IOWA-ILLINOIS GAS AND ELECTRIC COMPANY
SUPPLEMENTAL RETIREMENT PLAN FOR DESIGNATED OFFICERS
October 1993
I. ESTABLISHMENT
Iowa-Illinois Gas and Electric Company, an Illinois
corporation, (the "Company") hereby amends and restates
the Company's Supplemental Retirement Plan for Principal
Officers as the Company's Supplemental Retirement Plan for
Designated Officers (the "Plan"), effective as of July 1,
1993.
II. PURPOSE
The purpose of the Plan is to enable the Company and its
subsidiaries to attract, retain, and motivate persons of
outstanding competence, and to provide appropriate
supplemental retirement and survivor benefits to
Designated Officers of the Company.
III. CONSTRUCTION
Section 3.1. Definitions. Whenever used herein, the
following terms shall have the respective meanings set
forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Cause" means a Participant's discharge from the
employment of the Company because such Participant
willfully engages in conduct, or lack thereof, that
is demonstrably and materially injurious to the
Company, its business reputation of financial
structure, but shall not include a Qualifying
Termination. Determination of "Cause" shall be made
by the Committee in the exercise of good faith and
reasonable judgement and approved by the Board.
(c) "Change in Control" means either:
(i) Approval by the shareholders of the Company of a
plan of merger, consolidation, or reorganization
of the Company unless at least sixty percent
(60%) of the members of the board of directors
of the corporation resulting from such merger,
consolidation, or reorganization were members of
the Incumbent Board; or
(ii) The occurrence of any other event that is
designated as being a "Change in Control" by a
majority vote of the directors of the Incumbent
Board who are not also employees of the Company.
(d) "Change-in-Control Benefit" means:
(i) For a Participant who has made an effective
Transitional Election, a Normal Supplemental
Retirement Benefit reduced at the rate of four
percent (4%) for each full year that, on the
effective date of a Qualifying Termination, the
Participant's age is less than sixty-three (63)
years; provided, however, that the Change-in-
Control Benefit shall in all cases be no less
than thirty percent (30%) of a Normal
Supplemental Retirement Benefit;
(ii) For all Participants that have not made an
effective Transitional Election (including all
individuals who first become Participants
following the Effective Date), a pro rata
portion of a Normal Supplemental Retirement
Benefit, based upon the ratio of: (a) the
Participant's years of service (to the full day)
as a Designated Officer or Principal Officer on
the effective date of his or her Qualifying
Termination to (b) the number of years (to the
full day) from the day the Participant became a
Designated Officer or Principal Officer to the
day such Participant would have otherwise
reached his or her Normal Retirement Date;
provided, however, that the Change-In-Control
Benefit shall in all cases be no less than
thirty percent (30%) of a Normal Supplemental
Retirement Benefit.
(e) "Code" means the Internal Revenue code of 1986, as
amended.
(f) "Committee" means an Administrative Committee
comprised of Company employees selected by the
President of the Company and approved by the Board to
administer the Plan pursuant to Article IV herein.
(g) "Designated Officer" is an officer of the Company or
its subsidiaries who has been authorized by the Board
to participate in the Plan.
(h) "Disability" means a Termination of Services
resulting from a total and permanent disability of a
Participant, within the meaning of Code Section
22(e)(3), as a result of a medically determinable
physical or mental impairment which renders such
Participant unable to engage in any substantial
gainful employment, and which can be expected to be
of indefinite duration. Such Disability shall be
determined by the Committee in the exercise of good
faith and reasonable judgment in reliance on
competent medical advice from one or more qualified
individuals selected by the Committee.
(i) "Disability Benefit" means, for such Participant, the
Normal Supplemental Retirement Benefit computed as
though the Participant were age sixty-five (65),
regardless of his or her actual age on the date of
Termination of Services due to such Disability.
