REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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NORTHWEST NATURAL GAS COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OREGON 93-0256722
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
ONE PACIFIC SQUARE, 220 N.W. SECOND AVENUE, PORTLAND, OREGON 97209
(503-226-4211)
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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ROBERT L. RIDGLEY
PRESIDENT AND CHIEF EXECUTIVE OFFICER
ONE PACIFIC SQUARE, 220 N.W. SECOND AVENUE
PORTLAND, OREGON 97209
(503) 226-4211
BRUCE R. DEBOLT ROBERT G. SCHUUR, ESQ.
SENIOR VICE PRESIDENT, FINANCE, REID & PRIEST
AND CHIEF FINANCIAL OFFICER 40 WEST 57TH STREET
ONE PACIFIC SQUARE, 220 N.W. SECOND AVENUE NEW YORK, NEW YORK 10019
PORTLAND, OREGON 97209 (212) 603-2000
(503) 226-4211
(NAMES, ADDRESSES, INCLUDING ZIP CODES, AND TELEPHONE NUMBERS, INCLUDING
AREA CODES, OF AGENTS FOR SERVICE)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING
OFFERED PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK
THE FOLLOWING BOX. /__/
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE
OFFERED ON A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE
SECURITIES ACT OF 1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION
WITH DIVIDEND OR INTEREST REINVESTMENT PLANS, CHECK THE FOLLOWING BOX. /x/
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CALCULATION OF REGISTRATION FEE
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PROPOSED
MAXIMUM
TITLE OF EACH CLASS AMOUNT PROPOSED MAXIMUM AGGREGATE AMOUNT OF
OF SECURITIES TO TO BE OFFERING PRICE OFFERING REGISTRATION
BE REGISTERED REGISTERED(1) PER UNIT(1) PRICE(1) FEE(2)
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FIRST MORTGAGE
BONDS
COMMON STOCK
TOTAL $60,000,000 $60,000,000 $20,690
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(1) INFORMATION AS TO EACH CLASS OMITTED PURSUANT TO GENERAL INSTRUCTION
II(D) TO FORM S-3.
(2) CALCULATED IN ACCORDANCE WITH RULE 457(o).
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT
THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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SUBJECT TO COMPLETION, DATED MAY 25, 1994
PROSPECTUS
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NORTHWEST NATURAL GAS COMPANY
FIRST MORTGAGE BONDS
COMMON STOCK
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Northwest Natural Gas Company (the "Company") intends from time to time
to sell of its First Mortgage Bonds (the "New Bonds") and/or Common Stock
(the "New Common Stock") (the New Bonds and the New Common Stock being
collectively referred to herein as the "Securities") in any combination at
an aggregate initial offering price not to exceed $60,000,000. The
Securities will be offered at prices and on terms to be determined at the
times of sale. For each issue of the New Bonds for which this Prospectus
will be delivered, there will be an accompanying Prospectus Supplement that
will set forth, with respect to such issue, its series designation, the
aggregate principal amount thereof, the terms of the offering, its maturity
date or dates, its interest rate or rates, the interest payment dates and
the date from which interest will accrue, whether all or any portion will
be issued to a designated depositary, its redemption provisions, if any,
and any other specific terms. For each issue of the New Common Stock for
which this Prospectus will be delivered, there will be an accompanying
Prospectus Supplement that will set forth the terms of the offering. The
Common Stock is traded in the over-the-counter market. Its price and
volume data are reported on the National Association of Securities
DealersAutomated Quotation (NASDAQ) National Market System using the symbol
"NWNG". The sale of one of the Securities will not be contingent upon the
sale of the other.
__________________
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 Securities may be sold directly by the Company or through agents
designated from time to time or through underwriters or dealers. If any
agents of the Company or any underwriters are involved in the sale of the
Securities in respect of which this Prospectus will be delivered, the names
of such agents or underwriters, and the initial price to the public, any
applicable commissions or discounts and the net proceeds to the Company, or
the means of determining the same, will be set forth in an accompanying
Prospectus Supplement. The Company may indemnify agents and underwriters
against certain civil liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Plan of Distribution".
The date of this Prospectus is , 1994.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with
the Securities and Exchange Commission. These securities may not be
sold nor may offers to buy be accepted prior to the time the registration
statement becomes effective. This prospectus shall not constitute an
offer to sell or the solicitation of an offer to buy nor shall there be
any sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such State.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), and, in
accordance therewith, files reports and other information with the
Securities and Exchange Commission. Reports, proxy statements and other
information filed by the Company can be inspected and copied at the public
reference facilities of the Commission, Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, as well as at the following
regional offices: 7 World Trade Center, 13th Floor, New York, New York
10048, and Northwest Atrium Center, Suite 1400, 500 West Madison Street,
Chicago, Illinois 60661-2511. Copies of such material can be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in this Prospectus the
following documents heretofore filed with the Securities and Exchange
Commission:
(1) The Company's Annual Report on Form 10-K for the year ended
December 31, 1993.
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1994.
