IOWA-ILLINOIS GAS AND ELECTRIC COMPANY
COMPENSATION DEFERRAL 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 Compensation Deferral Plan for Principal
Officers as the Company's Compensation Deferral 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 executives
of outstanding competence by providing, among other
benefits, the opportunity to defer a portion of their
Total Cash Compensation. The Plan permits each
Participant to custom design his or her individual level
of retirement income.
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" shall mean a Participant's discharge from
the employment of the Company because the
Participant willfully engages in conduct, or lack
thereof, that is demonstrably and materially
injurious to the Company, its business reputation,
or financial structure. Determination of "Cause"
shall be made by the Committee in the exercise of
good faith and reasonable judgment 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 reorgani-
zation 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
Iowa-Illinois Gas and Electric Company.
(d) "Change-in-Control Benefit" means, with respect to
each Participant, his or her Early Retirement
Benefit, computed as of the effective date of his
or her Qualifying Termination as though such
Participant were age fifty-five (55) at such time,
or his or her actual age if greater. If a
Participant is age sixty-five (65) or older upon
the effective date of Qualifying Termination, his
or her "Change-in-Control Benefit" shall equal his
or her Normal 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.
(g) "Deferred Compensation" means the amount of Total
Cash Compensation which such Participant and the
Committee mutually agree shall be deferred in any
given Plan Year in accordance with the provisions
of the Plan.
(h) "Designated Officer" is an officer of the Company
or its subsidiaries who has been authorized by the
Board to participate in the Plan.
(i) "Disability" means a Termination of Services
resulting from a total and permanent disability of
a Participant, within the meaning of Section
22(e)(3) of the Code, 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 continue for an 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.
(j) "Disability Benefit" means, with respect to each
Participant, his or her Early Retirement Benefit
computed as though such Participant were age fifty-
five (55) or such Participant's actual age if
greater. If a Participant is age sixty-five (65)
or older at the date of Termination of Services,
"Disability Benefit" means his or her Normal
Retirement Benefit.
(k) "Early Retirement Benefit" means:
(i) For deferrals made by a Participant prior to
January 1, 1994, his or her Normal Retirement
Benefit reduced by a cumulative percentage,
based upon his or her actual age on the
effective date of Termination of Services with
the Company, as follows:
Age of Participant Percentage Reduction
Upon Termination for Each Year Prior to
of Services Normal Retirement Age 65
65 or more 0%
55 to less than 65 4%
The cumulative percentage reduction is such
that a Termination of Services at age fifty-
five (55) would result in a forty percent
(40%) reduction in the Normal Retirement
Benefit [i.e., ten (10) years at four percent
(4%)].
(ii) For deferrals made by a Participant after
December 31, 1993, his or her Normal
Retirement Benefit reduced by a cumulative
percentage, based upon his or her actual age
on the effective date of Termination of
Services with the Company, as follows:
Age of Participant Percentage Reduction
Upon Termination for Each Year Prior to
of Services Normal Retirement Age 65
65 or more 0%
62 to less than 65 4%
50 to less than 62 6%
This reduction is cumulative such that a
Termination of Services at age fifty-five (55)
would result in a fifty-four percent (54%)
reduction in the Normal Retirement Benefit
[i.e., three (3) years at four percent (4%),
plus seven (7) years at six percent (6%)].
(l) "Early Retirement" means, with respect to each
Participant, the effective date of Termination of
Services of such Participant other than because of
death, Disability, Cause, or Qualifying Termination
after such Participant has attained age fifty (50)
for deferrals made after December 31, 1993, and age
fifty-five (55) for deferrals made prior to
January 1, 1994, but in all cases prior to such
Participant's Normal Retirement Date.
(m) "Early Retirement Date" means the first day of the
month next following the date of Early Retirement.
(n) "Effective Date" means April 26, 1991.
(o) "Eligible Employee" means a Designated Officer of
the Company, as further provided in Article V.
(p) "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time,
or any successor thereto.
(q) "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 and 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.
