EX-99.7
INTERSTATE POWER COMPANY IRREVOCABLE TRUST AGREEMENT - 1997
This Agreement made this 29th day of December, 1997, by and between
Interstate Power Company ("Company") and American Trust & Savings Bank, of
Dubuque, Iowa ("Trustee");
(a) WHEREAS, Company has adopted the non-qualified deferred
compensation Plan as listed in Appendix 1.
(b) WHEREAS, Company has incurred or expects to incur liability
under the terms of such Plan with respect to the individuals participating
in such Plan;
(c) WHEREAS, Company wishes to establish a trust (hereinafter called
"Trust") and to contribute to the Trust assets that shall be held
therein, subject to the claims of Company's creditors in the event of
Company's Insolvency, as herein defined, until paid to Plan participants
and their beneficiaries in such manner and at such times as specified in
the Plan;
(d) WHEREAS, it is the intention of the parties that this Trust
shall constitute an unfunded arrangement and shall not affect the status
of the Plan as an unfunded plan maintained for the purpose of providing
deferred compensation for a select group of management or highly
compensated employees for purposes of Title I of the Employee Retirement
Income Security Act of 1974;
(e) WHEREAS, it is the intention of Company to make contributions to
the Trust to provide itself with a source of funds to assist it in the
meeting of its liabilities under the Plan;
NOW, THEREFORE, the parties do hereby establish the Trust and agree
that the Trust shall be comprised, held and disposed of as follows:
Section 1. Establishment of Trust
(a) Company hereby deposits with Trustee in trust $4,400,000, which
shall become the principal of the Trust to be held, administered and
disposed of by Trustee as provided in this Trust Agreement.
(b) The Trust hereby established shall be irrevocable.
(c) The Trust is intended to be a grantor trust, of which Company
is the grantor, within the meaning of sub-part E, part I subchapter J,
chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended,
and shall be construed accordingly.
(d) The principal of the Trust, and any earnings thereon shall be
held separate and apart from other funds of Company and shall be used
exclusively for the uses and purposes of Plan participants and general
creditors as herein set forth. Plan participants and their beneficiaries
shall have no preferred claim on, or any beneficial ownership interest
in, any assets of the Trust. Any rights created under the Plan and this
Trust Agreement shall be mere unsecured contractual rights of Plan
participants and their beneficiaries against Company. Any assets held by
the Trust will be subject to the claims of Company's general creditors
under federal and state law in the event of Insolvency, as defined in
Section 3(a) herein.
(e) Within 60 days following the end of the Plan years, ending after
the Trust has become irrevocable pursuant to Section 1(b) hereof, Company
shall be required to irrevocably deposit additional cash or other property
to the Trust in an amount sufficient to pay each Plan participant or
beneficiary the benefits payable pursuant to the terms of the Plan as of
the close of the Plan year.
Section 2. Payments to Plan Participants and Their Beneficiaries.
(a) Company shall deliver to Trustee a schedule (the "Payment
Schedule") that indicates the amounts payable in respect of each Plan
participant (and his or her beneficiaries), that provides a formula or
other instructions acceptable to Trustee for determining the amounts so
payable, the form in which such amount is to be paid (as provided for or
available under the Plan, and the time of commencement for payment of
such amounts. Except as otherwise provided herein, Trustee shall make
payments to the Plan participants and their beneficiaries in accordance
with such Payment Schedule. The Trustee shall make provision for the
reporting and withholding of any federal, state or local taxes that may
be required to be withheld with respect to the payment of benefits
pursuant to the terms of the Plan and shall pay amounts withheld to the
appropriate taxing authorities or determine that such amounts have been
reported, withheld and paid by Company.
(b) The entitlement of a Plan participant or his or her
beneficiaries to benefits under the Plan shall be determined by Company
or such party as it shall designate under the Plan, and any claim for
such benefits shall be considered and reviewed under the procedures set
out in the Plan.
(c) Company may make payment of benefits directly to Plan
participants or their beneficiaries as they become due under the terms of
the Plan. Company shall notify Trustee of its decision to make payment of
benefits directly prior to the time amounts are payable to participants
or their beneficiaries. In addition, if the principal of the Trust, and
any earnings thereon, are not sufficient to make payments of benefits in
accordance with the terms of the Plan, Company shall make the balance of
each such payment as it falls due. Trustee shall notify Company where
principal and earnings are not sufficient.
Section 3. Trustee Responsibility Regarding Payments to Trust
Beneficiary When Company is Insolvent.
(a) Trustee shall cease payment of benefits to Plan participants
and their beneficiaries if the Company is Insolvent. Company shall be
considered "Insolvent" for purposes of this Trust Agreement if (i)
Company is unable to pay its debts as they become due, or (ii) Company is
subject to a pending proceeding as a debtor under the United States
Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided
in Section 1(d) hereof, the principal and income of the Trust shall be
subject to claims of general creditors of Company under federal and state
law as set forth below.