All documents filed by the Company pursuant to Section 13, 14 or 15(d)
of the Exchange Act after the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the date of
filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded, for purposes of this Prospectus, to
the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
THE COMPANY HEREBY UNDERTAKES TO PROVIDE, WITHOUT CHARGE, TO EACH
PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM A COPY OF THIS PROSPECTUS
SHALL HAVE BEEN DELIVERED, UPON WRITTEN OR ORAL REQUEST OF SUCH PERSON, A
COPY OF ANY OR ALL OF THE DOCUMENTS WHICH HAVE BEEN OR MAY BE INCORPORATED
IN THIS PROSPECTUS BY REFERENCE, OTHER THAN EXHIBITS TO SUCH DOCUMENTS,
UNLESS SUCH EXHIBITS SHALL HAVE BEEN SPECIFICALLY INCORPORATED BY REFERENCE
INTO SUCH DOCUMENTS. REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO
NORTHWEST NATURAL GAS COMPANY, SHAREHOLDER SERVICES DEPARTMENT, ONE PACIFIC
SQUARE, 220 N.W. SECOND AVENUE, PORTLAND, OREGON 97209, OR BY CALLING THE
FOLLOWING NUMBER: 503-226-4211.
THE COMPANY
The Company, which was incorporated under the laws of Oregon in 1910,
distributes natural gas to customers in western Oregon and southwestern
Washington, including the Portland metropolitan area. Gas service is
provided in 95 cities and neighboring communities in 16 Oregon counties,
and in nine cities and neighboring communities in three Washington
counties. The Company's service areas have a population of 2,600,000,
including about 78 percent of the population of the State of Oregon. The
Company's executive offices are located at One Pacific Square, 220 N.W.
Second Avenue, Portland, Oregon 97209. Its telephone number is 503-226-
4211.
Oregon Natural Development Corporation, a wholly-owned subsidiary, is
engaged in natural gas exploration, development and production in the
western United States and Canada.
NNG Financial Corporation, another wholly-owned subsidiary, holds
financial investments as a limited partner in four solar electric
generating systems, four windmill projects and a hydroelectric project, all
located in California, and in a low-income housing project in Portland.
NNG Financial also arranges short-term financing for the Company's
operating subsidiaries.
RATIO OF EARNINGS TO FIXED CHARGES
The Company has calculated the ratios of earnings to fixed charges
pursuant to Item 503 of SEC Regulation S-K as follows:
Twelve Months Ended
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March
31, December 31,
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1994 1993 1992 1991 1990 1989
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2.94 3.22 1.81 1.59 2.64 2.75
Earnings consist of net income to which have been added taxes on income
and fixed charges. Fixed charges consist of interest on all indebtedness,
amortization of debt expense and discount or premium, and the estimated
interest portion of rentals charged to income.
USE OF PROCEEDS AND FINANCING PROGRAM
The net proceeds to be received by the Company from the sale of the
Securities will be added to the general funds of the Company and used for
corporate purposes, primarily to fund, in part, the Company's ongoing
utility construction program and to repay short-term debt incurred for such
purpose.
The Company expects its utility construction and equipment expenditures
in 1994 to aggregate $75 million. The Company expects such expenditures
for the five-year period, 1994-98, to aggregate between $325 million and
$350 million. The capital requirements of its subsidiaries during the same
period are expected to be limited to funds internally generated by the
subsidiaries. Approximately $21 million of long-term debt matures in 1996
and $26 million in 1997.
The Company estimates that 50% or more of the funds required for utility
purposes during the 1994-98 period will be internally generated and that
the balance, as well as substantially all of the funds required for the
repayment of maturing debt, will be funded through short-term borrowings,
which will be refinanced periodically through the sale of long-term debt
and equity securities, in such amounts and at such times as the Company's
cash requirements and market conditions shall determine. Based upon this
estimate, the Company expects that, through the end of 1995, its sales of
Common Stock will not exceed $50 million, consisting of not more than
$40 million of New Common Stock and approximately $10 million of Common
Stock expected to be sold through its Dividend Reinvestment and Stock
Purchase Plan and various employee plans.
DESCRIPTION OF THE NEW BONDS
General: The New Bonds are to be issued under the Company's Mortgage
and Deed of Trust, dated as of July 1, 1946, to Bankers Trust Company and
R.G. Page (Stanley Burg, successor), as trustees, as supplemented by twenty
supplemental indentures and as to be further supplemented by one or more
additional supplemental indentures providing for one or more series of the
New Bonds, all of which are collectively referred to as the "Mortgage".
The statements herein concerning the New Bonds and the Mortgage are
merely an outline and do not purport to be complete. They make use of
terms defined in the Mortgage and are qualified in their entirety by
express reference to the cited Sections and Articles.
Reference is made to the Prospectus Supplement for each issue of the New
Bonds for the following terms, among others, of the New Bonds offered
thereby: (i) the series designation and aggregate principal amount thereof,
(ii) the initial public offering price and other terms of their offering,
(iii) the date or dates on which they will mature, (iv) the rate or rates
per annum at which they will bear interest, (v) the times at which such
interest will be payable and the date from which it will accrue, (vi)
whether all or any portion thereof will be issued to a designated
depositary, (vii) any redemption provisions, and (viii) other specific
terms.
