I N T E R S T A T E P O W E R C O M P A N Y
DIVIDEND REINVESTMENT AND
STOCK PURCHASE PLAN
Stock Symbol IPW
Prospectus
The Company serves in the
shaded area shown below.
[Logo inserted here]
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No person has been authorized to give any information or to
make any representation other than those contained in this
Prospectus or incorporated by reference, and, if given or made,
such other information or representation must be relied upon as
having been authorized by the Company. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy
any of these securities in any State to any person to whom it is
unlawful to make such offer or solicitation in such State.
Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create an implication
that information is correct as of any time subsequent to its date.
TABLE OF CONTENTS
PAGE
AVAILABLE INFORMATION 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 2
USE OF PROCEEDS 2
THE COMPANY 2
THE PLAN 3
Definitions 3
Purpose Prospectus
Cover & 4
Advantages 4
Administration 5
Participation 5
Costs 7
Purchases 7
Optional Cash 8
Reports to Participants 9
Dividends 9
Certificate of Shares 9
Safekeeping Service for Shares 10
Withdrawal 10
Taxes 11
Other Information 12
DESCRIPTION OF COMMON STOCK 13
LEGALITY 15
EXPERTS 15
INDEMNIFICATION UNDER
SECURITIES ACT 15
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PROSPECTUS
INTERSTATE POWER COMPANY
Dividend Reinvestment and Stock Purchase Plan
Common Stock
($3.50 par value)
The Company's Common Stock is listed on the New York,
Chicago and Pacific Stock Exchanges
The Dividend Reinvestment and Stock Purchase Plan (the "Plan")
of Interstate Power Company (the "Company") provides the
Company's common stock shareholders, residential and farm utility
customers, and Company employees with an economical and convenient
method of purchasing shares of the Company's Common Stock.
Interstate Power Company residential and farm utility customers
may enroll in the Plan by making an initial cash investment.
Regular employees of the Company may also purchase Common Stock
through automatic payroll deductions.
Participants in the Plan may:
reinvest all or a portion of cash dividends paid on shares of
Interstate Power Company Common Stock, (the "Common Stock").
invest by making optional cash payments of not more than $2,000
per month, with or without reinvesting their dividends. Employees
and residential and farm customers who are not stockholders of
Interstate Power Company Common Stock may participate in the Plan
by making an initial investment of $50 to $2,000, accompanied by
an Authorization Form.
receive, upon written request, certificates for whole shares of
Common Stock credited to their Plan account.
sell shares of Common Stock credited to their Plan account through
the Plan.
deposit certificates representing Common Stock into the Plan for
safekeeping.
Dividends, optional cash payments and payroll deductions will
be used to purchase shares of Common Stock which, at the option of
the Company, will be either newly issued or will be purchased on
behalf of Plan participants in the open market by an Independent
Agent.
The price of newly issued shares will be the average of the
high and low sales prices of the Company's Common Stock on the
investment date. The price of shares purchased in the open market
will be the weighted average price at which the Independent Agent
acquires the shares.
This Prospectus relates to the balance of 500,000 shares of
Common Stock, par value $3.50 (the "Additional Common Stock") of
the Company registered by Registration Statement 33-62644. Such
balance after the November 20, 1996 dividend reinvestment is
160,462 shares of additional Common Stock. This prospectus should
be retained for future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR BY ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is December 31, 1996
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and, in accordance therewith, files reports and other
information with the Securities and Exchange Commission (the
"SEC"). Such reports, proxy statements and other information
filed by the Company can be inspected and copied at the offices of
the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C.; 500 West Madison Street, Suite 1400, Chicago,
IL.; and 13th Floor, Seven World Trade Center, New York, NY.
Copies of this material can also be obtained at prescribed rates
from the Public Reference Section of the SEC at 450 Fifth Street,
N.W., Washington, D.C. 20549. The SEC maintains a Web site that
contains reports, proxy and information statements and other
information concerning the Company that have been filed
electronically at http://www.sec.gov. The common stock of the
Company is listed on the New York, Chicago, and Pacific Stock
Exchanges, where reports, proxy statements and other information
concerning the Company can be inspected.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates herein by reference and, at
any time hereafter prior to the termination of the offering made
by this Prospectus, the Company shall be deemed to have
incorporated herein by reference its Annual Report on Form 10-K
for the year ended December 31, 1995, and all other reports filed
by it pursuant to Section 13(a), 14 or 15(d) of the Exchange Act
since the end of the fiscal year covered by such Annual Report.
