reduces, changes,
terminates, forfeits, or suspends the benefits of a retired participant,
a beneficiary receiving benefits or a separated participant's vested
benefit amount, except as provided in Section (15).
(18) Participant's Rights under ERISA. As a participant in this Plan,
you are entitled to certain rights and protections under the Employee
Retirement Income Security Act of 1974 (ERISA). ERISA provides that all
Plan participants are entitled to:
(a) Examine, without charge, at the Plan Administrator's office
and at other specified locations (such as worksites), all Plan
documents, including insurance contracts and copies of all documents
filed by the Plan with the U.S. Department of Labor, such as detailed
annual reports and plan descriptions.
(b) Obtain copies of all Plan documents and other Plan information
upon written request to the Plan Administrator. The Plan Administrator
may make a reasonable charge for the copies.
(c) Receive a summary of the Plan's annual financial report. ERISA
requires the Plan Administrator to furnish each participant with a copy
of this summary annual report.
(d) Obtain a statement telling you that you have a right to
receive a retirement benefit at the normal retirement age under the Plan
and what your benefit could be at normal retirement age if you stop
working under the Plan now. If you do not have a right to a retirement
benefit, the statement will advise you of the number of additional years
you must work to receive a retirement benefit. You must request this
statement in writing. The law does not require the Plan Administrator to
give this statement more than once a year. The Plan must provide the
statement free of charge.
In addition to creating rights for Plan participants, ERISA imposes
duties upon the people who are responsible for the operation of the
employee benefit plan. The people who operate this Plan, called
"fiduciaries" of the Plan, have a duty to do so prudently and in the
interest of you and other Plan participants and beneficiaries. No one,
including your Employer, your union or any other person may fire you or
otherwise discriminate against you in any way to prevent you from
obtaining a retirement benefit or from exercising your rights under
ERISA.
If your claim for a retirement benefit is denied in whole or in part,
you must receive a written explanation of the reason for the denial. You
have the right to have the Plan review and reconsider your claim.
Under ERISA, there are steps you can take to enforce the above rights.
For instance, if you request materials from the Plan and do not receive
the materials within 30 days, you may file suit in a Federal court. In
such a case, the court may require the Plan Administrator to provide the
materials and pay you up to $100 a day until you receive the materials,
unless the materials were not sent because of reasons beyond the control
of the Plan Administrator. If you have a claim for benefits which is
denied or ignored, in whole or in part, you may file suit in a state or
Federal court. If it should happen that Plan fiduciaries misuse the
Plan's money, or if you are discriminated against for asserting your
rights, you may seek assistance from the U.S. Department of Labor, or
you may file suit in a Federal court. The court will decide who should
pay court costs and legal fees. If you are successful, the court may
order the person you have sued to pay these costs and fees. If you lose,
the court may order you to pay these costs and fees, for example, if it
finds your claim is frivolous.
If you have any questions about your Plan, you should contact the Plan
Administrator. If you have any questions about this statement or about
your rights under ERISA, you should contact the nearest Area Office of
the U.S. Labor-Management Services Administration, Department of Labor.
(19) Federal Income Taxation of Benefits Paid. Existing Federal income
tax laws do not require you to report as income the portion of the
annual Employer contribution allocated to your account. However, when
the Plan later distributes your account balance to you, such as upon
your retirement, you must report as income the Plan distributions you
receive. The Federal tax laws may permit you to report a Plan
distribution under a special averaging provision. Also, it may be
possible for you to defer Federal income taxation of a distribution by
making a "rollover" contribution to your own rollover individual
retirement account or to another qualified plan. We emphasize you should
consult your own tax adviser with respect to the proper method of
reporting any distribution you receive from the Plan.
(20) Participant Loans. This Plan permits the Advisory Committee to
adopt a policy under which the Plan may make loans to participants and
beneficiaries. A copy of the loan policy adopted by the Advisory
Committee is attached to this summary plan description as Exhibit A.
INTERSTATE POWER COMPANY 401(k) PLAN
INVESTMENT POLICY
The Trustee will make available, the following investment funds for
participant directed investments:
* A Money Market Fund which will have as its primary
objective stability of principal.
* A GIC Fund which will have as its primary objective the
stability of principal and as its secondary objective, current
income.
* A Bond Fund which will have as its primary objective the
maximization of current income and as its secondary objective,
stability of principal.
* A Stock Fund which will have as its primary objective
capital appreciation.
An Interstate Power Company Stock Account will have as
its primary objective a high level of current income and as
its secondary objective, moderate capital appreciation.
A participant may direct the investment of his or her account into the
above investment funds in the proportion the participant chooses.
The participant may change his or her investment election to be
effective on the first day of the following calendar quarter, if the
election form has been received by the Plan Administrator (Employer) 10
days in advance of the beginning of the quarter.
Election forms to be used for initial and subsequent investment
elections may be obtained from either the employer or the Trustee.
If a participant fails at any time to have an effective investment
election form on file, then the Trustee will invest that participants
account 100% in the Money Market Fund.
INTERSTATE POWER COMPANY 401(k) PLAN
LOAN POLICY
Exhibit A
The Advisory Committee of the Interstate Power Company 401(k) Plan
adopts the following loan policy pursuant to the terms of the Plan.
1. LOAN APPLICATION. Any Plan participant may apply for a loan
from the Plan. For purposes of this loan policy, the term "participant"
means any participant or beneficiary who is party in interest (as
determined under ERISA Section 3(14)) with respect to the Plan. A
participant must apply for each loan in writing with an application
which specifies the amount of the loan desired, the requested duration
for the loan and the source of security for the loan. The Advisory
Committee will not approve any loan if a participant is not
creditworthy.