Form, Exchange and Payment: Unless otherwise indicated in the
Prospectus Supplement for an issue of the New Bonds, the New Bonds offered
thereby will be issued only in fully registered form in denominations of
$1,000 and any multiple thereof. The New Bonds are exchangeable at the
office of Bankers Trust Company in New York City, without charge other than
taxes or other governmental charges incident thereto. Principal and
interest are payable at such office.
Provisions for Maintenance of Property: While the Mortgage contains
provisions for the maintenance of the Mortgaged and Pledged Property, the
Mortgage does not permit redemption of First Mortgage Bonds ("Bonds")
pursuant to these provisions.
Security: The New Bonds together with all other Bonds now or hereafter
issued under the Mortgage will be secured by the Mortgage, which
constitutes, in the opinion of Bruce B. Samson, Esq., General Counsel of
the Company, a first mortgage lien on all of the gas plants, distribution
systems and other materially important physical properties of the Company
(except as stated below), subject to (a) leases of minor portions of the
Company's property to others for uses which, in the opinion of such
Counsel, do not interfere with the Company's business, (b) leases of
certain property of the Company not used in its gas utility business or the
gas by-product business, (c) excepted encumbrances, and (d) minor defects
and encumbrances customarily found in properties of like size and character
which, in the opinion of such Counsel, do not impair the use of such
properties by the Company. There are excepted from the lien all cash and
securities; certain equipment, apparatus, materials or supplies; aircraft,
automobiles and other vehicles; receivables, contracts, leases and
operating agreements; timber, minerals, mineral rights and royalties; and
all natural gas and oil production property.
The Mortgage contains provisions subjecting after-acquired property
(subject to pre-existing liens) to the lien thereof, subject to limitations
in the case of consolidation, merger or sale of substantially all of the
Company's assets. (See Mortgage, Art. XVI.)
The Mortgage provides that the trustees shall have a lien upon the
mortgaged property, prior to that of the Bonds, for the payment of their
reasonable compensation and expenses, and for indemnity against certain
liabilities. (See Mortgage, Sec. 96.)
Issuance of Additional Bonds: Bonds may be issued from time to time on
the basis of (1) 60% of property additions, after adjustments to offset
retirements; (2) retirement of Bonds or qualified lien bonds; or (3)
deposit of cash. With certain exceptions in the case of (2) above, the
issuance of Bonds is subject to adjusted net earnings before income taxes
for 12 consecutive months out of the preceding 15 months being at least
twice the annual interest requirements on all Bonds at the time
outstanding, including the additional issue, and all indebtedness of prior
rank.
Property additions generally include gas, electric, steam or hot water
property or gas by-product property acquired after March 31, 1946, but may
not include securities, airplanes, automobiles or other vehicles or natural
gas transmission lines or natural gas and oil production property. As of
March 31, 1994, approximately $201,300,900 of property additions and
$93,000,000 of retired Bonds were available for use as the basis for the
issuance of Bonds.
The Mortgage contains certain restrictions upon the issuance of Bonds
against property subject to liens.
The New Bonds will be issued against property additions and retired
Bonds.
(See Mortgage, Secs. 4-7, 20-30 and 46 and Third Supplemental, Secs. 3
and 4.)
Release and Substitution of Property: Property may be released against
(1) deposit of cash or, to a limited extent, purchase money mortgages, (2)
property additions, or (3) waiver of the right to issue Bonds without
applying any earnings test. Cash so deposited and cash deposited against
the issuance of additional bonds may be withdrawn upon the bases stated in
(2) and (3) above. When property released is not funded property, property
additions used to effect the release may again, in certain cases, become
available as credits under the Mortgage, and the waiver of the right to
issue Bonds to effect the release may, in certain cases, cease to be
effective as such a waiver. Similar provisions are in effect as to cash
proceeds of such property. The Mortgage contains special provisions with
respect to qualified lien bonds pledged and the disposition of moneys
received on pledged prior lien bonds. (See Mortgage, Secs. 5, 31, 32, 37,
46 to 50, 59 to 61, 100 and 118.)
Defaults and Notice Thereof: Defaults are: default in payment of
principal; default for 60 days in payment of interest or of installments of
funds for retirement of bonds; certain defaults with respect to qualified
lien bonds; certain events in bankruptcy, insolvency or reorganization; and
default for 90 days after notice in the case of other covenants. The
trustees may withhold notice of default (except in payment of principal,
interest or any funds for the retirement of Bonds) if they think it in the
interest of the Bondholders. (See Mortgage, Secs. 65 and 66.)
Holders of 25% of the Bonds may declare the principal and the interest
due on default, but a majority may annul such declaration if such default
has been cured. No holder of Bonds may enforce the lien of the Mortgage
without giving the trustees written notice of a default and unless holders
of 25% of the Bonds have requested the trustees to act and offered them
reasonable opportunity to act and the trustees have failed to act. The
trustees are not required to risk their funds or incur personal liability
if there is reasonable ground for believing that the repayment is not
reasonably assured. The holders of a majority of the Bonds may direct the
time, method and place of conducting any proceedings for any remedy
available to the trustees, or exercising any trust or power conferred upon
the trustees but the trustees are not required to follow such direction if
not sufficiently indemnified for expenditures. (See Mortgage, Secs. 67,
71, 80 and 94.)