All such reports shall be deemed to be incorporated by reference
into this Prospectus.
The Company will provide without charge to each person to whom
this Prospectus is delivered, on the request of any such person, a
copy of any or all of the foregoing documents incorporated herein
by reference (other than exhibits to such documents). Requests
for such copies should be directed to Director - Investor
Services, Interstate Power Company, P.O. Box 769, Dubuque, Iowa
52004-0769, telephone 319-582-5421.
USE OF PROCEEDS
Since the requirements of Plan participants may be satisfied
by either the issuance of new shares of Common Stock by the
Company, or the purchase of shares of Common Stock by the
Independent Agent in the open market, the number of shares of
Common Stock, if any, that the Company ultimately will sell under
the Plan, or the prices at which such shares will be sold, is not
known and the Company is unable to predict the number of shares
that will be purchased under the Plan or the prices at which such
shares will be purchased. If new shares of Common Stock are
issued by the Company under the Plan, the proceeds from the sale
will be used for working capital and capital expenditures or to
reduce indebtedness incurred for such purposes or other general
corporate purposes. If shares are purchased by the Independent
Agent in the open market, the Company will not receive any
proceeds.
THE COMPANY
The Company was incorporated in 1925 under the laws of
Delaware. Its executive offices are located at 1000 Main Street,
P.O. Box 769, Dubuque, Iowa 52004-0769. It is a public utility
engaged principally in the generation, purchase, transmission,
sale and distribution of electricity in a 10,000 square mile
service area having an estimated population of 338,000 in
northeastern and north central Iowa, southern Minnesota and
northwestern Illinois. The Company also engages in the purchase,
sale and distribution of natural gas in 37 incorporated
communities including Albert Lea, Minnesota, Clinton, Mason City
and Clear Lake, Iowa and Savanna, Illinois, and in a number of
smaller Illinois, Iowa and Minnesota communities.
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DESCRIPTION OF THE PLAN
The following, which is set forth in question form, constitutes a
complete statement of the Plan:
Definitions
Authorization Card - The form to be completed by the registered
shareholder, Interstate Power Company residential and farm utility
customer, or a regular full-time or regular part-time employee of
the Company to participate in the Plan.
Regular Employee - An individual who works 20 or more hours each
week in an established Interstate Power Company job position.
Business Day - Any day on which the New York Stock Exchange is
open for the business of trading securities.
Common Dividend - The cash dividend payable on Registered
Shares.
Dividend Payment Date - The date on which dividends are payable
on the Company's Common Stock, usually the 20th day of March,
June, September and December.
Dividend Record Date - The date on which a person or entity must
be a registered shareholder of Common Stock in order to receive
dividends, usually the 20th day of February, May, August and
November.
Independent Agent - The agent appointed by the Company from time
to time, who acts on behalf of Plan participants in buying Common
Stock on the open market if the Company elects not to satisfy the
requirements of Plan participants with newly issued shares. The
agent will also sell Plan Shares for participants upon written
request to the Company.
Investment Date - The date on which shares of Common Stock are
acquired under the Plan. The Investment Date is the 20th day of
each month unless such day is not a Business Day, in which case
the Investment Date is the next succeeding Business Day.
Plan Dividend - The cash dividend payable on shares of Common
Stock held by the Company in your Plan account.
Plan Shares - The shares of Common Stock held by the Company in
a participant's Plan account.
Registered Shares - The shares of Common Stock for which a
participant holds a stock certificate.
Safekeeping Service - The service allowing Plan participants to
deliver all of their Common Stock certificates to the Stockholder
Services Department for credit of the shares to their Plan
account.
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Purpose
1. What is the purpose of the Plan?
The Plan provides Common Stock shareholders, residential and
farm utility customers of the Company and regular employees of the
Company with a convenient and economical way to purchase the
Company's Common Stock. Once you are enrolled in the Plan, cash
dividends, as well as any cash investments and/or payroll
deductions, may be used to purchase shares of Common Stock (both
whole and fractional shares).
YOU SHOULD RECOGNIZE THAT THE COMPANY CANNOT ASSURE YOU OF A
PROFIT OR PROTECT YOU AGAINST A LOSS ON THE SHARES OF COMMON STOCK
PURCHASED UNDER THE PLAN.
