<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 16, 1998
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
IDACORP, INC.
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<S> <C> <C>
IDAHO 6719 [APPLIED FOR]
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>
------------------------------
1221 WEST IDAHO STREET
BOISE, IDAHO 83702-5627
(208) 388-2200
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
------------------------------
<TABLE>
<S> <C> <C>
JOSEPH W. MARSHALL JAN B. PACKWOOD J. LAMONT KEEN
Chairman of the Board President Vice President and Treasurer
IDACORP, Inc. IDACORP, Inc. IDACORP, Inc.
1221 West Idaho Street 1221 West Idaho Street 1221 West Idaho Street
Boise, Idaho 83702-5627 Boise, Idaho 83702-5627 Boise, Idaho 83702-5627
(208) 388-2200 (208) 388-2200 (208) 388-2200
</TABLE>
<TABLE>
<S> <C>
ROBERT W. STAHMAN, ESQ. WILLIAM S. LAMB, ESQ.
Vice President and Secretary ELIZABETH W. POWERS, ESQ.
IDACORP, Inc. LeBoeuf, Lamb, Greene & MacRae, L.L.P.
1221 West Idaho Street 125 West 55th Street
Boise, Idaho 83702-5627 New York, New York 10019
(208) 388-2200 (212) 424-8000
</TABLE>
(Names, Addresses, Including Zip Codes, and Telephone Numbers,
Including Area Codes, of Agents for Service)
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: At the effective date of the share exchange, which shall occur as soon
as practicable after this Registration Statement is declared effective and the
satisfaction of all conditions precedent to the share exchange.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT OFFERING PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock,
without par value........................ 38,500,000 shares(1) $35.875(2) $1,381,187,500(2) $139,635(3)
</TABLE>
(1) The number of shares of IDACORP, Inc. common stock to be issued in exchange
for Idaho Power Company common stock in the share exchange described herein
cannot be precisely determined at the time this Registration Statement
becomes effective because shares of Idaho Power Company common stock may be
issued thereafter and until the effective time of the share exchange under
the Idaho Power Company Dividend Reinvestment and Stock Purchase Plan and
the Employee Savings Plan. This Registration Statement covers the number of
shares of IDACORP, Inc. common stock which is estimated to be at least as
large as the number of shares of Idaho Power Company common stock expected
to be outstanding at the effective time of the share exchange.
(2) The registration fee was calculated in accordance with Rule 457(f)(1) based
on the average of the high and low sale prices for shares of Idaho Power
Company common stock on the consolidated transaction reporting system on
March 10, 1998.
(3) Pursuant to Rule 457(b), the total fee required of $407,451 has been reduced
by the $267,816 filing fee previously paid at the time of filing of
preliminary proxy materials by Idaho Power Company on February 3, 1998.
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 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
IDAHO POWER COMPANY
1221 West Idaho Street
Boise, Idaho 83702
P.O. Box 70
Boise, Idaho 83707
March 23, 1998
DEAR FELLOW SHAREHOLDER:
It is our pleasure to invite you to attend the 1998 Annual Meeting of
Shareholders to be held on May 6, 1998, at 2:00 P.M., local time, at the Boise
Centre on the Grove, 850 West Front Street, Boise, Idaho. Your Board of
Directors and management look forward to personally greeting those shareholders
able to attend.
Information about the nominees for election as members of the Board of
Directors and the other business of the meeting is set forth in the Notice of
Meeting and the Proxy Statement and Prospectus on the following pages. This
year, you are asked to elect four Directors and to ratify the appointment of an
independent auditor for the fiscal year ending December 31, 1998. In addition,
there will be an important decision regarding the structure of our Company. You
are being asked to consider and vote upon a proposal to form a holding company
structure for Idaho Power Company.
In the formation of a holding company, each outstanding share of Idaho Power
Company ("Idaho Power") common stock would be exchanged for one share of
IDACORP, Inc. ("IDACORP") common stock. As a result, the common shareholders of
Idaho Power would become the shareholders of IDACORP.
Your Board of Directors and management believe the formation of a holding
company will offer the best means of positioning the Company to respond to the
changing business environment in the electric utility industry. While the
primary focus for IDACORP will be maintaining the strength of its core
business--serving the electric needs of Idaho Power's customers, the formation
of a holding company will provide greater flexibility to develop and operate new
businesses in an increasingly competitive environment and to respond to new
growth opportunities.
If the holding company formation is approved and becomes effective, it will
not be necessary for you to turn in your Idaho Power common stock certificates
in exchange for IDACORP common stock certificates. The certificates for Idaho
Power common stock you now hold will automatically represent shares of IDACORP
common stock. New certificates bearing the name of IDACORP will be issued in the
future as certificates for presently outstanding shares of Idaho Power common
stock are presented for transfer.
The utility industry is undergoing change, and Idaho Power continues to
change to meet the challenges of a competitive future. Anticipating and
responding to the competitive future is critical to our continued success.
The Board of Directors and management believe that the formation of a
holding company is in the best interest of the shareholders and unanimously
recommend approval of the holding company proposal and urge you to vote for the
proposal.
YOUR VOTE IS IMPORTANT. YOU CAN BE SURE YOUR SHARES ARE REPRESENTED AT THE
MEETING BY PROMPTLY RETURNING YOUR COMPLETED PROXY IN THE ENCLOSED ENVELOPE. You
may revoke your proxy prior to or at the meeting and may vote in person if you
wish.
Sincerely,
<TABLE>
<S> <C>
Joseph W. Marshall Jan B. Packwood
CHAIRMAN OF THE BOARD AND PRESIDENT AND CHIEF
CHIEF EXECUTIVE OFFICER OPERATING OFFICER
</TABLE>
<PAGE>
IDAHO POWER COMPANY
1221 WEST IDAHO STREET
BOISE, IDAHO 83702
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 6, 1998, AT BOISE, IDAHO
------------------------
March 23, 1998
TO THE SHAREHOLDERS OF
IDAHO POWER COMPANY:
The Annual Meeting of Shareholders of Idaho Power Company ("Idaho Power")
will be held on May 6, 1998, at 2:00 P.M., local time, at the Boise Centre on
the Grove, 850 West Front Street, Boise, Idaho 83702, for the following
purposes:
1. to elect four Director nominees;
2. to approve the formation of a holding company and an Agreement and Plan
of Exchange, whereby IDACORP, Inc. ("IDACORP"), an Idaho corporation
formed by Idaho Power, will become the parent company of Idaho Power (the
"Holding Company Proposal");
3. to ratify the selection of Deloitte & Touche LLP as independent auditor
for the fiscal year ending December 31, 1998; and
4. to transact such other business that may properly come before the
meeting.
All shareholders of record at the close of business on March 17, 1998 are
entitled to notice of the meeting. Holders of Idaho Power common stock, 4%
Preferred Stock, $100 par value, and 7.68% Series, Serial Preferred Stock, $100
par value, of record at the close of business on March 17, 1998, are entitled to
vote at the meeting. Holders of Idaho Power 4% Preferred Stock, $100 par value,
and 7.68% Series, Serial Preferred Stock, $100 par value, may be entitled to
assert dissenters' rights of appraisal under Part 13 of the Idaho Business
Corporation Act ("BCA") in connection with the Holding Company Proposal. The
attached Proxy Statement and Prospectus contains a summary of the dissenters'
rights provisions of the BCA (see "Proposal No. 2--HOLDING COMPANY
PROPOSAL--Rights of Dissenting Shareholders") and a copy of Part 13 of the BCA
(Exhibit D).
All shareholders are cordially invited to attend the Annual Meeting in
person. WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE RETURN YOUR PROXY PROMPTLY. It
is important that you mark, sign, date and return the accompanying proxy,
regardless of the size of your holdings, as promptly as possible. A
self-addressed postage prepaid envelope is enclosed for you to return the proxy
card. Any shareholder returning a proxy card who attends the meeting may vote in
person by revoking that proxy prior to or at the meeting.
By Order of the Board of Directors
Robert W. Stahman
CORPORATE SECRETARY
TO SHAREHOLDERS WHO RECEIVE MULTIPLE PROXIES
IF YOU OWN IDAHO POWER STOCK (COMMON OR PREFERRED) OTHER THAN THE SHARES
SHOWN ON THE ENCLOSED PROXY, YOU WILL RECEIVE A PROXY IN A SEPARATE ENVELOPE FOR
EACH SUCH HOLDING. PLEASE EXECUTE AND RETURN EACH PROXY RECEIVED.
<PAGE>
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 JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL
PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
JURISDICTION.
<PAGE>
SUBJECT TO COMPLETION DATED MARCH 16, 1998
PROXY STATEMENT
OF
IDAHO POWER COMPANY
------------------
PROSPECTUS
OF
IDACORP, INC.
COMMON STOCK
------------------
This Proxy Statement and Prospectus contains both a Proxy Statement for the
Annual Meeting of Shareholders of Idaho Power Company, an Idaho corporation
("Idaho Power" or the "Company"), to be held on May 6, 1998 (the "Annual
Meeting") and a Prospectus of IDACORP, Inc., an Idaho corporation ("IDACORP"),
relating to the issuance of up to 38,500,000 shares of common stock, without par
value, of IDACORP ("IDACORP Common Stock"), upon the effectiveness of the
proposed formation of a holding company for Idaho Power as described herein.
Pursuant to an Agreement and Plan of Exchange (the "Exchange Agreement"), a
copy of which is attached hereto as Exhibit A, Idaho Power proposes to
reorganize itself into a holding company structure. Under the terms of the
Exchange Agreement, each outstanding share of Idaho Power common stock, $2.50
par value ("Idaho Power Common Stock"), will be exchanged for one share of
IDACORP Common Stock (the "Exchange"). As a result of the Exchange, Idaho Power
will become a wholly-owned subsidiary of IDACORP, and all of the IDACORP Common
Stock outstanding immediately after the effective date of the Exchange will be
owned by the holders of the Idaho Power Common Stock outstanding immediately
prior to the effective date of the Exchange. See "Proposal No. 2--HOLDING
COMPANY PROPOSAL."
All shareholders of record at the close of business on March 17, 1998 are
entitled to notice of the meeting. Holders of Idaho Power Common Stock, 4%
Preferred Stock, $100 par value, and 7.68% Series, Serial Preferred Stock, $100
par value, of record at the close of business on March 17, 1998, are entitled to
vote at the meeting. Holders of Idaho Power 4% Preferred Stock, $100 par value,
and 7.68% Series, Serial Preferred Stock, $100 par value, may be entitled to
assert dissenters' rights of appraisal under Part 13 of the Idaho Business
Corporation Act ("BCA") in connection with the Holding Company Proposal. This
Proxy Statement and Prospectus contains a summary of the dissenters' rights
provisions of the BCA (see Proposal No. 2--HOLDING COMPANY PROPOSAL--Rights of
Dissenting Shareholders) and a copy of Part 13 of the BCA (Exhibit D).
The principal executive offices of Idaho Power and of IDACORP are located at
1221 West Idaho Street, Boise, Idaho 83702, telephone (208) 388-2200.
This Proxy Statement and Prospectus and the accompanying proxy, solicited on
behalf of the Board of Directors of Idaho Power, and the 1997 Annual Report to
Shareholders were first sent to shareholders of Idaho Power on or about March
23, 1998.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this Proxy Statement and Prospectus is March 23, 1998.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---
<S> <C>
AVAILABLE INFORMATION........................................................... 1
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE................................. 1
SUMMARY......................................................................... 3
VOTING.......................................................................... 8
PROPOSAL NO. 1--ELECTION OF DIRECTORS........................................... 9
Nominees for Election......................................................... 9
Continuing Directors.......................................................... 10
Meetings of the Board and Committees.......................................... 13
Transactions with Management.................................................. 13
PROPOSAL NO. 2--HOLDING COMPANY PROPOSAL........................................ 14
General....................................................................... 14
Idaho Power................................................................... 14
Reasons for the Holding Company Proposal...................................... 15
Agreement and Plan of Exchange................................................ 15
Amendment or Termination of Exchange Agreement................................ 16
Effective Date of the Exchange................................................ 16
Exchange of Stock Certificates Not Required................................... 16
Certain Considerations........................................................ 16
Regulatory Approvals.......................................................... 17
Regulation of IDACORP......................................................... 17
Business of IDACORP........................................................... 18
Treatment of Preferred Stock.................................................. 18
Rights of Dissenting Shareholders............................................. 19
Dividend Policy............................................................... 20
Listing of IDACORP Common Stock............................................... 20
United States Federal Income Tax Consequences................................. 20
IDACORP Capitalization........................................................ 22
Comparative Shareholders' Rights.............................................. 24
Rights Agreement.............................................................. 26
Certain Idaho Statutory Provisions............................................ 26
Directors and Management...................................................... 27
Dividend Reinvestment and Stock Purchase Plan................................. 28
Common Stock Plans............................................................ 28
Market Price of Idaho Power Common Stock...................................... 28
Transfer Agent and Registrar.................................................. 28
PROPOSAL NO. 3--RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR.............. 28
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS.......................... 29
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE......................... 29
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS................................ 29
Report of Compensation Committee of the Board of Directors on Executive 29
Compensation................................................................
Summary Compensation Table.................................................... 32
Long-Term Incentive Plans--Awards in Last Fiscal Year......................... 33
Director Compensation......................................................... 33
Compensation Committee Interlocks and Insider Participation................... 33
Employment Contracts.......................................................... 33
Performance Graph............................................................. 34
Retirement Benefits........................................................... 35
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
---
<S> <C>
Pension Plan Table............................................................ 35
EXPERTS......................................................................... 36
LEGAL OPINIONS.................................................................. 36
OTHER BUSINESS.................................................................. 36
1999 ANNUAL MEETING OF SHAREHOLDERS............................................. 36
EXHIBIT A - AGREEMENT AND PLAN OF EXCHANGE...................................... A-1
EXHIBIT B - RESTATED ARTICLES OF INCORPORATION OF IDACORP....................... B-1
EXHIBIT C - AMENDED BYLAWS OF IDACORP........................................... C-1
EXHIBIT D - PART 13 "DISSENTERS' RIGHTS" OF THE IDAHO BUSINESS
CORPORATION ACT................................................. D-1
</TABLE>
ii
<PAGE>
No person has been authorized to give any information or to make any
representation not contained in this Proxy Statement and Prospectus. If given or
made, such information or representation must not be relied upon as having been
authorized by either IDACORP or Idaho Power. This Proxy Statement and Prospectus
does not constitute an offer to sell or a solicitation of an offer to buy shares
of IDACORP Common Stock or the solicitation of a proxy to or from any person to
or from whom it is unlawful to make such offer or solicitation of an offer or
proxy solicitation in such jurisdiction. Neither the delivery of this Proxy
Statement and Prospectus nor any distribution of the securities made under this
Proxy Statement and Prospectus shall, under any circumstances, create any
implication that there has been no change in the affairs of Idaho Power or
IDACORP or in the information set forth herein since the date of this Proxy
Statement and Prospectus.
AVAILABLE INFORMATION
Idaho Power is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "SEC"). Such reports, proxy statements
and other information can be inspected and copied, at prescribed rates, at the
offices of the SEC specified below. Idaho Power Common Stock is listed on the
New York Stock Exchange ("NYSE") and the Pacific Stock Exchange ("PSE"), and
reports, proxy statements and other information concerning Idaho Power may be
inspected at the offices of such exchanges.
IDACORP has filed with the SEC a registration statement (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
registering the shares of IDACORP Common Stock to be issued upon effectiveness
of the Exchange. This Proxy Statement and Prospectus, which constitutes a part
of the Registration Statement, does not contain all of the information set forth
in the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the SEC. Such Registration Statement and the
exhibits thereto may be inspected and copied, at prescribed rates, at the public
reference facilities maintained by the SEC at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549 and at the SEC's regional offices at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, Suite
1300, New York, New York 10048. The SEC also maintains a web site that contains
reports, proxy statements and other information regarding registrants that file
electronically with the SEC. The address of such site is at http://www.sec.gov.
IDACORP will become subject to the same informational requirements as Idaho
Power following the Exchange described in this Proxy Statement and Prospectus,
and both IDACORP and Idaho Power will file reports and other information with
the SEC in accordance with the Exchange Act. Upon completion of the Exchange,
IDACORP Common Stock will be listed on the NYSE and PSE. At the time of such
listing, Idaho Power Common Stock will be withdrawn from listing and
registration under Section 12 of the Exchange Act.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
THIS PROXY STATEMENT AND PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE
WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS, OTHER
THAN EXHIBITS THERETO, UNLESS THEY ARE SPECIFICALLY INCORPORATED BY REFERENCE,
ARE AVAILABLE WITHOUT CHARGE TO ANY PERSON TO WHOM THIS PROXY STATEMENT AND
PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST TO ROBERT W. STAHMAN,
ESQ., IDAHO POWER COMPANY, 1221 WEST IDAHO STREET, BOISE, ID 83702, (208)
388-2676. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST
SHOULD BE MADE BY APRIL 29, 1998.
1
<PAGE>
The following document, which has heretofore been filed by Idaho Power with
the SEC pursuant to the Exchange Act, is incorporated by reference in this Proxy
Statement and Prospectus and shall be deemed to be a part hereof:
Idaho Power's Annual Report on Form 10-K for the year ended December 31,
1997.
All documents filed by Idaho Power with the SEC pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Proxy
Statement and Prospectus and prior to the termination of the offering covered by
this Proxy Statement and Prospectus shall be incorporated herein by reference
and shall be deemed to be a part hereof from the date of filing of such
documents (such documents, and the document enumerated above, being hereinafter
referred to as "Incorporated Documents"; provided, however, in each year during
which an offering is made by this Proxy Statement and Prospectus, all documents
filed by Idaho Power pursuant to Section 13, 14 or 15 of the Exchange Act prior
to the filing with the SEC of Idaho Power's Annual Report on Form 10-K covering
such year shall not be Incorporated Documents or be incorporated by reference in
this Proxy Statement and Prospectus or be a part hereof from and after such
filing of such Annual Report on Form 10-K).
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of this Proxy Statement and Prospectus to
the extent that a statement contained herein or in any other subsequently filed
Incorporated Document modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Proxy Statement and Prospectus.
2
<PAGE>
SUMMARY
The following Summary highlights selected information on the matters to be
voted on at the Annual Meeting. Reference is made to, and this Summary is
qualified in its entirety by, the more detailed information contained in,
attached to or incorporated by reference in this Proxy Statement and Prospectus
and the Exhibits hereto.
VOTING
The outstanding voting securities of the Company as of the record date for
the meeting are as follows: 166,407 shares of 4% Preferred Stock, $100 par value
(the "4% Preferred Stock"), each share being entitled to twenty votes; 150,000
shares of 7.68% Series, Serial Preferred Stock, $100 par value (the "7.68%
Series Preferred Stock"), each share being entitled to one vote (together with
the 4% Preferred Stock, the "Idaho Power Voting Preferred Stock"); and
37,612,351 shares of Common Stock, $2.50 par value, each share being entitled to
one vote (the outstanding voting securities together constituting "Idaho Power
Voting Stock"). The aggregate voting power of Idaho Power Voting Stock is
41,090,491 votes.
Only holders of record of shares of Idaho Power Voting Stock on March 17,
1998 (the "Record Date") will be entitled to vote at the Annual Meeting.
PROPOSAL NO. 1--ELECTION OF DIRECTORS
Four persons have been nominated for election as directors of Idaho Power to
serve a term of three years and until their respective successors shall have
been elected and qualified. If the proposed formation of a holding company is
adopted and becomes effective, each of the persons then serving as a director of
Idaho Power will also be a director of IDACORP for the same term.
------------------------
Directors are elected by a plurality of the votes cast by shares entitled to
vote at the meeting for the election of directors.
PROPOSAL NO. 2--HOLDING COMPANY PROPOSAL
1. WHAT IS IDAHO POWER'S HOLDING COMPANY PROPOSAL?
Pursuant to the Exchange Agreement, a copy of which is attached as Exhibit A
hereto, the Company will reorganize itself into a holding company structure. In
the Exchange, each outstanding share of Idaho Power Common Stock will be
exchanged for one share of IDACORP Common Stock. As a result of the Exchange,
Idaho Power will become a wholly-owned subsidiary of IDACORP, and all of the
IDACORP Common Stock outstanding immediately after the effective date of the
Exchange will be owned by the holders of Idaho Power Common Stock outstanding
immediately prior to the effective date of the Exchange.
Subject to the rights of dissenting shareholders that may apply to certain
series of the preferred stock and are summarized below, each outstanding share
of each series of preferred stock of Idaho Power, which consists of the
following: 4% Preferred Stock, $100 par value; 7.68% Series, Serial Preferred
Stock, $100 par value; Flexible Auction Series A, Serial Preferred Stock,
without par value; and 7.07% Series, Serial Preferred Stock, without par value
(collectively, the "Idaho Power Preferred Stock"), will continue unchanged as an
issued and outstanding share of Idaho Power Preferred Stock with the same
preferences, designations, relative rights, privileges and powers, and subject
to the same restrictions, limitations and qualifications as were applicable to
such shares prior to the effective date of the Exchange.
The outstanding first mortgage bonds of Idaho Power and all other contracts
and agreements to which Idaho Power is a party and the terms thereof will not be
altered as a result of the Exchange. Idaho Power's Restated Articles of
Incorporation, as amended ("Idaho Power Articles"), will not be changed in any
way as a result of the Exchange.
3
<PAGE>
On or as soon as practicable after the Exchange, Idaho Power will transfer
to IDACORP the stock of one of its non-utility subsidiaries, Ida-West Energy
Company ("Ida-West").