(1) The Board of Directors and the Chief Executive Officer of
Company shall have the duty to inform Trustee in writing of Company's
Insolvency. If a person claiming to be a creditor of Company alleges in
writing to Trustee that Company has become Insolvent, Trustee shall
determine whether Company is Insolvent and, pending such determination,
Trustee shall discontinue payment of benefits to Plan participants or
their beneficiaries.
(2) Unless Trustee has actual knowledge of Company's Insolvency, or
has received notice from Company or a person claiming to be a creditor
alleging that Company is Insolvent, Trustee shall have no duty to inquire
whether Company is Insolvent. Trustee may in all events rely on such
evidence concerning Company's solvency as may be furnished to Trustee and
that provides Trustee with a reasonable basis for making a determination
concerning company's solvency.
(3) If at any time Trustee has determined that Company is
Insolvent, Trustee shall discontinue payments to Plan participants or
their beneficiaries and shall hold the assets of the Trust for the
benefit of Company's general creditors. Nothing in this Trust Agreement
shall in any way diminish any rights of Plan participants or their
beneficiaries to pursue their rights as general creditors of Company with
respect to benefits due under the Plan or otherwise.
(4) Trustee shall resume the payment of benefits to Plan
participants or their beneficiaries in accordance with Section 2 of this
Trust Agreement only after Trustee has determined that Company is not
Insolvent (or is no longer Insolvent).
(c) Provided that there are sufficient assets, if Trustee
discontinues the payment of benefits from the Trust pursuant to Section
3(b) hereof and subsequently resumes such payments, the first payment
following such discontinuance shall include the aggregate amount of all
payments due to Plan participants or their beneficiaries under the terms
of the Plan for the period of such discontinuance, less the aggregate
amount of any payments made to Plan participants or their beneficiaries by
Company in lieu of the payments provided for hereunder during any such
period of discontinuance.
Section 4. Payments to Company.
Except as provided in Section 3 hereof, Company shall have no right
or power to direct Trustee to return to Company or to divert to others any
of the Trust assets before all payments of benefits have been made to Plan
participants and their beneficiaries pursuant to the terms of the Plan.
Notwithstanding the above, if the merger between the Company, W.P.L.
Holdings, Inc. and IES Industries, Inc. is not finalized on or before May
10, 1998, the Company shall have the right and power to direct the Trustee
to return to the Company all of the Trust assets.
Section 5. Investment Authority.
(a) In no event may Trustee invest in securities (including stock or
rights to acquire stock) or obligations issued by Company, other than a
de minimis amount held in common investment vehicles in which Trustee
invests. All rights associated with assets of the Trust shall be
exercised by Trustee or the person designated by Trustee, and shall in no
event be exercisable by or rest with Plan participants.
Company shall have the right, at anytime, and from time to time in
its sole discretion, to substitute assets of equal fair market value for
any asset held by the Trust.
Section 6. Disposition of Income.
(a) During the term of this Trust, all income received by the Trust,
net of expenses shall be accumulated and reinvested.
Section 7. Accounting by Trustee.
Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing
between Company and Trustee. Within sixty
(60) days following the close of each calendar year and within fifteen
(15) days after the removal or resignation of Trustee, Trustee shall
deliver to Company a written account of its administration of the Trust
during such year or during the period from the close of the last
preceding year to the date of such removal or resignation, setting forth
all investments, receipts, disbursements and other transactions effected
by it, including a description of all securities and investments purchased
and sold with the cost or net proceeds of such purchases or sales (accrued
interest paid or receivable being shown separately), and showing all cash,
securities and other property held in the Trust at the end of such year or
as of the date of such removal or resignation, as the case may be.
Section 8. Responsibility of Trustee.
(a) Trustee shall act with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in
like capacity and familiar with such matters would use in the conduct of
an enterprise of a like character and with like aims, provided, however,
that Trustee shall incur no liability to any person for any action taken
pursuant to a direction, request or approval given by Company which is
contemplated by, and in conformity with, the terms of the Plan or this
Trust and is given in writing by Company. In the event of a dispute
between Company and a party, Trustee may apply to a court of competent
jurisdiction to resolve the dispute.
(b) If Trustee undertakes or defends any litigation arising in
connection with this Trust, Company agrees to indemnify Trustee against
Trustee's costs, expenses and liabilities (including, without limitation,
attorneys' fees and expenses) relating thereto and to be primarily liable
for such payments. If Company does not pay such costs, expenses and
liabilities in a reasonably timely manner, Trustee may obtain payment
from the Trust.
(c) Trustee may consult with legal counsel (who may also be counsel
for Company generally) with respect to any of its duties or obligations
hereunder.
