As filed with the Securities and Exchange Commission on June , 1997
Registration No.
===========================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
The Montana Power Company
(Exact name of registrant as specified in its charter)
Montana 810170530
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
40 East Broadway
Butte, Montana 59701
(406) 7235421
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
--------------------------
D. T. BERUBE, J. P. PEDERSON, M. E. ZIMMERMAN, Esq.
Chairman of the Board Vice President and Vice President and
and Chief Financial General Counsel
Chief Executive Officer and Information Officer The Montana Power Company
The Montana Power Company The Montana Power Company 40 East Broadway
40 East Broadway 40 East Broadway Butte, Montana 59701
Butte, Montana 59701 Butte, Montana 59701 (406) 7235421
(406) 7235421 (406) 7235421
MARY LOUISE WEBER, Esq.
Reid & Priest LLP
40 West 57th Street
New York, New York 10019
(212) 6032187
(Names, addresses, including zip codes, and telephone numbers, including
area codes, of agents for service)
---------------------------
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/
-------------------------
CALCULATION OF REGISTRATION FEE
=================================================================
PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM
EACH CLASS OFFERING AGGREGATE AMOUNT OF
OF SECURITIES AMOUNT TO BE PRICE PER OFFERING REGISTRATION
TO BE REGISTERED REGISTERED UNIT* PRICE* FEE
---------------- ---------- ------- -------- ----------
Common Stock . . 3,000,000 $22.563 $67,689,000 $20,511.88
shares
================================================================
*Estimated solely for the purpose of calculating the registration
fee.
Pursuant to Rule 429, the combined prospectus filed herewith also
relates to Registration No. 33-58403.
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 or until the registration statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
PROSPECTUS
THE MONTANA POWER COMPANY
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
______________ SHARES OF COMMON STOCK
Daniel T. Berube
Chairman of the Board
Dear Participant or Prospective Participant:
We are pleased to send you this Prospectus describing our
amended Dividend Reinvestment and Stock Purchase Plan, (the
"Plan"). The Plan amendments include (i) the investment of
optional cash payments twice a month, instead of monthly; (ii) an
increase in the initial cash payment for all new investors to
$100; (iii) the addition of non-shareholder residents of Arizona,
Florida, and North Carolina as eligible to join the Plan (iv) an
increase in the minimum optional cash payment to $25
(participants who elected automatic monthly electronic funds
transfer payments or employee payroll deductions of less than $25
prior to July __, 1997, will not be required to increase that
amount).
The Plan provides investors with a simple, cost effective,
and convenient method of acquiring shares of the Company's common
stock. Participation in the Plan is open to (i) shareholders of
record of the common and preferred stock of the Company, (ii) to
the extent described below, beneficial owners of the common and
preferred stock of the Company, (iii) employees of the Company
and its subsidiaries, and (iv) other interested investors who are
resident in the following states: Arizona, California, Colorado,
Florida, Georgia, Illinois, Louisiana, Minnesota, Montana, New
Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania,
South Dakota, Tennessee, Texas, Utah, and Wisconsin.
The Plan permits you to reinvest dividends on all or any
specified number of your shares of common and/or preferred stock
in additional shares of common stock, purchase shares of common
stock and deposit your common stock and preferred stock
certificates into your Plan account for safekeeping.
If your shares are held by a brokerage, bank, or other
intermediary account, you may participate only by reinvesting
your dividends to purchase a whole number of shares and only
through participation by your brokerage, banker or trustee.
If you are a shareholder of record and wish to join the
Plan, you may enroll at any time by completing an enrollment
form. Employees and other interested investors residing in the
states described above may also join the Plan by completing an
enrollment form and making an initial cash payment of $100. To
obtain these forms, contact the Investor Services Department at
The Montana Power Company, 40 E Broadway, Butte, MT 59701-9394 or
call (800) 245-6767 or 406-497-3014.
We suggest you retain this Prospectus for future reference.
Sincerely,
Daniel T. Berube
Chairman of the Board
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR BY ANY
STATE SECURITIES COMMISSION NOR HAS THE 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 ___________________.
-2-
THE COMPANY
The Montana Power Company (the "Company") is the issuer of
the additional shares of common stock offered hereby. The
principal executive offices of the Company are located at 40 East
Broadway, Butte, Montana 59701-9394, telephone (800) 245-6767 or
(406) 497-3014.
AVAILABLE INFORMATION
The Company files reports and other information with the
Securities and Exchange Commission (the "Commission") under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
Reports, proxy statements and other information filed by the
Company can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C., as well as at
the following regional offices: 13th Floor, Seven World Trade
Center, New York, New York, and Suite 1400, 500 West Madison
Street, Chicago, Illinois. 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. The Commission also maintains a web site
(http://www.sec.gov) that contains reports, proxy statements and
other information relating to the Company. The common stock is
listed on the New York Stock Exchange and Pacific Exchange.
Reports, proxy statements and other information concerning the
Company can be inspected at such Exchanges.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Incorporated by reference in this Prospectus are the
following documents filed with the Commission:
The Company's Annual Report on Form 10-K for the year ended
December 31, 1996.
The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997.
The Company's Current Reports on Form 8-K, dated, January
28, February 21, February 28, and April 21, 1997.
All reports and other documents filed by the Company
pursuant to Section 13(a), 13(c), 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 in
this Prospectus and to be made a part hereof from the date of
filing of such reports and documents.
The Company, upon request, will provide, without charge a
copy of any or all of the documents referred to above which have
been or may be incorporated in this Prospectus by reference,
other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents.
Requests for such copies should be directed to the Investor
Services Department, The Montana Power Company, 40 East Broadway,
Butte, Montana 59701-9394, telephone (800) 245-6767 or (406) 497-
3014.
-3-
USE OF PROCEEDS
Unless shares of common stock are purchased directly from
the Company, the Company will receive no proceeds from the
offering of common stock through the Plan. To the extent that
shares are purchased directly from the Company the net proceeds
are expected to be used for general corporate purposes. During
1996, the Company sold 37,176 shares under the Plan for which it
received $841,107. The Company has no basis for estimating the
number of shares of common stock that the Company will sell
through the Plan or the prices at which such shares will be sold.
THE PLAN
The Company's Dividend Reinvestment and Stock Purchase Plan
(the "Plan") is as follows:
PURPOSE
The purpose of the Plan is to provide a simple, cost
effective, and convenient way to acquire additional shares of the
Company's common stock and provide for the safekeeping of
certificates.
ADVANTAGES
Additional shares of common stock can be acquired by (a)
reinvesting all or a portion of the cash dividends you receive on
shares of common and/or preferred stock registered in your own
name, and (b) making optional cash payments of at least $25 per
payment but not more than $60,000 per year.
At present, there are no service charges for participating
in the Plan (see "Costs"). When shares are purchased from the
Company, you will not pay any commissions. When shares are
purchased for you on the open market or in negotiated
transactions through one or more broker-dealers, you will pay
commissions. Broker-dealers (the "Broker") are appointed by the
Company to act as independent agents for such purpose. Because
of the volume of shares purchased through the Plan, the
commissions should be less than those which you would pay if you
purchased the same number of shares yourself.