CERTAIN CONSIDERATIONS
Certain factors that should be considered in determining whether or not to
vote to approve the Holding Company Proposal are discussed under "Proposal No.
2--HOLDING COMPANY PROPOSAL--Certain Considerations." (Please see pages 16-17.)
2. WHY DOES THE BOARD RECOMMEND FORMING A HOLDING COMPANY?
The Board of Directors proposes to reorganize Idaho Power into a holding
company structure to respond to the changing business environment in the
electric utility industry. The move to a competitive electricity industry,
together with technological advances in the energy business, has created new
opportunities for energy companies like Idaho Power. A holding company structure
will allow the Company to better define and separate Idaho Power's regulated and
unregulated businesses and help protect the utility business and utility
customers from the risks that may be involved in future non-utility ventures.
The Board of Directors and management believe that formation of the holding
company serves the best interests of the customers and shareholders of Idaho
Power. (Please see pages 14-28.)
4
<PAGE>
3. WHAT WOULD THE HOLDING COMPANY STRUCTURE LOOK LIKE?
The following charts show Idaho Power's current structure and the proposed
holding company structure:
[CHART]
4. IN WHAT TYPES OF BUSINESSES WOULD IDACORP INVEST?
Although specific investment opportunities have not been determined, the
primary focus would be maintaining the strength of Idaho Power's core
business--serving the electric needs of Idaho Power's customers. It is expected
that participation in other opportunities would be related to the energy
business. (Please see pages 15 and 18.)
5. WHO MUST APPROVE THE FORMATION OF THE HOLDING COMPANY?
Approval of the proposed holding company is required from the Federal Energy
Regulatory Commission ("FERC") and the state public utility commissions of
Idaho, Nevada, Oregon and Wyoming.
5
<PAGE>
Applications for approval have been filed with each commission, and orders have
been received from the state public utility commissions of Idaho and Oregon.
Most importantly, the holding company proposal requires a favorable vote from
the Company's shareholders. (Please see pages 8-9 and 17.)
6. HOW WOULD MY OWNERSHIP OF IDAHO POWER STOCK BE AFFECTED BY THE NEW STRUCTURE?
Owners of Idaho Power Common Stock automatically would become owners of
IDACORP Common Stock on a share-for-share basis. It is expected that the IDACORP
Common Stock would be traded on the NYSE and the PSE. (Please see page 20.)
Idaho Power preferred stock would remain a security of Idaho Power. As
discussed on pages 18-19, holders of certain series of Idaho Power preferred
stock may be entitled to assert dissenters' rights in connection with the
Exchange.
7. WOULD SHAREHOLDERS HAVE TO TURN IN THEIR CURRENT STOCK CERTIFICATES?
No. Idaho Power Common Stock certificates automatically would represent the
same number of shares of common stock of IDACORP. IT WOULD NOT BE NECESSARY FOR
HOLDERS OF IDACORP COMMON STOCK TO EXCHANGE THEIR STOCK CERTIFICATES. (Please
see page 16.)
8. HOW WOULD A HOLDING COMPANY STRUCTURE AFFECT COMMON AND PREFERRED STOCK
DIVIDENDS?
Common shareholders would receive dividends from IDACORP rather than from
Idaho Power. When the restructuring takes effect, it is expected that dividends
on IDACORP Common Stock will be no less than the dividends Idaho Power is then
paying on its common stock and that IDACORP dividends will be paid on
approximately the same dates in each year as Idaho Power dividends are paid now.
Subsequently, dividends would depend on the financial performance of IDACORP's
subsidiaries, principally Idaho Power, and on other factors. (Please see pages
16-17.)
The preferred stock would continue to be a security of Idaho Power and the
holders of preferred stock would continue to have priority as to Idaho Power
dividends. (Please see page 18-19.)
9. WOULD THE DIVIDEND REINVESTMENT PLAN CONTINUE UNDER A HOLDING COMPANY
STRUCTURE?
Yes. All shares of Idaho Power Common Stock held under the Dividend
Reinvestment and Stock Purchase Plan will be automatically exchanged for shares
of IDACORP Common Stock. The Dividend Reinvestment and Stock Purchase Plan will
be continued with IDACORP Common Stock after the Exchange. (Please see page 28.)
10. HOW WOULD FORMATION OF A HOLDING COMPANY AFFECT PERSONAL FEDERAL INCOME
TAXES?
There would be no federal income tax consequences to Idaho Power common
shareholders when Idaho Power Common Stock is converted to IDACORP Common Stock.
For capital gains purposes, the tax basis and holding period of IDACORP Common
Stock would be the same as those for Idaho Power Common Stock. (Please see pages
20-22.)
11. WHAT WOULD THE NEW HOLDING COMPANY BE CALLED?
The new holding company will be called IDACORP, Inc.
6
<PAGE>
12. WHAT WOULD BE THE EFFECTIVE DATE OF THE HOLDING COMPANY FORMATION?
The effective date would occur as soon as practicable after the receipt of
approval by the shareholders of the Company and the receipt of all necessary
regulatory approvals. Although the Company cannot predict when such approvals
will be in place, the Company is hopeful that the effective date will occur in
the second half of 1998. (Please see page 16.)
13. WHO WOULD MANAGE THE HOLDING COMPANY AFTER THE RESTRUCTURING?
The Board of Directors and certain of the principal executive officers of
Idaho Power will also serve as the Board of Directors and executive officers of
IDACORP. (Please see page 27-28.)
14. ARE THERE RIGHTS OF DISSENTING SHAREHOLDERS?
Holders of Idaho Power Common Stock, Flexible Auction Series A, Serial
Preferred Stock, without par value, and 7.07% Series, Serial Preferred Stock,
without par value, do not have dissenters' rights.
Holders of shares of 4% Preferred Stock, $100 par value, and 7.68% Series,
Serial Preferred Stock, $100 par value, who do not vote their shares in favor of
the Holding Company Proposal and meet all the requisite statutory requirements
contained in Sections 30-1-1301 through 30-1-1331 of the Idaho Business
Corporation Act ("BCA"), the full text of which is reproduced as Exhibit D to
this Proxy Statement and Prospectus, are entitled to demand in writing that the
Company pay to such shareholder the fair value, plus accrued interest, of the
shares of such stock held by such shareholder ("Dissenters' Rights"). Any
shareholder entitled to Dissenters' Rights who wishes to make a demand for
appraisal is urged to review carefully the provisions of Sections 30-1-1301
through 30-1-1331 of the BCA, particularly the provisions setting forth the
procedural steps required to perfect the appraisal rights. Appraisal rights will
be lost if such procedural requirements are not fully satisfied. (Please see
page 19.)
ANY SHAREHOLDER ENTITLED TO DISSENTERS' RIGHTS WHO DESIRES TO EXERCISE SUCH
RIGHTS SHOULD CAREFULLY REVIEW THE BCA AND IS ADVISED TO CONSULT HIS LEGAL
ADVISOR BEFORE EXERCISING OR ATTEMPTING TO EXERCISE SUCH RIGHTS.
15. WILL THERE BE CHANGES IN MY SHAREHOLDERS' RIGHTS?
IDACORP's Restated Articles of Incorporation and Bylaws will contain a
number of changes from those of Idaho Power. Some of these changes are due to
the newly revised Idaho Business Corporation Act, enacted in July 1997. (Please
see "Comparative Shareholders' Rights" at pages 24-26 under Proposal No. 2
within and Exhibits B and C hereto).
------------------------
The affirmative vote of a majority of (i) all the votes entitled to be cast
by the Idaho Power Voting Stock, voting as a single class, and (ii) all the
votes entitled to be cast by the Idaho Power Common Stock is required to approve
the Holding Company Proposal.
PROPOSAL NO. 3--RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR
At the Annual Meeting, the shareholders will be asked to ratify the
selection by the Board of Directors of Deloitte & Touche LLP as the firm of
independent public accountants to audit the financial statements of the Company
for the fiscal year 1998.
------------------------
The selection of auditor is ratified where the votes cast favoring
ratification exceed those cast opposing ratification.
7
<PAGE>
VOTING
Under the BCA, a majority of the votes entitled to be cast on a matter by a
voting group constitutes a quorum of that voting group for action on that
matter. Assuming a quorum is present, the following votes are required for
approval of each proposal at the Annual Meeting: (i) Proposal No. 1--directors
are elected by the affirmative vote of a plurality of the votes cast by the
shares entitled to vote in the election of directors; (ii) Proposal No. 2--the
Holding Company Proposal is approved by the affirmative vote of (y) a majority
of all the votes entitled to be cast by Idaho Power Voting Stock, voting as a
single class and (z) a majority of all the votes entitled to be cast by Idaho
Power Common Stock; and (iii) Proposal No. 3--the selection of auditor is
ratified where the votes cast within the voting group favoring ratification
exceed the votes cast opposing ratification.
Voting of shares held by brokers or other nominees is regulated by the NYSE
and other securities exchanges. In certain cases, referred to as "discretionary
matters," brokers or other nominees may vote, and deliver proxies with respect
to, such shares in their own discretion. In other cases, referred to as
"nondiscretionary matters," brokers or other nominees may deliver proxies with
respect to particular shares, but are not permitted to vote such shares without
specific instructions from the beneficial owner of the shares. These unvoted
shares are called "broker non-votes." The Holding Company Proposal is considered
"non-discretionary," and brokers or other nominees who have received no
instructions from their beneficial owners do not have the authority to vote on
the proposal. With respect to the Holding Company Proposal, an abstention or
broker non-vote will have the effect of a vote against the proposal.
With respect to the election of directors, votes may be cast in favor or
withheld; votes that are withheld will have no effect on the results.
If no direction is given by a shareholder, proxies received will be voted
FOR Proposal No. 1, election of management's nominees for Directors, FOR
Proposal No. 2, approval of the Holding Company Proposal, and FOR Proposal No.
3, ratification of the selection of Deloitte & Touche LLP as independent auditor
for the fiscal year 1998.
The outstanding voting securities of the Company as of the record date for
the meeting are as follows: 166,407 shares of 4% Preferred Stock, each share
being entitled to twenty votes; 150,000 shares of 7.68% Series Preferred Stock,
each share being entitled to one vote; and 37,612,351 shares of Idaho Power
Common Stock, each share being entitled to one vote. The aggregate voting power
of Idaho Power Voting Stock is 41,090,491 votes.
It is the policy of the Company that all proxy cards and ballots for
shareholder meetings that identify shareholders, including employees, are to be
kept secret, and no such document shall be available for examination nor shall
the identity and vote of any shareholder be disclosed to the Company or to any
third party. Proxy cards shall be returned in envelopes addressed to the
independent tabulator who receives, inspects and tabulates the proxies.
Individual voted proxies and ballots are not seen by nor reported to the Company
except (i) as necessary to meet applicable legal requirements, (ii) to allow the
independent election inspectors to certify the results of the shareholder vote,
(iii) in the event of a matter of significance where there is a proxy
solicitation in opposition to the Board of Directors, based upon an opposition
proxy statement filed with the SEC, or (iv) to respond to shareholders who have
written comments on their proxies.
A proxy may be revoked at any time before it is voted at the meeting. Any
shareholder who attends the meeting and wishes to vote in person may revoke his
or her proxy by oral notice at that time. Otherwise, revocation of a proxy must
be mailed to the Corporate Secretary of the Company at 1221 West Idaho Street,
Boise, Idaho 83702-5627, and received prior to the meeting.
The close of business on March 17, 1998 is the record date for determining
shareholders entitled to notice of and to vote at the meeting.
8
<PAGE>
The cost of soliciting proxies will be paid by the Company. Besides
soliciting by mail, the Company may request the return of proxies personally or
by telephone, telegraph or facsimile without extra compensation. Additionally,
solicitation of proxies from brokers, banks, nominees and institutional
investors will be made by Beacon Hill Partners, Inc., at a cost to the Company
of approximately $5,500 plus out-of-pocket expenses. The Company will reimburse
banks, brokerage firms and other custodians, nominees and fiduciaries for their
expenses in sending proxy materials to beneficial owners.
PROPOSAL NO. 1--ELECTION OF DIRECTORS
The Idaho Power Articles provide that the Directors of the Company be
elected for three-year terms with approximately one-third of the Board of
Directors to be elected at each Annual Meeting of Shareholders. The four
Directors standing for election at the 1998 Annual Meeting are identified below
as nominees for election with terms expiring in the year 2001. All nominees are
currently Directors of the Company.
Unless otherwise instructed, proxies received will be voted in favor of the
election of the Director nominees. While it is not expected that any of the
nominees will be unable to qualify for or accept office, if for any reason one
or more shall be unable to do so, the proxies will be voted for nominees
selected by the Board of Directors.
NOMINEES FOR ELECTION--TERMS EXPIRE 2001
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------
ROBERT D. BOLINDER Age 66 Director since 1980
President of Robert D. Bolinder Associates; Director of
[PHOTO] Hannaford Bros. Co. Inc.; retired director and Executive
Vice President--Corporate Development and Planning of
Smith's Food & Drug Centers, Inc. (1988-1996).
- ------------------------------------------------------------------------------------------
JON H. MILLER Age 60 Director since 1988
Private Investor; formerly President and Chief Operating
[PHOTO] Officer (1978-1990) and a director (1977-1990) of Boise
Cascade Corporation; director of Specialty Paperboard
Corporation.
- ------------------------------------------------------------------------------------------
GENE C. ROSE Age 69 Director since 1983
Formerly partner, now of counsel to the law firm of Yturri,
[PHOTO] Rose, Burnham, Bentz & Helfrich.
</TABLE>
9
<PAGE>
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------
PHIL SOULEN Age 68 Director since 1971
President of Soulen Livestock Co.; President of Weiser Feed
[PHOTO] & Storage, Inc.
</TABLE>
CONTINUING DIRECTORS--TERMS EXPIRE 2000
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------
PETER T. JOHNSON Age 65 Director since 1993
Private Investor; formerly Administrator of the Bonneville
[PHOTO] Power Administration (1981-1986); director of Standard
Insurance Company.
- ------------------------------------------------------------------------------------------
JOSEPH W. MARSHALL Age 59 Director since 1989
Chairman of the Board and Chief Executive Officer of Idaho
[PHOTO] Power Company (1989 to present).
</TABLE>
10
<PAGE>
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------
PETER S. O'NEILL Age 61 Director since
1995
President, O'Neill Enterprises Inc. (since 1990); director
[PHOTO] of BMC West Corporation.
- ------------------------------------------------------------------------------------------
JAN B. PACKWOOD Age 54 Director since 1997
President and Chief Operating Officer of Idaho Power Company
[PHOTO] (since 1997); formerly Executive Vice President (1996-1997)
and Vice President-Bulk Power (1989-1996) of Idaho Power
Company.
</TABLE>
CONTINUING DIRECTORS--TERMS EXPIRE 1999
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------
ROGER L. BREEZLEY Age 59 Director since 1993
Private Investor; formerly a director (1983-1995), Chairman
[PHOTO] of the Board (1987-1994) and Chief Executive Officer
(1987-1993) of U.S. Bancorp.
</TABLE>
11
<PAGE>
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------
JOHN B. CARLEY Age 64 Director since 1990
Chairman of the Executive Committee of the Board of
[PHOTO] Directors (1996) of Albertson's, Inc.; formerly President
(1984-1996) and Chief Operating Officer (1990-1996) of
Albertson's, Inc.; director of Boise Cascade Office Products
Co.
- ------------------------------------------------------------------------------------------
JACK K. LEMLEY Age 63 Director since 1995
Director of Lemley & Associates, Inc. (since 1987) and
[PHOTO] Chairman of the Board and Chief Executive Officer of
American Ecology Corp.
- ------------------------------------------------------------------------------------------
EVELYN LOVELESS Age 64 Director since 1987
Chief Executive Officer (since 1992) and a director of
[PHOTO] Global, Inc.; director of Key Bank of Idaho (since 1993);
formerly President of Global, Inc. (1989-1992).
</TABLE>
12
<PAGE>
MEETINGS OF THE BOARD AND COMMITTEES
The Board of Directors held six meetings during 1997. All incumbent
Directors attended all of the meetings of the Board of Directors and all
committees of which they were members. Board committees, their membership during
1997 and a brief statement of their principal responsibilities are presented
below.
EXECUTIVE COMMITTEE
The Executive Committee, pursuant to the Company's Bylaws, can exercise the
authority of the full Board of Directors which may be lawfully delegated between
meetings of the full Board in the management of the business affairs of the
Company. It also acts as a nominating committee to review and make
recommendations to the Board of Directors for Director candidates to fill Board
vacancies and to select nominees for membership on Board committees. In
addition, it considers shareholder nominees for the Board of Directors for whom
written resumes are received prior to December 10 for the next year's annual
meeting. Members of the Committee are Robert D. Bolinder (chairman), John B.
Carley, Joseph W. Marshall, Jon H. Miller and Gene C. Rose. During 1997, the
Executive Committee met one time.
AUDIT COMMITTEE
The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities by reviewing the
financial information which will be provided to the shareholders and others, the
systems of internal controls which management and the Board have established,
the audit process and services provided by the independent auditors, the plans
and activities of the Internal Audit Department and the conducting of business
under the Business Conduct Guide. Members of the Committee are Gene C. Rose
(chairman), Robert D. Bolinder, Peter T. Johnson and Jack K. Lemley. During
1997, the Audit Committee met six times.
COMPENSATION COMMITTEE
The primary function of the Compensation Committee is to assist the Board of
Directors in discharging its duties and responsibilities regarding management of
the Company's total compensation philosophy, total compensation programs for
executives, senior managers and employees, and all other compensation-related
matters which properly come before the Board of Directors. Members of the
Committee are John B. Carley (chairman), Peter T. Johnson, Evelyn Loveless and
Peter S. O'Neill. During 1997, the Compensation Committee met three times.
FINANCE COMMITTEE
The Finance Committee has authority to authorize and approve the issuance
and sale or contract for the sale of debt securities and/or the call for
redemption of debt securities of the Company. Members of the Committee are
Joseph W. Marshall (chairman), Robert D. Bolinder, John B. Carley and Jon H.
Miller. During 1997, the Finance Committee did not meet.
INVESTMENT COMMITTEE
The primary function of the Investment Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities to participants and
beneficiaries under the Retirement Plan and to the Company's shareholders by
reviewing plan design, formulating investment philosophies and establishing
investment policies, establishing performance measurement objectives and
benchmarks, monitoring the performance of investment managers, trustees,
independent consultants and consulting actuaries to the plan, reviewing
sufficiency of plan assets to cover liabilities and reviewing compliance with
all applicable laws and regulations pertaining to the plan. Members of the
Committee are Jon H. Miller (chairman), Roger L. Breezley, Phil Soulen and Jan
B. Packwood. During 1997, the Investment Committee met three times.
TRANSACTIONS WITH MANAGEMENT
See "COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS--Compensation
Committee Interlocks and Insider Participation" for additional information
regarding Mr. O'Neill.
13
<PAGE>
PROPOSAL NO. 2--HOLDING COMPANY PROPOSAL
GENERAL
The Board of Directors and management of Idaho Power consider it to be in
the best interests of Idaho Power, its shareholders and customers to change the
corporate organization of Idaho Power into a holding company structure. This
will result in Idaho Power becoming a wholly-owned subsidiary of IDACORP, with
the present holders of Idaho Power Common Stock becoming the holders of the
IDACORP Common Stock.
Idaho Power has formed IDACORP, a newly-incorporated subsidiary of Idaho
Power, to effect the organization into a holding company structure. Idaho Power
and IDACORP have approved the Exchange Agreement under which, subject to
shareholder approval as required by the BCA and other conditions as set forth
therein, the Exchange will be effected, and Idaho Power will become a subsidiary
of IDACORP. In the Exchange, each share of Idaho Power Common Stock will be
converted into one share of IDACORP Common Stock. A copy of the Exchange
Agreement is attached to this Proxy Statement and Prospectus as Exhibit A and
incorporated herein by reference. It is not expected that the Exchange will
affect the position of the present common shareholders of Idaho Power for United
States federal income tax purposes. See "--HOLDING COMPANY PROPOSAL--United
States Federal Income Tax Consequences". The Holding Company Proposal is also
subject to various approvals by regulatory authorities. See "--HOLDING COMPANY
PROPOSAL--Regulatory Approvals."
Except for the exercise of Dissenters' Rights as described below, the other
securities of Idaho Power, including its first mortgage bonds and each series of
Idaho Power Preferred Stock, will not be changed by the Exchange, and each will
continue to be outstanding securities of Idaho Power. See "--HOLDING COMPANY
PROPOSAL--Treatment of Preferred Stock and--Rights of Dissenting Shareholders."
In conjunction with the formation of a holding company, one of the
non-utility subsidiaries of Idaho Power, Ida-West, will become a subsidiary of
IDACORP, on, or as soon as practicable after, the effective date of the
Exchange. IDACORP may form or acquire other unregulated subsidiaries in the
future. Ida-West and any future non-utility subsidiaries of IDACORP are
hereinafter referred to as the "IDACORP Subsidiaries."
IDAHO POWER
Idaho Power is an electric public utility incorporated under the laws of the
State of Idaho in 1989 as successor to a Maine corporation organized in 1915.
The principal executive offices of Idaho Power are located at 1221 West Idaho
Street, Boise, Idaho 83702-5627. Its telephone number, including area code, is
(208) 388-2200.
The Company is engaged in the generation, purchase, transmission,
distribution and sale of electric energy in an approximate 20,000 square-mile
area in southern Idaho, eastern Oregon and northern Nevada, with an estimated
population of 754,000 people. Idaho Power holds franchises in approximately 70
cities in Idaho and 10 cities in Oregon, and holds certificates from the
respective public utility regulatory authorities to serve all or a portion of 28
counties in Idaho, 3 counties in Oregon and 1 county in Nevada.