2. When did the Plan become effective?
The original Plan became effective February 28, 1977. This
amendment is effective on the effective date of this
Prospectus.
Advantages and Features
3. What are the advantages and features of the Plan?
You may elect to have your cash dividends on all or a
portion of your shares of Common Stock automatically
reinvested.
You may make cash investments of not less than $25 per
payment but up to $2,000 per month for the purchase of
Common Stock.
Residential and farm utility customers of Interstate
Power Company may enroll in the Plan by making a minimum
initial cash investment of $50.00 to purchase Common
Stock under the terms of the Plan.
Regular employees of the Company may purchase shares of
Common Stock through automatic payroll deductions.
A full investment of funds is possible under the Plan
because both full and fractional shares will be credited
to your Plan account.
You may deliver all of your certificates of Common Stock
to the Stockholder Services Department for credit of the
shares represented thereby to your Plan account.
You will receive a statement of account as soon as
practicable following each Investment Date on which
shares are purchased.
Statements of account are your continuing record of
transactions and should be retained for tax purposes.
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Administration
4. Who administers the Plan?
The Company will administer the Plan, and will act as agent for
participants, keep a continuing record of their accounts, send
regular statements of account to participants, and perform other
duties relating to the administration of the Plan. The shares of
the Company's Common Stock purchased under the Plan will be
registered in the name of the Company as agent and custodian for
the participants in the Plan. If the Company elects to meet the
requirements of Plan participants by purchasing shares of Common
Stock in the open market, an Independent Agent will act on behalf
of Plan participants in buying such shares. The Agent will also
sell Plan Shares for participants upon written request by the
participant to the Company.
The Company reserves the right to interpret and regulate
the Plan as deemed necessary or desirable. The Company, or the
Independent Agent, will not be liable for any act done in good
faith or for any omission to act in good faith, including, without
limitations, any claim of liability arising out of failure to
terminate a participant's account upon the participant's death
prior to receipt of written notice of such death.
You may contact the Company with questions concerning the
Plan by writing to:
Stockholder Services Department
Interstate Power Company
P.O. Box 769
Dubuque, Iowa 52004-0796
or by calling Stockholder Services Department at 319-557-2230.
The Company reserves the right to suspend, modify or
discontinue the Plan at any time. Any suspension, major
modification or discontinuance of the Plan will be announced by
the Company to all registered holders of its Common Stock, its
employees, and its residential and farm customers, including both
Plan participants and non-participants.
Participation and Enrollment
5. Who is eligible to participate in the Plan?
Any holder of record of the Company's Common Stock,
Interstate Power Company residential for farm utility customer, or
regular employee of the Company is eligible to participate in the
Plan. In order for any beneficial owners of the Company's Common
Stock to be eligible to participate in the Plan, they must
initially become the holder of record of such shares by having the
stock transferred into their name.
Under the terms of the Plan, employees of the Company are
eligible to participate in the Plan even if they are not initially
holders of record. To enroll in the Plan the employee must submit
an Authorization Form and a payroll deduction Authorization to the
Stockholder Services Department.
An Interstate Power Company residential or farm utility
customer may join the Plan without prior common stock ownership.
To enroll in the Plan the Authorization Form must be accompanied
by an initial cash payment of not less than $50.00.
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6. Does ownership of Preferred or Preference Stock or Bonds
of the Company qualify an investor to join the Plan?
No. Under the Plan ownership of shares of Preferred or
Preference Stock or Bonds does not qualify an investor to
participate in the Plan.
7. When may an eligible stockholder join the Plan?
A Common Stockholder on the records of the Company may join
the Plan at any time by completing an Authorization Form. If a
stockholder's executed Authorization Form is received before or on
the record date for a dividend payment, reinvestment of dividends
will commence with that dividend payment.
If you are joining the Plan as an optional cash payment only
participant, your Authorization Form and initial cash payment must
be received by the Company no later than ten days prior to the
investment date. If the Authorization Form is received by the
Company after that date, the cash will not be invested until the
next investment date. The investment of optional cash payments
will occur on the 20th day of each month unless such day is not a
business day.
The dividend record date is approximate 30 days preceding
each dividend payment date. The dividend payment dates have
customarily been between the 15th and 20th days of March, June,
September and December.