Evidence to be Furnished to the Trustees: Compliance with Mortgage
provisions is evidenced by written statements of the Company's officers or
persons selected by the Company. In certain major matters the accounting,
engineer, appraiser or other expert must be independent. Various
certificates and other papers, including a certificate with respect to
compliance with the terms of the Mortgage and the absence of defaults, are
required to be filed annually and upon the occurrence of certain events.
(See Mortgage, Secs. 67, 71, 80 and 94).
Modification of the Mortgage: The rights of the Bondholders may be
modified with the consent of 70% of the Bonds and, if less than all series
of Bonds are affected, the consent also of 70% of Bonds of each series
affected. The Company has reserved the right without any consent or other
action by holders of any series of Bonds (including the New Bonds), and
intends in conjunction with the issuance of the New Bonds, to substitute
66-2/3% for 70%. In general, no modification of the terms of payment of
principal and interest, and no modification affecting the lien of the
Mortgage or reducing the percentage required for modification is effective
against any Bondholder without his consent. (See Mortgage, Art. XIX and
Ninth Supplemental, Sec. 6.)
The Company has reserved the right to amend the Mortgage, without any
consent or other action by holders of the Bonds of the Eighteenth Series or
of Bonds of any subsequently created series (including the New Bonds), in
the following respects:
Release and Substitution of Property. To permit the release of property
at the lesser of its cost or its fair value at the time that such
property became funded property, rather than at its fair value at the
time of its release; and to facilitate the release of unfunded property.
(See Mortgage, Secs. 3, 59 and 60 and Eighteenth Supplemental, Sec.
2.03.)
Issuance of Additional Bonds. To clarify that (i) for purposes of
determining annual interest requirements, interest on Bonds or other
indebtedness bearing interest at a variable interest rate shall be
computed at the average of the interest rates borne by such Bonds or
other indebtedness during the period of calculation, or, if such Bonds
or other indebtedness shall have been issued after such period or shall
be the subject of pending applications, interest shall be computed at
the initial rate borne upon issuance, and (ii) no extraordinary items
shall be included in operating expenses or deducted from revenues or
other income in calculating adjusted net earnings (See Mortgage, Sec.
7); and to revise the basis for the issuance of additional Bonds from
60% of property additions, after adjustments to offset retirements, to
70%. (See Mortgage, Secs. 25, 26, 59 and 61 and Eighteenth
Supplemental, Secs. 2.01 and 2.02.)
The Corporate Trustee
Bankers Trust Company also serves as the Indenture Trustee under
the Indenture under which the Company's Unsecured Medium-Term Notes are
issued.
DESCRIPTION OF COMMON STOCK
The following is a summary of certain rights and privileges of the Common
Stock. This summary does not purport to be complete. Reference is made to
the Restated Articles of Incorporation and the Bylaws of the Company, filed
as exhibits to the Registration Statement, for complete statements. The
following statements are qualified in their entirety by such references.
Dividends and Liquidation Rights: Except as hereinafter stated, the
Common Stock is entitled to receive such dividends as are declared by the
Board of Directors and to receive ratably on liquidation any assets which
remain after payment of liabilities. The Company's Preferred and
Preference Stock are entitled in preference to the Common Stock (1) to
cumulative dividends at the annual rate fixed for each series by the Board
of Directors, and (2) in voluntary and involuntary liquidation, to the
amounts fixed for each series by the Board of Directors, plus in each case,
unpaid accumulated dividends.
Dividend Limitations: Should dividends on either the Preferred or the
Preference Stock be in arrears, no dividends on the Common Stock may be
paid or declared. Except with the consent of the holders of a majority of
the Preferred Stock then outstanding, no dividends on the Common Stock or
the Preference Stock may be paid or declared unless the Preferred Stock
purchase and sinking fund obligations have been met for that year. Future
series of the Preferred or the Preference Stock could contain sinking fund,
purchase or redemption obligations under which no dividends on the Common
Stock may be paid or declared while such obligations are in default.
Common Stock dividends also may be restricted by the provisions of future
instruments pursuant to which the Company may issue long-term debt.
Voting Rights: Except as provided by law or as described below, only the
Common Stock has voting rights. Cumulative voting is permitted by the
Restated Articles of Incorporation to holders of Common Stock at elections
of directors. The Preferred Stock has the special right to elect the
smallest number of directors which constitutes at least one-fourth of the
total number of directors, or two directors, whichever is greater, if
payments of four quarterly dividends or more on any share or shares of
Preferred Stock should be in arrears.