Idaho Power operates 17 hydro power plants and shares ownership in three
coal-fired generating plants. Idaho Power relies heavily on hydroelectric power
for its generating needs and is one of the nation's few investor-owned utilities
with a predominantly hydro base. It participated in the development of thermal
generation in the neighboring states of Wyoming, Oregon and Nevada using
low-sulfur coal from Wyoming and Utah.
14
<PAGE>
REASONS FOR THE HOLDING COMPANY PROPOSAL
The principal reason for the formation of a holding company is to respond to
the changing business environment in the electric utility industry in a manner
that serves the best interests of the shareholders and customers of Idaho Power.
The formation of IDACORP as the parent company over Idaho Power will allow Idaho
Power to continue to operate its regulated utility business efficiently, while
providing for the separation of certain non-regulated businesses of Idaho Power
from the regulated utility business. The holding company structure will make it
easier for IDACORP to enter into new businesses within the energy industry as
well as continue its diversification into other businesses.
Competition is increasing in the electric utility industry due to a variety
of developments including the changes enacted by the Energy Policy Act of 1992,
new regulatory policies issued by the FERC and state regulatory initiatives. As
part of its ongoing strategic planning process, Idaho Power has determined that
the increasingly competitive energy market requires a restructuring of the
Company.
The changes presently underway in the electric utility industry are
dramatically changing the nature of the regulated utility business. For example,
the FERC has issued an order requiring all utility companies to provide access
to their transmission lines for the wheeling of power over their system. This
"open access" policy has led to the creation of power marketing companies that
sell power at market-based rates and buy and sell electric energy in the
wholesale power market. Many utility holding companies have formed non-regulated
power marketing subsidiaries to market electric power to other utility companies
and to industrial users. IDACORP may wish to form such a power marketing
subsidiary. The Company has a marketing business unit, formed in 1997, that is
participating in the wholesale electricity markets and in natural gas trading.
Idaho Power also believes that the holding company structure will facilitate
the development of future unregulated businesses. As an unregulated company,
IDACORP will be able to enter into new businesses without obtaining the prior
approval of state regulatory commissions. The holding company structure will
also permit the use of financing techniques by the unregulated businesses that
are better suited to the particular requirements, characteristics and risks of
non-regulated businesses. Because IDACORP will not be a regulated utility,
securities issued by it and by its unregulated subsidiaries will not be subject
to the jurisdiction of state utility regulators or the FERC.
Following the formation of IDACORP, Idaho Power will continue to operate as
a public utility subject to the jurisdiction of the FERC, the Idaho Public
Utilities Commission ("IPUC"), the Oregon Public Utilities Commission ("OPUC"),
the Public Service Commission of Nevada and the Public Service Commission of
Wyoming.
AGREEMENT AND PLAN OF EXCHANGE
The Exchange Agreement in the form attached hereto as Exhibit A has been
unanimously approved by the Boards of Directors of Idaho Power and IDACORP and
has been executed by authorized officers of each company. In the Exchange, each
outstanding share of Idaho Power Common Stock will be exchanged for one share of
IDACORP Common Stock. As a result of the Exchange, Idaho Power will become a
wholly-owned subsidiary of IDACORP, and all of the IDACORP Common Stock
outstanding immediately after the effective date of the Exchange will be owned
by the holders of Idaho Power Common Stock outstanding immediately prior to the
effective date of the Exchange.
Subject to any applicable Dissenters' Rights, each outstanding share of each
series of Idaho Power Preferred Stock will continue unchanged as an issued and
outstanding share of Idaho Power Preferred Stock with the same preferences,
designations, relative rights, privileges and powers, and subject to the same
restrictions, limitations and qualifications as were applicable to such shares
prior to the effective date of the Exchange. See "--Rights of Dissenting
Shareholders" below.
15
<PAGE>
The outstanding first mortgage bonds of Idaho Power and all other contracts
and agreements to which Idaho Power is a party and the terms thereof will not be
altered as a result of the Exchange. The Idaho Power Articles will not be
changed in any way as a result of the Exchange.
AMENDMENT OR TERMINATION OF EXCHANGE AGREEMENT
By the mutual consent of their respective Boards of Directors, Idaho Power
and IDACORP may amend, modify, supplement or waive compliance with any provision
or condition in the Exchange Agreement in such manner as may be agreed upon by
them at any time before or after approval of the Holding Company Proposal by the
shareholders of Idaho Power; provided, however, that no amendment, modification
or supplement shall be made which would, in the judgment of the Board of
Directors of Idaho Power, materially and adversely affect the shareholders of
Idaho Power.
The Exchange Agreement may be terminated, at any time before or after its
approval by the shareholders of Idaho Power, by action of the Board of Directors
of Idaho Power if it determines, in its sole discretion, that consummation of
the Exchange would be inadvisable or not in the best interests of Idaho Power or
its shareholders. In making such determination, the Board of Directors of Idaho
Power would consider, among other things, the nature of FERC approval under the
Federal Power Act or the nature of any state regulatory approval requirements.
Idaho Power is unable to predict under what other circumstances the Exchange
might be terminated and abandoned.
EFFECTIVE DATE OF THE EXCHANGE
It is expected that the effective date of the Exchange will occur as soon as
practicable after the required approval by shareholders of Idaho Power and the
receipt of necessary regulatory approvals under applicable law. Idaho Power
cannot predict when such approvals will be received. See "--Regulatory
Approvals" below. Idaho Power is hopeful that the Exchange will occur in the
second half of 1998.
EXCHANGE OF STOCK CERTIFICATES NOT REQUIRED
If the Exchange takes place, it will not be necessary for holders of Idaho
Power Common Stock to physically exchange their existing stock certificates for
stock certificates of IDACORP. The holders of Idaho Power Common Stock will
become the owners of shares of IDACORP Common Stock on a share-for-share basis,
and the present stock certificates of Idaho Power will automatically represent
shares of IDACORP Common Stock. After the Exchange, as presently outstanding
certificates of Idaho Power Common Stock are presented for transfer, new
certificates bearing the IDACORP name will be issued.
CERTAIN CONSIDERATIONS
The Board of Directors of Idaho Power believes that the formation of a
holding company is in the best interests of the shareholders of Idaho Power.
Nevertheless, the future performance of IDACORP Common Stock cannot be
guaranteed.
For a period of time following the Exchange, the funds required by IDACORP
to enable it to pay dividends on shares of IDACORP Common Stock are expected to
be derived predominantly from the dividends paid to IDACORP by Idaho Power.
Accordingly, the ability of IDACORP to pay dividends to its shareholders, as a
practical matter, will be governed by the ability of Idaho Power to pay
dividends on its common stock held by IDACORP. The ability of Idaho Power to pay
dividends on its common stock will continue to be subject to the preferential
dividend rights of the holders of the Idaho Power Preferred Stock. In addition,
although it has no present intention to do so, it is expected that Idaho Power
may need to issue additional preferred stock in the future to meet its capital
requirements. Such additional preferred stock will also have preferential
dividend rights. The Board of Directors of IDACORP has no current intention to
change the current dividend policy of Idaho Power.
16
<PAGE>
The IDACORP Subsidiaries may encounter competitive and other factors not
previously experienced by Idaho Power and may have different, and perhaps
greater, investment risks than those involved in the regulated utility business
of Idaho Power. There can be no assurance that such businesses will be
successful or, if unsuccessful, that they will not have a direct or indirect
adverse effect on IDACORP. Any losses incurred by such businesses may not be
recoverable in the utility rates of Idaho Power.
The business activities of the IDACORP Subsidiaries, and the assets employed
in connection therewith, will not be available to the holders of the Idaho Power
Preferred Stock as a source of cash for the payment of dividends or other
amounts. The Idaho Power Preferred Stock will continue to have priority over the
shares of Idaho Power Common Stock as to the payment of dividends and upon any
liquidation, and will be on a parity with any additional preferred stock that
may be issued by Idaho Power.
IDACORP will obtain funds to invest in the IDACORP Subsidiaries from
dividends IDACORP receives on its Idaho Power Common Stock, borrowings or the
issuance of additional securities by IDACORP and any dividends it may in the
future receive from any earnings of the IDACORP Subsidiaries, although there can
be no assurance that the IDACORP Subsidiaries will have any earnings, or pay any
dividends to IDACORP, in the foreseeable future.
REGULATORY APPROVALS
As a utility, Idaho Power is under the regulatory jurisdiction (as to rates,
service, accounting and other general matters of utility operation) of the FERC,
the IPUC, the OPUC and the Public Service Commission of Nevada. The Company is
also under the regulatory jurisdiction of the IPUC, OPUC and the Public Service
Commission of Wyoming as to the issuance of securities. The Company is subject
to the provisions of the Federal Power Act as a "licensee" and "public utility"
as therein defined. The Company's retail rates are established under the
jurisdiction of the state regulatory agencies and its wholesale and transmission
rates are regulated by the FERC. The formation of a holding company will not
change the applicability of such regulatory jurisdictions to Idaho Power.
Receipt of orders from the FERC under the Federal Power Act and state
regulatory approvals, in forms satisfactory to Idaho Power, are conditions
precedent to consummation of the Exchange. The Company has received orders from
the state public utility commissions of Idaho and Oregon.
IDACORP believes that, after the formation of the holding company, it will
be entitled to an exemption from all provisions of the Public Utility Holding
Company Act of 1935 (the "Holding Company Act"), except Section 9(a)(2). Section
9(a)(2) requires prior approval of the SEC for certain utility acquisitions. The
exemption will take effect upon completion of the Exchange and the related
restructuring and the filing with the SEC of an appropriate exemption statement
pursuant to the provisions of the Holding Company Act. The exemption from the
provisions of the Holding Company Act may be revoked on a finding by the SEC
that such exemption may be detrimental to the public interest or the interest of
investors or consumers.
REGULATION OF IDACORP
Upon consummation of the Exchange, IDACORP, as the owner of all the
outstanding Idaho Power Common Stock, will thereby become a "holding company"
under the Holding Company Act. As described above, however, it is anticipated
that IDACORP will claim an exemption under the Holding Company Act and, as such,
will be an exempt holding company. It will be necessary to file an annual
exemption statement each year thereafter. The basis of this exemption is that
both IDACORP and Idaho Power, as IDACORP's only public utility subsidiary, are
incorporated in the same state (i.e., Idaho), and Idaho Power is predominantly
intrastate in character and carries on its business substantially in the state
of incorporation. The exemption is available only so long as the utility
business of Idaho Power, and of any other public utility subsidiary from which
IDACORP derives a material portion of its income, remain predominantly within
Idaho. Consequently, there are limitations on the extent to which IDACORP could
expand the
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utility business of Idaho Power or any other material utility subsidiary outside
of Idaho. In addition, prior approval of the SEC under the Holding Company Act
would be required if IDACORP were to acquire, directly or indirectly, 5% or more
of the voting securities of any other electric or gas utility company.
Under the Holding Company Act and current policies of the SEC, there are
limitations on the extent to which exempt holding companies may diversify into
businesses not functionally related to the electric and gas utility businesses.
It is not anticipated that these limitations will have any significant impact on
IDACORP in the foreseeable future.
The Company does not anticipate that IDACORP will be deemed to be a public
utility under the state public utility codes of Idaho, Oregon, Nevada or
Wyoming. However, the public utility commissions in these jurisdictions may
impose restrictions on IDACORP's relationship with Idaho Power that are designed
to protect utility customers.
BUSINESS OF IDACORP
Upon completion of the Exchange, IDACORP will be a holding company owning
all of the outstanding shares of Idaho Power Common Stock and may engage,
directly or through subsidiaries, in other businesses. For the foreseeable
future, the primary focus for IDACORP will be maintaining the strength of its
core business--serving Idaho Power's electric customers.
IDACORP will also own all of the outstanding securities of Ida-West.
Ida-West was formed in 1989 as an independent power producer and currently holds
investments in thirteen operating hydroelectric plants with a total generating
capacity of approximately 72 megawatts (MW). A subsidiary of Ida-West operates
and maintains ten of these plants. Ida-West owns a 50% interest in five
hydroelectric projects in Idaho with a total generating capacity of 33.4 MW.
In January 1996, Ida-West made an investment by acquiring all of the
outstanding bonds that were issued to finance three hydroelectric plants known
collectively as the Friant Power Project. This project is located at the U.S.
Bureau of Reclamation's Friant Dam on the headwaters of the San Joaquin River in
Madera and Fresno Counties, California. It has an aggregate generating capacity
of 27.4 MW. The project is owned and operated by Friant Power Authority, a
quasi-governmental entity consisting of six irrigation districts, a water
district and a municipal utility district.
In November 1996, Ida-West purchased an interest in five hydroelectric
projects located in Shasta County, California, with a total generating capacity
of 11.2 MW. Ida-West acquired the projects through a limited liability company
in which it holds a 50 percent interest.
In addition, Ida-West has a 50% interest in the Hermiston Power Project, a
460 MW gas-fired cogeneration project to be located near Hermiston, Oregon.
Ida-West has been responsible for managing all permitting and development
activities relating to the project since its inception in 1993, and has obtained
all permits necessary for construction and operation of the project. The
partnership is exploring various alternatives for marketing the project's
output.
At December 31, 1997, the Company had invested $20 million in Ida-West.
TREATMENT OF PREFERRED STOCK
Except for the exercise of Dissenters' Rights as described below, the
Exchange will not result in any change in any of the outstanding Idaho Power
Preferred Stock, which will remain outstanding securities of Idaho Power and
will not be converted into or otherwise become a security of IDACORP.
Idaho Power Preferred Stock will continue to rank senior to Idaho Power
Common Stock (all of which, after the Exchange, will be held by IDACORP) as to
dividends and as to distribution of assets of Idaho Power in the event of any
liquidation of Idaho Power.
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Although the formation of a holding company is not expected to adversely
affect the Idaho Power Preferred Stock outstanding, any growth of assets and
earnings of IDACORP other than such growth of assets and earnings attributable
to Idaho Power will be of no direct benefit to the holders of such stock.
However, the utility operations of Idaho Power presently constitute, and are
expected to continue to constitute for the foreseeable future, the predominant
part of Idaho Power's consolidated assets and earnings. Accordingly, although
Idaho Power is unable to predict the ultimate outcome of regulatory and other
industry changes, it is believed that this transaction will not materially
affect the holders of Idaho Power Preferred Stock or the investment ratings of
such stock.
RIGHTS OF DISSENTING SHAREHOLDERS
The BCA provides Dissenters' Rights for the holders of shares of Idaho Power
Voting Preferred Stock who do not vote their shares in favor of the Holding
Company Proposal and who meet all of the requisite statutory requirements
contained in Sections 30-1-1321 and 30-1-1323 of the BCA. Under the BCA, any
holder of Idaho Power Voting Preferred Stock who wishes to assert Dissenters'
Rights must: (a) deliver to Idaho Power before the vote is taken written notice
of his intent to demand payment for his shares if the proposed action is
effectuated and (b) not vote his shares of Idaho Power Voting Preferred Stock in
favor of the Holding Company Proposal. If the Holding Company Proposal is
approved at the Annual Meeting,
Idaho Power is required to provide a written dissenters' notice in accordance
with the BCA to all holders of Idaho Power Voting Preferred Stock who satisfied
the above requirements. Holders of Idaho Power Voting Preferred Stock who are
sent a dissenters' notice as described above must demand payment, certify
whether they acquired beneficial ownership of the shares before the date set
forth in the dissenters' notice and, with respect to any certificated shares,
deposit such certificates in accordance with the terms of the notice. At the
effective time of the Exchange, Idaho Power will pay to such shareholders the
amount that Idaho Power estimates to be the "fair value" of such shares of Idaho
Power Voting Preferred Stock, plus accrued interest.
A shareholder who does not satisfy each of the aforementioned requirements
is not entitled to payment for such shareholder's shares of Idaho Power Voting
Preferred Stock under the dissenters' rights provisions of the BCA and will
remain a shareholder of Idaho Power. Idaho Power may elect to withhold payment
from a dissenter unless he was the beneficial owner of the shares before the
date set forth in the dissenters' notice as the date of the first announcement
to news media or to shareholders of the terms of the proposed corporate action.
To the extent Idaho Power elects to withhold payment as set forth in the
preceding sentence, after taking the proposed corporate action, it shall
estimate the fair value of the shares, plus accrued interest, and shall pay this
amount to each dissenter who agrees to accept it in full satisfaction of his
demand.
A dissenter may notify Idaho Power in writing of his own estimate of the
fair value of his shares and amount of interest due, and demand payment of his
estimate, less any payment made, or reject Idaho Power's offer under Section
30-1-1327 of the BCA (relating to after-acquired shares) and demand payment of
the fair value of his shares and interest due if (i) the dissenter believes that
the amount paid, or offered under Section 30-1-1327, is less than the fair value
of his shares or that the interest due is incorrectly calculated; (ii) Idaho
Power fails to make payment within 60 days after the date set for demanding
payment; or (iii) Idaho Power, having failed to take the proposed action, does
not return the deposited certificates within 60 days after the date set for
demanding payment. A dissenter waives his right to demand payment under this
section unless he notifies Idaho Power of his demand in writing within 30 days
after Idaho Power made or offered payment for his shares.
Holders of Idaho Power Common Stock, Flexible Auction Series A, Serial
Preferred Stock, without par value, and 7.07% Series, Serial Preferred Stock,
without par value, do not have Dissenters' Rights.
The above summary of the procedures relating to the exercise of Dissenters'
Rights does not purport to be a complete statement of, and is qualified in its
entirety by reference to, the provisions of Sections 30-1-1301 through 30-1-1331
of the BCA, a copy of which is attached as Exhibit D hereto and to any
amendments to such sections as may be adopted after the date of this Proxy
Statement and Prospectus.
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DIVIDEND POLICY
While future dividends on IDACORP Common Stock will depend primarily upon
the earnings, financial condition and capital requirements of its subsidiaries,
principally Idaho Power, it is contemplated that IDACORP initially will make
dividend payments on IDACORP Common Stock at the rate currently applicable to
Idaho Power Common Stock. In addition, it is expected that such dividends of
IDACORP will be declared and paid on approximately the same schedule of dates as
that now followed by Idaho Power with respect to Idaho Power Common Stock
dividends. The most recent dividend declared by the Board of Directors of Idaho
Power was $0.465 per share of Idaho Power Common Stock and was paid on February
20, 1998.
Subject to the availability of earnings and the needs of its electric
utility business, Idaho Power intends to make regular cash payments to IDACORP
in the form of dividends on Idaho Power Common Stock in amounts which, to the
extent not otherwise provided by IDACORP's other subsidiaries, would be
sufficient for IDACORP to pay cash dividends on IDACORP Common Stock as referred
to above, for operating expenses of IDACORP and for such other purposes as the
Board of Directors of IDACORP may determine. Idaho Power is not a party to any
agreement or subject to any laws or regulations which materially restrict the
payment of dividends by it to IDACORP.
Payment of dividends on the Idaho Power Preferred Stock is anticipated to
continue at the specified rates without interruption or change; provided,
however, that the payment of these dividends also is dependent upon, among other
things, the earnings and financial condition of Idaho Power, agreements to which
Idaho Power is or may become a party and upon requirements of Idaho law.
The declaration and payment of future dividends will be at the discretion of
each Board of Directors; there can be no assurances that payment of dividends
will remain at current levels.
LISTING OF IDACORP COMMON STOCK
IDACORP will apply to list the IDACORP Common Stock on the NYSE and the PSE.
It is expected that such listing will become effective on the effective date of
the Exchange, subject to the rules of such exchanges. After the effective date
of the Exchange, Idaho Power Common Stock will be delisted from trading on these
stock exchanges.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following general discussion summarizes the material federal income tax
consequences of the Exchange and the exercise of Dissenters' Rights and is based
upon the Internal Revenue Code of 1986, as amended (the "Code"), the applicable
Treasury Department regulations thereunder, judicial authority and current
administrative rulings and practice, all as in effect as of the date hereof.
Future legislation, regulations, administrative rulings or court decisions could
significantly change such authorities either prospectively or retroactively. The
following discussion does not address the consequences of the Exchange or the
exercise of Dissenters' Rights under state, local or foreign law nor does the
discussion address all aspects of federal income taxation that may be important
to a shareholder in light of such shareholder's particular circumstances or to
shareholders subject to special rules including, without limitation, foreign
corporations or shareholders who are not citizens or residents of the United
States, financial institutions, insurance companies, tax-exempt entities,
dealers in securities or persons who acquired Idaho Power Common Stock pursuant
to the exercise of an employee option (or otherwise as compensation). This
discussion assumes that the shareholders hold their Idaho Power Common Stock and
Idaho Power Preferred Stock as capital assets within the meaning of Section 1221
of the Code.
No ruling from the Internal Revenue Service (the "IRS") concerning the
federal income tax consequences of the Exchange or the exercise of Dissenters'
Rights will be requested. It is a condition to the Exchange that Idaho Power
receive an opinion from LeBoeuf, Lamb, Greene & MacRae, L.L.P., to the
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effect that the Exchange qualifies, for federal income tax purposes, as a
tax-free transaction described under Section 351(a) of the Code. The opinion
will be based upon (i) certain assumptions set forth therein and (ii)
representations by the managements of Idaho Power and IDACORP. The opinion
referred to above neither binds nor precludes the IRS from adopting a contrary
position and no assurance can be given that contrary positions will not be
successfully asserted by the IRS or adopted by a court if the issues are
litigated.