8. What does the Authorization Form provide?
The Authorization Form allows you to choose from a variety of
services and options under the Plan, including (1) automatic
reinvestment of dividends paid on shares of Common Stock, (2)
Optional cash payments of up to $2,000 per month, (3) a free
custodial service for depositing Common Stock certificates with
the Plan Administrator for safekeeping, (4) the ability to sell
Shares of Common Stock through the Plan and (5) the ability to
purchase your initial Plan Shares directly from the Company if you
are an employee or a residential or Farm Customer of Interstate
Power Company.
The Authorization Form is how you indicate to the Company
which Dividend and Optional Cash Payment options you have chosen
for your Plan account. The Authorization Form directs the Company,
as Administrator of the Plan, of your Plan choices, including 1)
automatic reinvestment of dividends paid on Shares of Common
Stock, 2) the option to receive a check or electronic deposit or
to reinvest all or part of any Dividend or 3) Optional Cash
Payments of up to $2,000 per month.
If a signed Authorization Form is returned with no option
checked, the account will be opened as "Optional Cash" only.
9. May a stockholder have dividends reinvested under the Plan
for less than all of the shares registered in that stockholder's name?
Yes. A participant may elect to have the dividends
reinvested on a specified number of shares. If the participant
designates in writing the specified number of certificate shares
for partial reinvestment, the Company will reinvest the dividends
on those shares and will pay cash dividends on the remaining
shares.
10. May a participant change the method of participation
after enrollment?
Yes. If participants elect to change the manner in which
they participate in the Plan, a new Authorization Form must be
completed and returned to the Company. The Authorization Form
must be received no later than the dividend record date in order
to start or stop the reinvestment of dividends payable on the
dividend payment date.
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Costs
11. Are there any expenses to participants in connection
with purchases under the Plan?
Yes. The broker's charge for purchase of the shares on the
market will be assessed against the participant. (The cost per
share will probably be less than $.10 per share.) However, if the
Company elects to use newly issued shares there would be no
brokerage charge. The costs of administration of the Plan will be
paid by the Company. If a participant withdraws from the Plan,
either wholly or partially, and requests the Company to sell
either all or a portion of his or her shares, the participant will
be charged for the broker's charge and any other fees.
Purchases
12. How may shares of Common Stock will be purchased for
participants?
At the option of the Company, reinvested dividends and cash
payments will be used to purchase authorized but unissued shares
from the Company or shares that are purchased on the open market
by the Independent Agent. The number of shares purchased depends
on the amount of the participant's reinvested dividends, cash
investments, and the price of the Common Stock. In the case of an
employee participant, the number of shares purchased also depends
on the amount of the employee's payroll deduction. Each
participant's account will be credited with the number of shares,
including fractions computed to three decimal places, equal to the
total amount invested divided by the purchase price.
13. Who purchases the shares for the Plan?
The Company may elect to satisfy the requirements of Plan
participants with either newly issued shares of Common Stock, or
shares of Common Stock purchased on the open market. If the
Company elects to purchase shares of Common Stock on the open
market, the Independent Agent will make all such purchases
necessary to meet the requirements of the Plan. The Company does
not exercise any direct or indirect control over the prices or
timing of purchases made by the Independent Agent on the open
market. If open market purchases are not made, the shares issued
under the Plan will be from the authorized but unissued shares of
Common Stock of the Company.
14. What will be the price of shares of Common Stock
purchased under the Plan?
If the Company elects to satisfy the requirements of the Plan
with shares of Common Stock purchased on the open market, the
price of such shares will be the average price at which the
Independent Agent acquires the shares plus a nominal brokerage
commission. The average purchase price for these shares under the
Plan each month will be obtained by dividing the total purchase
price by the total number of shares. The Company shall have no
responsibility as to the market value of Common Stock acquired for
a participant's account in the open market. If the Company elects
to satisfy the requirements of the Plan with newly issued shares
of Common Stock, the price of such shares will be 100% of the
average of the high and low sales prices of the Company's Common
Stock, based on the New York Stock Exchange Composite Transactions
on the respective Investment Date. This date is also the
transaction date that will appear on your statement of account.
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Optional Cash Payments
15. Who is eligible to make optional cash payments?
All Plan participants, whether or not they have authorized
the reinvestment of dividends, are eligible to make cash
investments. The Company will apply these cash payments to the
purchase of shares of Common Stock for the account of each
participant on the respective investment dates.