Full investment of funds is possible because the Plan
permits the purchase of fractions of shares, as well as whole
shares, to be credited to your account. In addition, dividends
and whole shares will be reinvested in additional shares.
You may authorize your bank to make a monthly payment from
your account to purchase shares each month. Employees may
authorize payroll deductions.
You may avoid the cumbersome safekeeping of certificates for
shares credited to your account, since all shares purchased
through the Plan are held by the Custodian (see
"Administration"). In addition, you may deposit your common and
preferred stock certificates into the Plan for safekeeping.
Regular statements of account provide simplified record keeping.
You may request that the shares of common stock held in your
account be sold or that certificates be issued for the shares of
common and/or preferred stock.
As described below, there are certain limitations upon
participation in the Plan if you are the beneficial owner
(beneficial owner) of shares registered in the names of
brokerages, banks or other intermediary account.
-4-
DISADVANTAGES
You have no control over the price at which shares are
purchased or sold for your account since shares (i) are purchased
under the Plan on specified dates or during specified periods,
and (ii) are sold on dates determined by the broker after the
Plan Administrator has processed a request for sale. Therefore,
you bear the risk of fluctuations in the market price of the
common stock (See "Purchases," "Per Share Price" and "Sale of
Shares").
Optional cash payments must be received by the twelfth day
or the twenty-seventh day of any month to be invested on the next
purchase date (for purchases from the Company) or during the next
purchase period (for purchases on the open market). Optional cash
payments received after the twelfth day or the twenty-seventh day
of the month will be held until the second following purchase
date or purchase period. In no event will optional cash payments
remain uninvested more than thirty-five days after receipt by the
Plan Administrator. No interest will be paid to you on funds
held by the Plan Administrator pending investment under the Plan
(See "Purchases").
ADMINISTRATION
The Company, as the Plan Administrator, administers the
Plan, keeps records, sends statements of account to participants,
monthly, in the case of optional cash purchases, and quarterly,
in the case of dividend reinvestment, and performs other duties
relating to the Plan. The Company appoints the Broker who acts
as the independent agent of participants to purchase shares on
the open market or in negotiated transactions. The Company, as
Custodian of the Plan, holds shares acquired under the Plan and
shares deposited into the Plan for safekeeping. The Company may
resign as Plan Administrator or as Custodian at any time upon the
appointment of a successor. The Company believes that its
position as Plan Administrator, as compared with that of a
registered broker-dealer or federally insured banking
institution, poses no material risk for the following reasons:
(i) the Company has substantial experience in administering its
dividend reinvestment plan over the years, having served as
administrator of the plan since 1982, (ii) the Plan
Administrator's duties are limited to clerical and administrative
functions such as recordkeeping, processing of forms and
preparing and distributing regular statements of account and
(iii) a segregated trust or escrow account has been established
with a bank to hold cash payments received from participants
pending investment under the Plan.
All communications concerning the Plan should be directed by
mail or telephone to the Plan Administrator as follows:
Plan Administrator, Investor Services Department
The Montana Power Company
40 East Broadway
Butte, Montana 59701-9394
Telephone: (800) 245-6767
(406) 497-3014
Fax: (406) 497-3018
ENROLLMENT
Shareholders of Record Common and Preferred Shares are
registered in your name.
You may join the Plan by returning a completed Authorization
Form to the Plan Administrator, Investor Services Department.
Beneficial Owners Common and Preferred shares are held in
street name by brokerages, banks, or trustees.
-5-
You may participate in the dividend reinvestment portion of
the Plan, if your brokerage, bank or trustee elects to join the
Plan on your behalf. Reinvestment of dividends is limited to the
purchase of whole shares. Optional cash payments may not be
made.
Brokerages, banks or trustees may participate on your behalf
by completing a Brokerage, Bank, or Trustee Authorization Form
and returning it to the Plan Administrator, Investor Services
Department. If the Plan Administrator receives written
instructions from a brokerage, bank or trustee shareholder by the
fifth business day following each dividend record date, the Plan
Administrator reinvests that dividend in accordance with those
instructions. The reinvestment of dividends is limited with
respect to each account designated on the brokerage, bank or
trustee Authorization form to the purchase of the largest number
of whole shares that can be purchased with the dividends
attributable to such account. Any funds remaining after
reinvestment are remitted to the brokerage, bank or trustee. A
dividend check is mailed to the brokerage, bank or trustee in the
usual manner for all shares for which reinvestment instructions
are not received by the Plan Administrator. Standing
instructions are not permitted.
Since the Plan Administrator does not maintain records as
to, or hold shares for the accounts of beneficial owners, you
must look to your brokerage, bank or trustee for records of your
participation and with respect to the sale of shares purchased
with reinvested dividends or the receipt of certificates.
If you are a beneficial owner and want to participate in the
Plan as a shareholder of record, contact your brokerage, bank or
trustee and request that some or all of your shares be
transferred to your name.
Each brokerage, bank or trustee shareholder who participates
in the Plan on your behalf is mailed a quarterly statement
showing each transaction. In addition, the brokerage, bank or
trustee shareholder receives one stock certificate registered in
its name for the total number of shares purchased, and a check
for the uninvested dividends.
Employees
Employees of the Company or any of its subsidiaries may join
the Plan by completing an Employee Authorization Form,
accompanied by a cash payment of not less than $100 nor more than
$60,000; and may choose to make regular optional cash payments
through payroll deductions by completing an Employee Payroll
Deduction Form. These forms are to be sent to the Plan
Administrator, Investor Services Department.
Payroll deductions must be in an even dollar amount, not
less than $25 per deduction and not more than $60,000 per year.
Payroll deductions may be increased, decreased (but not below
$25) or terminated by an employee at any time by signing a new
Employee Payroll Deduction Form and sending it to the Plan
Administrator by the tenth day of the month.
If you elected to make payroll deductions of less than $25
prior to July __, 1997, you will not be required to increase the
amount to $25.
Other Interested Investors
Other interested investors who are individuals domiciled, or
which are corporations or other legal entities whose principal
places of business are, in the States of Arizona, California,
Colorado, Florida, Georgia, Illinois, Louisiana, Minnesota,
Montana, New Mexico, New York, North Carolina, Ohio, Oregon,
Pennsylvania, South Dakota, Tennessee, Texas, Utah and Wisconsin,
or such other states in which the Company has satisfied the
requirements of the state's securities laws applicable to the
operation of the Plan, may join the Plan by completing an
Authorization Form and returning it to the Plan Administrator,
Investor Services Department. The form must be accompanied by a
cash payment of not less than $100 nor more than $60,000.
-6-
Other interested investors located in foreign countries may
not join the Plan until they become either shareholders of record
or beneficial owners.
Enrollment Deadlines
If the Plan Administrator receives your Authorization Form
directing reinvestment of dividends on or prior to the dividend
record date, that dividend will be reinvested in accordance with
your instructions in shares of common stock and the new shares
will be credited to your account. If the Plan Administrator
receives your Authorization Form after the dividend record date,
that dividend will be paid in cash and reinvestment will begin
with the next dividend. For example, in the case of a common
stock dividend paid by the Company on May 1, for which the record
date was April 10, if the Authorization Form directing
reinvestment is received by the Plan Administrator on or prior to
April 10, the May 1 dividend will be reinvested in shares of
common stock and will be credited to your account. However, if
the Authorization Form is received by the Plan Administrator
after April 10, the May 1 dividend will be paid in cash and
reinvestment will not begin until the next dividend. The record
dates for the payment of dividends on common and preferred stock
are customarily three weeks prior to the dividend payment dates.