THE FOLLOWING IS A SUMMARY OF CERTAIN MATERIAL FEDERAL INCOME TAX
CONSEQUENCES OF THE EXCHANGE AND THE EXERCISE OF DISSENTERS' RIGHTS, WITHOUT
REFERENCE TO THE PARTICULAR FACTS AND CIRCUMSTANCES OF ANY PARTICULAR
SHAREHOLDER. IN ADDITION, THIS DISCUSSION DOES NOT ADDRESS ANY NON-INCOME TAX OR
ANY FOREIGN, STATE OR LOCAL TAX CONSEQUENCES OF THE EXCHANGE OR THE EXERCISE OF
DISSENTERS' RIGHTS. THIS DISCUSSION DOES NOT ADDRESS THE TAX CONSEQUENCES OF ANY
TRANSACTION OTHER THAN THE EXCHANGE AND THE EXERCISE OF DISSENTERS' RIGHTS.
ACCORDINGLY, EACH SHAREHOLDER IS STRONGLY URGED TO CONSULT WITH SUCH
SHAREHOLDER'S TAX ADVISOR TO DETERMINE THE PARTICULAR UNITED STATES FEDERAL,
STATE, LOCAL OR FOREIGN INCOME OR OTHER TAX CONSEQUENCES OF THE EXCHANGE AND THE
EXERCISE OF DISSENTERS' RIGHTS TO SUCH SHAREHOLDER.
The Exchange will be treated as a transfer of all of the outstanding Idaho
Power Common Stock by the Idaho Power shareholders to IDACORP solely in exchange
for all of the outstanding IDACORP Common Stock, in a tax-free exchange
described under Section 351 of the Code.
TAX IMPLICATIONS TO THE HOLDERS
No gain or loss will be recognized for federal income tax purposes by
holders of Idaho Power Common Stock who exchange their Idaho Power Common Stock
for IDACORP Common Stock pursuant to the Exchange. The aggregate tax basis of
the IDACORP Common Stock received as a result of the Exchange will be the same
as the shareholder's aggregate tax basis in the Idaho Power Common Stock
surrendered in the Exchange. The holding period of the IDACORP Common Stock
received will include the holding period of the Idaho Power Common Stock
surrendered therefor.
Idaho Power Preferred Stock will remain outstanding as preferred stock of
Idaho Power and no gain or loss will be recognized for federal income tax
purposes by holders of Idaho Power Preferred Stock as a result of the Exchange.
Holders of Idaho Power Preferred Stock who exercise Dissenters' Rights will
recognize capital gain or loss equal to the difference between the cash received
upon the exercise of Dissenters' Rights and the holder's tax basis in the Idaho
Power Preferred Stock if the payment (i) results in a "complete termination" of
the shareholder's stock interest in Idaho Power under Section 302(b)(3) of the
Code, (ii) is "substantially disproportionate" with respect to the shareholder
under Section 302(b)(2) of the Code or (iii) is "not essentially equivalent to a
dividend" with respect to the shareholder under Section 302(b)(1) of the Code.
Otherwise, the cash received will be treated as a dividend to the extent of the
current or accumulated earnings and profits of Idaho Power. Shareholders should
consult their tax advisors to determine if any cash received in connection with
their exercise of Dissenters' Rights will be characterized as a dividend under
Section 302 of the Code.
TAX IMPLICATIONS TO IDACORP
No gain or loss will be recognized by IDACORP for federal income tax
purposes upon receipt of the Idaho Power Common Stock. For federal income tax
purposes, the basis of the Idaho Power Common Stock received by IDACORP will be
the same as Idaho Power's net asset basis immediately after the Exchange,
subject to certain adjustments under Treasury Regulations relating to
consolidated groups, and
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IDACORP's holding period in the Idaho Power Common Stock received in the
Exchange includes the period during which such stock was held by shareholders.
IDACORP CAPITALIZATION
The Restated Articles of Incorporation of IDACORP ("IDACORP Articles"), a
copy of which is attached hereto as Exhibit B, provide for an authorized
capitalization consisting of 120,000,000 shares of Common Stock, without par
value, and 20,000,000 shares of Preferred Stock, without par value (the "IDACORP
Preferred Stock").
The shares of IDACORP Common Stock for which Idaho Power Common Stock will
be exchanged upon consummation of the Exchange and which will constitute all
outstanding shares of IDACORP Common Stock at that time will be validly issued,
fully paid and nonassessable. Each share of IDACORP Common Stock will be equal
to every other share in every respect. Immediately after the Exchange, the
number of shares of IDACORP Common Stock outstanding will be equal to the number
of shares of Idaho Power Common Stock outstanding prior to the Exchange.
The IDACORP Preferred Stock may be issued in series. The Board of Directors
of IDACORP will have the authority to determine, for any such series of
preferred stock, the voting powers, designations, preferences, limitations,
restrictions and relative rights thereof within the limitations set forth in the
IDACORP Articles and such limitations as may be provided by law.
PAR VALUE
The IDACORP Common Stock and IDACORP Preferred Stock will not have par
value. A designated par value is not required under the BCA.
CLASSIFIED BOARD
The IDACORP Articles and the IDACORP Amended Bylaws, a copy of which is
attached hereto as Exhibit C (the "IDACORP Bylaws") provide: (i) that the Board
shall consist of not less than nine nor more than fifteen persons who shall be
elected, except as otherwise provided for in the IDACORP Bylaws, by the
shareholders; (ii) for the division of the Board into three classes, which shall
be as nearly equal in number as possible, with directors in each class being
elected for a three-year term; (iii) that no decrease in the number of
directorships shall shorten the term of any director then in office; and (iv)
that no director shall be removed without cause and no director shall be removed
for cause except by the affirmative vote of two-thirds of the outstanding shares
entitled to vote in elections of directors.
DIVIDENDS
Subject to the prior rights, if any, of holders of IDACORP Preferred Stock
or any class of stock hereafter authorized that may be issued in the future,
holders of IDACORP Common Stock are entitled to receive such dividends when and
as declared by the Board of Directors of IDACORP from time to time out of any
tangible or intangible property legally available for this purpose.
VOTING RIGHTS
The shares of IDACORP Common Stock will entitle the holders thereof to one
vote per share upon all matters upon which shareholders of IDACORP have the
right to vote. Holders of IDACORP Preferred Stock will not have any right to
vote except as otherwise provided by law or established by the Board of
Directors of IDACORP with respect to any such series. Holders of IDACORP Common
Stock will not have cumulative voting rights in the election of directors.
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LIQUIDATION RIGHTS
Upon any dissolution, liquidation or winding up of IDACORP, whether
voluntary or involuntary, any net assets of IDACORP available for distribution
to its shareholders shall be distributed ratably to holders of IDACORP Common
Stock, subject to the prior rights, if any, of holders of IDACORP Preferred
Stock or any class of stock hereafter authorized.
PREEMPTIVE RIGHTS AND OTHER RIGHTS
The holders of IDACORP Common Stock have no preemptive rights. In addition,
IDACORP Common Stock is not subject to redemption and does not have any
conversion or sinking fund provisions.
INDEMNIFICATION AND LIMITATION OF LIABILITY
The IDACORP Articles provide that directors and officers shall be
indemnified to the fullest extent permitted by applicable law. The IDACORP
Articles provide that, to the fullest extent permitted by applicable law, no
director shall be personally liable to IDACORP or its shareholders for monetary
damages resulting from any action taken, or any failure to take any action, as a
director. No amendment, modification or repeal of the liability limitation
provisions shall eliminate or limit the protection afforded to a director under
the IDACORP Articles with respect to any act or omission occurring prior to the
effective date of such amendment, repeal or modification.
POSSIBLE ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF THE ARTICLES AND
BYLAWS OF IDACORP
Although it is not the intention of the Board of Directors to discourage
legitimate offers to enhance shareholder value, the existence of unissued
IDACORP Common Stock and other provisions in the IDACORP Articles and Bylaws
could permit IDACORP's Board of Directors to render more difficult or to
discourage a merger, tender offer, proxy contest or other transaction aimed at
obtaining control of IDACORP.
NO CUMULATIVE VOTING. The IDACORP Articles do not provide for cumulative
voting. The lack of cumulative voting could prevent directors from being elected
by a relatively small group of shareholders.
CLASSIFIED BOARD. The classified board provisions in the IDACORP Articles
could have the effect of prolonging the time required for a shareholder or
shareholders with significant voting power to gain majority representation on
the Board of Directors. Where majority or supermajority Board of Directors
approval is important to facilitate the success of a transaction, such as an
interested shareholder business combination, the inability to immediately gain a
majority representation on the Board of Directors at an annual meeting of
shareholders could discourage takeovers and tender offers.
ADVANCE NOTICE OF BUSINESS TO BE BROUGHT BEFORE SHAREHOLDER
MEETINGS. IDACORP Bylaws require that for nominations or other business to be
properly brought before an annual meeting by a shareholder, the shareholder must
give notice not earlier than 90 days nor later than 60 days prior to the first
anniversary of the preceding year's annual meeting.
IDACORP Bylaws further require that business transacted at a special meeting
of the shareholders be limited to the purposes set forth in the notice of the
special meeting. In the event IDACORP calls a special meeting of shareholders
for the purpose of electing one or more directors to the Board of Directors, any
shareholder may nominate a person or persons, as the case may be, for election
to such position or positions as specified in the Company's notice of meeting,
if the shareholder's notice is delivered not earlier than 90 days and not later
than 60 days prior to such special meeting or 10 days following the day on which
public announcement is first made of the date of the special meeting.
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Such advance notice requirements may delay the ability of individuals to
bring before shareholder meetings matters other than those that IDACORP deems
desirable and may provide sufficient time for IDACORP to institute litigation or
take other appropriate steps to respond to such business, or to prevent such
business from being acted upon, if such response or prevention is thought to be
necessary or desirable for any reason.
"BLANK CHECK" PREFERRED STOCK. The IDACORP Articles authorize the issuance
of 20,000,000 shares of IDACORP Preferred Stock. The Board of Directors has the
full authority to determine the terms of any series of the IDACORP Preferred
Stock. Although the IDACORP Board of Directors currently has no intention of
doing so, shares of IDACORP Preferred Stock could be issued in a manner (E.G.,
with disproportionate or class voting rights) which could have the effect of
discouraging takeover attempts.
COMPARATIVE SHAREHOLDERS' RIGHTS
GENERAL
Idaho Power and IDACORP are both Idaho corporations. When the Exchange
becomes effective, holders of Idaho Power Common Stock will become holders of
IDACORP Common Stock, and their rights will be governed by the IDACORP Articles
and IDACORP Bylaws instead of the Idaho Power Articles and Bylaws. Copies of the
IDACORP Articles and IDACORP Bylaws, each substantially in the form to be in
effect immediately prior to the effective time of the Exchange, are attached as
Exhibit B and Exhibit C, respectively, to this Proxy Statement and Prospectus.
The Idaho Power Articles and Idaho Power Bylaws are filed as exhibits to the
Registration Statement.
Certain differences and similarities between the rights of holders of
IDACORP Common Stock and those of holders of Idaho Power Common Stock are
summarized below. The following discussion is not intended to be a complete
statement of all differences affecting the rights of shareholders, but
summarizes certain material differences between the Articles and Bylaws of Idaho
Power and those of IDACORP. This summary is qualified in its entirety by
reference to the IDACORP Articles and IDACORP Bylaws in Exhibit B and Exhibit C
hereto, respectively, the Idaho Power Articles and Idaho Power Bylaws filed as
exhibits to the Registration Statement and the applicable Idaho corporate law.
1997 REVISIONS TO THE BCA
In July 1997, the State of Idaho enacted a revised BCA. The revisions to the
BCA are reflected widely in the IDACORP Articles and IDACORP Bylaws. These
revised BCA provisions are the basis for many of the differences between the
Articles and Bylaws of Idaho Power and those of IDACORP, some of which are
discussed in this section.
PURPOSE CLAUSE
The IDACORP Articles purpose clause does not limit authorized activities.
IDACORP is authorized to engage in any lawful act or activity under the BCA. The
Idaho Power Articles include an enumeration of permitted activities.
COMMON STOCK
IDACORP will be authorized to issue 70,000,000 more shares of common stock
than Idaho Power. With the exception of the number of authorized shares and the
requirement in the IDACORP Bylaws of advance notice prior to shareholders
meetings, the relative rights of IDACORP Common Stock are substantially the same
as the relative rights of Idaho Power Common Stock. See "--IDACORP
Capitalization" above for a discussion of the authorized IDACORP Common Stock.
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PREFERRED STOCK
The Board of Directors of IDACORP has full authority under the IDACORP
Articles to divide the IDACORP Preferred Stock into one or more classes or
series and to determine the voting rights, if any, and designations,
preferences, limitations and special rights of any class or series of the
IDACORP Preferred Stock. The authority of the Board of Directors to establish
voting rights, preferences or other rights with respect to preferred stock may
have certain anti-takeover effects. See "--IDACORP Capitalization--Possible
Anti-takeover Effects of Certain Provisions of the Articles and Bylaws of
IDACORP" above.
The Idaho Power Articles authorize three classes of preferred stock as
follows: 215,000 shares of 4% Preferred Stock; 150,000 shares of Serial
Preferred Stock, $100 par value (the "Par Value Serial Preferred Stock"); and
3,000,000 shares of Serial Preferred Stock, without par value (the "No Par Value
Serial Preferred Stock"). The IDACORP Articles authorize 20,000,000 shares of
preferred stock, a significantly greater number of shares than the 3,365,000
shares of preferred stock authorized under the Idaho Power Articles. The Idaho
Power Articles provide the Board of Directors with the authority to fix the
relative rights and preferences of each class of preferred stock, but on a more
limited basis than provided in the IDACORP Articles. The Idaho Power Board has
the authority to issue from time to time shares of Par Value Serial Preferred
Stock and shares of No Par Value Serial Preferred Stock in series and to
establish the rights and preferences of each series, subject, however, to the
requirement that the shares of both the Par Value Serial Preferred Stock and No
Par Value Serial Preferred Stock be on a parity with respect to dividends and
liquidations with each other and the 4% Preferred Stock. After the Exchange,
subject to the rights of dissenting shareholders, outstanding shares of Idaho
Power Preferred Stock will continue as equity securities of Idaho Power with the
same preferences, designations, relative rights, privileges and powers, and
subject to the same restrictions, limitations and qualifications, as were
applicable to outstanding shares of Idaho Power Preferred Stock prior to the
Exchange.
PAR VALUE
The shares of Idaho Power Common Stock and two of the three classes of Idaho
Power Preferred Stock have designated par values, whereas neither IDACORP Common
Stock nor IDACORP Preferred Stock has par value. It is anticipated that the
absence of par value in the IDACORP capital stock will not affect the market
value of such stock.
BUSINESS COMBINATION PROVISIONS
There are no business combination provisions in the IDACORP Articles. Any
proposed business combination would be governed by the provisions of the Idaho
Business Combination Law and the Idaho Control Share Acquisition Law. See
"--Certain Idaho Statutory Provisions." The Idaho Power Articles contain
business combination provisions.
SPECIAL MEETINGS OF SHAREHOLDERS
The IDACORP Bylaws provide that a special meeting of shareholders may be
called by the holders of twenty percent of the shares entitled to vote on any
issue proposed to be considered at the special meeting. The Idaho Power Articles
require that the holders of eighty percent of the shares entitled to vote at the
meeting call a special meeting.
ADVANCE NOTICE PRIOR TO SHAREHOLDERS MEETING REQUIRED
The IDACORP Bylaws require shareholders to provide advance notice of any
business to be brought before a shareholders meeting. The Idaho Power Articles
and Bylaws, however, do not have advance notice provisions. See "--IDACORP
Capitalization--Possible Anti-takeover Effects of Certain Provisions of the
Articles and Bylaws of IDACORP."
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CHANGES IN THE SIZE OF THE BOARD OF DIRECTORS
The designated size of the Board of Directors is established in the IDACORP
Bylaws, which may be amended by a two-thirds vote of shareholders or by the
affirmative vote of a majority of the Board of Directors. The designated size of
the Idaho Power Board of Directors is provided in the Idaho Power Bylaws, which
require an eighty percent vote of shareholders for an amendment, unless such
amendment is recommended by two-thirds of the continuing directors, as defined
therein.
AMENDMENT, REPEAL AND ADOPTION OF BYLAWS
Under the IDACORP Bylaws, the amendment, alteration or change of the
provisions of the IDACORP Bylaws relating to the Board of Directors and advance
notice prior to shareholders meetings requires the affirmative vote of
two-thirds of all shares entitled to vote thereon or the affirmative vote of a
majority of the Board of Directors. The Idaho Power Articles and Bylaws require
an affirmative vote of the holders of eighty percent of the shares entitled to
vote on an amendment in order to approve the amendment of certain provisions of
the Idaho Power Bylaws, including provisions relating to the Board of Directors
and business combinations, unless such amendment is recommended by two-thirds of
the continuing directors, as defined therein.
RIGHTS AGREEMENT
On January 11, 1990, the Board of Directors of Idaho Power adopted a
Shareowner Rights Plan (the "Rights Plan"). Under the Rights Plan, Idaho Power
declared a distribution of one Preferred Stock Right (a "Right") for each
outstanding share of Idaho Power Common Stock held on January 29, 1990, or
issued thereafter. The Rights are currently not exercisable and will be
exercisable only if a person or group (an "Acquiring Person") either acquires
ownership of 20% or more of Idaho Power's voting stock or commences a tender
offer that would result in the ownership of 20% or more. Idaho Power may redeem
the Rights at a price of $0.01 per Right anytime prior to acquisition by an
Acquiring Person of a 20% position. Following the acquisition by an Acquiring
Person of a 20% position, each Right will entitle its holder (other than such
person or members of such group), subject to regulatory approval, to purchase
for $85 that number of shares of Idaho Power Common Stock and/or at the election
of Idaho Power, Idaho Power Preferred Stock having a market value of $170. If
after the Rights become exercisable, Idaho Power is acquired in a merger or
other business combination, 50% or more of its consolidated assets or earning
power are sold or the Acquiring Person engages in certain acts of self-dealing,
each Right entitles the holder to purchase for $85 shares of the acquiring
company's common stock having a market value of $170. Any Rights that are or
were held by an Acquiring Person become void if any of these events occurs. The
Rights expire on January 11, 2000. The Rights Plan has been amended so that it
will not be triggered by the Exchange. Prior to the Effective Time of the
Exchange, it is anticipated that IDACORP will enter into a rights agreement
similar to the one described above.
CERTAIN IDAHO STATUTORY PROVISIONS
The Company is subject to the Idaho Control Share Acquisition Law (the
"CSAL"), which is designed to protect minority shareholders in the event that a
person acquires or proposes to acquire, directly or indirectly, by tender offer
or otherwise, shares giving it at least 20%, at least 33 1/3%, or more than 50%
of the voting power in the election of directors (such an acquisition, a
"Control Share Acquisition"). IDACORP will be subject to the CSAL upon
completion of the Exchange. The CSAL is applicable to a publicly held Idaho
corporation which has at least 50 shareholders, such as the Company, unless a
provision in its articles of incorporation or bylaws, adopted in accordance with
the CSAL, makes an express election not to be subject to the CSAL. There are no
such provisions in the Idaho Power or IDACORP Articles or Bylaws.
26
<PAGE>
Under the CSAL, an acquiring person is required to deliver to the
corporation an information statement disclosing, among other things, the
identity of the person, the terms of the acquisition or proposed acquisition,
and the financing thereof. An acquiring person will not be able to vote those
shares acquired in a Control Share Acquisition that exceed one of the cited
thresholds (such shares, "Control Shares") unless a resolution approved by
66 2/3% of the voting power of all shares entitled to vote thereon (excluding
shares with respect to which voting power can be exercised by the acquiring
person or an officer or director of the corporation) approves of such voting
power. At the request of the acquiring person, such a resolution must be put
forth before shareholders at a special meeting held within 55 days after receipt
of the information statement, provided that the acquiring person undertakes to
pay the costs of such special meeting and has delivered to the corporation
copies of definitive financing agreements with responsible entities for any
required financing of the Control Share Acquisition. If an information statement
has not been delivered to the corporation by the 10th day after a Control Share
Acquisition, or the shareholders of the corporation have voted not to accord
voting rights to the Control Shares, the corporation may redeem all (but not
less than all) of the Control Shares at their fair market value. Shares that are
not accorded voting rights pursuant to the CSAL regain their voting rights when
acquired by another person in an acquisition that is not subject to the CSAL.
The Company also is subject to the Idaho Business Combination Law (the
"BCL"), which prohibits a corporation from engaging in certain business
combinations with an "interested shareholder" for a period of three years after
the date of the transaction in which the person became an interested
shareholder, unless, among other things, (i) the corporation's articles of
incorporation or bylaws include a provision that was adopted in accordance with
the BCL and that expressly provides that the corporation is not subject to the
statute (the Company has not made such an election), or (ii) a committee of the
corporation's board of directors approves of the business combination or the
acquisition of the shares before the date such shares were acquired. After the
three year moratorium period, the corporation may not consummate a business
combination unless, among other things, it is approved by the affirmative vote
of the holders of at least two-thirds of the outstanding shares entitled to vote
(other than those beneficially owned by the interested shareholder or an
affiliate or associate thereof) or the business combination meets certain
minimum price and form of payment requirements. An interested shareholder is
defined to include, with certain exceptions, any person who is the beneficial
owner of 10% or more of the voting power of the outstanding voting shares of the
corporation. Business combinations subject to the BCL include certain mergers,
consolidations, recapitalizations and reverse share splits. IDACORP also will be
subject to the BCL upon completion of the Exchange.