Classification of the Board of Directors: The Board of Directors of the
Company may consist of not less than nine nor more than 13 persons, as
determined by the Board, divided into three classes as nearly equal in
number as possible. The current number is twelve. One class is elected
for a three-year term at each annual meeting of shareholders. Vacancies,
including those resulting from an increase in the size of the Board, may be
filled by a majority vote of the directors then in office. One or more of
the directors may be removed, with or without cause, by the affirmative
vote of the holders of not less than two-thirds of the shares entitled to
vote thereon; provided, however, that if fewer than all of the directors
should be candidates for removal, no one of them shall be removed if the
votes cast against such director's removal would be sufficient to elect
such director if then cumulatively voted at an election of the class of
directors of which such director shall be a part. Except for those persons
nominated by the Board, no person shall be eligible for election as a
director unless a request from a shareholder entitled to vote in the
election of directors that such person be nominated and such person's
consent thereto shall be delivered to the Secretary of the Company in
advance of the meeting at which such election shall be held. The foregoing
provisions may not be amended or repealed except by the affirmative vote of
the holders of not less than two-thirds of the shares entitled to vote at
an election of directors. The foregoing provisions will not apply to
directors, if any, elected by the holders of the Preferred Stock.
Transactions with Related Persons: The Company shall not enter into any
business transaction with a related person or in which a related person
shall have an interest (except proportionately as a shareholder of the
Company) without first obtaining both (1) the affirmative vote of the
holders of not less than two-thirds of the outstanding shares of the
capital stock of the Company not held by such related person, and (2) the
determination of a majority of the continuing directors that the cash or
fair market value of the property, securities or other consideration to be
received per share by the holders, other than such related person, of the
shares of each class or series of the capital stock of the Company in such
business transaction shall not be less than the highest purchase price paid
by such related person in acquiring any of its holdings of shares of the
same class or series, unless the continuing directors by a majority vote
shall either (a) have expressly approved the acquisition of the shares of
the capital stock of the Company that caused such related person to become
a related person, or (b) have expressly approved such business transaction.
As used in this paragraph: a "business transaction" includes a merger,
consolidation, reorganization or recapitalization, a purchase, sale, lease,
exchange or mortgage of all or a substantial part (10% or more) of the
property of the Company or a related person, an issuance, sale or exchange
of securities and a liquidation, spin-off or dissolution; a "related per-
son" includes a person, organization or group thereof owning 10% or more of
the capital stock of the Company; "continuing directors" are those whose
nominations for directorship shall have been approved by a majority of the
directors in office on April 9, 1984 or by a majority of the then continu-
ing directors. The foregoing provisions may not be amended or repealed
except by the affirmative vote of the holders of not less than two-thirds
of the shares of the capital stock of the Company (other than shares held
by related persons).
Preemptive Rights: The holders of the Common Stock have no preemptive
rights.
Other Provisions: The issued and outstanding shares of Common Stock are,
and the shares of the New Common Stock, if any, will be, fully paid and
nonassessable.
Transfer Agent and Registrar: The Company is the transfer agent and
registrar for the Common Stock.
PLAN OF DISTRIBUTION
The Company may sell the Securities in any of three ways: (i) through
underwriters or dealers; (ii) directly to a limited number of purchasers or
to a single purchaser; or (iii) through agents. Each Prospectus Supplement
will set forth the terms of the offering of the Securities offered thereby,
including the name or names of any underwriters, the purchase price of such
Securities and the proceeds to the Company from such sale, any underwriting
discounts and other items constituting underwriters' compensation, any
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
If underwriters are used in the sale, the Securities will be acquired by
the underwriters for their own account and may be sold from time to time in
one or more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time of the
sale. The Securities may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters as
may be designated by the Company, or directly by one or more of such firms.
The underwriter or underwriters with respect to a particular underwritten
offering of Securities will be named in the Prospectus Supplement relating
to such offering and, if an underwriting syndicate is used, the managing
underwriter or underwriters will be set forth on the cover page of such
Prospectus Supplement. Unless otherwise set forth in a Prospectus
Supplement, the obligations of the underwriters to purchase the Securities
offered thereby will be subject to certain conditions precedent, and the
underwriters will be obligated to purchase all such Securities if any are
purchased.
Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Each Prospectus Supplement
will set forth the name of any agent involved in the offer or sale of the
Securities in respect of which such Prospectus Supplement is delivered as
well as any commissions payable by the Company to such agent. Unless
otherwise indicated in such Prospectus Supplement, any such agent will be
acting on a best efforts basis for the period of its appointment.
If so indicated in a Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain specified
institutions to purchase the Securities offered thereby from the Company at
the public offering price set forth in such Prospectus Supplement pursuant
to delayed delivery contracts providing for payment and delivery on a
specified date in the future. Such contracts will be subject to those
conditions set forth in such Prospectus Supplement, which will set forth
the commission payable for solicitation of such contracts.
Agents and underwriters may be entitled under agreements entered into
with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act of 1933, as
amended.
EXPERTS
The financial statements and the financial statement schedules of
Northwest Natural Gas Company incorporated in this Prospectus by reference
from the Company's Annual Report on Form 10-K, have been audited by
Deloitte & Touche, independent auditors, as stated in their report, which
is incorporated herein by reference, and have been so incorporated in
reliance upon the report of such firm, given upon their authority as
experts in accounting and auditing.