In order to be creditworthy, the participant must have established
in his or her community, a reputation which would entitle him or her to
a similar loan from a commercial or business lender. In applying for the
loan from the Plan, each participant must give full authority to
investigate his or her creditworthiness.
2. LIMITATION ON LOAN AMOUNT/PURPOSE OF LOAN. The Advisory
Committee will not approve any loan to a participant in an amount which
exceeds 50% of his or her nonforfeitable accrued benefit (account
balance), as reflected by the books and records of the Plan. The maximum
aggregate dollar amount of loans outstanding to any participant may not
exceed $50,000 as aggregated with all participant loans from other
employer qualified plans, reduced by the excess of the participant's
highest outstanding participant loan balance during the 12-month period
ending on the date of the loan over the participant's current
outstanding participant loan balance on the date of the loan. A
participant may not request a loan for less than $1,000.00.
3. EVIDENCE AND TERMS OF LOAN. The Advisory Committee will
document every loan in the form of a promissory note signed by the
participant for the face amount of the loan, together with a
commercially reasonable rate of interest. The Advisory Committee will
determine the appropriate interest rate by obtaining at least one quote
from a financial institution, as chosen by the Advisory Committee, that
is in the business of lending money. The interest rate quote(s) must
take into account the term of the loan, the security on that loan, the
creditworthiness of the participant, whether the interest rate is
adjustable during the term of the loan, and the intended use of the loan
proceeds, if known, and must reflect a commercially reasonable rate for
the geographical region in which the participant lives. If participants
in the Plan live in different geographical regions, the Advisory
Committee may establish a uniform commercially reasonable interest rate
applicable to all regions based on information obtained from at least
one region in which participants live. The Advisory Committee must
reevaluate interest rates for new loans made more than one month since
the last loan made by the Plan.
A loan may provide a fixed rate of interest or an adjustable rate
of interest, as negotiated between the Advisory Committee and the
participant. The Advisory Committee will determine whether the interest
rate is commercially reasonable at the time it approves the loan and, in
the case of an adjustable rate loan, at the time of each scheduled
adjustment. A loan must provide at least quarterly payments under a
level amortization schedule, however, under this loan policy all loans
must include monthly payments through payroll deduction while the
participant is employed. The policy requires monthly payments if the
borrower is not employed.
The loan may permit a suspension of payments for a period not
exceeding one year which occurs during an approved leave of absence. The
Advisory Committee will fix the term for repayments of any loan,
however, in no instance may the term of repayment be greater than five
years, unless the loan qualifies as a home loan. The Advisory Committee
may fix the term for repayment of a home loan for a period not to exceed
30 years. A "home loan" is a loan used to acquire a dwelling unit which,
within a reasonable time, the participant will use as a principal
residence.
Participants should note the law treats the amount of any loan
(other than a "home loan") not repaid five years after the date of the
loan as a taxable distribution on the last day of the five year period
or, if sooner, at the time the loan is in default. If a participant
extends a non-home loan having a five year or less repayment term beyond
five years, the balance of the loan at the time of the extension is a
taxable distribution to the participant.
Reasonable administrative fees, including application and annual
maintenance fees, will be assessed to the borrowing participant's
account.
4. SECURITY FOR LOAN. A participant must secure each loan with an
irrevocable pledge and assignment of 50% of the nonforfeitable amount of
the borrowing participant's accrued benefit under the Plan or other
security (e.g., principal residence) the Advisory Committee accepts and
finds to be adequate, or both 50% of the participant's accrued benefit
and other security. The Advisory Committee may request the borrowing
participant to secure each loan with additional collateral acceptable to
the Advisory Committee or to substitute collateral given for the loan.
Generally, an irrevocable pledge and assignment of 50% of the
nonforfeitable amount of the borrowing participant's accrued benefit
will be the only security required unless the loan is a home loan.
5. FORM OF PLEDGE. If the participant secures the loan wholly or
partly with 50% of his vested accrued benefit, the pledge and assignment
of that portion of his accrued benefit will be in the form attached to
this Loan Policy.
6. DEFAULT/RISK OF LOSS. The Advisory Committee will treat this
loan in default if:
(a) any scheduled payment remains unpaid more than 90 days;
(b) the making or furnishing of any representation or
statement to the Plan by or on behalf of the participant which
proves to have been false in any material respect when made or
furnished;
(c) loss, theft, damage, destruction, sale or encumbrance to
or of any of the collateral, or the making of any levy seizure or
attachment thereof or thereon;
(d) death, dissolution, insolvency, business failure,
appointment of receiver of any part of the property of, assignment
for the benefit of creditors by, or the commencement of any
proceeding under any bankruptcy or insolvency laws of, by or
against the participant.
The participant will have the opportunity to repay the loan, resume
current status of the loan by paying any missed payment plus interest
or, if distribution is available under the plan, request distribution of
the note. If the loan remains in default, the Advisory Committee has the
option of foreclosing on any other security it holds or, to the extent
a distribution to the participant is permissible under the Plan, offset
the participant's vested account balance by the outstanding balance of
the loan. The Advisory Committee will treat the note as repaid to the
extent of any permissible offset. Pending final disposition of the note,
the participant remains obligated for any unpaid principal and accrued
interest.
The Plan intends this loan program not to place other participants
at risk with respect to their interests in the Plan. In this regard, the
Advisory Committee will administer any participant loan as a participant
directed investment of that portion of the participant's vested account
balance equal to the outstanding principal balance of the loan. The Plan
will credit that portion of the participant's interest with the interest
earned on the note and with principal payments received by the
participant. The Plan also will charge that portion of the participant's
account balance with expenses directly related to the organization,
maintenance and collection of the note.
Dated this 30 day of November , 19 93 .
J. C. McGowan /s/
D. D. Jannette /s/
J. E. Thill /s/
ADVISORY COMMITTEE