(j) "Early Retirement Supplemental Benefit" means:
(i) For each Participant who has made an effective
Transitional Election, a Normal Supplemental
Retirement Benefit reduced at the rate of four
percent (4%) for each full year that, on the
effective date of Termination of Services, such
Participant's age is less that sixty-five (65)
years, with such rate of reduction extending
down to age fifty-five (55). An Early
Retirement Supplemental Benefit will not be
available to any Participant whose Termination
of Services occurs prior to attaining age five
(55) years;
(ii) For a Participant who has not made an effective
Transitional Election (including all individuals
that first became Participants following the
Effective Date), a pro rata portion of a Normal
Supplemental Retirement Benefit, based on the
ratio of: (a) the Participant's years of
service (to the full day) as a Designated
Officer or Principal Officer on the effective
day of the Termination of Services {but
excluding all years of service as a Designated
Officer or Principal Officer prior to the
Participant reaching the age of forty-five to
(b) the number of years (to the full day) from
the day the Participant became a Designated
Officer or Principal Officer {but excluding all
years of service as a Designated Officer or
Principal Officer prior to the Participant
reaching the age of forty-five (45)} to the day
the Participant would have otherwise reached his
or her Normal Retirement.
(k) "Early Retirement" means, for each Participant, the
Termination of Services of such Participant other
than because of death, Disability, Cause, or
Qualifying Termination, but prior to such
Participant's Normal Retirement.
(l) "Early Retirement Date" means the first day of the
month next following the date of Early Retirement.
(m) "Effective Date" means April 26, 1991.
(n) "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, or any
successor thereto.
(o) "Incumbent Board" means the members of the Board on
April 26, 1991. For this purpose, an individual who
becomes a member of the Board subsequent to April 26,
1991 and who has been nominated for election by the
Company's shareholders by resolution adopted by a
vote of at least two-thirds of the directors then
comprising the Incumbent Board at a duly convened
meeting thereof shall be deemed to be a member of the
Incumbent Board.
(p) "Normal Supplemental Retirement Benefit" means the
annual benefit provided under the Plan upon a
Termination of Services on or following a
Participant's Normal Retirement Date, in the amount
of sixty-five percent (65%) of such Participant's
highest rate of annual Total Cash Compensation in
effect at any time during the three (3) years
immediately prior to such Termination of Services
reduced by the sum of:
(i) the annual benefits provided to such Participant
under the Company's (tax qualified) Pension
Plan; and
(ii) tax qualified and non tax-qualified pension type
retirement plan benefits payable to such
Participant by other employers of such
converting such benefits to an actuarially
equivalent amount as provided in the Company's
(tax qualified) Pension Plan, as determined by
the Committee in the exercise of good faith and
reasonable judgment.
(q) "Normal Retirement" means, for each Participant, the
Termination of Services of such Participant upon
attaining age sixty-five (65) years.
(r) "Normal Retirement Date" means the first day of the
month next following the date of Normal Retirement.
(s) "Participant" means an officer of the Company or its
subsidiaries who has been approved by the Board, and
any retired individual who has a vested accrued
benefit under the Plan as specified in Article V.
(t) "Plan Year" means the calendar year beginning
January 1 and ending December 31.
(u) "Principal Officer" means a member of the Chairman's
Advisory Committee of the Company prior to July 1,
1993.
(v) "Qualifying Termination" means a Termination of
Services of a Participant within twenty-four (24)
full calendar months immediately after a Change in
Control either: (i) involuntarily for any reason or
(ii) voluntarily, provided that such Participant has
furnished six (6) full months prior written notice of
his or her intent to voluntarily terminate employment
to the President of the corporation resulting from
such Change in Control.
(w) "Rabbi Trust" means a grantor trust, within the
meaning of Sections 671-678 of the Code, established
by the Company for the benefit of the Participants,
both active and retired, and the Participants' desig-
nated beneficiaries, as specified in Article VIII.