If a participant has checked the "Optional Cash Payments
Only" box on the Authorization Form, the Company will pay cash
dividends on any shares registered in the participant's name
directly to the participant. The Company will apply any optional
cash payment received from the participant to the purchase of
additional shares of Common Stock for the participant's account.
Any optional cash payments must be received no later than ten days
prior to the investment date. Dividends payable on shares of
common stock held in the Plan may be either fully or partially
reinvested in accordance with the participant's authorization
Form. DIVIDENDS PAYABLE ON SHARES OF COMMON STOCK HELD IN THE
PLAN WILL BE REINVESTED IN ADDITIONAL SHARES OF COMMON STOCK
UNLESS THE PARTICIPANT HAS SPECIFIED OTHERWISE.
16. How are optional cash payments made?
An initial cash investment may be made by a participant when
enrolling by enclosing a check with the Authorization Form.
CHECKS SHOULD BE MADE PAYABLE TO INTERSTATE POWER COMPANY and
returned with the Authorization Form. The entire check will be
invested and no portion will be refunded to the participant.
Thereafter, cash investments may be submitted by the use of the
cash payment form which is a part of the statement of account sent
to participants. The Company will acknowledge receipt of optional
cash payments on the monthly statement of account.
17. What are the limitations on making optional cash
payments?
Cash investments by a participant cannot exceed a total of
$2,000.00 in any month (minimum single payment $25.00). The same
amount of money need not be sent each time, and there is no
obligation to make an optional cash payment each investment
period.
18. When will optional cash payments received by the Company
be invested?
Optional Cash payments will be invested monthly on the
Investment Date. Cash received on or after an Investment Date
will be held by the Company until, and will be invested on, the
next Investment Date. SINCE NO INTEREST WILL BE PAID BY THE
COMPANY ON OPTIONAL CASH PAYMENTS RECEIVED AND
HELD BY THE COMPANY PENDING INVESTMENT ON THE NEXT
INVESTMENT DATE, YOU ARE URGED TO SEND THEM SHORTLY
BEFORE AN INVESTMENT DATE. HOWEVER, ALLOW SUFFICIENT
TIME TO ENSURE THAT YOUR OPTIONAL CASH PAYMENTS WILL
BE RECEIVED AT LEAST TWO BUSINESS DAYS PRIOR TO AN
INVESTMENT DATE. OPTIONAL CASH RECEIVED BY THE COMPANY
WILL BE RETURNED IF A WRITTEN REQUEST FOR REFUND IS
RECEIVED BY THE STOCKHOLDER SERVICES DEPARTMENT PRIOR
TO THE MONTHLY INVESTMENT DATE ON WHICH THE CASH WAS
INTENDED FOR INVESTMENT.
Shares purchased with optional cash payments will earn their
first dividend on the first dividend payment date following the
date of purchase, provided shares are of record on the following
dividend record date. For example, shares purchased for the Plan
on March 20, 1996, would receive the dividend on the next dividend
payment date of June 20, 1996, but would not be eligible for the
March 20, 1996 dividend.
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Reports to Participants
19. What reports will the participant receive?
As soon as practicable following each Investment Date on
which shares are purchased, you will receive a statement of your
account. These statements are a participant's continuing record
of purchases, share balances and other information and should be
retained for tax purposes. In addition, each participant will
receive copies of information sent to all stockholders including
the Company's quarterly and annual reports, notice of annual
meeting and proxy statement, and income tax information for
reporting dividends paid.
Dividends
20. Will dividends from shares held in the Plan always be
reinvested?
The Company will reinvest the dividends paid on full shares
and fractional shares held in the participant's Plan account in
accordance with the designation made by the participant on the
Authorization Form.
21. Will stock certificates be issued to participants for
shares of Common Stock purchased for the Plan?
All shares purchased on your behalf through the Plan will be
held by the Administrator in book-entry form. You can, however, at
any time and without charge, obtain a certificate for all or part
of the whole shares credited to your Plan account by making a
request in writing to the Company.
Issuance of certificates will not terminate participation in
the Plan if at least one full share remains in the account. This
request should be mailed to Stockholder Services Department at the
address shown in Question 4. Any remaining full and fraction
shares will remain in the participant's account. CERTIFICATES FOR
FRACTIONAL SHARES WILL NOT BE ISSUED.
If all full shares are issued to the participant from the
Plan account, the account will be closed and a check issued for
the fractional share value.
