EXHIBIT 10(f)
IES UTILITIES INC. GRANTOR TRUST
FOR DEFERRED COMPENSATION AGREEMENTS
THIS AGREEMENT, made this 15th day of August, 1997, by and between
IES UTILITIES INC. ("the Company") and NORWEST BANK IOWA, N.A. (the
"Trustee");
W I T N E S S E T H:
WHEREAS, the Company has adopted or entered into the nonqualified
deferred compensation plans and agreements (the "Plans") listed in
Appendix A;
WHEREAS, the Company has incurred or expects to incur liability
under the terms of such Plans with respect to the individuals
participating in such Plans;
WHEREAS, the Company wishes to establish a trust (the "Trust") and
to contribute to the Trust assets that shall be held therein, subject to
the claims of the Company's creditors in the event of the 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
Plans;
WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of
the Plans as unfunded plans 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; and
WHEREAS, it is the intention of the 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 Plans;
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
1.1 The Company hereby deposits with the Trustee, in trust, the
sum of $1,000, which shall become the principal of the Trust to be held,
administered and disposed of by the Trustee as provided in this Trust
Agreement.
1.2 The Trust hereby established shall be irrevocable.
1.3 The Trust is intended to be a grantor trust, of which the
Company is the grantor, within the meaning of subpart E, part I,
subchapter J, chapter 1, subtitle A of the Internal Revenue Code of
1986, as amended, and shall be construed accordingly.
1.4 The principal of the Trust, and any earnings thereon, shall be
held separate and apart from other funds of the 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 Plans and this Trust Agreement shall be mere unsecured
contractual rights of Plan participants and their beneficiaries against
the Company. Any assets held by the Trust will be subject to the claims
of the Company's general creditors under federal and state law in the
event of Insolvency, as defined in Section 3.1 herein.
1.5 Within ten business days following a Change in Control, the
Company shall make an irrevocable contribution to the Trust in an amount
that is equal to the sum of the participants' and beneficiaries' account
balances established pursuant to the terms of the Plans as of the date
of the Change in Control.
1.6 As of each December 31 following a Change in Control
("Valuation Date"), the Company shall determine the amount of the
contribution which would have been required pursuant to Section 1.5 if
the Change in Control had occurred on such Valuation Date. If the
amount so determined exceeds the fair market value of the Trust assets
on such Valuation Date, the Company shall, within ten business days
following such Valuation Date, make an irrevocable contribution to the
Trust in an amount which is not less than such excess.
1.7 The Company, in its sole discretion, may at any time, or from
time to time, make additional deposits of cash or other property in
trust with the Trustee to augment the principal to be held, administered
and disposed of by the Trustee as provided in this Trust Agreement.
Neither the Trustee nor any Plan participant or beneficiary shall have
any right to compel such additional deposits.
SECTION 2
PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES
2.1 The Company shall deliver to the Trustee a schedule (the
"Payment Schedule") that indicates the amounts payable in respect of
each Plan participant (and his or her beneficiaries), or that provides a
formula or other instructions acceptable to the Trustee for determining
the amounts so payable, the form in which such amount is to be paid (as
provided for or available under the Plans), and the time of commencement
for payment of such amounts. Except as otherwise provided herein, the
Trustee shall make payments to the Plan participants and their
beneficiaries in accordance with the most recent Payment Schedule
received by the Trustee. 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 Plans and shall pay amounts withheld to the
appropriate taxing authorities or determine that such amounts have been
reported, withheld and paid by the Company.
2.2 The entitlement of a Plan participant or his or her
beneficiaries to benefits under the Plans shall be determined by the
Company or such party as it shall designate under the Plans, and any
claim for such benefits shall be considered and reviewed under the
procedures set out in the Plans.
2.3 The Company may make payment of benefits directly to Plan
participants or their beneficiaries as they become due under the terms
of the Plans. The Company shall notify the 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 Plans, the
Company shall make the balance of each such payment as it falls due.
The Trustee shall notify the Company where principal and earnings are
not sufficient.
SECTION 3
TRUSTEE RESPONSIBILITY REGARDING PAYMENTS
TO TRUST BENEFICIARY WHEN COMPANY IS INSOLVENT
3.1 The Trustee shall cease payment of benefits to Plan
participants and their beneficiaries if the Company is Insolvent. The
Company shall be considered "Insolvent" for purposes of this Trust
Agreement if it is unable to pay its debts as they become due, or
if it is subject to a pending proceeding as a debtor under the United
States Bankruptcy Code.