The application of the CSAL and the BCL may have the effect of delaying,
deferring or preventing a change of control of the Company or IDACORP.
DIRECTORS AND MANAGEMENT
The current directors of Idaho Power will be the directors of IDACORP at the
effective time of the Exchange. They will be elected to serve as directors of
IDACORP for the same terms of service for which they are currently serving as
directors of Idaho Power.
Upon effectiveness of the Exchange, IDACORP's executive officers are
expected to be:
<TABLE>
<S> <C>
Joseph W. Marshall Chairman and Chief Executive Officer
Jan B. Packwood President and Chief Operating Officer
J. LaMont Keen Vice President, Chief Financial Officer
and Treasurer
Robert W. Stahman Vice President, General Counsel and
Secretary
</TABLE>
These executive officers of IDACORP will continue to be executive officers
of Idaho Power.
27
<PAGE>
Certain information concerning the executive officers of Idaho Power is
incorporated herein by reference from the Company's latest Annual Report on Form
10-K.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
At the effective time of the Exchange, IDACORP will assume Idaho Power's
existing Dividend Reinvestment and Stock Purchase Plan as in effect immediately
prior to the effective time. Shares of Idaho Power Common Stock held in the plan
will automatically become a like number of shares of IDACORP Common Stock, and
shares of IDACORP Common Stock will be issued and delivered under the plan on
and after the effective time.
COMMON STOCK PLANS
At the effective time of the Exchange, shares of Idaho Power Common Stock
held under Idaho Power's 1994 Restricted Stock Plan and the Employee Savings
Plan (401(k) Plan) will automatically become a like number of shares of IDACORP
Common Stock, and shares of IDACORP Common Stock will be issued and delivered
under such plans on and after the effective time.
Shareholder approval of the Holding Company Proposal will also constitute
shareholder approval or ratification of the actions to be taken in connection
with the 1994 Restricted Stock Plan, including the adoption or assumption of the
1994 Restricted Stock Plan by IDACORP and the adoption of any amendments to the
1994 Restricted Stock Plan necessary to accomplish those actions.
MARKET PRICE OF IDAHO POWER COMMON STOCK
On March 10, 1998, the high and low sales prices for Idaho Power Common
Stock, as reported in the consolidated transaction reporting system, were
$36 1/8 and $35 5/8 , respectively.
TRANSFER AGENT AND REGISTRAR
First Security Bank of Idaho is expected to act as Registrar, and IDACORP
and The Bank of New York are expected to act as Transfer Agents for IDACORP
Common Stock once the Exchange is consummated.
The Board of Directors of Idaho Power has unanimously approved the Holding
Company Proposal and believes that it is in the best interests of Idaho Power's
shareholders.
THE BOARD OF DIRECTORS OF IDAHO POWER RECOMMENDS APPROVAL AND ADOPTION OF,
AND URGES EACH SHAREHOLDER TO VOTE "FOR", THE HOLDING COMPANY PROPOSAL AS
DISCUSSED IN PROPOSAL NO. 2.
PROPOSAL NO. 3--RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR
At the meeting, the shareholders will be asked to ratify the selection by
the Board of Directors of Deloitte & Touche LLP as the firm of independent
public accountants to audit the financial statements of the Company for the
fiscal year 1998. This firm has conducted consolidated annual audits of the
Company for many years and is one of the world's largest firms of independent
certified public accountants. A representative of Deloitte & Touche LLP is
expected to be present at the meeting and will have an opportunity to make a
statement and to respond to appropriate questions.
THE BOARD OF DIRECTORS OF IDAHO POWER RECOMMENDS A VOTE "FOR" DELOITTE &
TOUCHE LLP AS INDEPENDENT AUDITOR.
28
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the number of shares beneficially owned on
January 30, 1998, by the Directors and nominees, by those Executive Officers
named in the Summary Compensation Table and by the Directors and Executive
Officers of the Company as a group:
<TABLE>
<CAPTION>
AMOUNT OF
NAME OF BENEFICIAL PERCENT
TITLE OF CLASS BENEFICIAL OWNER OWNERSHIP(1) OF CLASS
- ------------------- -------------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C>
Common Stock Robert D. Bolinder.................................................. 1,000 *
Common Stock Roger L. Breezley................................................... 650 *
Common Stock John B. Carley...................................................... 2,805 *
Common Stock Larry R. Gunnoe..................................................... 27,944 *
Common Stock Peter T. Johnson.................................................... 2,000 *
Common Stock Jack K. Lemley...................................................... 1,500 *
Common Stock Evelyn Loveless..................................................... 1,325 *
Common Stock Joseph W. Marshall.................................................. 36,159 *
Common Stock Jon H. Miller....................................................... 500 *
Common Stock Peter S. O'Neill.................................................... 500 *
Common Stock Jan B. Packwood..................................................... 19,200 *
Common Stock Gene C. Rose........................................................ 2,423 *
Common Stock Phil Soulen......................................................... 5,771 *
Common Stock Douglas H. Jackson.................................................. 24,343 *
Common Stock J. LaMont Keen...................................................... 10,437 *
Common Stock Richard R. Riazzi................................................... 3,113 *
Common Stock All Directors and Executive Officers as a group (20 persons)........ 178,435 *
Preferred Stock All Directors and Executive Officers as a group (20 persons)........ 27 *
</TABLE>
- ------------------------
* Less than 1 percent.
(1) Includes shares of Common Stock subject to forfeiture issued pursuant to the
1994 Restricted Stock Plan.
All Directors and Executive Officers have voting and investment power for
the shares held by them including shares owned through the Employee Savings Plan
and the Dividend Reinvestment and Stock Purchase Plan.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon a review of Company records and copies of reports on Forms
3, 4 and 5 furnished to the Company or written representations that no reports
on Form 5 were required, the Company believes that during 1997 all persons
subject to the reporting requirements of Section 16(a) of the Securities
Exchange Act of 1934, as amended, filed the required reports on a timely basis,
except J.C. Miller and Kip W. Runyan for whom Initial Statements of Beneficial
Ownership on Form 3 were filed late and J. LaMont Keen for whom a Form 4 was
filed late.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
REPORT OF COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
GENERAL
The Compensation Committee (Committee) of the Board of Directors administers
the Company's executive compensation program. As such, the Committee is
responsible for recommending (1) the
29
<PAGE>
compensation philosophy, (2) executive compensation plans that support the
philosophy, and (3) the appropriate levels of compensation for Executive
Officers. The Committee is composed of four independent, non-employee Directors.
Following the development of recommendations by the Compensation Committee, all
issues related to executive compensation are submitted to the full Board of
Directors for approval. The Board approved, without modification, all executive
compensation recommendations of the Committee for 1997.
EXECUTIVE OFFICER COMPENSATION PHILOSOPHY
The compensation philosophy for Executive Officers is consistent with the
compensation philosophy the Company has adopted for all employees. The Company's
compensation program is designed to:
1. manage employee compensation as an investment with the expectation
employees will contribute to the Company's financial performance, its
environmental record and public reputation in the territory it serves;
2. be competitive with respect to those companies in the markets in
which the Company competes for employees, allowing the Company to
successfully attract and retain the qualified employees necessary for
long-term success;
3. recognize individuals for their demonstrated ability to perform
their position responsibilities; and
4. balance total compensation with the Company's ability to pay.
EXECUTIVE OFFICER 1997 COMPENSATION
Salary ranges for Executive Officers are reviewed annually and are supported
by salary comparisons with similar positions in electric utilities throughout
the United States with annual revenues ranging from $500 million to $700
million. The competitive point for executive compensation for 1997 was targeted
near the median of the salary levels for executive officers of these utilities.
Actual compensation of individual Executive Officers is based upon their levels
of responsibility, experience in their positions, prior experience, breadth of
knowledge and job performance. The electric utility group utilized by the
Committee to compare Executive Officer salaries is different from the EEI 100
Electric Utilities Index group utilized by the Company to compare the financial
performance of the Company with a nationally recognized industry standard. The
Committee has used this smaller electric group for salary comparison purposes
since November 1994, based on its belief that it is more appropriate to compare
Executive Officer salaries with electric utilities of comparable revenues, size
and complexity than with all electric utilities regardless of size as
represented in the EEI Electric Utilities Index.
In November of 1996, the Committee recommended adjustments to the 1997
salary ranges for the Executive Officer group based on the annual Executive
Officer compensation review referenced above. Salary adjustments for 1997
averaged approximately 6 percent, to move them nearer (but slightly below) the
median of the comparison group. The Committee considered each of the factors
discussed above but did not assign a formal weighting for each factor.
The Company's Executive Annual Incentive Plan implemented on January 1, 1995
that tied a portion of each executive's compensation to achieving annual
operational and financial goals was suspended for 1997. Effective January 1,
1997, the executive officers participated in the Company's Employee Incentive
Plan ("EIP"). The objectives of the EIP are to (1) allow employees to
participate with shareholders in the Company's success, (2) focus attention on
the achievement of sustained growth in earnings, (3) promote and reinforce a
sense of individual ownership and personal accountability for the Company's
success, (4) strengthen understanding and commitment to key business strategies
and goals, and (5) unify employee efforts toward accomplishing business
strategies and goals. Under the EIP, the total Company award equals 40 percent
times the increase in the Company's earnings on common stock over the average of
the
30
<PAGE>
previous three years. The total Company award is converted to an individual
award amount by dividing the total Company award by the total compensation
expense (base pay plus overtime) for the Company for 1997. The same percentage
payout applies to all employees including Executive Officers. The maximum
individual award percentage payout under the EIP is 15 percent of base pay. In
1997, the Company achieved a level of performance under the EIP that will result
in all Executive Officers receiving an award of approximately 7.8 percent of
their individual base salaries. Awards under the Executive Annual Incentive Plan
are reflected in the bonus column of the Summary Compensation Table.
The 1994 Restricted Stock Plan ("Restricted Stock Plan"), approved by
shareholders at the May 1994 Annual Meeting, was implemented in January 1995 as
an equity-based long-term incentive plan. Restricted Stock grants made in
January 1995 for the 1995-1997 restricted period were earned at the maximum
level for all named executive officers, based on achieving the Cumulative
Earnings Per Share ("CEPS") goal at the maximum level. A grant under the
Restricted Stock Plan was made to all officers in January 1997, with a
three-year restricted period ending December 31, 1999, with a single financial
performance goal of CEPS. To receive a final share award each officer must be
employed by the Company, as an officer, during the entire restricted period
(with certain exceptions), and the Company must achieve the CEPS performance
goal established by the Board of Directors. The restricted stock grant
percentage (a percentage of base salary converted into shares of stock based
upon the closing stock price for a share of Company common stock on December 31,
1996) varied by position with the percentages for the Chief Executive Officer
and the President and Chief Operating Officer ranging from a minimum of 15
percent to a maximum of 45 percent. For the next tier of executive officers, the
percentage ranges from a minimum of 12 percent to a maximum of 36 percent. For
the next tier of executive officers, the percentage ranges from a minimum of 9
percent to a maximum of 27 percent. The target grant percentages for new grants
are reviewed annually as part of the annual Executive Officer compensation
review referenced above and the 1997 grants were at a level below the median
target levels among the comparison group.
The Company has no policy regarding the deductibility of qualifying
compensation paid to Executive Officers under Section 162(m) of the Internal
Revenue Code.
CEO 1997 COMPENSATION
In January of 1997, Mr. Marshall, who has served as Chief Executive Officer
since 1989, was granted a salary increase of approximately 5 percent. The
competitiveness of Mr. Marshall's salary is reviewed annually based upon
comparisons with salaries of chief executive officers of comparable utilities
with annual revenues ranging from $500 million to $700 million. The competitive
point for Mr. Marshall's salary is targeted near the median of this comparison.
The actual 1997 salary adjustment for Mr. Marshall is based on the level of his
responsibilities, the depth of his experience, his job performance and the
overall competitive level of his current compensation based on the annual
Executive Officer compensation review referenced above and was near the median
of salary levels for chief executive officers of the comparison utility group.
The Committee considered each of these factors but did not assign a formal
weighting for each factor. Mr. Marshall is a participant in the EIP, as
described above. In 1997, the Company achieved a level of performance under the
EIP that will result in Mr. Marshall receiving an award of approximately 7.8
percent of his base salary. In addition Mr. Marshall is a participant in the
Restricted Stock Plan as discussed above and earned his restricted stock grant
made in January 1995 for the 1995-1997 restricted period at the maximum level,
based on achieving the CEPS goal at the maximum level. This resulted in a final
award of 27 percent of Mr. Marshall's base salary at the time of grant. Mr.
Marshall received a new stock grant at the target level of 24 percent in 1997
and will receive a final share award after the restricted period ends if he
remains employed by the Company as an officer during the entire restricted
period and the Company achieves its CEPS performance goal established by the
Board of Directors.
<TABLE>
<S> <C>
John B. Carley, Chairman Evelyn Loveless
Peter T. Johnson Peter S. O'Neill
</TABLE>
31
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-------------
AWARDS
ANNUAL -------------
COMPENSATION RESTRICTED ALL OTHER
-------------------- STOCK COMPENSATION(2)
NAME AND SALARY BONUS AWARD(S)(1) -----------------
PRINCIPAL POSITION YEAR ($) ($) ($) ($)
- ---------------------------------------------------- --------- --------- --------- ------------- -----------------
<S> <C> <C> <C> <C> <C>
Joseph W. Marshall 1997 420,000 32,760 126,000 6,400
Chairman of the Board 1996 400,000 56,990 96,000 6,000
and Chief Executive 1995 375,000 73,125 69,090 6,000
Officer
Larry R. Gunnoe 1997 284,000 22,152 85,200 6,400
Retired President and 1996 270,000 38,470 64,800 6,000
Chief Operating Officer(3) 1995 240,000 46,800 43,710 6,000
Jan B. Packwood 1997 207,692 16,200 56,000 5,873
President and 1996 182,000 25,049 30,600 6,000
Chief Operating Officer 1995 155,000 30,225 18,330 6,000
Douglas H. Jackson 1997 175,000 13,650 49,000 6,192
Vice President- 1996 170,000 24,222 30,600 5,449
Corporate Affairs 1995 155,000 30,225 18,330 6,000
J. LaMont Keen 1997 178,000 13,884 49,840 6,400
Vice President, 1996 170,000 24,222 30,600 6,000
Chief Financial Officer 1995 152,000 29,640 18,330 6,000
and Treasurer
Richard R. Riazzi 1997 181,450 14,153 64,640 --
Vice President- 1996 -- -- -- --
Marketing and 1995 -- -- -- --
Sales
</TABLE>
- ------------------------
(1) Aggregate restricted stock holdings as of December 31, 1997 are as follows:
Mr. Marshall held 10,188 ($383,323.50) shares of restricted stock; Mr.
Gunnoe held 6,757 ($254,232.13) shares of restricted stock; Mr. Packwood
held 3,599 ($135,412.38) shares of restricted stock; Mr. Jackson held 3,374
($126,946.75) shares of restricted stock; Mr. Keen held 3,401 ($127,962.63)
shares of restricted stock; and Mr. Riazzi held 1,718 ($64,640) shares of
restricted stock. Dividends are paid on restricted stock when and as paid on
the Company's Common Stock.
(2) Represents the Company's contribution to the Employee Savings Plan (401-k
plan).
(3) Mr. Gunnoe retired from his position as President and Chief Operating
Officer during 1997.
32
<PAGE>
LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF PERFORMANCE OR
SHARES, UNITS OTHER PERIOD UNTIL
NAME OR OTHER RIGHTS(1) MATURATION OR PAYOUT
- ------------------------------------------------------------------------- ------------------- --------------------
<S> <C> <C>
Richard R. Riazzi 3918 1997-1999
</TABLE>
- ------------------------
(1) The phantom stock was awarded to Mr. Riazzi on January 1, 1997 pursuant to
his Employment Agreement. Dividend equivalents will accrue as additional
phantom shares during the three year period. If Mr. Riazzi remains employed
by the Company on December 31, 1999, he will be paid the cash value of the
phantom stock on that date.
DIRECTOR COMPENSATION
Directors who are not employees of the Company receive $800 for each Board
meeting and for each committee meeting attended. In addition, non-employee
Directors who are chairmen of Board committees receive $1,820 per month; other
non-employee Directors receive $1,650 per month. The Company permits Directors
to defer all or a portion of any retainers and meeting fees under a deferred
compensation plan. Under the plan, at retirement Directors may receive one
lump-sum payment of all amounts deferred with interest, or a series of up to 10
equal annual payments, depending upon the specific deferral arrangement. A
special account is maintained on the Company's books showing the amounts
deferred and the interest accrued thereon. The Directors participate in a
non-qualified deferred compensation plan (a non-qualified defined benefit plan
for Directors) that is financed by life insurance on the participants and
provides, upon retirement from the Board, for the payment of $17,500 per year
for a period of 15 years.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee for 1997 were John B. Carley,
Peter T. Johnson, Evelyn Loveless and Peter S. O'Neill. O'Neill Enterprises, of
which Mr. O'Neill is President, is the developer of the Surprise Valley
Partnership developing a residential community in southeast Boise. In May of
1995, the Company entered into an agreement leasing approximately 48.21 acres to
Surprise Valley Partnership for 10 years at a monthly rate of $1,118.75. The
lease payments were based on an 8 percent return on fair market value with the
fair market value of the leased land determined by independent appraisers. The
Company's appraisal was provided by Nelson & Hastings, Real Estate Appraisers
and Consultants, with Brad Janoush Appraisal M.A.I. providing the appraisal for
Surprise Valley Partnership.
EMPLOYMENT CONTRACTS
The Company has entered into an employment agreement with Richard R. Riazzi,
Vice President-- Marketing and Sales, for a three-year term ending December
1999, with automatic one year extensions thereafter unless the parties agree to
terminate. The agreement provides for a minimum base salary of $191,000 per year
subject to annual review, a phantom stock award (shown in the Long-Term
Incentive Plans Table), plus annual and long-term incentive compensation
opportunities. In the event of termination of employment following a change of
control of the Company, which is defined as the acquisition of beneficial
ownership of 20% of voting power of the Company, certain changes in the
Company's Board, or approval by the shareholders of the liquidation of the
Company, of certain merger or consolidations or of certain transfers of the
Company's assets, Mr. Riazzi will receive 18 months base salary plus the greater
of two times the most recent annual bonus or two times the average annual bonus
for the three previous years, subject to any limitations provided by Section
280G of the Internal Revenue Code.
33
<PAGE>
PERFORMANCE GRAPH
[GRAPH]
Source: ZACKS INVESTMENT RESEARCH, INC. and EDISON ELECTRIC INSTITUTE
The table shows a Comparison of Five-Year Cumulative Total Shareholder
Return for Idaho Power Company Common Stock, the S&P 500 Index and the Edison
Electric Institute (EEI) 100 Electric Utilities Index. The data assumes that
$100 was invested on December 31, 1992, with beginning-of-period weighting of
the peer group indices (based on market capitalization) and monthly compounding
of returns.
<TABLE>
<CAPTION>
EEI 100
ELECTRIC
IDAHO POWER S&P 500 UTILITIES
----------- --------- ---------------
<S> <C> <C> <C>
1992................................................ $ 100.00 $ 100.00 $ 100.00
1993................................................ 117.38 110.08 111.15
1994................................................ 97.62 111.53 98.29
1995................................................ 134.11 153.45 128.78
1996................................................ 147.92 188.68 130.32
1997................................................ 189.73 251.63 166.00
</TABLE>
34
<PAGE>
RETIREMENT BENEFITS
The following table sets forth the estimated annual retirement benefits
payable under the Company's Retirement Plan (a qualified defined benefit pension
plan for all regular employees) and under the Company's Security Plan for Senior
Management Employees (a non-qualified defined benefit plan for senior management
employees).
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
----------------------------------------------------------------------
REMUNERATION 15 20 25 30 35 40
- ------------------------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 75,000......................................... $ 45,000 $ 48,750 $ 52,500 $ 56,250 $ 56,250 $ 56,250
$100,000......................................... $ 60,000 $ 65,000 $ 70,000 $ 75,000 $ 75,000 $ 75,000
$125,000......................................... $ 75,000 $ 81,250 $ 87,500 $ 93,750 $ 93,750 $ 93,750
$150,000......................................... $ 90,000 $ 97,500 $ 105,000 $ 112,500 $ 112,500 $ 112,500
$175,000......................................... $ 105,000 $ 113,750 $ 122,500 $ 131,250 $ 131,250 $ 131,250
$200,000......................................... $ 120,000 $ 130,000 $ 140,000 $ 150,000 $ 150,000 $ 150,000
$225,000......................................... $ 135,000 $ 146,250 $ 157,500 $ 168,750 $ 168,750 $ 168,750
$250,000......................................... $ 150,000 $ 162,500 $ 175,000 $ 187,500 $ 187,500 $ 187,500
$275,000......................................... $ 165,000 $ 178,750 $ 192,500 $ 206,250 $ 206,250 $ 206,250
$300,000......................................... $ 180,000 $ 195,000 $ 210,000 $ 225,000 $ 225,000 $ 225,000
$325,000......................................... $ 195,000 $ 211,250 $ 227,500 $ 243,750 $ 243,750 $ 243,750
$350,000......................................... $ 210,000 $ 227,500 $ 245,000 $ 262,500 $ 262,500 $ 262,500
$375,000......................................... $ 225,000 $ 243,750 $ 262,500 $ 281,250 $ 281,250 $ 281,250
$400,000......................................... $ 240,000 $ 260,000 $ 280,000 $ 300,000 $ 300,000 $ 300,000
$450,000......................................... $ 270,000 $ 292,500 $ 315,000 $ 337,500 $ 337,500 $ 337,500
$500,000......................................... $ 300,000 $ 325,000 $ 350,000 $ 375,000 $ 375,000 $ 375,000
</TABLE>
Benefits under the Retirement Plan for senior management employees at normal
retirement age are calculated on years of credited service using the average of
the highest five consecutive years' salary plus bonus (as reported in the
Summary Compensation Table) in the last 10 years before retirement. Benefits
under the Security Plan for Senior Management Employees are based upon a similar
average of the highest five consecutive years of salary plus bonus in the last
10 years before retirement, a normal retirement age of 62 years, years of
participation as a senior management employee, and are payable over the
participant's lifetime. Generally, total retirement benefits from the Retirement
Plan and Security Plan for Senior Management Employees will range from 60
percent to 75 percent of the participant's average salary plus bonus in the
highest five consecutive years in the last 10 years of employment. The Security
Plan is financed by life insurance on the participants and is designed so that
if assumptions made as to mortality expectation, policy dividends and other
factors are realized, the Company will recover the cost of this plan. Effective
August 1, 1996, the Company terminated its Supplemental Employee Retirement Plan
(a non-qualified plan that provided benefits that would otherwise have been
denied participants by reason of certain Internal Revenue Code limitations on
qualified plan benefits). Benefits payable from the Retirement Plan and the
Security Plan are included in the table above. Benefits shown above are not
subject to any deduction for Social Security benefits or other offset amounts.