(x) "Survivor's Benefit" means the benefit payable to a
Participant's designated beneficiary or estate under
the Plan as specified in section 6.5 in the event of
such Participant's death. The annual amount of the
Survivor's Benefit shall equal the annual amount of
such Participant's Normal Retirement Benefit
(determined as if such Participant were age sixty-
five (65) and without regard to such Participant's
actual age at the time of death or the age of his or
her designated beneficiary.
(y) "Termination of Services" means the severing of a
Participant's employment with the Company for any
reason.
(z) "Total Cash Compensation" means the amount payable to
a Participant by the Company as annual salary,
without regard to deferrals.
(aa) "Transitional Election" means a statement signed by a
Principal Officer, who was a Participant immediately
prior to the Effective Date, and delivered to the
President of the Company prior to February 1, 1994
which expresses an irrevocable election by the
Participant to be eligible for the benefits provided
by the Plan (which, in most respects, provide
benefits that are similar to those provided prior to
the Plan's April 26, 1991 amendment and restatement).
Designated Officers or Principal Officers who become
Participants after the Effective Date shall not be
allowed to make a Transitional Election.
Section 3.2. Gender and Number. Except when otherwise
indicated by the context, any masculine term used herein
also shall include the feminine; the plural shall include
the singular; and the singular shall include the plural.
Section 3.3. Severability. In the event any provision of
the Plan shall be held illegal or invalid for any reason,
the illegality or invalidity shall not affect the
remaining parts of the Plan; and the Plan shall be
construed and enforced as if the illegal or invalid
provision had not been included.
IV. ADMINISTRATION
Section 4.1. The Committee. The Plan shall be
administered within the guidelines contained in this
Article IV by an Administrative Committee comprised of
Company employees selected by the President of the Company
and approved by the Board. The Committee may delegate the
responsibility of performing ministerial acts to such
administrative agents as it deems advisable or desirable
to carry out the purpose of the Plan.
Section 4.2. Authority of the Committee. Subject to
ratification by the Board, the Committee shall have the
power to construe and interpret the Plan and any agreement
or instrument entered into hereunder; to prescribe, amend,
or waive rules and regulations for the Plan's
administration; and to make any other determination which
may be necessary or advisable for the Plan's
administration. The Committee may correct any defect or
supply any omission or reconcile any inconsistency in the
Plan in the manner and to the extent reasonable to effect
its purpose.
The Company may elect to insure the lives of Participants;
in such case, Participants must agree to undergo physical
examinations and otherwise cooperate in obtaining such
insurance as a condition precedent to participation in the
Plan. Any such life insurance policies shall be owned by
and be considered a general asset of the Company. Subject
to Section 7.2, no Participant or beneficiary shall have
any rights to or interest in or shall be entitled to any
benefits under such policies.
Section 4.3. Decisions Binding. All determinations and
decisions made by the Committee pursuant to the provisions
of the Plan, as ratified by the Board, and all related
orders or resolutions of the Board shall be final,
conclusive, and binding on all persons, including the
Company, its shareholders, employees, the Participants and
their estates and designated beneficiaries.
The Board shall have the full power to amend or terminate
the Plan at any time prior to the occurrence of a Change
in Control, as further described in article VII herein.
V. ELIGIBILITY AND PARTICIPATION
Section 5.1. Participation. Upon approval by the
Board,Designated Officers shall automatically become
Participants under the Plan. Retired individuals who have
a vested accrued benefit under the Plan will also be
considered to be Participants.
Section 5.2. No Employment Guarantee. Neither this Plan
nor any action taken hereunder shall be construed as
giving a Participant the right to be retained as an
employee of the Company for any period.
VI. BENEFITS
Section 6.1. Benefits Upon Normal Retirement. Upon a
Participant's Normal Retirement, the Company shall pay to
such Participant, as compensation for services rendered
prior to such date, the Normal Supplemental Retirement
Benefit in equal monthly installments commencing on the
Normal Retirement Date and continuing on the first day of
each month thereafter during the lifetime of such
Participant.