With respect to the unaudited interim financial information which is
incorporated herein by reference, Deloitte & Touche has applied limited
procedures in accordance with professional standards for a review of such
information. However, as stated in their reports included in the Company's
Quarterly Reports on Form 10-Q and incorporated by reference herein, they
did not audit and they do not express an opinion on that interim financial
information. Accordingly, the degree of reliance on their reports on such
information should be restricted in light of the limited nature of the
review procedures applied. Deloitte & Touche is not subject to the
liability provisions of Section 11 of the Securities Act of 1933, as
amended, for their reports on the unaudited interim financial information
because such reports are not "reports" or a "part" of the registration
statement prepared or certified by an accountant within the meaning of
Sections 7 and 11 of the Act.
The statements made as to matters of law and legal conclusions in the
documents incorporated in this Prospectus by reference and under
"Description of the New Bonds" and "Description of Common Stock" herein
and, if any, in the accompanying Prospectus Supplement have been reviewed
by Bruce B. Samson, Esquire, Portland, Oregon. Mr. Samson is General
Counsel of the Company. These statements and conclusions are set forth in
reliance upon the opinion of Mr. Samson given upon his authority as an
expert. As of March 31, 1994, Mr. Samson owned approximately 2,802 shares
of the Company's common stock (including 1,009 shares through the Company's
Retirement K Savings Plan) and has been granted options to purchase 8,000
additional shares at a price of $24.875 and 2,000 additional shares at a
price of $36.00, the market prices of the shares on the dates of such
grants. Mr. Samson's shares, including the underlying shares subject to
options granted to him, have a current fair market value of approximately
$412,865.
LEGALITY
The legality of the Securities will be passed upon for the Company by Mr.
Samson and by Reid & Priest, New York, New York. Certain legal matters
will be passed upon for the Underwriters by Simpson Thacher & Bartlett (a
partnership which includes professional corporations), New York, New York.
However, all matters pertaining to titles, the lien and enforceability of
the Mortgage, franchises and all other matters of Oregon and Washington law
will be passed upon only by Mr. Samson.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Filing fee Securities and Exchange Commission . . . $ 20,690
Rating agencies' fees* . . . . . . . . . . . . . . 50,000
Trustees' fees* . . . . . . . . . . . . . . . . . . 20,000
Legal fees and expenses* . . . . . . . . . . . . . 100,000
Accounting fees and expenses* . . . . . . . . . . . 15,000
Printing and engraving* . . . . . . . . . . . . . . 35,000
Miscellaneous expenses* . . . . . . . . . . . . . . 34,310
------
Total expenses* . . . . . . . . . . . . . . . . . $275,000
--------
--------
_________________________
*Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Oregon Business Corporation Act (the "Act") provides, in general,
that a director or officer of a corporation who has been or is threatened
to be made a defendant in a legal proceeding because that person is or was
a director or officer of the corporation:
(1) shall be indemnified by the corporation for all reasonable expenses
of such litigation when the director or officer is wholly successful on the
merits or otherwise;
(2) may be indemnified by the corporation for the expenses, judgments,
fines and amounts paid in settlement of such litigation (other than a
derivative lawsuit) if he or she acted in good faith and in a manner
reasonably believed to be in, or at least not opposed to, the best
interests of the corporation (and, in the case of a criminal proceeding,
had no reasonable cause to believe the conduct was unlawful); and
(3) may be indemnified by the corporation for reasonable expenses of a
derivative lawsuit (a suit by a shareholder alleging a breach by a director
or officer of a duty owed to the corporation) if he or she acted in good
faith and in a manner reasonably believed to be in, or at least not opposed
to, the best interests of the corporation, provided the director or officer
is not adjudged liable to the corporation.
The Act also authorizes the advancement of litigation expenses to a
director or officer upon receipt of a written affirmation of the director's
or officer's good faith belief that the standard of conduct has been met
and a written undertaking by such director or officer to repay such ex-
penses if it is ultimately determined that he or she is not entitled to be
indemnified. The Act also provides that the indemnification provided
thereunder shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any bylaw, agreement, vote of
shareholders or disinterested directors or otherwise.
The Company's Bylaws provide that the Company shall indemnify directors
and officers to the fullest extent permitted under the Act, thus making
mandatory the discretionary indemnification authorized by the Act.
The Company's Restated Articles of Incorporation provide that the Company
shall indemnify its officers and directors to the fullest extent permitted
by law, which may be broader than the indemnification authorized by the
Act.
The Company's shareholders have approved and the Company has entered into
indemnity agreements with its directors and officers which provide for
indemnity to the fullest extent permitted by law and also alter or clarify
the statutory indemnity in the following respects:
(1) prompt advancement of litigation expenses is provided if the
director or officer makes the required affirmation and undertaking;
(2) the director or officer is permitted to enforce the indemnity
obligation in court and the burden is on the Company to prove that the
director or officer is not entitled to indemnification;
(3) indemnity is explicitly provided for judgments and settlements in
derivative actions;
(4) prompt indemnification is provided unless a determination is made
that the director or officer is not entitled to indemnification; and
(5) partial indemnification is permitted if the director or officer is
not entitled to full indemnification.
The Company maintains in effect a policy of insurance providing for
reimbursement to the Company of payments made to directors and officers as
indemnity for damages, judgments, settlements, costs and expenses incurred
by them which the Company may be required or permitted to make according to
applicable law, common or statutory, or under provisions of its Restated
Articles of Incorporation, Bylaws or agreements effective under such laws.