As of December 31, 1997, the final five-year average salary plus bonus under
the retirement plans as referred to above for the Executive Officers named in
the Summary Compensation Table are: Mr. Marshall, $395,459; Mr. Gunnoe,
$255,123; Mr. Packwood, $174,227; Mr. Jackson, $164,800; and Mr. Keen, $163,283.
Years of credited service under the Retirement Plan and years of participation
as a senior management employee are, respectively: Mr. Marshall, 28, 21; Mr.
Gunnoe, 29, 22; Mr. Packwood, 28, 21; Mr. Jackson, 41, 21; and Mr. Keen, 24, 15.
Mr. Riazzi has one year of credited service but has not vested in the plan.
35
<PAGE>
EXPERTS
The consolidated financial statements and the related consolidated financial
statement schedule incorporated in this Proxy Statement and Prospectus by
reference from the Company's Annual Report on Form 10-K for the year ended
December 31, 1997 have been audited by Deloitte & Touche LLP, 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.
LEGAL OPINIONS
The validity of the shares of IDACORP Common Stock to be issued pursuant to
the Exchange will be passed upon by Robert W. Stahman, Vice President, General
Counsel and Secretary of Idaho Power and by LeBoeuf, Lamb, Greene & MacRae,
L.L.P. LeBoeuf, Lamb, Greene & MacRae, L.L.P. may rely upon the opinion of Mr.
Stahman as to matters of Idaho law. As of January 30, 1998, Mr. Stahman owned
17,083 shares of Company Common Stock. Mr. Stahman is acquiring additional
shares of Common Stock at regular intervals through the Employee Savings Plan.
OTHER BUSINESS
Neither the Board of Directors nor management intends to bring before the
meeting any business other than the matters referred to in the Notice of Meeting
and this Proxy Statement and Prospectus. In addition, they have not been
informed that any other matter will be presented to the meeting by others. If
any other business should properly come before the meeting, or any adjournment
thereof, the persons named in the proxy will vote on such matters according to
their best judgment.
At the meeting, management will report on the Company's business, and
shareholders will have an opportunity to ask questions.
1999 ANNUAL MEETING OF SHAREHOLDERS
Nominations for Director may be made only by the Board of Directors or by a
shareholder entitled to vote who has delivered written notice to the Secretary
of the Company not earlier than 90 days, and not later than 60 days, prior to
the Company's annual meeting.
No business may be brought before an annual meeting of the shareholders
except as specified in the notice of the meeting or as otherwise properly
brought before the meeting by or at the direction of the Board or by a
shareholder entitled to vote who has delivered written notice to the Secretary
of the Company not earlier than 90 days, and not later than 60 days, prior to
the Company's annual meeting. If the Exchange is effective prior to the 1999
Annual Meeting of the Company, any nomination or proposal that a common
shareholder intends to present for action at the Company's 1999 Annual Meeting
will be considered for IDACORP's 1999 Annual Meeting.
These requirements are separate and apart from and in addition to the
Securities and Exchange Commission's requirements that a shareholder must meet
in order to have a shareholder proposal included in the Company's Proxy
Statement under Rule 14a-8 of the Exchange Act. For purposes of the Company's
Annual Meeting of Shareholders expected to be held on May 5, 1999, any
shareholder who wishes to submit a proposal for inclusion in the Company's proxy
materials must submit such proposal to the Secretary of the Company on or before
November 23, 1998. If the Exchange is effective prior to the 1999 Annual Meeting
of the Company, any proposal that a common shareholder submits for inclusion in
the Company's 1999 Proxy Statement will be considered for IDACORP's 1999 Proxy
Statement.
IT IS REQUESTED THAT EACH SHAREHOLDER WHO CANNOT ATTEND THE MEETING SEND IN
HIS OR HER PROXY OR PROXIES WITHOUT DELAY.
36
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF EXCHANGE
This AGREEMENT AND PLAN OF EXCHANGE (this "Agreement"), dated as of February
2, 1998, is between IDAHO POWER COMPANY, an Idaho corporation (the "Company"),
the company whose shares will be acquired pursuant to the Exchange described
herein, and IDAHO POWER HOLDING COMPANY, an Idaho corporation ("IPHC"), the
acquiring company. The Company and IPHC are hereinafter referred to,
collectively, as the "Companies".
WITNESSETH:
WHEREAS, the authorized capital stock of the Company consists of (a)
50,000,000 shares of Common Stock, $2.50 par value ("Company Common Stock"), of
which 37,612,351 shares are issued and outstanding, (b) 215,000 shares of 4%
Preferred Stock, $100 par value, of which 166,972 shares are issued and
outstanding, (c) 150,000 shares of Serial Preferred Stock, $100 par value, of
which 150,000 shares are issued and outstanding and (d) 3,000,000 shares of
Serial Preferred Stock, without par value, of which 500,500 shares are issued
and outstanding; the number of shares of Company Common Stock being subject to
increase to the extent that shares reserved for issuance are issued prior to the
Effective Time, as hereinafter defined.
WHEREAS, IPHC is a wholly-owned subsidiary of the Company with authorized
capital stock consisting of (a) 120,000,000 shares of Common Stock, without par
value ("IPHC Common Stock"), of which 100 shares are issued and outstanding and
owned of record by the Company and (b) 20,000,000 shares of Preferred Stock,
without par value ("IPHC Preferred Stock"), none of which shares are issued and
outstanding;
WHEREAS, the Boards of Directors of the respective Companies deem it
desirable and in the best interests of the Companies and the shareholders of the
Company that each share of Company Common Stock be exchanged for a share of IPHC
Common Stock with the result that IPHC becomes the owner of all outstanding
Company Common Stock and that each holder of Company Common Stock becomes the
owner of an equal number of shares of IPHC Common Stock, all on the terms and
conditions hereinafter set forth; and
WHEREAS, the Boards of Directors of the Companies have each approved and
adopted this Agreement and the Board of Directors of the Company has recommended
that its shareholders approve this Agreement pursuant to the Idaho Business
Corporation Act (the "Act");
NOW, THEREFORE, in consideration of the premises, and of the agreements,
covenants and conditions hereafter contained, the parties hereto agree with
respect to the exchange provided for herein (the "Exchange") that at the
Effective Time (as hereinafter defined) each share of Company Common Stock
issued and outstanding immediately prior to the Effective Time will be exchanged
for one share of IPHC Common Stock, and that the terms and conditions of the
Exchange and the method of carrying the same into effect shall be as follows:
ARTICLE I
This Agreement shall be submitted to the shareholders of the Company
entitled to vote with respect thereto for approval as provided by the Act.
ARTICLE II
Subject to the satisfaction of the terms and conditions set forth in this
Agreement and to the provisions of Article VI, IPHC agrees to file with the
Secretary of State of the State of Idaho (the "Secretary of State") Articles of
Share Exchange (the "Articles") with respect to the Exchange, and the Exchange
shall take effect upon the effective date as specified in the Articles (the
"Effective Time").
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ARTICLE III
A. At the Effective Time: (1) each share of Company Common Stock issued and
outstanding immediately prior to the Effective Time shall be automatically
exchanged for one share of IPHC Common Stock, which shares shall thereupon be
fully paid and non-assessable;
(2) IPHC shall acquire and become the owner and holder of each issued and
outstanding share of Company Common Stock so exchanged;
(3) each share of IPHC Common Stock issued and outstanding immediately prior
to the Effective Time shall be canceled and shall thereupon constitute an
authorized and unissued share of IPHC Common Stock;
(4) each share of Company Common Stock held under the Dividend Reinvestment
and Stock Purchase Plan, the Employee Savings Plan and the 1994 Restricted Stock
Plan (including fractional and uncertificated shares) immediately prior to the
Effective Time shall be automatically exchanged for a like number of shares
(including fractional and uncertificated shares) of IPHC Common Stock, which
shares shall be held under the Dividend Reinvestment and Stock Purchase Plan,
the Employee Savings Plan and the 1994 Restricted Stock Plan, as the case may
be; and
(5) the former owners of Company Common Stock shall be entitled only to
receive shares of IPHC Common Stock as provided herein.
B. Subject to dissenters' rights as set forth in Part 13 of the Act for the
4% Preferred Stock, $100 par value and the Serial Preferred Stock, $100 par
value, shares of the Company's 4% Preferred Stock, $100 par value, Serial
Preferred Stock, $100 par value, and Serial Preferred Stock, without par value,
shall not be exchanged or otherwise affected in connection with the Exchange
and, to the extent issued and outstanding immediately prior to the Effective
Time, shall continue to be issued and outstanding following the Exchange as
shares of the Company of the applicable series designation.
C. As of the Effective Time, IPHC shall succeed to the Dividend Reinvestment
and Stock Purchase Plan as in effect immediately prior to the Effective Time,
and the Dividend Reinvestment and Stock Purchase Plan shall be appropriately
amended to provide for the issuance and delivery of IPHC Common Stock on and
after the Effective Time.
D. As of the Effective Time, the Employee Savings Plan and the 1994
Restricted Stock Plan shall be appropriately amended to provide for the issuance
and delivery of IPHC Common Stock on and after the Effective Time.
ARTICLE IV
The filing of the Articles with the Secretary of State and the consummation
of the Exchange are subject to the satisfaction of the following conditions
precedent:
(1) the approval by the shareholders of the Company, to the extent required
by the Act, of this Agreement;
(2) the approval for listing, upon official notice of issuance, by the New
York Stock Exchange, of IPHC Common Stock to be issued and reserved for issuance
pursuant to the Exchange;
(3) the receipt of such orders, authorizations, approvals or waivers from
the Idaho Public Utilities Commission and all other regulatory bodies, boards or
agencies as are required in connection with the Exchange, which orders,
authorizations, approvals or waivers remain in full force and effect and do not
include, in the sole judgment of the Board of Directors of the Company,
unacceptable conditions; and
(4) the receipt by the Company of a tax opinion of LeBoeuf, Lamb, Greene &
MacRae L.L.P. satisfactory to the Board of Directors of the Company to the
effect that (a) common shareholders of the Company (i) will recognize no gain or
loss in connection with the Exchange, (ii) will have the same basis in their
IPHC Common Stock after the Exchange as they had in their Company Common Stock
before the Exchange and (iii) will be entitled to include any period that they
held Company Common Stock before the Exchange when determining any holding
period with respect to IPHC Common Stock received in the Exchange and (b) IPHC
will recognize no gain or loss upon its receipt of Company Common Stock in the
Exchange.
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ARTICLE V
Following the Effective Time, each holder of an outstanding certificate or
certificates theretofore representing shares of Company Common Stock may, but
shall not be required to, surrender the same to IPHC for cancellation and
reissuance of a new certificate or certificates in such holder's name or for
cancellation and transfer, and each holder or transferee will be entitled to
receive a certificate or certificates representing the same number of shares of
IPHC Common Stock as the shares of Company Common Stock previously represented
by the certificate or certificates surrendered. Until so surrendered or
presented for transfer, each outstanding certificate which, immediately prior to
the Effective Time, represented Company Common Stock shall be deemed and treated
for all corporate purposes to represent the ownership of the same number of
shares of IPHC Common Stock as though such surrender or transfer and exchange
had taken place. The holders of Company Common Stock at the Effective Time shall
have no right to have their shares of Company Common Stock transferred on the
stock transfer books of the Company, and such stock transfer books shall be
deemed to be closed for this purpose at the Effective Time.
ARTICLE VI
This Agreement may be amended, modified or supplemented, or compliance with
any provision or condition hereof may be waived, at any time, by the mutual
consent of the Boards of Directors of the Company and of IPHC; provided,
however, that no such amendment, modification, supplement or waiver shall be
made or effected, if such amendment, modification, supplement or waiver would,
in the judgment of the Board of Directors of the Company, materially and
adversely affect the shareholders of the Company.
Notwithstanding shareholder approval of this Agreement, this Agreement may
be terminated and the Exchange and related transactions abandoned at any time
prior to the time the Articles are filed with the Secretary of State, if the
Board of Directors of the Company determines, in its sole discretion, that
consummation of the Exchange would be inadvisable or not in the best interests
of the Company or its shareholders.
IN WITNESS WHEREOF, each of the Company and IPHC, pursuant to authorization
and approval given by its Board of Directors, has caused this Agreement to be
executed as of the date first above written.
IDAHO POWER COMPANY
By: /s/ JAN B. PACKWOOD
-----------------------------------------
Jan B. Packwood
PRESIDENT
IDAHO POWER HOLDING COMPANY
By: /s/ JOSEPH W. MARSHALL
-----------------------------------------
Joseph W. Marshall
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE
OFFICER
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EXHIBIT B
RESTATED ARTICLES OF INCORPORATION
OF
IDACORP, INC.
BOISE, IDAHO
, 1998
<PAGE>
ARTICLE I
NAME
The name of the Corporation is IDACORP, Inc.
ARTICLE II
PURPOSE
The purpose for which the Corporation is organized is to engage in any
lawful act or activity for which corporations may be organized under the Idaho
Business Corporation Act (the "Act").
ARTICLE III
REGISTERED OFFICE AND REGISTERED AGENT
The address of the registered office of the Corporation is P.O. Box 70, 1221
West Idaho Street, Boise, Idaho 83702, and the name of the Corporation's
registered agent at this address is Robert W. Stahman.
ARTICLE IV
INCORPORATOR
The incorporator of the Corporation is Robert W. Stahman, whose address is
P.O. Box 70, 1221 West Idaho Street, Boise, Idaho 83702.
ARTICLE V
CAPITAL STOCK
Section 1. AUTHORIZED CAPITAL STOCK. The aggregate number of shares of all
classes of capital stock which the Corporation has the authority to issue is
140,000,000, consisting of: (i) 20,000,000 shares of Preferred Stock, without
par value; and (ii) 120,000,000 shares of Common Stock, without par value.
Section 2. DIVIDENDS. Subject to restrictions in these Restated Articles of
Incorporation and to the extent permitted by law, the Board of Directors may
declare, and the Corporation may pay, dividends from any tangible or intangible
property legally available therefor. Dividends payable in shares of any class
may be paid to the holders of shares of another class.
Section 3. PREFERRED STOCK. Shares of Preferred Stock may be issued in one
or more series. Each series shall be so designated as to distinguish the shares
thereof from the shares of all other series of the Preferred Stock and all other
classes of stock of the Corporation. The Board of Directors is hereby expressly
authorized to establish series of Preferred Stock and, within the limitations
set forth in these Restated Articles of Incorporation and such limitations as
may be provided by any applicable law, to prescribe the number of shares to be
included in any series and the preferences, limitations and relative rights of
each series of the Preferred Stock so established. Such action by the Board of
Directors shall be expressed in a resolution or resolutions adopted by it prior
to the issuance of shares of each series. Without limitation thereto, the
authority of the Board of Directors with respect to each series shall include
the determination of any or all of, and the shares of each series may vary from
the shares of any other series in, the following:
(a) the number of shares constituting such series and the designation
thereof;
(b) the rate or rates of dividend, if any, or any formula or other
method or other means by which such rate or rates are to be determined at
any time or from time to time, the date or dates on which dividends may be
payable, whether such dividends shall be cumulative, noncumulative or
partially cumulative and, if cumulative or partially cumulative, the date
from which dividends shall accumulate;
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(c) whether shares may be redeemed or converted (i) at the option of the
Corporation, the shareholder or another person or upon the occurrence of a
designated event; (ii) for cash, indebtedness, securities or other property;
(iii) in a designated amount or in an amount determined in accordance with a
designated formula or by reference to extrinsic data or events;
(d) the preference, if any, of shares of such series over any other
class of shares with respect to distributions, including dividends and
distributions upon any voluntary or involuntary dissolution, liquidation or
winding up of the Corporation;
(e) whether the shares shall have any voting powers, in addition to the
voting powers provided by law, and the terms of any such voting powers; and
(f) any other relative rights, preferences and limitations of that
series.
All shares of the Preferred Stock of the same series shall be identical and
shall have identical preferences, limitations and relative rights, except that
shares of the same series issued at different times may vary as to the dates
from which dividends thereon shall be cumulative and except as otherwise not
prohibited by applicable law.
Section 4. COMMON STOCK.
A. LIQUIDATION RIGHTS. Subject to the limitations set forth in these
Restated Articles of Incorporation, any applicable law and to the rights, if
any, expressly granted to the holders of the Preferred Stock or of any class of
stock hereafter authorized, upon any dissolution, liquidation or winding up of
the Corporation, whether voluntary or involuntary, any net assets of the
Corporation available for distribution to its shareholders shall be distributed
ratably to the holders of the Common Stock. Without limiting the right of the
Corporation to distribute its assets or to dissolve, liquidate or wind up in
connection with any sale, merger or consolidation, the sale of all or
substantially all of the property of the Corporation, or the merger or
consolidation of the Corporation into or with any other corporation or
corporations, shall not be deemed to be a distribution of assets or a
dissolution, liquidation or winding up of the Corporation, whether voluntary or
involuntary, for purposes of this paragraph.
B. VOTING RIGHTS. Subject to any applicable law and to the rights, if any,
expressly granted to the holders of the Preferred Stock or of any class of stock
hereafter authorized, the holders of the Common Stock shall have the exclusive
right to vote in elections of directors and with respect to all other purposes.
ARTICLE VI
BOARD OF DIRECTORS
Section 1. NUMBER. The number of directors constituting the Board of
Directors shall be determined in the Bylaws.
Section 2. TERMS. At the first Annual Meeting of Shareholders, the Board of
Directors shall be divided into three classes as nearly equal in number as
possible, unless otherwise provided by any applicable law. The initial term of
office of each director in the first class shall expire at the first following
Annual Meeting of Shareholders; the initial term of office of each director in
the second class shall expire at the second following Annual Meeting of
Shareholders; and the initial term of office of each director in the third class
shall expire at the third following Annual Meeting of Shareholders. At each
annual election commencing at the Annual Meeting of Shareholders after such
classification, the successors to the class of directors whose term expires at
that time shall be elected to hold office for a term of three years.
Section 3. VACANCIES. Newly created directorships resulting from any
increase in the authorized number of directors or any vacancies in the Board of
Directors shall be filled by a two-thirds vote of the directors then in office,
or a sole remaining director, although less than a quorum. Directors chosen to
fill vacancies resulting from an increase in the authorized number of directors
shall hold office until the next
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<PAGE>
election of directors by the shareholders; directors chosen to fill other
vacancies shall hold office for a term expiring at the Annual Meeting of
Shareholders at which the term of the class to which they have been elected
expires.
Section 4. REMOVAL. A director may be removed by the shareholders only for
cause at a meeting called for the purpose of removing him by the affirmative
vote of not less than two-thirds of the outstanding shares entitled to vote in
elections of directors. The meeting notice must state that the purpose, or one
(1) of the purposes, of the meeting is removal of the director.
ARTICLE VII
LIMITATION OF LIABILITY
Section 1. GENERAL. No director of the Corporation shall be personally
liable to the Corporation or its shareholders for monetary damages resulting
from any action taken, or any failure to take any action, as a director;
provided, however, that nothing herein shall be deemed to eliminate or limit any
such liability which may not be so eliminated or limited under any applicable
law, as now in effect or as it may be amended or substituted from time to time.
Section 2. AMENDMENTS. No amendment, alteration, change, repeal or
substitution of this Article VII shall eliminate or limit the protection
afforded by this Article VII to a director with respect to any act or omission
occurring prior to the effective date thereof, unless otherwise provided by any
applicable law.
ARTICLE VIII
INDEMNIFICATION
Section 1. DEFINED TERMS. Capitalized terms used in this Article VIII that
are defined in Section 30-1-850 of the Act shall have the meaning given to such
terms under Section 30-1-850 of the Act.
Section 2. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Corporation shall
indemnify its Directors and Officers against Liability and Expenses and shall
advance Expenses to its Directors and Officers in connection with any Proceeding
to the fullest extent permitted by the Act, as now in effect or as it may be
amended or substituted from time to time.