Common and preferred stock dividend payment dates usually are the
first days of February, May, August and November.
FORMS
Authorization Forms, Brokerage, Bank or Trustee
Authorization Forms, Employee Authorization Forms, Employee
Payroll Deduction Forms, Cash Payment Forms, Automatic Cash
Payment Forms, Safekeeping Authorization Forms and instructions
may be obtained, at any time, from the Plan Administrator,
Investor Services Department.
PURCHASES
Shares purchased under the Plan are either authorized but
unissued shares of common stock purchased from the Company or
outstanding shares purchased by the Broker in the open market or
through negotiated transactions. Periodically, the Company may
change the source of such purchases. In no event will optional
cash payments received for investment remain uninvested for more
than thirty-five days after receipt by the Plan Administrator.
Purchases from the Company
Reinvested Dividends
Shares purchased from the Company with reinvested common and
preferred stock dividends are purchased and credited to your
account as of each dividend payment date. Dividend payment dates
for both the common and preferred stock usually are the first
days of February, May, August and November.
Optional Cash Payments
Shares purchased from the Company with optional cash
payments are purchased and credited to your account twice a month
on the first and the fourteenth days (or the next business day).
If the Company receives your optional cash payment by the twelfth
day of the month, it will be invested on the fourteenth day. If
the Company receives your optional cash payment after the twelfth
day and by the twenty-seventh day of the month, it will be
invested on the first day of the following month. For example,
an optional cash payment received on or after April 13 will not
be invested until May 1 and an optional cash payment received on
or after April 28 will not be invested
-7-
until May 14. You will not be paid interest on optional cash
payments held by the Plan Administrator until the next purchase
date.
Market Purchases
Reinvested Dividends
Shares purchased by the Broker with reinvested common stock
and preferred stock dividends are purchased during the periods
commencing three business days prior to the first days of
February, May, August and November and ending at the discretion
of the Broker. Purchases are credited to your account as of the
last day of the purchase period.
Optional Cash Payments
Shares purchased by the Broker with optional cash payments
are purchased during two periods each month, beginning on the
thirteenth and twenty-eighth days of the month and ending at the
discretion of the Broker (except that in months in which a common
stock ex-dividend date occurs the purchase period will end on the
day before the ex-dividend date). If the Company receives your
optional cash payments by the twelfth day of the month, the
Broker will invest it during the period beginning on the
thirteenth day. If the Company receives your optional cash
payment after the twelfth day and by the twenty-seventh day of
the month, the Broker will invest it during the period beginning
on the twenty-eighth day. For example, an optional cash payment
received on or after April 13 will not be invested until the
purchase period beginning on April 28 and an optional cash
payment received on or after April 28 will not be invested until
the purchase period beginning May 13. You will not be paid
interest on optional cash payments held by the Plan Administrator
until the next purchase period. In no event will optional cash
payments remain uninvested for more than 35 days after receipt by
the Plan Administrator. Purchases are credited to your account
as of the last day of the purchase period.
The Broker will not purchase any shares in the open market
on any day on which the market price of the common shares will be
the basis for determining the price of shares purchased from the
Company. The number of shares purchased with reinvested
dividends and optional cash payments on any day during each
purchase period and the prices paid for such shares are
determined by the Broker.
Number of Common Shares Purchased
The number of shares purchased for you on any purchase date
or during any purchase period depends on (a) the amount of your
dividends to be reinvested and/or your optional cash payments to
be invested, and (b) the price of the shares of common stock
purchased, including, in the case of purchases made through the
Broker, the brokerage commissions. Your account is credited with
that number of shares, including any fractional share computed to
three decimal places, equal to the total amount of dividends
reinvested or optional cash payments invested on your behalf
divided by the applicable price per share. THE MANNER IN WHICH
THE PLAN OPERATES DOES NOT PERMIT THE PLAN ADMINISTRATOR TO HONOR
A REQUEST THAT A SPECIFIC NUMBER OF SHARES BE PURCHASED.
PER SHARE PRICE
Purchases from the Company
The per share price of shares purchased from the
Company is the average of the high and low prices of the
common stock quoted on the New York Stock Exchange (NYSE)
Composite Transaction listing on the applicable purchase
date or, if common stock is not traded on such day, on the
preceding day on which it is traded.
-8-
Market Purchases
The per share price of shares purchased by the Broker
is the weighted average of the cost of all purchases of
common stock (including brokerage commissions) during the
applicable purchase period. The broker determines the prices
paid for all shares purchased.
CASH PAYMENTS
Optional Cash Payments
You may choose to make an optional cash payment by
sending a check or money order payable to The Montana Power
Company, together with a Cash Payment Form, to the Plan
Administrator, Investor Services Department. Payments may
vary in amount, but may not be less than $25 per payment nor
more than $60,000 per year. Cash Payment Forms are a part
of the Authorization Form and, in addition, are included
with each statement sent by the Plan Administrator.
Without withdrawing from the Plan, you may have your
optional cash payment returned by contacting the Plan
Administrator prior to the investment of that payment
(Purchase Period).
Optional cash payments received by the Company are
deposited promptly in a segregated trust or escrow bank
account. No interest will be paid to you on funds held by
the Plan Administrator pending investment. Any interest
earned on the account will be used to defray costs of
administering the Plan.
Automatic Cash Payments
You may elect to have monthly cash payments (not less
than $25) in a designated amount automatically charged
against your bank account by completing an Automatic Cash
Payment Form and sending it to the Plan Administrator,
Investor Services Department by the first day of any month.
The Plan Administrator will make the necessary arrangements
with your bank so that, on or about the twenty-seventh day
of each month, your bank account will be charged with the
amount designated on the Automatic Cash Payment Form. You
will not be required to write any checks or mail any
additional forms. You may discontinue the automatic cash
payments at any time by notifying the Plan Administrator,
Investor Services, by the tenth day of any month.
If you elected to make automatic monthly electronic
funds transfer payments of less than $25 prior to July __,
1997, you will not be required to increase the amount to
$25.
You may change the amount of your automatic cash
payment by completing a new Automatic Cash Payment Form and
sending it to the Plan Administrator, Investor Services
Department, by the tenth day of any month.
You may change the name of your bank or bank account
number, by completing a new Automatic Cash Payment Form and
sending it to the Plan Administrator, Investor Services
Department, by the first day of any month.
Employee Payroll Deduction
See "Employees" under "Enrollment" above.
-9-
COSTS
Service Fees
At present, there are no service charges for participating
in the Plan. All costs of administration of the Plan are paid by
the Company. However, the Company reserves the right at any time
to charge an initial setup fee and quarterly handling fees.
Should the Company determine to charge such fees, you will be
notified ninety days in advance.
Other Fees
You will be charged a fee of $25 each time you request a
duplicate copy of cost basis information, or request a wire
transfer or next day delivery of the proceeds of any sale of
shares for your account (the $25 fee may be deducted from the
proceeds of the sale). A check made payable to the Montana Power
Company must accompany your request.