(r) "Normal Retirement Benefit" means a benefit
provided under the Plan in an amount determined by
the Committee prior to the beginning of each Plan
Year, payable as described herein upon a
Participant's Normal Retirement Date, based upon:
(i) the amount of Total Cash Compensation deferred
by such Participant in such Plan Year; (ii) the age
of such Participant at the time of making each
deferral; and (iii) the Rate of Return pertaining
to each deferral as established by the Committee
for each Plan year in which a deferral is made.
Table I attached to this document, entitled "Iowa-
Illinois Revised Benefit Table," specifies the
Normal Retirement Benefit amount for deferrals made
in the Plan year beginning January 1, 1991 and each
Plan Year thereafter until such table is revised by
action of the Committee.
(s) "Normal Retirement" means, for each Participant,
the Termination of Services of such Participant
upon attaining age sixty-five (65) years.
(t) "Normal Retirement Date" means the first day of the
month next following the date of Normal Retirement.
(u) "Participant" means an Eligible Employee who has
been approved by the Board, or a retired individual
who has a vested accrued benefit under the Plan, as
specified in Section 5.2.
(v) "Participation Agreement" means the agreement
executed by an Eligible Employee and the Committee
which identifies the amount of Deferred
Compensation for such Eligible Employee for a given
Plan Year pursuant to the Plan, such Agreement to
be in such form as may be determined by the
Committee.
(w) "Plan Year" means the calendar year beginning
January 1 and ending December 31.
(x) "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.
(y) "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' designated beneficiaries, as
specified in Article VIII.
(z) "Rate of Return" means the rate of interest that
will be earned on Deferred Compensation made under
the Plan in the event a Participant experiences a
Termination of Services which results in the
payment of Normal Retirement Benefits, Early
Retirement Benefits, Survivor Benefits, or
Disability Benefits, such Rate of Return to be
established prior to the beginning of each Plan
Year by the Committee, in its sole discretion, and
disclosed to the Participants at such time.
Table I attached to this document, entitled "Iowa-
Illinois Revised Benefit Table," specifies the Rate
of Return for Deferred Compensation in the Plan
Year beginning January 1, 1991, and each Plan Year
thereafter until such Rate of Return is revised by
action of the Committee.
(aa) "Survivor's Benefit" means the benefit payable to a
Participant's designated beneficiary or estate
under the Plan, as specified in Section 7.5(a), in
the event of such Participant's death prior to the
commencement of the payment of any benefit
hereunder. Table I attached, entitled "Iowa-
Illinois Revised Benefit Table," specifies the
Survivor's Benefit amount for deferrals made in the
Plan Year beginning January 1, 1991 and each Plan
Year thereafter until such table is revised by
action of the Committee.
(bb) "Termination of Services" means the severing of a
Participant's employment with the Company for any
reason.
(cc) "Total Cash Compensation" means the amount payable
to a Participant by the Company as an annual
salary, without regard to deferrals.
Section 3.2. Gender and Number. Unless otherwise
required 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, such illegality or invalidity shall not affect
the remaining provisions 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 shall deem
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 manner of investment of Deferred Compensation
hereunder shall be in the sole discretion of the
Committee. The Company may elect to insure the lives of
Participants, in which 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 considered a general
asset of the Company. Subject to Section 8.2, no
Participant or designated 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.
V. ELIGIBILITY AND PARTICIPATION
Section 5.1. Eligibility. All Designated Officers
shall be eligible to participate in the Plan.
Section 5.2. Participation. Upon approval by the
Board, Eligible Employees shall be notified of their
ability to elect to make deferrals under the Plan. Upon
receiving notification of eligibility, and at the
beginning of each Plan Year thereafter, each Eligible
Employee desiring to become a Participant under the Plan
must complete and return to the Company a Participation
Agreement, as described in section 6.2, before any
deferrals can be made under the Plan.
Retired individuals who have a vested accrued benefit
under the Plan will also be considered to be
Participants.