ITEM 16. LIST OF EXHIBITS.
1(a) - Form of Underwriting Agreement relating to the New Bonds.
1(b) - Form of Underwriting Agreement relating to the New Common
Stock.
4(a)* - Copy of Mortgage and Deed of Trust, dated as of July 1, 1946
(filed as Exhibit 7(j) in File No. 2-6494).
4(b)* - Copies of Supplemental Indentures Nos. 1 through 14 to the
Mortgage and Deed of Trust, dated, respectively, as of June 1,
1949, March 1, 1954, April 1, 1956, February 1, 1959, July 1,
1961, January 1, 1964, March 1, 1966, December 1, 1969, April
1, 1971, January 1, 1975, December 1, 1975, July 1, 1981, June
1, 1985, and November 1, 1985 (filed as Exhibit 4(d) in File
No. 33-1929); Supplemental Indenture No. 15 to the Mortgage
and Deed of Trust, dated as of July 1, 1986 (filed as Exhibit
4(c) in File No. 33-24168); Supplemental Indentures Nos. 16,
17 and 18 to the Mortgage and Deed of Trust, dated,
respectively, as of November 1, 1988, October 1, 1989 and July
1, 1990 (filed as Exhibit 4(c) in File No. 33-40482);
Supplemental Indenture No. 19 to the Mortgage and Deed of
Trust, dated as of June 1, 1991 (filed as Exhibit 4(c) in File
No. 33-64014).
4(c) - Copy of the Twentieth Supplemental Indenture to the Mortgage
and Deed of Trust, dated as of June 1, 1993.
4(d) - Form of Supplemental Indenture relating to the New Bonds.
4(e)* - Restated Articles of Incorporation as filed and effective June
24, 1988, as amended December 8, 1992 and December 1, 1993.
(incorporated herein by reference to Exhibit 4(a) to
Registration No. 33-51271).
4(f)* - Bylaws as amended December 16, 1993 (incorporated herein by
reference to Exhibit (3b) to the Company's Annual Report on
Form 10-K for 1993 in File No. 0-994).
5(a) - Opinion of Bruce B. Samson, Esquire.
5(b) - Opinion of Reid & Priest.
12* - Computation of Ratio of Earnings to Fixed Charges
(incorporated by reference to Exhibit 12 to the Company's
Quarterly Report on Form 10-Q for the first quarter of 1994 in
File No. 0-994).
15 - Letter of Independent Auditors relating to unaudited interim
financial information (see page II-7).
23 - Independent Auditors' Consent (see page II-8). The consents
of Bruce B. Samson,Esquire, and of Reid & Priest are included
in their opinions filed, respectively, as Exhibits 5(a) and
5(b).
24 - Power of Attorney (see page II-4).
25(a) - Statement of Eligibility of the Corporate Mortgage Trustee on
Form T-1.
25(b) - Statement of Eligibility of the Individual Mortgage Trustee on
Form T-2.
_____________
*Incorporated by reference herein as indicated.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply
if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in this registration statement.
(2) That, for the purpose of determining liability under the
Securities Act of 1933, each such post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes, that for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to section 13(a) or 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions described
under Item 15 of this registration statement, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in
the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
POWER OF ATTORNEY
Each director and/or officer of the registrant whose signature
appears hereinafter hereby appoints Robert L. Ridgley, Bruce R. DeBolt and
Robert G. Schuur, the Agents for Service named in this registration
statement, and each of them severally, as his attorney-in-fact to sign in
his name and behalf, in any and all capacities stated below, and to file
with the Securities and Exchange Commission, any and all amendments,
including post-effective amendments, to this registration statement, and
the registrant hereby also appoints each such Agent for Service as its
attorney-in-fact with like authority to sign and file any such amendments
in its name and behalf.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Portland, and State of Oregon on
the 23rd day of May, 1994.
NORTHWEST NATURAL GAS COMPANY
By ROBERT L. RIDGLEY
------------------------------------
Robert L. Ridgley,
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933 this
registration statement has been signed below by the following persons in
the capacities and on the date indicated.
Signature Title Date
--------- ----- ----
ROBERT L. RIDGLEY President, May 23, 1994
--------------------------- Chief Executive
Robert L. Ridgley, Officer, and Director
Principal Executive Officer
BRUCE R. DEBOLT Senior Vice President, May 23, 1994
--------------------------- Finance, and Chief
Bruce R. DeBolt, Financial Officer
Principal Financial Officer
D. JAMES WILSON Treasurer and May 23, 1994
--------------------------- Controller
D. James Wilson,
Principal Accounting Officer
MARY ARNSTAD Director May 23, 1994
---------------------------
Mary Arnstad
THOMAS E. DEWEY, JR. Director May 23, 1994
---------------------------
Thomas E. Dewey, Jr.