Commissions
When shares are purchased from the Company, you will not pay
any commissions on shares purchased through the Plan. When
shares are purchased through the Broker, you will pay commissions
on those shares. Because of the volume of shares purchased
through the Plan, commissions should be less than those which you
would otherwise pay if you purchased the same number of shares
yourself.
If you request that the Plan Administrator sell your
shares, you will pay any related brokerage commission and
applicable taxes.
WITHDRAWALS
Certificates
Shares of common stock purchased for you under the Plan and
your common and/or preferred stock certificates which have been
deposited in the Plan for safekeeping will be credited to your
Plan account.
Upon written request to the Plan Administrator, you may
request a certificate for any number of whole shares held in your
account. The Company will issue a certificate for such shares in
the same name(s) in which your account is maintained, unless
otherwise instructed. If you want the certificate to be issued
in a name other than the name in which your Plan account
registration is maintained, your signature(s) on the instructions
or stock power must be guaranteed by a guarantor who is a member
of or a participant in a Securities Transfer Association "STA"
recognized signature guarantee program. Any remaining full
shares and fraction of a share will continue to be held in your
account. Certificates for fractions of shares are not issued
under any circumstances.
If you participate in the Plan through your brokerage, bank
or trustee and want to obtain stock certificates for your shares
of common stock purchased on your behalf through the Plan,
contact your brokerage, bank or trustee and request that the
shares be transferred into your name.
Sale of Shares
Upon a written request, the Plan Administrator will instruct
the Broker to sell any number of whole shares of common stock
held in your account. However, no shares of common stock will be
sold beginning on the common stock ex-dividend date and ending on
the related dividend record date. The Plan Administrator, in its
discretion, may refuse to sell shares of common stock deposited
in the Plan for safekeeping or purchased with
-10-
optional cash payments which have been in your account for less
than 90 days. You will receive the proceeds of the sale less
brokerage commissions and applicable taxes within 30 days of the
sale you request. If you request a wire transfer or next day
delivery of the sale proceeds, a $25 charge will be deducted from
the proceeds of the sale, unless your request is accompanied by a
check made payable to the Company. SHARES OF PREFERRED STOCK
HELD IN THE PLAN WILL NOT BE SOLD FOR YOU.
You can choose to sell your shares through a stockbroker of
your choice, in which case you should request a certificate for
your shares from the Plan Administrator.
Beneficial owners who want to sell shares of common stock
purchased through the Plan must contact their brokerages, banks
or trustees.
Withdrawal from the Plan
To withdraw from the Plan, send written notification to the
Plan Administrator. You may request, either (a) the issuance of
certificates for all of the whole shares of stock held in your
account and a cash payment for any fraction of a share, or (b)
the sale of all of the shares of common stock held in your
account, including any fraction of a share or (c) a combination
of the above. Shares will be sold in the manner described under
"Sale of Shares".
If you withdraw from the Plan before a purchase period
begins in any month, your optional cash payment, which the
Company may be holding to invest during that purchase period will
be returned. If your request is received after the purchase
period begins, any optional cash payment being held will be
invested during that purchase period. The Plan Administrator
would then withdraw those purchased shares as you requested.
If you are a beneficial owner participant and wish to
withdraw from participation in the Plan, contact your brokerage,
bank or trustee.
CHANGE IN MANNER OF PARTICIPATION
You may change the extent to which your dividends are
reinvested by completing a new Authorization Form specifying the
change and sending it to the Plan Administrator, Investor
Services Department. Changes become effective with respect to
the next dividend payment if the Authorization Form is received
by the Plan Administrator on or prior to the record date for that
dividend. Changes with respect to automatic cash payments may be
made in the manner described under "Cash Payments-Automatic Cash
Payments."
If you are a beneficial owner participant and wish to change
the extent to which you participate in the Plan you must contact
your brokerage, bank or trustee.
SAFEKEEPING OF STOCK CERTIFICATES AND BOOK ENTRY
Any Montana Power Company shareholder may deposit their common
stock or preferred stock certificate(s) into the Plan's
"safekeeping" service at no cost. Safekeeping is beneficial
because you no longer bear the risk and cost associated with the
loss, theft, or destruction of stock certificates. Certificates
representing shares to be deposited for safekeeping should be
sent, together with a completed Safekeeping Authorization Form,
by registered mail to the Plan Administrator, Investor Services
Department, The Montana Power Company, 40 East Broadway, Butte,
Montana 59701-9394. Certificates should not be endorsed. It is
suggested that you use registered mail when sending stock
certificates, declaring a value equal to 2% of the market value
of the shares on the date of mailing. This amount would be the
approximate cost of replacing the certificates should they be
lost in the mail. It is your
-11-
responsibility to retain records relative to the cost of any
shares represented by certificates deposited for safekeeping. A
Safekeeping Authorization Form may be obtained at any time by
request to the Plan Administrator.
Shares of stock purchased for you under the Plan will be
maintained in your Plan account for safekeeping in book entry
form.
PARTICIPANTS' ACCOUNTS AND REPORTS
The Plan Administrator maintains your account. All shares
purchased under the Plan or delivered by you for safekeeping are
credited to, and held in, your account.
In addition to a quarterly statement of your account, you
will receive a monthly statement following each purchase of
additional common shares, each sale of shares and each withdrawal
of certificates for shares and upon withdrawal from the Plan.
THESE STATEMENTS ARE YOUR CONTINUING RECORD OF THE COST OF SHARES
PURCHASED, THE BASIS FOR FEDERAL INCOME TAX PURPOSES, THE
PROCEEDS OF SALES AND THE AMOUNT OF DIVIDENDS REPORTABLE FOR
FEDERAL INCOME TAX PURPOSES, AND SHOULD BE RETAINED FOR INCOME
TAX PURPOSES. TO RECEIVE A DUPLICATE COPY OF THIS INFORMATION,
YOU MUST SUBMIT A CHECK IN THE AMOUNT OF $25 MADE PAYABLE TO THE
MONTANA POWER COMPANY. In addition, each participant receives
each revised Plan Prospectus and the same communications sent to
all shareholders, including the Company's Annual Report and any
Quarterly Reports to Shareholders, Notice of Annual Meeting and
Proxy Statement and tax information for reporting dividends paid.
Brokerages, banks and trustees participating in the Plan
receive from the Company, shortly after each dividend payment
date, a statement identifying the designated amount for
reinvestment and showing the number of shares with respect to
which dividends were to be reinvested, the total dividends paid,
the number of shares purchased, the total cost of the shares, the
amount of uninvested dividends remaining, the fair market
(taxable) value of the shares and the total dividends reportable
for Federal income tax purposes. With the statement, the
brokerage, bank or trustee receives one certificate registered
in its name for the total number of shares purchased for all of
the designated accounts and a check for the total amount of
uninvested dividends.
If your shares are held in street name, you must contact
your brokerage, bank or trustee for accounts and records of your
participation in the Plan.
SHARES PLEDGED
Shares held in the Plan cannot be pledged. If your shares
are to be pledged, contact the Plan Administrator to request a
certificate be issued in your name(s).