Shares credited to the account of a participant under the
Plan may not be pledged as collateral for a loan or other similar
purposes. A participant who wishes to pledge these shares must
request certificates to be issued.
22. In whose name will Plan accounts be maintained and
certificates registered when issued?
Certificates will be issued in the name shown on the
participant's account. Plan accounts will be in the participant's
name as shown on the Company's stockholder records at the time the
participant enters the Plan. Upon written request, certificates
can also be registered and issued in names other than the account
name, subject to compliance with any applicable laws, provided
that the request bears the signature(s) of the participant(s) and
the signature is guaranteed by a financial institution that is a
member of a recognized medallion signature guarantee program.
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Safekeeping Service for Common Stock Shares
23. What is the purpose of the Plan's Safekeeping Service for
Common Stock shares and how does it work?
Your stock certificates are valuable documents representing
your investment and ownership in Interstate Power Company. They
should be kept in a secure place where they will be protected from
loss, theft or destruction. The Plan's Share Safekeeping Service
provides for your Company common stock certificates by allowing
you to deposit all the certificates for Common Stock held by you
with the Administrator for safekeeping. The Share Safekeeping
Service keeps your Common Stock on deposit in your Plan account at
no cost to you. Deposited certificates will be transferred into
the name of the Company, as agent for participants in the Plan,
and will be credited to the participant's Plan account.
Thereafter, the shares will be treated in the same manner as
shares purchased through the Plan.
24. What are the advantages of the Plan's Safekeeping
Service?
The Plan's Safekeeping Service for stock certificates offers
three significant advantages to participants. First, the risk
associated with loss of your stock certificates is eliminated.
Second, because shares for safekeeping are treated in the same
manner as shares purchased through the Plan, they may be sold
through the Plan in a convenient manner. Third, statements will
reflect reinvestment of dividends and total shares held in a
consolidated single entry. If you wish, the shares deposited for
safekeeping may continue to receive dividends paid by check or
electronic deposit by checking the share safekeeping only box on
the Authorization Form. You may join the Share safekeeping
service at any time after enrollment by completing a safekeeping
deposit form.
25. How may Common Stock certificates be deposited with the
Stockholder Services Department?
Participants who wish to deposit their certificates of Common
Stock for safekeeping should send them, unsigned, to Stockholder
Services with written instructions to deposit them to their Plan
account. We recommend that securities be sent via registered mail
for your protection.
26. May shares remain on deposit if participation in the Plan
is discontinued?
No. Upon withdrawal from the Plan, participants must elect
to receive their Plan shares either in certificate form or in
cash.
Withdrawing from the Plan
27. How does a participant withdraw from the Plan?
To withdraw from the Plan, either wholly or partially, a
participant must notify the Company in writing. When a
participant withdraws from the Plan or upon termination of the
Plan by the Company, certificates for whole shares credited to his
or her account will be issued and a cash payment will be made for
any fraction of a share.
Upon such withdrawal the participant may also request all
shares be sold. Upon receipt of the participant's request,
Stockholder Services will place a market order with the
Independent Agent to sell those shares as soon as practicable
after receiving the request. The participant will receive the
proceeds of the sale less any brokerage commission and any other
fee as soon as practicable.
28. When may a participant withdraw from the Plan?
If participants' requests for a full or partial withdrawal
are received by Stockholder Services Department on
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or after a Dividend Record Date for a dividend payment, such
requests will be processed as soon as practicable after
the records have been balanced for payment of the dividend and
such dividend has been reinvested in the participants' accounts.
Requests received at any other time will be processed as soon as
practicable.
29. May a participant remain in the Plan without reinvesting
dividends on shares held by the participant in
certificate form or held in the Plan?
Yes. See Question 9, 15 and 20.
30. Can a shareholder re-enter the Plan after withdrawal?
Yes. A shareholder may re-enter the Plan by completing and
signing a new Authorization Form. The Company reserves the right
to reject any Authorization Form from a previous participant on
grounds of excessive withdrawal and re-entry.
Income Taxes
31. What are the Federal Income Tax consequences of
participation in the Plan?
In general, participants in the Plan have the same federal
income tax obligations with respect to their dividends as do
shareholders who are not Plan participants. This means that
dividends reinvested under the Plan are taxable as having been
received even though the participants did not actually receive
them in cash but, instead, used them to purchase additional shares
under the Plan.