Section 6.2. Benefits Upon Early Retirement. Upon a
Participant's Early Retirement, the Company shall pay to
the Participant, as compensation for services rendered
prior to such date, an Early Retirement Supplemental
Benefit in equal monthly installments commencing on the
later of (i) the Participant's Early Retirement Date; or
(ii) the first day of the month next following the date on
which such Participant attains age fifty-five (55); and,
in all cases, continuing on the first day of each month
thereafter during the lifetime of such Participant.
Section 6.3. Benefits Upon Disability. Upon a
Participant's Termination of Services for Disability, the
Company shall pay to the Participant, as compensation for
services rendered prior to such date, a Disability Benefit
in equal monthly installments commencing on the first day
of the month next following the date of Termination of
Services due to such Disability and continuing on the
first day of each month thereafter during the lifetime of
such Participant.
Section 6.4. Benefits Upon a Qualifying Termination.
After a Participant's Qualifying Termination, the Company
shall pay to the Participant, as compensation for services
rendered prior to such date, his or her Change-in-Control
Benefit in equal monthly installments commencing on the
later of: (i) the first day of the month next following
the effective date of such Qualifying Termination; or (ii)
the first day of the month next following the date that
the Participant attains age fifty-five (55); and, in all
cases, continuing on the first day of each month
thereafter during the lifetime of such Participant.
Section 6.5. Benefits Upon Death. Upon a Participant's
death, the Company shall pay to such Participant's
designated beneficiary or estate, as appropriate, the
following Survivor's Benefit;
(a) Death Prior to Commencement of Benefits. If a
Participant dies prior to commencement of the payment
of any benefit hereunder, the Company shall pay to
such Participant's designated beneficiary or estate
the Survivor's Benefit in one hundred eighty (180)
equal monthly installments commencing on the first
day of the month following such date of death and
receipt of a death certificate by the Company, and
continuing on the first day of each month thereafter
until the one hundred eighty (180) payments have been
made.
(b) Death After Commencement of Benefits. If a
Participant dies after commencement of the payment of
any benefit hereunder, the Company shall pay to the
Participant's surviving spouse two-thirds of the
Survivor's Benefit commencing on the first day of the
month following such date of death and receipt of a
death certificate by the Company and continuing on
the first day of each month thereafter for the
remaining lifetime of the surviving spouse.
(c) Payment by the Company of the benefit in section 6.5
(a) or (b) shall relieve the Company of the
obligation to pay a Normal Supplemental Retirement
Benefit, an Early Retirement Supplemental Benefit, a
Disability Benefit, a Change-in-Control Benefit, or
any other benefit which the Participant might have
otherwise received under the Plan.
(d) In the event a Participant dies, without a surviving
spouse, after commencement of the payment of any
benefits hereunder, all benefits hereunder shall
cease to be paid as of the date of death, and the
Company shall have no further obligation to the
Participant (or the Participant's estate and/or
beneficiaries) for purposes of this Plan.
Section 6.6. Forfeiture Upon Termination for Cause. Upon
a Participant's Termination of Services for Cause, such
Participant shall immediately forfeit all rights and
benefits provided under the Plan, and the Company shall
have no further obligation to such Participant under the
Plan.
Section 6.7. General Payout Restrictions. No benefits
shall be paid under this Plan prior to the actual
Termination of Services of a Participant.
VII. INDIVIDUAL ACCOUNTS AND THE RABBI TRUST
Section 7.1. Establishment of a Rabbi Trust. After the
Effective Date, the Company shall establish a revocable
Rabbi Trust for the benefit of the Participants, both
active and retired. The Rabbi Trust shall have an
independent trustee, selected by the Company, and, it
shall contain restrictions on the Company's ability to
amend or terminate any of the terms thereof after the
Rabbi Trust shall become irrevocable as provided in
Section 7.2.