SHAREHOLDER VOTING
You will receive a proxy card for the total shares held in
your Plan account (includes certificates held in the Plan for
safekeeping) and shares held directly by you (certificates). If
a proxy card is returned properly signed and marked for voting,
the shares covered are voted as marked. If a proxy card is
returned properly signed, but without instructions as to the
manner shares are to be voted with respect to any item thereon,
the shares covered are voted in accordance with the
recommendations of the Company's Board of Directors. If the
proxy card is not returned, or if it is returned unexecuted or
improperly executed, the shares covered are not voted.
-12-
RESPONSIBILITY OF THE PLAN ADMINISTRATOR, THE CUSTODIAN AND THE
BROKER
The Broker shall not have any responsibility with respect to
this Prospectus or the administration of the Plan. The Broker,
in acting as agent for the Plan participants, the Plan
Administrator, in administering the Plan, and the Custodian, in
holding shares under the Plan, are not liable for any act done in
good faith or for any good faith omission to act, including,
without limitation, any claim of liability (a) arising out of
failure to terminate your participation in the Plan upon your
death prior to receipt of legally sufficient instructions, and
(b) with respect to the prices at which shares are purchased or
sold for your account and the times at which such purchases or
sales are made. However, the foregoing in no way affects your
right to bring a cause of action based on alleged violations of
Federal securities laws.
THE COMPANY CANNOT ASSURE YOU OF PROFITS, OR PROTECT YOU
AGAINST LOSSES, ON THE SHARES PURCHASED UNDER THE PLAN, OR ASSURE
YOU OF FUTURE DIVIDENDS.
MODIFICATION OR TERMINATION OF PLAN; TERMINATION OF PARTICIPANTS
The Company reserves the right to suspend, modify or
terminate the Plan at any time and to interpret and regulate the
Plan as it deems necessary or desirable in connection with the
operation of the Plan.
The Company also reserves the right, at its discretion, to
terminate your participation in the Plan if your Plan account
contains less than one hundred shares. You would receive notice
of any such termination. In the event of any such termination,
your shares held under the Plan will be delivered or sold in the
manner described under "Withdrawal."
PARTICIPATION BY FOREIGN AND OTHER HOLDERS SUBJECT TO WITHHOLDING
Plan participants who are non-resident aliens or non-U.S.
corporations, trusts and estates and individuals are subject to
United States income tax withholding on dividends paid on shares
held in their account. The amount is determined in accordance
with U.S. Treasury regulations. Other holders of dividends may
be subject to United States back-up withholding. The dividends
will be reinvested or paid by check in an amount equal to the
dividends less the amount of tax required to be withheld.
Statements confirming purchases made for such participants will
indicate the net dividend reinvested and amount of tax withheld.
COMMUNICATIONS
All communications concerning the Plan should be directed to
the Plan Administrator as follows:
Plan Administrator, Investor Services Department
The Montana Power Company
40 East Broadway
Butte, Montana 59701-9394
Telephone: (800) 245-6767 or
(406) 497-3014
Fax: (406) 497-3018
TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN
The current Federal income tax consequences to a participant
in the Plan will be as follows:
-13-
With respect to reinvested cash dividends used to purchase
authorized but unissued shares from the Company, a participant is
treated for Federal income tax purposes as having received a
distribution in an amount equal to the fair market value on the
dividend payment date of the full number of shares and any
fractional share purchased with reinvested dividends. The fair
market value of such shares on the dividend payment date will be
treated as dividend income to the participant to the extent of
current or accumulated earnings and profits of the Company, as
determined for Federal income tax purposes. The basis of the
shares so purchased is equal to the fair market value of such
shares on the dividend payment date.
With respect to reinvested cash dividends used to purchase
shares in the open market or through negotiated transactions, a
participant is treated for Federal income tax purposes as having
received a distribution in an amount equal to the cash used to
purchase the shares and to pay the brokerage commissions to
obtain the shares. Such distribution will be treated as dividend
income to the participant to the extent of current or accumulated
earnings and profits of the Company, as determined for Federal
income tax purposes. The basis of the shares so purchased is
equal to the amount of this distribution.
If you purchase shares with optional cash payments you will
not recognize taxable income upon such purchases. The basis of
shares purchased in this manner is the amount of the optional
cash payment.
You are not in receipt of taxable income upon the
distribution to you of certificates for shares purchased under
the Plan. Upon the subsequent sale of these shares, or upon the
sale by the Company of shares held for your account, you will
recognize capital gain or loss on the sale measured by the
difference between the amount you receive for the shares sold and
the amount at which the shares were purchased (tax basis).
The foregoing is a general statement of Federal income tax
consequences only. You should consult your own tax advisor as to
the specific application of the tax rules governing the Plan as
they relate to you. The statements of account sent to you should
be retained for this purpose.
DESCRIPTION OF COMMON STOCK
The following information is a summary of certain rights and
privileges of the common stock of the Company. The summary does
not purport to be complete. Reference is made to the Company's
Restated Articles of Incorporation, By-laws and Indenture (For
Unsecured Subordinated Debt Securities relating to Trust
Securities), dated as of November 1, 1996, from the Company to
The Bank of New York, as trustee (the "Subordinated Debt
Indenture"), which are exhibits to the Registration Statement of
which this Prospectus constitutes a part, for complete
statements. The following statements are qualified in their
entirety by such references.
AUTHORIZED AND OUTSTANDING STOCK: The Company has 125,000,000
authorized shares, without par value, divided into 5,000,000
shares of preferred stock and 120,000,000 shares of common stock.
On May 30, 1997, 580,389 shares of the preferred stock and
54,625,540 shares of the common stock were issued and
outstanding. In addition, options to purchase 687,290 shares of
common stock under the Long-Term Incentive Plan were outstanding
on that date.
The common stock is without par value and nonassessable. It
is listed on the New York Stock Exchange and Pacific Exchange,
Inc.
VOTING RIGHTS: Each holder of the preferred and common stock of
the Company is entitled to vote cumulatively for the election of
Directors, and otherwise to one vote for each share held. The
Board of Directors has fourteen members, approximately one-third
of whom are elected at each annual meeting for a term of three
years. In general, the presence of a majority of the outstanding
shares of the preferred and common stock will constitute a
-14-
quorum at a meeting of shareholders; and the affirmative vote of
the majority of the shares present shall be the act of the
shareholders. Montana law requires (1) class voting upon such
matters as a change in the number of authorized shares or in the
relative rights and preferences of a class or series or the
creation of a new class of stock having superior rights and
preferences; and (2) the approval by two-thirds of the
outstanding shares of preferred and common stock of a merger,
consolidation or share exchange, the sale of all or substantially
all of the Company's assets, or the voluntary dissolution of the
Company. The Company's Restated Articles of Incorporation
require the affirmative vote of a majority of the outstanding
shares of the common stock (1) to redeem the preferred stock of
the $6 Series, the $4.20 Series or the $6.875 Series, and (2) the
affirmative vote of a majority of the outstanding shares of
preferred and common stock to create a new class of stock, or for
shareholder amendment of the By-laws. The Restated Articles of
Incorporation also require the affirmative vote of two-thirds of
the shares of the preferred stock voting at a meeting at which a
majority of the shares of the preferred stock shall be present to
(1) create a class of stock or to create any security convertible
into a class of stock ranking prior to the preferred stock, or
(2) to change the express terms of the preferred stock in a
manner substantially prejudicial to the holders thereof.