Section 5.3. No Employment Guarantee. Neither the
existence of the 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. DEFERRAL OPPORTUNITY
Section 6.1. Amount Which May Be Deferred. For the
1992 and 1993 Plan Years, each Participant may defer
twenty five percent (25%) of his or her Total Cash
Compensation. For each Plan Year beginning thereafter,
each Participant may defer a maximum of fifteen percent
(15%) of his or her Total Cash Compensation.
The Committee may establish, from time to time, a
minimum level of Total Cash Compensation which may be
deferred hereunder in any Plan Year.
Section 6.2. Participation Agreement. Each Eligible
Employee shall identify the amount of Deferred
Compensation in any Plan Year by the execution of a
Participation Agreement prior to the beginning of such
Plan Year. A Participation Agreement shall be sent to
each Eligible Employee by the Committee at least fifteen
(15) calendar days prior to the beginning of each Plan
Year. The amount of Deferred Compensation shall reduce
the Total Cash Compensation otherwise payable to such
Eligible Employee during such Plan Year by ratably
deducting an equal amount from the Participant's salary
for each pay period.
Such Participation Agreement shall remain in effect for
the entire Plan Year unless earlier amended or modified
pursuant to Section 6.3.
Section 6.3. Modification of Deferral During Plan Year.
The Committee, in its sole discretion, may permit
prospective modifications to a Participation Agreement
for the remainder of a Plan Year, but only for the
purpose of decreasing or terminating the amount to be
deferred.
A request to decrease or terminate the amount to be
deferred under a Participation Agreement shall be
submitted by a Participation agreement shall be
submitted by a Participant in writing to the Committee
and shall set forth in detail the reasons for the
requested modification. If a modification shall be
granted by the Committee, such modification shall be
effective for the balance of the Plan Year to which such
Participation Agreement relates.
VII. BENEFITS
Section 7.1. 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, his or her Normal
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 7.2. 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, his or her Early Retirement Benefit
in equal monthly installments commencing on the Early
Retirement Date and continuing on the first day of each
month thereafter during the lifetime of such
Participant.
Section 7.3. 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 following the
date of Termination of Services due to such Disability
and continuing on the first day of each month thereafter
until the first day of the month following such
Participant's attaining his or her Normal Retirement
Date, at which time the Company shall commence paying
his or her Normal Retirement Benefit.
Section 7.4. 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, payable in equal monthly
installments commencing on the later of: (i) the first
day of the month next following the effective date of
the Qualifying Termination; or (ii) the first day of the
month next following the date that the Participant
achieves age fifty-five (55); and in all cases,
continuing on the first day of each month thereafter
during the lifetime of the Participant.
Section 7.5. Benefits Upon Death. Upon a Participant's
death, the Company shall pay to such Participant's
designated beneficiary or estate, as appropriate, the
following 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 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 benefits hereunder (but prior to receiving
one hundred eighty (180) such payments), the
Company shall continue the payment of his or her
Normal Retirement Benefit, Early Retirement
Benefit, Disability Benefit or Change-in-Control
Benefit to his or her designated beneficiary or
estate until a total of one hundred eighty (180)
payments (including those previously paid to the
Participant) have been made.
Following a Participant's death, in the event the
Participant's beneficiary dies before receiving the
remainder of the one hundred eighty (180) of the
above described Normal Retirement Benefit, Early
Retirement Benefit, Disability Benefit or Change-
in-Control Benefit payments, the then remaining
payments shall be paid to the beneficiary's estate
in equal monthly installments until the one hundred
eighty (180) payments have been made or, in the
event the beneficiary is a spouse, to the
beneficiary of the spouse as elected pursuant to
the beneficiary election form.
(c) Payment by the Company of the benefit in Section
7.5(a) or (b) shall relieve the Company of the
obligation to pay a Normal Retirement Benefit, an
Early Retirement Benefit, a Disability Benefit, or
a Change-in-Control Benefit or any other benefit
which the Participant might have otherwise received
under the Plan.