Shares of Common Stock purchased in the open market with
reinvested dividends will have a tax basis equal to the market
price per share (including brokerage commissions and other fees).
The holding period for these shares will begin on the day
following the day the shares were purchased for the Plan.
The tax basis of newly issued shares acquired through
reinvested cash dividends, cash investments and payroll deductions
is equal to the fair market value of the Common Stock on the day
the shares are purchased. The holding period for these shares
will begin on the day following the day the shares are acquired
for the Plan.
32. What are the Federal income tax consequences of a sale of
shares of Common Stock acquired under the Plan?
Participants will not realize any taxable income when they
receive certificates for shares from their Plan account. However,
participants who receive a cash payment for sale of shares (even
the fractional share) in their account will recognize a gain or
loss when the sale is reported on their tax report. The gain or
loss is the difference between the share value and the tax basis
of the shares. A gain or loss will also be recognized when you
sell shares previously issued from the Plan. As aid in
calculating your tax liability for these sales be sure to keep
your statements of accounts. You will receive a Form 1099-B from
the Company for the proceeds of the sale of shares from your
account.
For further information as to tax consequences of
participation in the Plan, you are advised to consult with your
own tax advisor.
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33. How will income tax return information be furnished?
Information for income tax purposes will be provided on IRS
Form #1099 DIV. at year end.
34. What amounts are reinvested for foreign stockholders
subject to United States withholding tax?
The United States income tax withheld will be deducted from
the dividend amount and the net amount remaining will be
reinvested in the Plan. The statements of account confirming
purchases made for foreign participants will indicate the net
dividend payment reinvested.
Foreign stockholders who check the "Optional Cash Payments
Only" box on the Authorization Form will continue to receive cash
dividends on shares registered in their names in the same manner
as if they were not participating in the Plan. Optional cash
payments received from them must be in United States dollars and
will be invested in the same way as payments from other
participants.
Other Information
35. What happens when a participant sells or transfers all of
the shares registered in the participant's name?
If a participant disposes of all certificate shares
registered in the participant's name, the Company will continue to
maintain the shares in the participant's Plan account unless
otherwise instructed in writing.
36. What happens if the Company issues a stock dividend,
declares a stock split, or has a rights offering?
Any shares of Common Stock distributed by the Company as a
stock dividend on shares credited to your Plan account, or on any
split of these shares, will be credited to your Plan account. In
a rights offering your entitlement will be based on your holdings,
including those credited to your Plan account. Rights from a
rights offering applicable to shares credited to your Plan
account, however, will be sold by Stockholder Services. The
proceeds will be credited to your Plan account and applied as a
cash investment to purchase shares of Common Stock on the next
Investment Date.
Any participant who wishes to exercise stock purchase rights
on their Plan shares must request those shares to be issued in
certificate form in their name. The request must be received 10
work days prior to the record date for the rights.
37. How will participants' shares be voted at the annual
meeting of stockholders?
Participants will receive a proxy to vote shares registered
in their name as well as full shares credited to their Plan
account.
38. May the Plan be changed or discontinued?
While the Company hopes to continue the Plan indefinitely,
the Company reserves the right to suspend, modify or terminate the
Plan at any time. Any such action will be announced to
participating and nonparticipating stockholders.
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39. Where should correspondence regarding the Plan be
directed?
All correspondence concerning the Plan should be addressed
to:
Stockholder Services Department
Interstate Power Company
1000 Main Street
P.O. Box 769
Dubuque, Iowa 52004-0769
Phone No. 319-557-2230
DESCRIPTION OF COMMON STOCK (INCLUDING THE ADDITIONAL COMMON
STOCK)
General
The shares of Additional Common Stock will be fully paid and
non-assessable by the Company. The following outline of certain
provisions of the Restated Certificate of Incorporation, as
amended, of the Company and of its Bond Indenture, dated as of
January 1, 1948, as supplemented, pursuant to which its First
Mortgage Bonds have been issued, copies of which are filed as
exhibits to the Registration Statement, does not purport to be
complete and is qualified in its entirety by express reference
thereto. The holders of the Company's Common Stock at the annual
meeting held May 7, 1991, approved an amendment to the Company's
Restated Certificate of Incorporation, as amended to increase the
Company's authorized Common Stock to 30,000,000 shares and to
increase the total authorized shares of all classes to 34,000,000
shares.