DIVIDEND RIGHTS: Each series of the preferred stock is entitled,
in preference to the common stock, to (a) cumulative dividends at
the annual rate established for that series and (b) mandatory
redemption payments if provided for that series. After full
provision for preferred stock dividends and mandatory redemption
payments, if any, the common stock is entitled to dividends
declared out of any remaining funds available therefor.
LIMITATIONS ON PAYMENT OF DIVIDENDS: The Company's Subordinated
Debt Indenture contains a restriction on the payment of cash
dividends on Common Stock if the Company were to elect to defer
payment of interest on the debentures issued thereunder.
LIQUIDATION RIGHTS: In liquidation, the preferred stock is
entitled, in preference to the common stock, to the amount per
share fixed by the Directors in the resolutions providing for the
issue of each particular series plus accumulated unpaid
dividends. Thereafter, the common stock is entitled to all
remaining assets.
PREEMPTIVE RIGHTS: Holders of the common stock do not have
preemptive rights.
CHANGE OF CONTROL: The Company's Restated Articles of
Incorporation include a fair price provision that is intended to
provide protection against coercive takeover tactics deemed by
the Board of Directors not to be in the best interests of all
shareholders. It provides that in the event of certain business
combinations, including mergers, consolidations,
recapitalizations, certain sales or hypothecations of assets,
liquidations and certain issuances of securities, involving a
person or entity who is or may become the beneficial owner of 10%
or more of the outstanding shares of the capital stock of the
Company entitled to vote generally in the election of Directors
(the "Voting Shares"), the amount of cash or other consideration
to be paid to holders of the common stock must be at least equal
to the higher of the highest price paid by the 10% shareholder in
connection with the acquisition of certain of its shares of
common stock or the highest quoted price of the common stock on
certain dates related to such acquisition. Similar provisions
apply to the acquisition of the preferred stock. The fair price
provision does not apply in the event that such a business
combination shall have been approved by either two-thirds of
certain directors who are not affiliated with the 10% shareholder
(the "Continuing Directors") or the holders of 70% of the Voting
Shares. In addition, unless a proposed business combination has
been approved by two-thirds of the Continuing Directors, certain
other requirements must be met, including the requirement that a
proxy or information statement describing the proposed business
combination be mailed to shareholders at least 30 days prior to
its consummation. The fair price provisions may not be amended
or repealed except by the vote of holders of at least 70% of the
Voting Shares unless the amendment or repeal is recommended by
two-thirds of the Continuing Directors.
-15-
PREFERRED SHARE PURCHASE RIGHTS: The holders of the common stock
have one preferred share purchase right (each a "Right") for each
share of common stock. Each Right, evidenced by and traded with
the shares of common stock, entitles the shareholder to purchase
one one-hundredth of a share of Participating Preferred Shares, A
Series, at an exercise price of $120.00, subject to certain
adjustments. The Rights will be exercisable only if a person or
group acquires 20% or more of the Company's Voting Shares or
announces a tender offer, the consummation of which would result
in the beneficial ownership by a person or group of 20% or more
of the Company's Voting Shares.
If any person or group acquires 20% or more of the
outstanding Voting Shares of the Company, each Right will entitle
its holder (other than such person or members of such group) to
purchase a number of shares of common stock or Participating
Preferred Shares, A Series, having a market value of twice the
Right's exercise price. If any person or group acquires between
20% and 50% of the outstanding Voting Shares of the Company, the
Board of Directors of the Company may, subject to requisite
regulatory approval, if any, require each outstanding Right to be
exchanged for one share of common stock or one one-hundredth of a
Participating Preferred Share, A Series (or assets in lieu
thereof).
In addition, after any person or group has acquired 20% or
more of the outstanding Voting Shares of the Company, the Company
may not consolidate or merge with, or sell 50% or more of its
assets or earning power to, any person or group, or engage in
certain "self-dealing" transactions with any person or group
owning 20% or more of the outstanding Voting Shares of the
Company, unless proper provision is made so that each Right would
thereafter entitle its holder to purchase a number of the
acquiring company's common shares having a market value at the
time of twice the Right's exercise price.
The Rights may be redeemed, at a redemption price of $.01
per Right, by the Board of Directors of the Company at any time
until any person or group has acquired 20% or more of the
outstanding Voting Shares of the Company. The Rights will expire
June 6, 1999.
TRANSFER AGENTS AND REGISTRARS: The Transfer Agents for the
common stock are the Company and First Chicago Trust Company of
New York. The Registrars are First Chicago Trust Company of New
York and First Bank Montana, National Association, Butte,
Montana.
EXPERTS
The consolidated financial statements incorporated in this
Prospectus by reference to the Company's Annual Report on Form
10-K for the year ended December 31, 1996, have been so
incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as
experts in auditing and accounting.
The statements made as to matters of law and legal conclusions
under (i) "Business-Utility Operations Regulation and Rates",
"Properties" "Legal Proceedings", and "Management's Discussion
and Analysis of Financial Condition and Results of Operation
Utility Operations Summary of Significant Regulatory Matters,
Liquidity and Capital Resources, and Environmental Issues", in
the Company's Annual Report on Form 10-K, incorporated herein by
reference, and (ii) under "Description of Common Stock" herein
have been reviewed by Michael E. Zimmerman, Esq., General Counsel
of the Company, and are set forth therein and herein upon the
authority of such Counsel, as expert. The statements made as to
matters of law and legal conclusions under "Tax Consequences of
Participation in the Plan" herein have been reviewed by Reid &
Priest LLP, tax counsel, and are set forth herein upon the
authority of such counsel, as expert. As of 5/29/97, Mr.
Zimmerman owned approximately 3,184 shares through the Company's
Retirement Savings Plan (401-K) and has been granted options to
purchase 24,200 additional shares at the market price existing on
the date of such grant. Mr. Zimmerman's shares, including the
underlying shares subject to options granted to him, had a fair
market value of approximately $619,563 on that date.
-16-
No person has been authorized to
give any information or to make any
representations other than those
contained in this Prospectus and, if
given or made, such information or
representations must not 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
securities other than those specifically
offered hereby or in any circumstances
in which such offer or solicitations is
unlawful. Neither the delivery of this
Prospectus nor any sale hereunder, under
any circumstances, shall create any
implication that there has been no
change in the affairs of the Companmy or
its subsidiary since the date hereof or
that the information herein is correct
as of any time since its date.