Section 7.6. Benefits Upon Termination for Cause. Upon
a Participant's Termination of Services for Cause, the
Company shall pay, as compensation for services rendered
prior to such date and in complete fulfillment of all
its obligations under the Plan, an amount equal to the
aggregate of all of such Participant's Deferred
Compensation hereunder, together with interest
compounded annually on all such deferrals at five
percent (5%) per annum from the respective dates of such
deferrals. Such amount shall be paid in a lump sum as
soon as administratively practicable, but in no event
later than January 31 of the year following the date of
such Termination of Services.
Section 7.7. Benefits Upon Other Termination of
Services. Upon Termination of Services prior to a
Participant's Normal Retirement Date for any reason
other than death, Disability, Early Retirement,
Qualifying Termination, or Cause, the Company shall pay
to such Participant such Participant's total Deferred
Compensation previously deferred hereunder with interest
compounded annually on all such deferrals (beginning
with the dates of such deferrals and continuing until
paid to such Participant). Interest shall be at the
prime lending rate, as determined and adjusted by the
Committee on a basis no less frequent than annually.
The payment of such amount shall be made in a lump sum
as soon as administratively practicable, but in no event
later than January 31 of the year following the date of
such Termination of Services.
Section 7.8. General Payout Restrictions. No benefits
will be paid under this Plan prior to the actual
Termination of Services of the Participant.
VIII. INDIVIDUAL ACCOUNTS AND THE RABBI TRUST
Section 8.1. 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 8.2.
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 8.2. 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 8.3. 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.
IX. BENEFICIARY DESIGNATION
Section 9.1. 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 9.2. 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 7.5 shall be
paid to such Participant's estate.
X. MISCELLANEOUS
Section 10.1. 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 10.2. 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 10.3. Costs of the Plan. All costs of
implementing and administering the Plan shall be borne
by the Company.
Section 10.4. 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 10.5. 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 10.6. 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 10.7. 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.
Officers' Deferred Compensation
IOWA-ILLINOIS REVISED BENEFIT TABLE
TABLE 1
ASSUMES ONE $10,000 DEFERRAL
ANNUAL 15 YRS
RETIRE- CERTAIN ANNUAL TOTAL RATE
MENT TOTAL SURVIVOR SURVIVOR OF
AGE BENEFIT BENEFIT BENEFIT BENEFIT RETURN
30 48,250 723,750 25,000 375,000 11.00%
31 45,170 677,550 23,908 358,620
32 42,288 634,320 22,864 342,960
33 39,590 593,850 21,866 327,990
34 37,064 555,960 20,912 313,680
35 34,700 520,500 20,000 300,000 11.60%
36 32,097 481,455 19,126 286,890
37 29,690 445,350 18,291 274,365
38 27,464 411,960 17,493 262,395
39 25,404 381,060 16,729 250,935
40 23,500 352,500 16,000 240,000 12.20%
41 21,509 322,635 15,348 230,220
42 19,688 295,320 14,724 220,860
43 18,021 270,315 14,125 211,875
44 16,496 247,440 13,550 203,250
45 15,100 226,500 13,000 195,000 12.80%
46 13,671 205,065 12,128 181,920
47 12,379 185,685 11,315 169,725
48 11,208 168,120 10,557 158,355
49 10,149 152,235 9,849 147,735
50 9,190 137,850 9,190 137,850 13.40%
51 8,329 124,935 8,329 124,935
52 7,550 113,250 7,550 113,250
53 6,844 102,660 6,844 102,660
54 6,203 93,045 6,203 93,045
55 5,624 84,360 5,624 84,360 14.50%
56 4,956 74,340 4,956 74,340
57 4,368 65,520 4,368 65,520
58 3,850 57,750 3,850 57,750
59 3,394 50,910 3,394 50,910
60 2,992 44,880 2,992 44,880 15.00%
61 2,601 39,015 2,601 39,015
62 2,262 33,930 2,262 33,930
63 1,967 29,505 1,967 29,505
64 1,711 25,665 1,711 25,665
65 1,487 22,305 1,487 22,305
12/21/92