3.2 At all times during the continuance of this Trust, as provided
in Section 1.4 hereof, the principal and income of the Trust shall be
subject to claims of general creditors of the Company under federal and
state law as set forth below.
a. The Board of Directors and the Chief Executive Officer of
the Company shall have the duty to inform the Trustee in writing of
the Company's Insolvency. If a person claiming to be a creditor of
the Company alleges in writing to the Trustee that the Company has
become Insolvent, the Trustee shall determine whether the Company
is Insolvent and, pending such determination, the Trustee shall
discontinue payment of benefits to Plan participants or their
beneficiaries.
b. Unless the Trustee has actual knowledge of the Company's
Insolvency, or has received notice from the Company or a person
claiming to be a creditor alleging that the Company is Insolvent,
the Trustee shall have no duty to inquire whether the Company is
Insolvent. The Trustee may in all events rely on such evidence
concerning the Company's solvency as may be furnished to the
Trustee and that provides the Trustee with a reasonable basis for
making a determination concerning the Company's solvency.
c. If at any time the Trustee has determined that the
Company is Insolvent, the Trustee shall discontinue payments to
Plan participants or their beneficiaries and shall hold the assets
of the Trust for the benefit of the 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 the Company with respect to benefits
due under the Plans or otherwise.
d. The Trustee shall resume the payment of benefits to Plan
participants or their beneficiaries in accordance with Section 2 of
this Trust Agreement only after the Trustee has determined that the
Company is not Insolvent (or is no longer Insolvent).
3.3 Provided that there are sufficient assets, if the Trustee
discontinues the payment of benefits from the Trust pursuant to Section
3.2 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 Plans for the period of such discontinuance, less the aggregate
amount of any payments made to Plan participants or their beneficiaries
by the 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, after the Trust has become
irrevocable, the Company shall have no right or power to direct the
Trustee to return to the Company or to divert to others any of the Trust
assets before all payment of benefits have been made to Plan
participants and their beneficiaries pursuant to the terms of the Plans.
SECTION 5
INVESTMENT AUTHORITY
5.1 Except as otherwise specifically provided herein, and subject
to such investment guidelines as may be adopted by the Company and
delivered to the Trustee, the Trustee may invest, reinvest, and hold the
assets of the Trust in whatever form of investment the Trustee may see
fit (including, but not limited to, contracts or policies of insurance),
and in making or holding such investments, the Trustee shall not be
restricted to those investments which are authorized by the laws of any
state for the investment of trust funds.
5.2 The Company may at any time, and from time to time, appoint
one or more investment managers to manage and control all or any part of
the Trust's assets. Any such investment manager shall be a registered
investment adviser under the Investment Advisers Act of 1940; a bank, as
defined in that Act; or an insurance company that is qualified to
manage, acquire or dispose of the Plans' assets under the laws of more
than one state. Upon receipt of written notice of the appointment of an
investment manager, the Trustee shall segregate the portion of the
assets of the Trust to be managed by the investment manager into a
separate "Investment Manager Account." An investment manager shall
have full discretion and authority to invest, reinvest or dispose of the
Trust assets in its Investment Manager Account, and the Trustee shall
follow the directions of an investment manager with respect to the
investment of Trust assets allocated to such Investment Manager's
Account; provided, however, that if the Trustee shall not have received
contrary instructions from an investment manager, the Trustee may invest
for short term purposes any cash in its custody in short term, cash
equivalent investments or in common or collective funds composed
thereof. To the extent necessary to comply with the directions of an
investment manager. The Company may terminate the appointment of an
investment manager at any time, in which event the Company shall either
appoint a successor to such investment manager or direct the Trustee to
return the assets in the Investment Manager's Account to the
unsegregated portion of the Trust.
SECTION 6
DISPOSITION OF INCOME
During the term of this Trust, all income received by the Trust,
net of expenses and taxes, shall be accumulated and reinvested.