(d) Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist it in
performing any of its duties or obligations hereunder.
(e) Trustee shall have, without exclusion, all powers conferred on
Trustees by applicable law, unless expressly provided otherwise herein,
provided, however, that if an insurance policy is held as an asset of the
Trust, Trustee shall have no power to name a beneficiary of the policy
other than the Trust, to assign the policy (as distinct from conversion
of the policy to a different form) other than to a successor Trustee, or
to loan to any person the proceeds of any borrowing against such policy.
(f) Notwithstanding any powers granted to Trustee pursuant to this
Trust Agreement or to applicable law, Trustee shall not have any power
that could give this Trust the objective of carrying on a business and
dividing the gains therefrom, within the meaning of Section 301.7701-2 of
the Procedure and Administrative Regulations promulgated pursuant to the
Internal Revenue Code.
Section 9. Compensation and Expenses of Trustee.
Company shall pay all administrative and Trustee's fees and
expenses. If not so paid, the fees and expenses shall be paid from the
Trust.
Section 10. Resignation and Removal of Trustee.
(a) Trustee may resign at any time by written notice to Company,
which shall be effective ninety (90) days after receipt of such notice
unless Company and Trustee agree otherwise.
(b) Provided the majority of the participants or beneficiaries
entitled to payment of benefits pursuant to the terms of the Plan approve,
the trustee may be removed by Company on thirty (30) days notice or upon
shorter notice accepted by Trustee.
(c) Upon resignation or removal of Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the
successor Trustee. The transfer shall be completed within thirty (30)
days after receipt of notice of resignation, removal or transfer, unless
Company extends the time limit.
(d) If Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 11 hereof, by the effective date of
resignation or removal under paragraphs (a) or (b) of this section. If no
such appointment has been made, Trustee may apply to a court of competent
jurisdiction for appointment of a successor or for instructions. All
expenses of Trustee in connection with the proceeding shall be allowed as
administrative expenses of the Trust.
Section 11. Appointment of Successor.
(a) If Trustee resigns or is removed in accordance with Section 10
(a) or (b) hereof, Company must appoint a bank trust department or other
party that may be granted corporate trustee powers under state law, as a
successor to replace Trustee upon resignation or removal. The
appointment shall be effective when accepted in writing by the new
Trustee, who shall have all of the rights and powers of the former
Trustee, including ownership rights in the Trust assets. The former
Trustee shall execute any instrument necessary or reasonably requested by
Company or the successor Trustee to evidence the transfer.
(b) The successor Trustee need not examine the records and acts of
any prior Trustee and may retain or dispose of existing Trust assets,
subject to Sections 7 and 8 hereof. The successor Trustee shall not be
responsible for and Company shall indemnify and defend the successor
Trustee from any claim or liability resulting from any action or inaction
of any prior Trustee or from any other past event, or any condition
existing at the time it becomes successor Trustee.
Section 12. Amendment or Termination.
(a) This Trust Agreement may be amended by a written instrument
executed by Trustee and Company. Notwithstanding the foregoing, no such
amendment shall conflict with the terms of the Plan or shall make the
Trust revocable after it has become irrevocable in accordance with Section
l(b) hereof.
(b) The Trust shall not terminate until the date on which Plan
participants and their beneficiaries are no longer entitled to benefits
pursuant to the terms of the Plan. Upon termination of the Trust any
assets remaining in the Trust shall be returned to Company.
(c) Upon written approval of participants or beneficiaries entitled
to payment of benefits pursuant to the terms of the Plan, Company may
terminate this Trust prior to the time all benefit payments under the Plan
have been made. All assets in the Trust at termination shall be returned
to Company.
(d) Notwithstanding anything herein to the contrary, any provision
of this Trust which is subject to the approval of the participants or
beneficiaries entitled to payment of benefits pursuant to the terms of the
Plan, may not be amended without the unanimous approval of the
participants or beneficiaries.
Section 13. Miscellaneous.
(a) Any provision of this Trust Agreement prohibited by law shall
be ineffective to the extent of any such prohibition, without invalidating
the remaining provisions hereof.
(b) Benefits payable to Plan participants and their beneficiaries
under this Trust Agreement may not be anticipated, assigned (either at law
or in equity), alienated, pledged, encumbered or subjected to attachment,
garnishment, levy, execution or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed in
accordance with the laws of Iowa.
This Trust Agreement shall be binding upon the successors in interest
of the parties hereto.
Section 14. Effective Date.
The effective date of this Trust Agreement shall be December 29,
1997.
INTERSTATE POWER COMPANY
By: /s/ Michael R. Chase
Michael R. Chase, President and Chief
Executive Officer
AMERICAN TRUST & SAVINGS BANK, TRUSTEE
By: /s/ Robert J. Donovan
Robert J. Donovan,
Senior Vice President and
Trust Officer