TABLE OF CONTENTS
Page
The Company . . . . . . . . . . . . 3
Available Information . . . . . . . 3
Incorporation of Certain Documents by
Reference . . . . . . . . . . . . . 3
Use of Proceeds . . . . . . . . . . 4
The Plan . . . . . . . . . . . . . 4
Purpose . . . . . . . . . . . 4
Advantages . . . . . . . . . . 4
Disadvantages . . . . . . . . 5
Administration . . . . . . . . 5
Enrollment . . . . . . . . . . 5
Shareholders of Record . . 5
Beneficial Owners . . . . 5
Employees . . . . . . . . 6
Other Interested Investors
6
Enrollment Deadlines . . 7
Forms . . . . . . . . . . . . 7
Purchases . . . . . . . . . . 7
Purchases from the Company
7
Market Purchases . . . . 8
Number of Common Shares
Purchased . . . . . . . . . 8
Per Share Price . . . . . . . . 8
Purchases from the Company 8
Market Purchases . . . . . 9
Cash Payments . . . . . . . . . 9
Optional Cash Payments . . 9
Automatic Cash Payments . . 9
Employee Payroll Deduction 9
Costs . . . . . . . . . . . . 10
Service Fees . . . . . . 10
Other Fees . . . . . . . 10
Commissions . . . . . . . 10
Withdrawals . . . . . . . . . 10
Certificates . . . . . . 10
Sale of Shares . . . . . 10
Withdrawal from the Plan 11
Change in Manner of Participation
11
Safekeeping of Stock Certificates
and Book Entry . . . . . . . . 11
Participants' Accounts and Reports
12
Shares Pledged . . . . . . . . 12
Shareholder Voting . . . . . . 12
Responsibility of the Plan
Administrator, the Custodian
and the Broker . . . . 13
Modification or Termination of
Plan; Termination
of Participants . . . 13
Participation by Foreign and Other
Holders Subject
to Withholding . . . . 13
Communications . . . . . . . . 13
Tax Consequences of Participation in the
Plan . . . . . . . . . . . . . . . 13
Description of Common Stock . . . 14
Authorized and Outstanding
Stock . . . . . . . . . . 14
Voting Rights . . . . . . 14
Dividend Rights . . . . . 15
Liquidation Rights . . . 15
Preemptive Rights . . . . 15
Change of Control: . . . 15
Preferred Share Purchase
Rights . . . . . . . . . 15
Transfer Agents and
Registrars . . . . . . . 16
Experts . . . . . . . . . . . . . . 16
[column]
THE MONTANA POWER COMPANY
----------------
PROSPECTUS
----------------
DIVIDEND REINVESTMENT
AND
STOCK PURCHASE PLAN
________ ___, 1997
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
*Filing fee-Securities and Exchange Commission . . . $20,511.88
Stock exchange listing fees . . . . . . . . . . . . . 14,900.00
Legal fees . . . . . . . . . . . . . . . . . . . . . 20,000.00
Auditor's fees . . . . . . . . . . . . . . . . . . . 1,500.00
Printing . . . . . . . . . . . . . . . . . . . . . . 6,000.00
Miscellaneous . . . . . . . . . . . . . . . . . . . . 7,088.12
--------
Total expenses . . . . . . . . . . . . . . . . . $70,000.00
========
*Actual, others estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Restated Articles of Incorporation of the Company
provide for the indemnification of directors and officers to the
extent and in the manner provided in Sections 351451 through 351-
457, Montana Code Annotated, which Sections are as follows:
35-1-451. Definitions. As used in 35-1-451 through 35-1-459,
the following definitions apply:
(1) "Corporation" includes any domestic or foreign
predecessor entity of a corporation in a merger or other
transaction in which the predecessor's existence ceased upon
consummation of the transaction.
(2) (a) "Director" means an individual who is or was a
director of a corporation or an individual who, while a director
of a corporation, is or was serving at the corporation's request
as a director, officer, partner, trustee, employee, or agent of
another foreign or domestic corporation, partnership, joint
venture, trust, employee benefit plan, or other enterprise. A
director is considered to be serving an employee benefit plan at
the corporation's request if the director's duties to the
corporation include duties or services by him to the plan or to
participants in or beneficiaries of the plan.
(b) Director includes, unless the context requires
otherwise, the estate or personal representative of a
director.
(3) "Expenses" include attorneys' fees.
(4) "Liability" means the obligation to pay a judgment,
settlement, penalty, or fine, including an excise tax assessed
with respect to an employee benefit plan, or to pay reasonable
expenses incurred with respect to a proceeding.
(5) (a) "Official capacity" means:
(i) when used with respect to a director, the
office of director in a corporation; or
(ii) when used with respect to an individual other
than a director, as contemplated in 35-1-457, the office
in a corporation held by the officer or the employment
or agency relationship undertaken by the employee or
agent on behalf of the corporation.
II-1
(b) Official capacity does not include service for any
other foreign or domestic corporation or any partnership, joint
venture, trust, employee benefit plan, or other enterprise.
(6) "Party" includes an individual who was, is, or is
threatened to be made a named defendant or respondent in a
proceeding.
(7) "Proceeding" means any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal,
administrative or investigative and whether formal or informal.
35-1-452. Authority to indemnify.
(1) Except as provided in subsection (4), an individual
made a party to a proceeding because he is or was a director may
be indemnified against liability incurred in the proceeding if:
(a) he conducted himself in good faith;
(b) he reasonably believed:
(i) in the case of conduct in his official
capacity with the corporation, that his conduct was in
the corporation's best interests; and
(ii) in all other cases, that his conduct was at
least not opposed to the corporation's best interests;
and
(c) in the case of any criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful.
(2) A director's conduct with respect to an employee
benefit plan for a purpose the director reasonably believed to be
in the interests of the participants in and beneficiaries of the
plan is conduct that satisfies the requirement of subsection
(1)(b)(ii).
(3) The termination of a proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent is not, of itself, a determination that the director
did not meet the standard of conduct described in this section.
(4) A corporation may not indemnify a director under this
section:
(a) in connection with a proceeding by or in the right
of the corporation in which the director was adjudged liable
to the corporation; or
(b) in connection with any other proceeding charging
improper personal benefit to the director, whether or not
involving action in the director's official capacity, in
which the director was adjudged liable on the basis that
personal benefit was improperly received by the director.
(5) Indemnification permitted under this section in
connection with a proceeding by or in the right of the
corporation is limited to reasonable expenses incurred in
connection with the proceeding.
35-1-453. Mandatory indemnification. Unless limited by its
articles of incorporation, a corporation shall indemnify a
director who was wholly successful, on the merits or otherwise,
in the defense of any proceeding to which the director was a
party because he is or was a director of the corporation, against
reasonable expenses incurred by the director in connection with
the proceeding.
35-1-454. Advance for expenses.
(1) A corporation may pay for or reimburse the reasonable
expenses incurred by a director who is a party to a proceeding in
advance of final disposition of the proceeding if:
(a) the director furnishes the corporation a written
affirmation of the director's good faith belief that the
director has met the standard of conduct described in 35-1-
452;
II-2
(b) the director furnishes the corporation a written
undertaking, executed personally or on the director's
behalf, to repay the advance if it is ultimately determined
that the director did not meet the standard of conduct
described in 35-1-452; and
(c) a determination is made that the facts then known
to those making the determination would not preclude
indemnification under 35-1-451 through 35-1-459.
(2) The undertaking required by subsection (1)(b) must be
an unlimited general obligation of the director but need not be
secured and may be accepted without reference to financial
ability to make repayment.
(3) Determinations and authorizations of payments under
this section must be made in the manner specified in 35-1-456.