All assets held in the Rabbi Trust (while revocable or
irrevocable) shall at all times be specifically subject to
the claims of the Company's general creditors in the event
of bankruptcy or insolvency; such terms shall be
specifically defined within the provisions of the Rabbi
Trust, along with a required procedure for notifying the
Trustee of any such bankruptcy or insolvency.
Section 7.2. Causing the Trust to Become Irrevocable.
The instrument establishing the Rabbi Trust shall provide
that the Rabbi Trust shall be revocable until the
occurrence of either of the following:
(i) A Change in Control; or
(ii) A majority vote by the Incumbent Board to make the
Rabbi Trust irrevocable.
Section 7.3. Payment of Benefits from the Trust. The
Company shall be primarily obligated to pay all benefits
of Participants under the Plan, whether the Rabbi Trust is
revocable or irrevocable at the time. In the event the
Company fails to fulfill any such obligation hereunder in
a timely manner, the Trustee shall be empowered, under the
terms of the Rabbi Trust, to either cash in the related
life insurance policies or to borrow against the policies,
to the extent necessary to pay past due benefits directly
from the Trust.
VIII. BENEFICIARY DESIGNATION
Section 8.1. Designation of Beneficiary. Each
Participant shall be entitled to designate one or more
beneficiaries by filing a signed, written notice of such
designation with the Committee, in a form as the Committee
may prescribe. A Participant may revoke or modify a
beneficiary designation at any time by filing a new
beneficiary designation form with the Committee.
Section 8.2. Payment to a Participant's Estate. A
Participant's beneficiary designation shall be deemed
automatically revoked in the event all designated
beneficiaries predecease such Participant or, if the sole
beneficiary is such Participant's spouse, in the event of
dissolution of marriage. In such event, or in the event a
Participant does not designate a beneficiary, the benefits
under Section 6.5(a) shall be paid to such Participant's
estate.
IX. MISCELLANEOUS
Section 9.1. Unfunded Plan. This Plan is intended to be
an unfunded plan maintained primarily to provide benefits
to a "select group of management or highly compensated
employees" within the meaning of Sections 201, 301, and
401 of ERISA and, therefore, is further intended to be
exempt from the provisions of Parts 2, 3, and 4 of Title I
of ERISA. Accordingly, the Committee may terminate the
Plan for any or all Participants in order to achieve and
maintain this intended result, provided that previously
accrued benefits hereunder shall not be reduced or
otherwise adversely affected without the written consent
of all affected Participants.
Section 9.2. Withholding. The Company shall have the
right to require Participants to remit to the Company an
amount sufficient to satisfy Federal, state, and local tax
withholding tax requirements, or to deduct from any or all
payments made pursuant to the Plan amounts sufficient to
satisfy such withholding tax requirements.
Section 9.3. Costs of the Plan. All costs of
implementing and administering the Plan shall be borne by
the Company.
Section 9.4. Nontransferability. Neither the
Participants nor any designated beneficiary shall have the
right to sell, assign, transfer, or otherwise convey the
right to receive any payment hereunder; nor shall any such
payment be subject to attachment, garnishment, levy,
pledge, bankruptcy, or any other manner or kind of
execution in connection with any claim against the
Participants or any designated beneficiary thereof.
Section 9.5. Successors. All obligations of the Company
under the Plan shall be binding upon and inure to the
benefit of any successor to the Company, whether the
existence of such successor is the direct or indirect
result of a merger, consolidation, or reorganization
involving the Company or the purchase or other acquisition
of all or substantially all of the business and/or assets
of the Company.
Section 9.6. Address of Participant or Beneficiary. Each
Participant shall keep the Company apprised of his or her
current address and that of any designated beneficiary
during his or her participation in the Plan. Upon the
death of a Participant, any beneficiaries entitled to
receive benefit payment under the Plan shall keep the
Company apprised of their current address until the entire
amount to be distributed has been paid.
Section 9.7. Applicable Law. To the extent not preempted
by Federal law, the Plan shall be governed by and
construed in accordance with the laws of the state of
Illinois.