SECTION 7
ACCOUNTING BY TRUSTEE
The 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 the Company and the Trustee. Within 60 days
following the close of each calendar year, and within 60 days after the
removal or resignation of the Trustee, the Trustee shall deliver to the
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
8.1 The 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 the Trustee shall incur no liability to any
person for any action taken pursuant to a direction, request or approval
given by the Company or an investment manager which is contemplated by,
and in conformity with, the terms of the Plans or this Trust and is
given in writing by the Company or such investment manager. In the
event of a dispute between the Company and a party, the Trustee may
apply to a court of competent jurisdiction to resolve the dispute.
8.2 If the Trustee undertakes or defends any litigation arising in
connection with this Trust, the Company agrees to indemnify the Trustee
against the Trustee's costs, expenses and liabilities (including,
without limitation, attorneys' fees and expenses) relating thereto and
to be primarily liable for such payments. If the Company does not pay
such costs, expenses and liabilities in a reasonably timely manner, the
Trustee may obtain payment from the Trust.
8.3 The Trustee may consult with legal counsel (who may also be
counsel for the Company generally) with respect to any of its duties or
obligations hereunder.
8.4 The 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, and
may reasonably compensate them out of the Trust assets.
8.5 The 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, the 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.
8.6 Notwithstanding any powers granted to the Trustee pursuant to
this Trust Agreement or to applicable law, the 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
301.7700-2 of the Procedure and Administrative Regulations promulgated
pursuant to the Internal Revenue Code.
SECTION 9
COMPENSATION AND EXPENSES OF TRUSTEE
The Company shall pay all administrative and the Trustee's fees and
expenses. If not so paid, the fees and expenses shall be paid from the
Trust.
SECTION 10
RESIGNATION OR REMOVAL OF TRUSTEE
10.1 The Trustee may resign at any time by written notice to the
Company, which shall be effective 30 days after receipt of such notice
unless the Company and the Trustee agree otherwise.
10.2 Prior to a Change in Control, the Trustee may be removed by
the Company on 30 days notice or upon shorter notice accepted by the
Trustee. Following a Change in Control, the Trustee may not be removed
by the Company unless 65% of all employees or former employees of the
Company who are or may become entitled to the payment of benefits
pursuant to the Plans consent in writing to such removal.
10.3 Upon resignation or removal of the Trustee and appointment of
a successor Trustee, all assets shall subsequently be transferred to the
successor Trustee. The transfer shall be completed within 30 days after
receipt of notice of resignation, removal or transfer, unless the
Company extends the time limit.
10.4 If the 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 Section 10.1 or 10.2 of this section.
If no such appointment has been made, the Trustee may appoint a
successor Trustee or it may apply to a court of competent jurisdiction
for appointment of a successor or for instructions. All expenses of the
Trustee in connection with the proceeding shall be allowed as
administrative expenses of the Trust.
SECTION 11
APPOINTMENT OF SUCCESSOR
11.1 If the Trustee resigns or is removed in accordance with
Section 10.1 or 10.2 hereof, the Company, or if a Change in Control
shall previously have occurred the Company and at least 65% of all
employees or former employees of the Company who are or may become
entitled to the payment of benefits pursuant to the Plans, may appoint
any third party, such as a bank trust department or other party that may
be granted corporate trustee powers under state law, as a successor to
replace the 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 the Company or the
successor Trustee to evidence the transfer.
11.2 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 the 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 a successor Trustee.
SECTION 12
AMENDMENT OR TERMINATION
12.1 This Trust Agreement may be amended by a written instrument
executed by the Trustee and the Company. Notwithstanding the foregoing,
no such amendment shall conflict with the terms of the Plans or shall
make the Trust revocable after it has become irrevocable in accordance
with Section 1.2 hereof.
12.2 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 Plans. Upon termination of the Trust any
assets remaining in the Trust shall be returned to the Company.
12.3 Notwithstanding the foregoing:
a. This Trust Agreement may not be amended by the Company
prior to a Change in Control without the written approval of any
Plan participant or beneficiary whose rights or protections under
a Plan or this Agreement may be reduced, impaired, or otherwise
adversely affected by the amendment.
b. This Trust Agreement may not be amended by the Company
following a Change in Control without the written approval of all
employees or former employees of the Company who are, or may
become, entitled to the payment of benefits pursuant to the Plans.
c. The Company may terminate this Trust prior to the date
specified in Section 12.2 upon the written approval of all
employees or former employees of the Company who are or may become
entitled to the payment of benefits pursuant to the Plans.
SECTION 13
MISCELLANEOUS
13.1 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.
13.2 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.