35-1-455. Court ordered indemnification. Unless a
corporation's articles of incorporation provide otherwise, a
director of the corporation who is a party to a proceeding may
apply for indemnification to the court conducting the proceeding
or to another court of competent jurisdiction. On receipt of an
application, the court, after giving any notice the court
considers necessary, may order indemnification if it determines
that the director:
(1) is entitled to mandatory indemnification under 35-1-453,
in which case the court shall also order the corporation to pay
the director's reasonable expenses incurred in obtaining
court ordered indemnification; or
(2) is fairly and reasonably entitled to indemnification in
view of all the relevant circumstances, whether or not the
director met the standard of conduct set forth in 35-1-452 or was
adjudged liable as described in 35-1-452(4). If the director was
adjudged liable as described in 35-1-452(4), the director's
indemnification is limited to reasonable expenses incurred.
35-1-456. Determination and authorization of indemnification.
(1) A corporation may not indemnify a director under 35-1-452
unless authorized in the specific case after a determination has
been made that indemnification of the director is permissible in
the circumstances because the director has met the standard of
conduct set forth in 35-1-452.
(2) The determination must be made:
(a) by the board of directors by majority vote of a
quorum consisting of directors not at the time parties to
the proceeding;
(b) if a quorum cannot be obtained under subsection
(2)(a), by majority vote of a committee designated by the
board of directors, in which designated directors who are
parties may participate, consisting solely of two or more
directors not at the time parties to the proceeding;
(c) by special legal counsel:
(i) selected by the board of directors or its
committee in the manner prescribed in subsection (2)(a)
or (2)(b); or
(ii) if a quorum of the board of directors cannot
be obtained under subsection (2)(a) and a committee
cannot be designated under subsection (2)(b), selected
by majority vote of the full board of directors in
which selected directors who are parties may
participate; or
(d) by the shareholders, but shares owned by or voted
under the control of directors who are at the time parties
to the proceeding may not be voted on the determination.
(3) Authorization of indemnification and evaluation as to
reasonableness of expenses must be made in the same manner as the
determination that indemnification is permissible, except that if
the determination is made by special legal counsel, authorization
of indemnification and evaluation as to reasonableness of
expenses must be made by those entitled under subsection (2)(c)
to select counsel.
35-1-457. Indemnification of officers, employees, and agents.
Unless a corporation's articles of incorporation provide
otherwise:
II-3
(1) an officer of the corporation who is not a director is
entitled to mandatory indemnification under 35-1-453 and is
entitled to apply for court ordered indemnification under 35-1-455
to the same extent as to a director;
(2) the corporation may indemnify and advance expenses
under 35-1-451 through 35-1-459 to an officer, employee, or agent of
the corporation who is not a director to the same extent as to a
director; and
(3) a corporation may also indemnify and advance expenses
to an officer, employee, or agent who is not a director to the
extent, consistent with public policy, that may be provided by
its articles of incorporation, bylaws, general or specific action
of its board of directors, or contract.
* * * * * *
The bylaws of the Company further provide that the foregoing
right of indemnification shall not exclude or restrict any other
rights or actions which any director or officer may have, and
shall be available whether or not the director or officer
continues to hold such office at the time of incurring such
expense or discharging such liability.
The Company has insurance covering its expenditures which
might arise in connection with the lawful indemnification of its
directors and officers for their liabilities and expenses and
insuring officers and directors of the Company against certain
other liabilities and expenses.
II-4
ITEM 16. LIST OF EXHIBITS.
INCORPORATED BY REFERENCE
Exhibit No. Previous Filing Exhibit Designation
3(a) -- Restated Articles of
Incorporation, as amended.
3(b) -- Bylaws, as amended.
4(a) -- Rights Agreement dated as of 33-42882 4(d)
June 6, 1989, between The
Montana Power Company and
First Chicago Trust Company
of New York, as Rights Agent.
4(b) -- Indenture (For Unsecured 333-17181 4(d)
Subordinated Debt Securities
relating to Trust Securities),
dated as of November 1, 1996,
from the Company to The Bank of
New York, as Trustee
4(c) -- Officer's Certificate dated 333-17181 4(e)
November 6, 1996 establishing
the Company's Junior Subordinated
Deferrable Interest Debentures,
8.45% Series due 2036
5(a) -- Opinion of Michael E.
Zimmerman, Esq.
5(b)
and 8 -- Opinion of Reid & Priest LLP.
23(a) -- Consent of Price Waterhouse LLP.
23(b) -- Consent of Michael E.
Zimmerman, Esq. (included in
Exhibit 5(a)).
23(c) -- Consent of Reid & Priest LLP
(included in Exhibit 5(b)).
24 -- Power of Attorney (See page II-6).
II-5
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 this
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 (i) and (ii) above do not
apply if 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 any liability
under the Securities Act of 1933, each such post-effective
amendment 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.
(4) 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 Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference
in the 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 above, 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 Act 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 of 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 Act 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 below hereby appoints each of the Agents for
Service named in this registration statement as his or her
attorney-in-fact to sign in his or her 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.
II-6
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 Municipality of Butte-Silver Bow, and State of Montana, on
the 9th day of June, 1997.
THE MONTANA POWER COMPANY
By /s/ D. T. Berube
-------------------
D.T. Berube, Chairman
of the Board 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
/s/ D. T. Berube
-------------------
D. T. Berube Chairman of the Board, June 9, 1997
(Principal Executive Chief Executive Officer
Officer)
/s/ J. P. Pederson
-------------------
J. P. Pederson Vice President and June 9, 1997
(Principal Financial and Chief Financial
Accounting Officer) Information Officer
& Director
/s/ T. H. Adams
--------------------
T. H. Adams Director June 9, 1997
/s/ A. F. Cain
--------------------
A. F. Cain Director June 9, 1997
/s/ R. D. Corette
--------------------
R. D. Corette Director June 9, 1997
/s/ K. Foster
-------------------- Director June 9, 1997
K. Foster
/s/ R. P. Gannon
--------------------
R. P. Gannon Vice Chairman of the
Board and President
& Director June 9, 1997
/s/ B. D. Harris
--------------------
B. D. Harris Director June 9, 1997
/s/ C. T. Hibbard
--------------------
C. T. Hibbard Director June 9, 1997
II-7
/s/ J. R. Jester
--------------------
J. R. Jester Director June 9, 1997
/s/ D. P. Lambros
--------------------
D. P. Lambros Director June 9, 1997
/s/ C. Lehrkind III
--------------------
C. Lehrkind, III Director June 9, 1997
/s/ A. K. Neill
--------------------
A. K. Neill Director June 9, 1997
/s/ N. E. Vosburg
--------------------
N. E. Vosburg Director June 9, 1997
II-8
EXHIBIT INDEX
-------------
Exhibit
No. Description
------- ---------------------------
3(a) -- Restated Articles of Incorporation, as amended.
3(b) -- Bylaws, as amended.
5(a) -- Opinion of Michael E. Zimmerman, Esq.
5(b)
and 8 -- Opinion of Reid & Priest LLP.
23(a) -- Consent of Price Waterhouse LLP.
23(b) -- Consent of Michael E. Zimmerman, Esq. (included in
Exhibit 5(a)).
23(c) -- Consent of Reid & Priest LLP
(included in Exhibit 5(b)).
24 -- Power of Attorney (See page II-6).