ARTICLE IX
AMENDMENT OF RESTATED ARTICLES OF INCORPORATION
Section 1. DEFINED TERMS. For the purposes of this Article IX:
(i) "Interested Shareholder" shall have the meaning given in Section
30-1701 of the Idaho Business Combination Law; and
(ii) "Continuing Director" shall mean any member of the Board of
Directors who is unaffiliated with, and not a nominee of, any Interested
Shareholder and was a member of the Board of Directors prior to the time
that the Interested Shareholder became an Interested Shareholder and any
successor of a Continuing Director who is unaffiliated with, and not a
nominee of, any Interested Shareholder and is designated to succeed a
Continuing Director by two-thirds of Continuing Directors then on the Board
of Directors.
Section 2. GENERAL. The Corporation reserves the right to amend, alter,
change or delete any provision contained in these Restated Articles of
Incorporation, in the manner now or hereafter prescribed herein or by any
applicable law, and all rights conferred upon shareholders herein or as
contemplated hereby are granted subject to such reservation.
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<PAGE>
Section 3. ADDITIONAL VOTING REQUIREMENTS. In addition to any affirmative
vote required by any applicable law, these Restated Articles of Incorporation or
otherwise, any amendment, alteration, change, repeal or substitution of,
addition to, or adoption of any provision inconsistent with, Articles VI and IX
of these Restated Articles of Incorporation shall require the affirmative vote
of shareholders representing not less than eighty percent (80%) of the voting
power of all outstanding shares of the Corporation entitled to vote in elections
of directors, voting together as a single class; provided, however, that the
additional affirmative votes required by this Section 3 shall not be required
for any such amendment, alteration, change, repeal, substitution, addition or
adoption, and such action may be taken upon such authorization and approval by
shareholders as would otherwise be required, if it is recommended and submitted
to the shareholders for their consideration by the affirmative vote of
two-thirds of the Continuing Directors.
ARTICLE X
SHAREHOLDER VOTING AND QUORUM REQUIREMENTS
The shareholders may adopt or amend a bylaw that fixes a greater quorum or
voting requirement for shareholders, or voting groups of shareholders, than is
required by the Act.
B-4
<PAGE>
EXHIBIT C
AMENDED BYLAWS
OF
IDACORP, INC.
BOISE, IDAHO
, 1998
<PAGE>
ARTICLE I
OFFICE
Section 1.1. PRINCIPAL OFFICE. The Company shall maintain its principal
office in Boise, Idaho.
Section 1.2. REGISTERED OFFICE. The Company shall maintain a registered
office in the State of Idaho, as required by the Idaho Business Corporation Act
(the "Act").
ARTICLE II
SHAREHOLDERS
Section 2.1. ANNUAL MEETING OF SHAREHOLDERS. An annual meeting of the
shareholders shall be held on the first Wednesday of May or such other time as
may be designated by the Board of Directors.
Section 2.2. SPECIAL MEETINGS. A special meeting of the shareholders may be
called at any time by the President, a majority of the Board of Directors or the
Chairman of the Board. A special meeting of the shareholders also may be called
by the holders of not less than twenty percent (20%) of all the shares entitled
to vote on any issue proposed to be considered at the proposed special meeting
if such holders sign, date and deliver to the Secretary of the Company one (1)
or more written demands for the meeting describing the purpose or purposes for
which it is to be held. Upon receipt of one (1) or more written demands for such
proposed special meeting by the holders of not less than twenty percent (20%) of
all the shares entitled to vote on any issue proposed to be considered at the
proposed special meeting, the Secretary of the Company shall be responsible for
determining whether such demand or demands conform to the requirements of the
Act, the Restated Articles of Incorporation and these Bylaws. After making an
affirmative determination, the Secretary shall prepare, sign and deliver the
notices required for such meeting. The shareholders' demand may suggest a time
and place for the meeting but the Board of Directors shall, by resolution,
determine the time and place of any such meeting.
Section 2.3. PLACE OF MEETINGS. All meetings of the shareholders shall be
held at the Company's principal office or at such other place as shall be
designated in the notice of such meetings.
Section 2.4. NOTICE OF SHAREHOLDERS' MEETING. Written notice of the time and
place of a meeting of the shareholders shall be mailed to each shareholder
entitled to receive notice under the Act: (a) not less than 10 days nor more
than 60 days prior to the date of an annual or special meeting of the
shareholders; or (b) if applicable, within 30 days after the date on which a
shareholder demand satisfying the requirements of Section 2.2 is delivered to
the Secretary of the Company. Every notice of an annual or special meeting of
shareholders shall be deemed duly served when the notice is deposited in the
United States mail or with a private overnight courier service, with postage
prepaid and addressed to the shareholder at the shareholder's address as it
appears on the Company's records or if a shareholder shall have filed with the
Secretary of the Company a written request that the notice be sent to some other
address, then to such other address. If an annual or special shareholders'
meeting is adjourned to a different date, time or place, notice need not be
given of the new date, time or place if such new date, time or place is
announced at the meeting before adjournment. In any event, if a new record date
for the adjourned meeting is or must be determined, notice of the adjourned
meeting shall be given to persons who are shareholders as of the new record
date.
Section 2.5. WAIVER OF NOTICE. Any shareholder may waive any required notice
of the time, place, and purpose of any meeting of the shareholders by telegram,
telecopy, confirmed facsimile, or other writing, either before or after such
meeting has been held. Such waiver must be signed by the shareholder entitled to
the notice and be delivered to the Company for inclusion in the minutes or
filing with the corporate records. The attendance of any shareholder at any
shareholders' meeting shall constitute a waiver of: (a) any objection to lack of
notice or defective notice of the meeting, unless the shareholder at the
beginning of the meeting objects to holding the meeting or transacting business
at the meeting; and (b) any
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objection to consideration of a particular matter at the meeting that is not
within the purpose or purposes described in the meeting notice, unless the
shareholder objects to considering the matter when it is presented.
Section 2.6. QUORUM OF SHAREHOLDERS. Unless the Restated Articles of
Incorporation or the Act provide otherwise, a majority of the outstanding shares
entitled to vote on a particular matter at a meeting shall constitute a quorum
for purposes of action on that matter at the meeting. A share may be represented
at a meeting by the record holder thereof in person or by proxy. Once a share is
represented for any purpose at a meeting, it is deemed present for quorum
purposes for the remainder of the meeting and for any adjournment of that
meeting unless a new record date is or must be set for that adjourned meeting.
Whether or not a quorum is present, the meeting may be adjourned by a majority
vote of the shareholders present or represented. At any adjourned meeting where
a quorum is present, any business may be transacted that could have been
transacted at the meeting originally called.
Section 2.7. RECORD DATE FOR DETERMINATION OF SHAREHOLDERS. The Board of
Directors shall establish a record date for determining shareholders entitled to
notice of a shareholders' meeting, to vote or to take any other action, which
date shall not be more than 70 days before the meeting or action requiring a
determination of shareholders. A determination of shareholders is effective for
any adjournment of the meeting, unless a new record date is or must be set.
Section 2.8. SHAREHOLDERS' LIST FOR MEETING. The officer or agent in charge
of the stock transfer books for shares of the Company shall prepare an
alphabetical list of the names of all shareholders who are entitled to notice of
a shareholders' meeting. The list shall be arranged by voting group, and within
each voting group by class or series of shares, and show the address of and
number of shares held by each shareholder. The list shall be made available for
inspection by any shareholder, at least 10 days before the meeting for which the
list was prepared and continuing through the meeting, at the Company's principal
office or at a place identified in the meeting notice in the city where the
meeting will be held. The Company also shall make the list available at the
shareholders' meeting, and any shareholder is entitled to inspect the list at
any time during the meeting or any adjournment.
Section 2.9. TRANSACTION OF BUSINESS AT SHAREHOLDERS' MEETINGS.
2.9.1 TRANSACTION OF BUSINESS AT ANNUAL MEETING. Business transacted at an
annual meeting of shareholders may include all such business as may properly
come before the meeting. Nominations of persons for election to the Board of
Directors and the proposal of business to be considered by the shareholders may
be made at an annual meeting of shareholders: (a) pursuant to the Company's
notice of meeting; (b) by or at the direction of the Board of Directors; or (c)
by any shareholder who was a shareholder of record at the time of giving of
notice of the meeting, who is entitled to vote at the meeting and who complies
with the notice procedures set forth in this Section 2.9.1.
For nominations or other business to be properly brought before an annual
meeting by a shareholder, the shareholder must have given timely notice thereof
in writing to the Secretary of the Company and such other business must
otherwise be a proper matter for shareholder action. To be timely, a
shareholder's notice shall be delivered to the Secretary at the principal
executive offices of the Company not earlier than the close of business on the
90th day nor later than the close of business on the 60th day prior to the first
anniversary of the preceding year's annual meeting; provided, however, that in
the event that the date of the annual meeting is more than 30 days before or
more than 60 days after such anniversary date, notice by the shareholder to be
timely must be so delivered not earlier than the close of business on the 90th
day prior to such annual meeting and not later than the close of business on the
later of the 60th day prior to such annual meeting or the 10th day following the
day on which public announcement of the date of such meeting is first made by
the Company. In no event shall the public announcement of an adjournment of an
annual meeting commence a new time period for the giving of a shareholder's
notice as described above. Such shareholder's notice shall set forth: (a) as to
each person whom the shareholder proposes to nominate for election or reelection
as a director all information relating to such person that is required to
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be disclosed in solicitations of proxies for election of directors in an
election contest, or is otherwise required, in each case pursuant to Regulation
14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act")
and Rule 14a-11 thereunder (including such person's written consent to being
named in the proxy statement as a nominee and to serving as a director if
elected); (b) as to any other business that the shareholder proposes to bring
before the meeting, a brief description of the business desired to be brought
before the meeting, the reasons for conducting such business at the meeting and
any material interest in such business of such shareholder and the beneficial
owner, if any, on whose behalf the proposal is made; and (c) as to the
shareholder giving the notice and the beneficial owner, if any, on whose behalf
the nomination or proposal is made (i) the name and address of such shareholder,
as they appear on the Company's books, and of such beneficial owner and (ii) the
class and number of shares of the Company which are owned beneficially and of
record by such shareholder and such beneficial owner.
2.9.2 TRANSACTION OF BUSINESS AT SPECIAL MEETING. Business transacted at a
special meeting of the shareholders shall be limited to the purposes set forth
in the notice of the special meeting. Nominations of persons for election to the
Board of Directors may be made at a special meeting of shareholders at which
directors are to be elected pursuant to the Company's notice of meeting: (a) by
or at the direction of the Board of Directors; or (b) provided that the Board of
Directors has determined that directors shall be elected at such meeting, by any
shareholder of the Company who is a shareholder of record at the time of giving
of notice of the meeting, who is entitled to vote at the meeting and who
complies with the notice procedures set forth in this Section 2.9.2.
In the event the Company calls a special meeting of shareholders for the
purpose of electing one or more directors to the Board of Directors, any such
shareholder may nominate a person or persons, as the case may be, for election
to such position or positions as specified in the Company's notice of meeting,
if the shareholder's notice required by this Section 2.9.2 shall be delivered to
the Secretary at the principal executive offices of the Company not earlier than
the close of business on the 90th day prior to such special meeting and not
later than the close of business on the later of the 60th day prior to such
special meeting or the 10th day following the day on which public announcement
is first made of the date of the special meeting and of the nominees proposed by
the Board of Directors to be elected at such meeting. In no event shall the
public announcement of an adjournment of a special meeting commence a new time
period for the giving of a shareholder's notice as described above. Such
shareholder's notice shall set forth: (a) as to each person whom the shareholder
proposes to nominate for election or reelection as a director all information
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors in an election contest, or is otherwise
required, in each case pursuant to Regulation 14A under the Exchange Act and
Rule 14a-11 thereunder (including such person's written consent to being named
in the proxy statement as a nominee and to serving as a director if elected);
and (b) as to the shareholder giving the notice and the beneficial owner, if
any, on whose behalf the nomination or proposal is made, (i) the name and
address of such shareholder, as they appear on the Company's books, and of such
beneficial owner and (ii) the class and number of shares of the Company which
are owned beneficially and of record by such shareholder and such beneficial
owner.
2.9.3 GENERAL. Only such persons who are nominated in accordance with the
procedures set forth in this Section 2.9 shall be eligible to serve as directors
and only such business shall be conducted at a meeting of shareholders as shall
have been brought before the meeting in accordance with the procedures set forth
in this Section 2.9. The chairman of the meeting shall have the power and duty
to determine whether a nomination or any business proposed to be brought before
the meeting was made or proposed, as the case may be, in accordance with the
procedures set forth in this Section 2.9 and, if any proposed nomination or
business is not in compliance with this Section 2.9, to declare that such
defective proposal or nomination shall be disregarded, unless otherwise provided
by any applicable law.
For purposes of this Section 2.9, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or comparable national news service or in a
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document publicly filed by the Company with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
Notwithstanding the foregoing provisions of this Section 2.9, a shareholder
shall also comply with all applicable requirements of the Exchange Act and the
rules and regulations thereunder with respect to the matters set forth in this
Section 2.9. Nothing in this Section 2.9 shall be deemed to affect any rights
of: (a) the shareholders to request inclusion of proposals in the Company's
proxy statement pursuant to Rule 14a-8 under the Exchange Act; or (b) the
holders of any series of Preferred Stock to elect directors under specified
circumstances.
Section 2.10. ACTION BY WRITTEN CONSENT. Any action required or permitted by
the Act to be taken at an annual or special meeting of shareholders may be taken
without a meeting, without prior notice, and without a vote, if consents in
writing, setting forth the action so taken, are signed by the holders of all of
the outstanding shares of stock entitled to vote on the matter.
Section 2.11. PRESIDING OFFICER. The Chairman of the Board shall act as
chairman of all meetings of the shareholders. In the absence of the Chairman of
the Board, the President, or in his or her absence, any Vice President
designated by the Board of Directors shall act as the chairman of the meeting.
Section 2.12. PROCEDURE. At each meeting of shareholders, the chairman of
the meeting shall fix and announce the date and time of the opening and the
closing of the polls for each matter upon which the shareholders will vote at
the meeting and shall determine the order of business and all other matters of
procedure. Except to the extent inconsistent with any such rules and regulations
as adopted by the Board of Directors, the chairman of the meeting may establish
rules, which need not be in writing, to maintain order and safety and for the
conduct of the meeting. Without limiting the foregoing, the chairman of the
meeting may: (a) determine and declare to the meeting that any business is not
properly before the meeting and therefore shall not be considered; (b) restrict
attendance at any time to bona fide shareholders of record and their proxies and
other persons in attendance at the invitation of the chairman of the meeting;
(c) restrict dissemination of solicitation materials and use of audio or visual
recording devices at the meeting; (d) adjourn the meeting without a vote of the
shareholders, whether or not there is a quorum present; and (e) make rules
governing speeches and debate, including time limits and access to microphones.
The chairman of the meeting acts in his or her absolute discretion and his
or her rulings are not subject to appeal.
ARTICLE III
BOARD OF DIRECTORS
Section 3.1. AUTHORITY. The Board of Directors shall have the ultimate
authority over the conduct and management of the business affairs of the
Company.
Section 3.2. NUMBER. The number of directors of the Company shall be not
less than nine (9) nor more than 15, as determined from time to time by the vote
of a majority of the Board of Directors. Unless otherwise provided by the Act,
the number of directors may be increased or decreased, beyond the limits set
forth above, only by an amendment to these Bylaws. To the extent permitted by
the Act, any newly created or eliminated directorships resulting from such
increase or decrease shall be apportioned by the Board of Directors among the
then existing classes of directors so as to maintain such classes as nearly
equal in number as possible. No change in the number of directors shall shorten
the term of any director then in office.
Section 3.3. TERM. Each director shall hold office from the date of his or
her election and qualification until his or her successor shall have been duly
elected and qualified or until his or her earlier removal, resignation, death or
incapacity.
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Section 3.4. ELIGIBILITY FOR ELECTIONS. No person who will be 70 years of
age or more on or before an annual meeting shall be nominated to the Board of
Directors, and any directors who reach the age of 70 shall be automatically
retired from the Board of Directors.
Section 3.5. REGULAR MEETINGS OF THE BOARD. Regular meetings of the Board of
Directors may be held at times and places agreed on by a majority of the
directors at any meeting of the Board of Directors, and such regular meetings
may be held at such times and places without any further notice of the date,
time, place or purposes of such regular meetings.
Section 3.6. SPECIAL MEETINGS OF THE BOARD. Special meetings of the Board of
Directors may be called: (a) by, or at the request of, the Chairman of the
Board; or (b) by the Secretary of the Company at the written request of a
majority of the directors then in office. Special meetings of the Board of
Directors may be called on not less than 12 hours notice to each director, given
orally or in writing, either personally, by telephone (including by message or
by recording device), by facsimile transmission, by telegram or by telex, or on
not less than three (3) calendar days' notice to each director given by mail.
Notice of the special meeting of the Board of Directors shall specify the date,
time and place of the meeting. Actions taken at any such meeting shall not be
invalidated because of lack of notice if notice is waived as provided in Section
3.7.
Section 3.7. WAIVER OF NOTICE. A director may waive any required notice
before or after the date and time stated in the notice by written waiver signed
by the director entitled to the notice and filed with the minutes or corporate
records. In addition, a director's attendance at or participation in a meeting
waives any required notice to the director of the meeting unless the director at
the beginning of the meeting, or promptly upon the director's arrival, objects
to holding the meeting or transacting business at the meeting and does not
thereafter vote for or assent to action taken at the meeting.
Section 3.8. PARTICIPATION BY TELECOMMUNICATION. Any director may
participate in any meeting of the Board of Directors through the use of any
means of communication by which all directors participating in the meeting may
simultaneously hear each other during the meeting. A director participating in a
meeting by this means shall be deemed to be present in person at the meeting.
Section 3.9. QUORUM OF DIRECTORS. A majority of the directors in office
immediately before the meeting begins shall constitute a quorum for the
transaction of business at any meeting of the Board of Directors.
Section 3.10. ACTION. If a quorum is present when the vote is taken, the
Board of Directors shall take actions pursuant to resolutions adopted by the
affirmative vote of: (a) a majority of the directors present at the meeting of
the Board of Directors; or (b) such greater number of the directors as may be
required by the Restated Articles of Incorporation, these Bylaws or the Act.
Section 3.11. ACTION BY UNANIMOUS WRITTEN CONSENT. Any action required or
permitted to be taken at a Board of Directors' meeting may be taken without a
meeting if the action is taken by all members of the Board of Directors. The
action shall be evidenced by one (1) or more written consents describing the
action taken, signed by each director, and included in the minutes or filed with
the corporate records reflecting the action taken.
Section 3.12. SELECTION OF OFFICERS. The Board of Directors shall select a
Chairman of the Board of Directors, a President, a Vice President, a Secretary
and a Treasurer and such additional Vice Presidents, Assistant Secretaries,
Assistant Treasurers and other officers and agents as the Board of Directors
from time to time may deem advisable.
Section 3.13. POWERS AND DUTIES OF OFFICERS AND AGENTS. The powers and
duties of the officers and agents shall be determined by the Board of Directors
and these Bylaws.
Section 3.14. DELEGATION OF POWERS. For any reason deemed sufficient by the
Board of Directors, whether occasioned by absence or otherwise, the Board may
delegate all or any of the powers and duties of
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any officer to any other officer or director, but no officer or director shall
execute, verify or acknowledge any instrument in more than one capacity unless
specifically authorized by the Board of Directors.
Section 3.15. APPOINTMENT OF EXECUTIVE COMMITTEE. At the same meeting at
which the Board of Directors selects the Chairman of the Board, the Board of
Directors shall appoint an Executive Committee consisting of two (2) or more
members, who shall serve at the pleasure of the Board of Directors. Such
appointments shall be made by a majority of all the directors in office when the
action is taken. Unless otherwise provided by the Act or further limited by a
resolution of the Board of Directors, the Executive Committee may exercise all
of the powers of the Board of Directors.
Section 3.16. POWER TO APPOINT ADDITIONAL COMMITTEES OF THE BOARD. The Board
of Directors shall have the power to designate, by resolution, one (1) or more
additional committees and appoint members of the Board of Directors to serve on
them. To the extent provided in such resolution, such committees may manage the
business and affairs of the Company, unless otherwise provided by the Act. Each
committee shall have two (2) or more members, who shall serve at the pleasure of
the Board of Directors. A majority of the members of any committee of the Board
of Directors will constitute a quorum for any committee action.
Section 3.17. COMPENSATION. The Board of Directors may, by resolution,
authorize the payment to directors of compensation for the performance of their
duties. No such payment shall preclude any director from serving the Company in
any other capacity and receiving compensation therefor. The Board of Directors
may also, by resolution, authorize the reimbursement of expenses incurred by
directors in the performance of their duties.
Section 3.18. CONFLICTING INTEREST TRANSACTION. Any conflicting interest
transaction shall be governed by Sections 30-1-860 through 30-1-863 of the Act.
ARTICLE IV
OFFICERS
Section 4.1. GENERAL. The officers of the Company shall consist of a
Chairman of the Board, a President, a Vice President, a Secretary, a Treasurer
and such additional Vice Presidents, Assistant Secretaries, Assistant Treasurers
and other officers and agents as the Board of Directors from time to time may
deem advisable. Each such officer shall hold office for a term of one year or
until his or her successor shall have been duly elected and qualified or until
his or her earlier resignation, retirement, removal from office, incapacity or
death. The Board of Directors may remove any officer or agent at any time, with
or without cause, unless otherwise provided by the Act or the Restated Articles
of Incorporation. One person may hold two or more offices, except the offices of
President and Secretary.