13.3 This Trust Agreement shall be governed by and construed in
accordance with the laws of Iowa, except to the extent the same are
preempted by federal law.
13.4 This Trust Agreement shall be binding upon, and shall inure to
the benefit of, any successor (whether direct or indirect, by purchase,
merger, consolidation, or otherwise) to all or substantially all of the
business or assets of the Company. The Company (and any successor to
the Company) may not otherwise assign its obligations under this Trust
Agreement without the prior written approval of all employees or former
employees of the Company who are, or may become, entitled to the payment
of benefits pursuant to the Plans; provided, however, that, subsequent
to the merger of IES Industries Inc. with WPL Holdings, Inc. and
Interstate Power Company in accordance with the Agreement and Plan of
Merger dated November 10, 1995, as amended, and prior to a Change in
Control, the Company (or its successor) may assign its obligations under
this agreement to any corporation, 100% of the stock of which is owned
(either directly or through one or more subsidiaries) by the entity
resulting from such merger.
13.5 For the purposes of this Trust Agreement, Change in Control
shall mean:
a. the purchase or other acquisition by any person, entity
or group of persons, within the meaning of section 13(d) or 14(d)
of the Securities Exchange Act of 1934, or any comparable successor
provisions, of ownership (within the meaning of Rule 13d-3
promulgated under that Act) of 20% or more of the combined voting
power of IES Industries Inc.'s outstanding voting securities
entitled to vote generally in the election of directors;
b. the approval by the stockholders of IES Industries Inc.
of a reorganization, merger or consolidation, in each case, with
respect to which persons who were stockholders of IES Industries
Inc. immediately prior to such reorganization, merger or
consolidation do not, immediately thereafter, own more than 50% of
the combined voting power of the reorganized, merged or
consolidated entity's then outstanding securities entitled to vote
generally in the election of directors;
c. the approval by the stockholders of IES Industries Inc.
of a liquidation or dissolution of IES Industries Inc. or of the
sale of all or substantially all of IES Industries Inc.'s assets;
or
d. the failure of individuals who were Directors of IES
Industries Inc. at the beginning of any two consecutive year period
(including, for this purpose, any new Director whose election or
nomination for election was approved by a vote of at least two-
thirds of the Directors then still in office who were Directors at
the beginning of such period) to constitute a majority of IES
Industries Inc.'s Board of Directors;
provided, however, that the merger of IES Industries Inc. with WPL
Holdings, Inc. and Interstate Power Company in accordance with the
Agreement and Plan of Merger dated November 10, 1995, as amended, shall
not constitute a Change in Control unless and until the resulting
corporation fails to make any payment due pursuant to a Plan at the time
such payment is due.
SECTION 14
EFFECTIVE DATE
The effective date of this Trust Agreement shall be August 1, 1997.
* * * * *
IN WITNESS WHEREOF, this instrument has been executed as of the day
and year last above written.
IES UTILITIES INC.
By:
▇▇▇▇▇ ▇. ▇▇▇▇
President & Chief Operating Officer
NORWEST BANK IOWA, N.A.
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Employee Benefits Manager
APPENDIX A
PLANS
The following plans and agreements shall be funded through the
Trust:
▇▇▇▇▇▇, ▇▇▇▇ ▇.
▇▇▇▇, ▇▇▇▇▇▇ ▇., Retired
▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇., Retired
▇▇▇, ▇▇▇▇▇▇
Derby, ▇▇▇▇▇▇▇ ▇., Retired
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇., Retired
▇▇▇▇, ▇▇▇▇, Retired
▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇., Retired
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ L,, Retired
▇▇▇▇▇▇, ▇▇▇▇▇ ▇., Retired
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇▇▇▇▇, Retired
▇▇▇▇▇▇, Dundeana ▇.
▇▇▇▇▇▇, ▇▇▇▇, ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇ ▇., Retired
Males, ▇▇▇▇▇, Retired
▇▇▇▇, ▇▇▇▇▇▇, E., Retired
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇., Retired
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, Retired
▇▇▇▇▇, ▇▇▇▇▇▇ J, Retired
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇, Retired
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, Retired
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇, ▇▇▇▇▇▇ ▇., Retired
Root , ▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇▇▇, Retired
▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, Don, Retired
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇.
Voy, ▇▇▇▇▇ ▇., Retired
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇., Retired