Dividend Rights
Subject to the following limitations and after the payment of
full cumulative dividends on the Preferred Stock and the
Preference Stock, dividends may be paid on the Common Stock when
and as declared by the Board of Directors.
The Restated Certificate of Incorporation, as amended,
restricts the payment of dividends on Common Stock to 75% of net
income available for Common Stock dividends if the percentage of
capital represented by stock junior to the Preferred Stock is
between 20% and 25% of total capitalization, as defined, and to
50% of such net income if such percentage is less than 20%.
The Company's Bond Indenture, as supplemented, provides that,
while any of the First Mortgage Bonds are outstanding, the Company
will not pay any cash dividends on or make any other distribution
with respect to its Common Stock unless the earned surplus of the
Company, less the sum of (a) the aggregated amount of all such
payments and other distributions made during the period from
December 31,1946, to the date of the proposed payment of such
dividend or the making of such distribution that have not been
charged to such earned surplus and (b) the excess, if any, of the
Company's required Maintenance Fund payments (before any deduction
therefrom based on gross property additions), over the provisions
for depreciation of property made by the Company by charges
against earnings or earned surplus during the period, shall be at
least equal to the amount of the proposed dividend or
distribution.
Voting Rights
Each holder of Common Stock is entitled to one vote for each
share held. Cumulative voting in the election of directors was
repealed in 1991 by vote of the Company's shareholders.
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However, if four quarterly dividends on the Preferred Stock should
be in default, the holders of the Preferred Stock would have the
right to elect a majority of the directors and the holders of the
Common Stock would have the right to elect the remaining
directors. In the event that six quarterly dividends on the
Preference Stock should be in default, the holders of the
Preference Stock would have the right to elect two additional
directors to the board. The Company must secure the approval of
the holders of certain percentages of the Preferred and Preference
Stock prior to making certain unsecured borrowings.
Liquidation Rights
After payment to the holders of Preferred Stock and
Preference Stock of the full preferential amounts to which they
are, respectively, entitled, the remaining assets shall be
distributed to the holders of the Common Stock. In the event of
any voluntary liquidation, the holders of the Preferred Stock are
entitled to receive the then current redemption price thereof and,
if such liquidation is involuntary, the par value thereof plus, in
each case, full cumulative dividends. In the event of voluntary
liquidations, the holders of the Preference Stock are entitled to
receive the then current redemption price thereof, and, if such
liquidation is involuntary, the amount originally paid to the
Company therefor per share plus, in each case full cumulative
dividends.
Preemptive Rights
Holders of Common Stock have no preemptive rights, except that
additional offerings of Common Stock, or any security convertible
into Common Stock, for money, other than by a public offering or
an offering to or through underwriters or investment bankers who
shall have agreed to make a public offering thereof, must first be
offered pro rata to the holders of the then outstanding shares of
Common Stock.
Liability to Further Calls and to Assessment
The Additional Common Stock will be validly issued and fully
paid and non-assessable upon receipt by the Company of the
purchase price thereof.
Change of Control
At the May 7, 1991 annual meeting of shareholders an amendment
to the Company's Restated Certificate of Incorporation, as
amended, was approved to require that certain "fair price" and
procedural conditions be observed by any party which acquires more
than five percent of the Common Stock to accomplish a merger or
other business combination without the approval of the Company's
Board of Directors including requirements under certain
circumstances of an 80% vote of shareholders for approval of a
business combination. Also in that meeting there was an approval
of amendments to the Company's Restated Certificate of
Incorporation, as amended and the By-Laws to reorganize the Board
of Directors into three classes with staggered terms.
Transfer Agents and Registrars
The Company serves as transfer agent and registrar for the
Common Stock.
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LEGALITY
The legality of the Additional Common Stock offered hereby
will be passed upon for the Company by Defrees & Fiske, Suite
1100, 200 South Michigan Ave., Chicago, Illinois 60604.
EXPERTS
The financial statements incorporated in this Prospectus by
reference to Interstate Power Company's Annual Report on Form 10-K
have been so incorporated in reliance on the report of Deloitte &
Touche LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
SECURITIES AND EXCHANGE COMMISSION POSITION
ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Both Section 145 of the General Corporation Law of the State
of Delaware, under which the Company is incorporated, and Article
IX-A of the By-Laws of the Company provide for the indemnification
of its officers and directors under certain circumstances.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors,
officers, or persons controlling the Company pursuant to the
foregoing provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act
and is therefore unenforceable.