TOD R. HAMACHEK Director May 23, 1994
---------------------------
Tod R. Hamachek
RICHARD B. KELLER Director May 23, 1994
---------------------------
Richard B. Keller
WAYNE D. KUNI Director May 23, 1994
---------------------------
Wayne D. Kuni
DWIGHT A. SANGREY Director May 23, 1994
---------------------------
Dwight A. Sangrey
MELODY C. TEPPOLA Director May 23, 1994
---------------------------
Melody C. Teppola
RUSSELL F. TROMLEY Director May 23, 1994
---------------------------
Russell F. Tromley
BENJAMIN R. WHITELEY Director May 23, 1994
---------------------------
Benjamin R. Whiteley
WILLIAM R. WILEY Director May 23, 1994
---------------------------
William R. Wiley
CARLTON WOODARD Director May 23, 1994
---------------------------
Carlton Woodard
Exhibit 15
May 23, 1994
Northwest Natural Gas Company
Portland, Oregon
We have made a review, in accordance with standards established
by the American Institute of Certified Public Accountants, of the
unaudited interim financial information of Northwest Natural Gas
Company and subsidiaries for the periods ended March 31, 1994 and
1993, as indicated in our report dated April 28, 1994; because we
did not perform an audit, we expressed no opinion on that
information.
We are aware that our report referred to above, which was included
in your Quarterly Report on Form 10-Q for the quarter ended March
31, 1994, is incorporated by reference in this Registration
Statement.
We also are aware that the aforementioned reports, pursuant to
Rule 436(c) under the Securities Act of 1933, are not considered
a part of the Registration Statement prepared or certified by an
accountant or a report prepared or certified by an accountant
within the meaning of Sections 7 and 11 of that Act.
/s/ Deloitte & Touche
----------------------
DELOITTE & TOUCHE
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Northwest Natural Gas Company on Form S-3 of our
report dated February 25, 1994 (which expresses an unqualified
opinion and includes an explanatory paragraph relating to a
change in the Company's method of accounting for income taxes and
postretirement benefits in 1993) appearing in the Annual Report
on Form 10-K of Northwest Natural Gas Company for the year ended
December 31, 1993. We also consent to the references to us under
the heading "Experts" in such Registration Statement.
/s/ Deloitte & Touche
----------------------
DELOITTE & TOUCHE
May 23, 1994
INDEX TO EXHIBITS
Sequentially
Numbered
Exhibit Page
------- ------------
1(a) - Form of Underwriting Agreement relating to the New Bonds.
1(b) - Form of Underwriting Agreement relating to the Common
Stock.
4(a) - Copy of Mortgage and Deed of Trust, dated as of July 1, *
1946, to Bankers Trust Company and R.G. Page (to whom
Stanley Burg is now successor), Trustees (filed as
Exhibit 7(j) in File No. 2-6494).
4(b) - Copies of Supplemental Indentures Nos. 1 through 14 to *
the Mortgage and Deed of Trust, dated, respectively, as
of June 1, 1949, March 1, 1954, April 1, 1956, February
1, 1959, July 1, 1961, January 1, 1964, March 1, 1966,
December 1, 1969, April 1, 1971, January 1, 1975,
December 1, 1975, July 1, 1981, June 1, 1985, and
November 1, 1985 (filed as Exhibit 4(d) in File No. 33-
1929); Supplemental Indenture No. 15 to the Mortgage
and Deed of Trust, dated as of July 1, 1986 (filed as
Exhibit (4)(c) in File No. 33-24168); Supplemental
Indentures Nos. 16, 17 and 18 to the Mortgage and Deed
of Trust, dated, respectively, as of November 1, 1988,
October 1, 1989 and July 1, 1990 (filed as Exhibit
(4)(c) in File No. 33-40482); and Supplemental
Indenture No. 19 to the Mortgage and Deed of Trust,
dated as of June 1, 1991 (filed as Exhibit 4(c) in File
No. 33-64014).
4(c) - Copy of the Twentieth Supplemental Indenture to the
Mortgage and Deed of Trust, dated as of June 1, 1993.
4(d) - Form of Supplemental Indenture relating to the New
Bonds.
4(e) - Restated Articles of Incorporation as filed and *
effective June 24, 1988, as amended December 8, 1992
and December 1, 1993 (incorporated herein by reference
to Exhibit 4(a) in File No. 33-51271).
4(f) - Bylaws as amended December 16, 1993 (incorporated *
herein by reference to Exhibit (3b) to the Company's
Annual Report on Form 10-K for 1993 in File No. 0-
994).
5(a) - Opinion of Bruce B. Samson, Esquire.
5(b) - Opinion of Reid & Priest.
12 - Computation of Ratio of Earnings to Fixed Charges *
(incorporated by reference to Exhibit 12 to the
Company's Quarterly Report on Form 10-Q for the first
quarter of 1994 in File No. 0-994).
15 - Letter of Independent Auditors relating to unaudited
interim financial information (see page II-7).
23 - Independent Auditors' Consent (see page II-8). The
consents of Bruce B. Samson, Esquire, and of Reid &
Priest are included in their opinions filed,
respectively, as Exhibits 5(a) and 5(b).
24 - Power of Attorney (see page II-4).
25(a) - Statement of Eligibility of the Corporate
Mortgage Trustee on Form T-1.
25(b) - Statement of Eligibility of the Individual
Mortgage Trustee on Form T-2.
_________________________________________
* Previously filed as indicated.