Section 4.2. CHAIRMAN OF THE BOARD. The Chairman of the Board shall be
selected by and from the members of the Board of Directors. He or she shall
conduct all meetings of the Board of Directors and shall perform all duties
incident thereto.
Section 4.3. PRESIDENT. The President shall have general and active
management of the business of the Company and shall see that all orders and
resolutions of the Board of Directors are carried into effect. The President
shall have the general powers and duties of supervision and management usually
vested in the office of president of a corporation.
Section 4.4. VICE PRESIDENTS. Each Vice President shall serve under the
direction of the President and shall perform such other duties as the Board of
Directors shall from time to time direct.
Section 4.5. SECRETARY. The Secretary of the Company shall serve under the
direction of the President and shall perform such other duties as the Board of
Directors shall from time to time direct, unless otherwise provided by these
Bylaws or determined by the Board of Directors. The Secretary shall be
responsible for preparing minutes of the directors' and shareholders' meetings
and for authenticating
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records of the Company. The Secretary shall safely keep in his or her custody
the seal of the Company and shall have authority to affix the same to all
instruments where its use is required. The Secretary shall give all notices
required by the Act, these Bylaws or any resolution of the Board of Directors.
Section 4.6. TREASURER. The Treasurer shall serve under the direction of the
President and shall perform such other duties as the Board of Directors shall
from time to time direct. The Treasurer shall have custody of all corporate
funds and securities and shall keep in books belonging to the Company full and
accurate accounts of all receipts and disbursements. The Treasurer shall deposit
all monies, securities and other valuable effects in the name of the Company in
such depositories as may be designated for that purpose by the Board of
Directors and shall disburse the funds of the Company as may be ordered by the
Board of Directors. The Treasurer shall upon request report to the Board of
Directors on the financial condition of the Company.
Section 4.7. ASSISTANT SECRETARY AND ASSISTANT TREASURER. The Assistant
Secretary, in the absence or disability of the Secretary, shall perform the
duties and exercise the powers of the Secretary. The Assistant Treasurer, in the
absence or disability of the Treasurer, shall perform the duties and exercise
the powers of the Treasurer.
ARTICLE V
STOCK AND TRANSFERS
Section 5.1. CERTIFICATES FOR SHARES. Subject to the provisions of Section
5.2, every shareholder shall be entitled to a certificate of the shares to which
the shareholder has subscribed, and each certificate shall be signed, either
manually or by facsimile, by any two (2) of the following: the Chairman of the
Board, the President, the Treasurer and the Secretary. Such certificate may bear
the seal of the Company or a facsimile thereof. Each certificate shall state the
name of the Company, the number and class of shares and the designation of the
series, if any, that the certificate represents. In case any officer, transfer
agent or registrar who has signed, or whose facsimile signature has been placed
upon, a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the Company
with the same effect as if such person or entity were such officer, transfer
agent or registrar at the date of issue.
Section 5.2 SHARES WITHOUT CERTIFICATES. The Company shall have the power to
authorize the issue of some or all of the shares of any or all of its classes or
series without certificates. The authorization shall not affect shares already
represented by certificates until they are surrendered to the Company. Within a
reasonable time after the issue or transfer of shares without certificates, the
Company shall send the shareholder a written statement of the information
required on certificates by the Act.
Section 5.3 TRANSFERABLE ONLY ON BOOKS OF THE COMPANY. Shares of the capital
stock of the Company shall be transferred on the books of the Company only by
the holder of the shares in person or by an attorney lawfully appointed in
writing and upon surrender of the certificates, if any, for the shares. A record
shall be made of every such transfer and issue. Whenever any transfer is made
for collateral security and not absolutely, the fact shall be so expressed in
the entry of such transfer.
Section 5.4 STOCK LEDGER. The Company shall maintain a stock ledger that
contains the name and address of each shareholder and the number of shares of
each class of the capital stock that the shareholder holds. The stock ledger may
be in written form or in any other form that can be converted within a
reasonable time into written form for visual inspection.
Section 5.5 REGISTERED SHAREHOLDERS. The Company shall have the right to
treat the registered holder of any share of its capital stock as the absolute
owner of such share and shall not be bound to recognize any equitable or other
claim to or interest in such share on the part of any other person, whether or
not the Company shall have express or other notice thereof, unless otherwise
required by any applicable law.
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ARTICLE VI
INDEMNIFICATION
Section 6.1. DEFINED TERMS. Capitalized terms used in this Article VI that
are defined in Section 30-1-850 of the Act shall have the meaning given to such
terms under Section 30-1-850 of the Act.
Section 6.2. INSURANCE. The Company shall have the power to purchase and
maintain insurance, in such amounts as the Board of Directors may deem
appropriate, on behalf of any person who is a Director, Officer, employee or
agent against Liability and Expenses in connection with any Proceeding, to the
extent permitted under any applicable law.
Section 6.3. AGREEMENTS. The Company may enter into an indemnification
agreement with any Director, Officer, employee or agent, to the extent permitted
under any applicable law.
Section 6.4. AMENDMENTS. Any amendment or repeal of this Article VI shall
not be retroactive in effect.
Section 6.5. SEVERABILITY. In case any provision in this Article VI shall be
determined at any time to be unenforceable in any respect, the other provisions
shall not in any way be affected or impaired thereby, and the affected provision
shall be given the fullest possible enforcement in the circumstances.
ARTICLE VII
AMENDMENT OF BYLAWS
Section 7.1. AMENDMENT BY THE BOARD OF DIRECTORS. These Bylaws may be
amended, altered, changed, added to, repealed or substituted by the affirmative
vote of a majority of the Board of Directors, unless the Restated Articles of
Incorporation, these Bylaws or the Act provide otherwise.
Section 7.2. AMENDMENT BY THE SHAREHOLDERS. Subject to the provisions of
Section 7.3, these Bylaws may be amended, altered, changed, added to, repealed
or substituted by the affirmative vote of a majority of all shares entitled to
vote thereon, if notice of the proposed amendment, alteration, change, addition,
repeal or substitution is contained in the notice of the meeting.
Section 7.3. AMENDMENT OF CERTAIN PROVISIONS. Notwithstanding any other
provision of these Bylaws, (i) any amendment, alteration, change, addition,
repeal or substitution of this Section 7.3, Section 2.9 or Article III of these
Bylaws by the shareholders shall require the affirmative vote of two-thirds of
all shares entitled to vote thereon; and (ii) no change of the date for the
annual meeting of the shareholders shall be made by the shareholders within the
30-day period preceding the date designated for the annual meeting pursuant to
Section 2.l, unless consented to in writing, as provided in Section 2.10, or
approved at any meeting of the shareholders by a majority of all shares entitled
to vote thereon.
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EXHIBIT D
PART 13 "DISSENTERS' RIGHTS" OF THE
IDAHO BUSINESS CORPORATION ACT
30-1-1301 DEFINITIONS.--IN THIS PART:
(1) "Corporation" means the issuer of the shares held by a dissenter before
the corporate action, or the surviving or acquiring corporation by merger or
share exchange of that issuer.
(2) "Dissenter" means a shareholder who is entitled to dissent from
corporate action under section 30-1-1302, Idaho Code, and who exercises that
right when and in the manner required by sections 30-1-1320 through 30-1-1328,
Idaho Code.
(3) "Fair value," with respect to a dissenter's shares, means the value of
the shares immediately before the effectuation of the corporate action to which
the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action unless exclusion would be inequitable.
(4) "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans or, if none, at a rate that is fair and
equitable under all the circumstances.
(5) "Record shareholder" means the person in whose name shares are
registered in the records of the corporation or the beneficial owner of shares
to the extent of the rights granted by a nominee certificate on file with a
corporation.
(6) "Beneficial shareholder" means the person who is a beneficial owner of
shares held in a voting trust or by a nominee as the record shareholder.
(7) "Shareholder" means the record shareholder or the beneficial
shareholder.
30-1-1302 RIGHT TO DISSENT.--(1)
A shareholder is entitled to dissent from, and obtain payment of the fair
value of his shares in the event of, any of the following corporate actions:
(a) Consummation of a plan of merger to which the corporation is a party:
(i) If shareholder approval is required for the merger by section
30-1-1103, Idaho Code, or the articles of incorporation and the shareholder
is entitled to vote on the merger; or
(ii) If the corporation is a subsidiary that is merged with its parent
under section 30-1-1104, Idaho Code;
(b) Consummation of a plan of share exchange to which the corporation is a
party as the corporation whose shares will be acquired, if the shareholder is
entitled to vote on the plan;
(c) Consummation of a sale or exchange of all, or substantially all, of the
property of the corporation other than in the usual and regular course of
business, if the shareholder is entitled to vote on the sale or exchange,
including a sale in dissolution, but not including a sale pursuant to court
order or a sale for cash pursuant to a plan by which all or substantially all of
the net proceeds of the sale will be distributed to the shareholders within one
(1) year after the date of sale;
(d) An amendment of the articles of incorporation that materially and
adversely affects rights in respect of a dissenter's shares because it:
(i) Alters or abolishes a preferential right of the shares;
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(ii) Creates, alters or abolishes a right in respect of redemption,
including a provision respecting a sinking fund for the redemption or
repurchase, of the shares;
(iii) Alters or abolishes a preemptive right of the holder of the shares
to acquire shares or other securities;
(iv) Excludes or limits the right of the shares to vote on any matter,
or to cumulate votes, other than a limitation by dilution through issuance
of shares or other securities with similar voting rights; or
(v) Reduces the number of shares owned by the shareholder to a fraction
of a share if the fractional share so created is to be acquired for cash
under section 30-1-604, Idaho Code; or
(e) Any corporate action taken pursuant to a shareholder vote to the extent
the articles of incorporation, bylaws, or a resolution of the board of directors
provides that voting or nonvoting shareholders are entitled to dissent and
obtain payment for their shares.
(2) A shareholder entitled to dissent and obtain payment for his shares
under this part may not challenge the corporate action creating his entitlement
unless the action is unlawful or fraudulent with respect to the shareholder or
the corporation.
(3) This section does not apply to the holders of shares of any class or
series if the shares of the class or series are redeemable securities issued by
a registered investment company as defined pursuant to the investment company
act of 1940 (15 U.S.C. 80a-15 U.S.C. 80a-64).
(4) Unless the articles of incorporation of the corporation provide
otherwise, this section does not apply to the holders of shares of a class or
series if the shares of the class or series were registered on a national
securities exchange, were listed on the national market systems of the national
association of securities dealers automated quotation system or were held of
record by at least two thousand (2,000) shareholders on the date fixed to
determine the shareholders entitled to vote on the proposed corporate action.
30-1-1303 DISSENT BY NOMINEES AND BENEFICIAL OWNERS.--
(1) A record shareholder may assert dissenters' rights as to fewer than all
the shares registered in his name only if he dissents with respect to all shares
beneficially owned by any one (1) person and notifies the corporation in writing
of the name and address of each person on whose behalf he asserts dissenters'
rights. The rights of a partial dissenter under this subsection are determined
as if the shares as to which he dissents and his other shares were registered in
the names of different shareholders.
(2) A beneficial shareholder may assert dissenters' rights as to shares held
on his behalf only if:
(a) He submits to the corporation the record shareholder's written consent
to the dissent not later than the time the beneficial shareholder asserts
dissenters' rights; and
(b) He does so with respect to all shares of which he is the beneficial
shareholder or over which he has power to direct the vote.
30-1-1304-30-1-1319 [RESERVED.]
30-1-1320 NOTICE OF DISSENTERS' RIGHTS.--
(1) If proposed corporate action creating dissenters' rights under section
30-1-1302, Idaho Code, is submitted to a vote at a shareholders' meeting, the
meeting notice must state that shareholders are or may be entitled to assert
dissenters' rights under this part and be accompanied by a copy of this part.
(2) If corporate action creating dissenters' rights under section 30-1-1302,
Idaho Code, is taken without a vote of shareholders, the corporation shall
notify in writing all shareholders entitled to assert
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dissenters' rights that the action was taken and send them the dissenters'
notice described in section 30-1-1322, Idaho Code.
30-1-1321 NOTICE OF INTENT TO DEMAND PAYMENT.--
(1) If proposed corporate action creating dissenters' rights under section
30-1-1302, Idaho Code, is submitted to a vote at a shareholders' meeting, a
shareholder who wishes to assert dissenters' rights:
(a) Must deliver to the corporation before the vote is taken written notice
of his intent to demand payment for his shares if the proposed action is
effectuated; and
(b) Must not vote his shares in favor of the proposed action.
(2) A shareholder who does not satisfy the requirements of subsection (1) of
this section is not entitled to payment for his shares under this part.
30-1-1322 DISSENTERS' NOTICE.--
(1) If proposed corporate action creating dissenters' rights under section
30-1-1302, Idaho Code, is authorized at a shareholders' meeting, the corporation
shall deliver a written dissenters' notice to all shareholders who satisfied the
requirements of section 30-1-1321, Idaho Code.
(2) The dissenters' notice must be sent no later than ten (10) days after
the corporate action was taken, and must:
(a) State where the payment demand must be sent and where and when
certificates for certificated shares must be deposited;
(b) Inform holders of uncertificated shares to what extent transfer of the
shares will be restricted after the payment demand is received;
(c) Supply a form for demanding payment that includes the date of the first
announcement to news media or to shareholders of the terms of the proposed
corporate action and requires that the person asserting dissenters' rights
certify whether or not he acquired beneficial ownership of the shares before
that date;
(d) Set a date by which the corporation must receive the payment demand,
which date may not be fewer than thirty (30) nor more than sixty (60) days after
the date the notice in subsection (1) of this section is delivered; and
(e) Be accompanied by a copy of this part.
30-1-1323 DUTY TO DEMAND PAYMENT.--
(1) A shareholder sent a dissenters' notice described in section 30-1-1322,
Idaho Code, must demand payment, certify whether he acquired beneficial
ownership of the shares before the date required to be set forth in the
dissenters' notice pursuant to section 30-1-1322(2)(c), Idaho Code, and, with
respect to any certificated shares, deposit his certificates in accordance with
the terms of the notice.
(2) The shareholder who demands payment and, with respect to any
certificated shares, deposits his share certificates under subsection (1) of
this section retains all other rights of a shareholder until these rights are
cancelled or modified by the taking of the proposed corporate action.
(3) A shareholder who does not demand payment or deposit his share
certificates where required, each by the date set in the dissenters' notice, is
not entitled to payment for his shares under this part.
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30-1-1324 SHARE RESTRICTIONS.--
(1) The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received until the proposed corporate
action is taken or the restrictions released under section 30-1-1326, Idaho
Code.
(2) The person for whom dissenters' rights are asserted as to uncertificated
shares retains all other rights of a shareholder until these rights are
cancelled or modified by the taking of the proposed corporate action.
30-1-1325 PAYMENT.--
(1) Except as provided in section 30-1-1327, Idaho Code, as soon as the
proposed corporate action is taken, or upon receipt of a payment demand, the
corporation shall pay each dissenter who complied with section 30-1-1323, Idaho
Code, the amount the corporation estimates to be the fair value of his shares,
plus accrued interest.
(2) The payment must be accompanied by:
(a) The corporation's balance sheet as of the end of a fiscal year ending
not more than sixteen (16) months before the date of payment, an income
statement for that year, a statement of changes in shareholders' equity for that
year, and the latest available interim financial statements, if any;
(b) A statement of the corporation's estimate of the fair value of the
shares;
(c) An explanation of how the interest was calculated;
(d) A statement of the dissenter's right to demand payment under section
30-1-1328, Idaho Code; and
(e) A copy of this part.
30-1-1326 FAILURE TO TAKE ACTION.--
(1) If the corporation does not take the proposed action within sixty (60)
days after the date set for demanding payment and depositing share certificates,
the corporation shall return the deposited certificates and release the transfer
restrictions imposed on uncertificated shares.
(2) If after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send a new
dissenters' notice under section 30-1-1322, Idaho Code, and repeat the payment
demand procedure.
30-1-1327 AFTER-ACQUIRED SHARES.--
(1) A corporation may elect to withhold payment required by section
30-1-1325, Idaho Code, from a dissenter unless he was the beneficial owner of
the shares before the date set forth in the dissenters' notice as the date of
the first announcement to news media or to shareholders of the terms of the
proposed corporate action.
(2) To the extent the corporation elects to withhold payment under
subsection (1) of this section, after taking the proposed corporate action, it
shall estimate the fair value of the shares, plus accrued interest, and shall
pay this amount to each dissenter who agrees to accept it in full satisfaction
of his demand. The corporation shall send with its offer a statement of its
estimate of the fair value of the shares, an explanation of how the interest was
calculated, and a statement of the dissenter's right to demand payment under
section 30-1-1328, Idaho Code.
D-4
<PAGE>
30-1-1328 PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR OFFER.--
(1) A dissenter may notify the corporation in writing of his own estimate of
the fair value of his shares and amount of interest due, and demand payment of
his estimate, less any payment under section 30-1-1325, Idaho Code, or reject
the corporation's offer under section 30-1-1327, Idaho Code, and demand payment
of the fair value of his shares and interest due, if:
(a) The dissenter believes that the amount paid under section 30-1-1325,
Idaho Code, or offered under section 30-1-1327, Idaho Code, is less than the
fair value of his shares or that the interest due is incorrectly calculated;
(b) The corporation fails to make payment under section 30-1-1325, Idaho
Code, within sixty (60) days after the date set for demanding payment; or
(c) The corporation, having failed to take the proposed action, does not
return the deposited certificates or release the transfer restrictions imposed
on uncertificated shares within sixty (60) days after the date set for demanding
payment.
(2) A dissenter waives his right to demand payment under this section unless
he notifies the corporation of his demand in writing under subsection (1) of
this section within thirty (30) days after the corporation made or offered
payment for his shares.
30-1-1329 [RESERVED.]
30-1-1330 COURT ACTION TO DETERMINE SHARE VALUE.--
(1) If a demand for payment under section 30-1-1328, Idaho Code, remains
unsettled, the corporation shall commence a proceeding within sixty (60) days
after receiving the payment demand and petition the court to determine the fair
value of the shares and accrued interest. If the corporation does not commence
the proceeding within the sixty-day period, it shall pay each dissenter whose
demand remains unsettled the amount demanded.
(2) The corporation shall commence the proceeding in the Idaho district
court of the county where a corporation's principal office or, if none in this
state, its registered office is located. If the corporation is a foreign
corporation without a registered office in this state, it shall commence the
proceeding in the county in this state where the registered office of the
domestic corporation merged with or whose shares were acquired by the foreign
corporation was located.
(3) The corporation shall make all dissenters, whether or not residents of
this state, whose demands remain unsettled parties to the proceeding, as in an
action against their shares, and all parties must be served with a copy of the
petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law.
(4) The jurisdiction of the court in which the proceeding is commenced under
subsection (2) of this section is plenary and exclusive. The court may appoint
one (1) or more persons as appraisers to receive evidence and recommend decision
on the question of fair value. The appraisers have the powers described in the
order appointing them, or in any amendment to it. The dissenters are entitled to
the same discovery rights as parties in other civil proceedings.
(5) Each dissenter made a party to the proceeding is entitled to judgment:
(a) For the amount, if any, by which the court finds the fair value of his
shares, plus interest, exceeds the amount paid by the corporation; or
(b) For the fair value, plus accrued interest, of his after-acquired shares
for which the corporation elected to withhold payment under section 30-1-1327,
Idaho Code.
D-5
<PAGE>
30-1-1331 COURT COSTS AND COUNSEL FEES.--
(1) The court in an appraisal proceeding commenced under section 30-1-1330,
Idaho Code, shall determine all costs of the proceeding, including the
reasonable compensation and expenses of appraisers appointed by the court. The
court shall assess the costs against the corporation, except that the court may
assess costs against all or some of the dissenters, in amounts the court finds
equitable, to the extent the court finds the dissenters acted arbitrarily,
vexatiously, or not in good faith in demanding payment under section 30-1-1328,
Idaho Code.
(2) The court may also assess the fees and expenses of counsel and experts
for the respective parties, in amounts the court finds equitable:
(a) Against the corporation and in favor of any or all dissenters if the
court finds the corporation did not substantially comply with the requirements
of sections 30-1-1320 through 30-1-1328, Idaho Code; or
(b) Against either the corporation or a dissenter, in favor of any other
party, if the court finds that the party against whom the fees and expenses are
assessed acted arbitrarily, vexatiously, or not in good faith with respect to
the rights provided by this part.
(3) If the court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated, and that the fees
for those services should not be assessed against the corporation, the court may
award to these counsel reasonable fees to be paid out of the amounts awarded to
dissenters who were benefited.
D-6
<PAGE>
PART II--INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 30-1-850 ET SEQ. of the Idaho Business Corporation Act (the "Act")
provide for indemnification of the Registrant's directors, officers, employees
and agents in a variety of circumstances.
Article VIII of the Registrant's Restated Articles of Incorporation provides
that the Registrant shall indemnify its directors and officers against liability
and expenses and shall advance expenses to its directors and officers in
connection with any proceeding to the fullest extent permitted by the Act as now
in effect or as it may be amended or substituted from time to time. Article VI
of the Amended Bylaws of the Registrant provides that the Registrant shall have
the power to purchase insurance on behalf of any director, officer, employee or
agent against liability and expenses in connection with any proceeding, to the
extent permitted under applicable law. Article VI further provides that the
Registrant may enter into indemnification agreements with any director, officer,
employee or agent to the extent permitted under any applicable law.
Upon effectiveness of the Exchange, the Registrant expects to have in effect
liability insurance protecting its directors and officers against liability by
reason of their being or having been directors or officers. In addition, the
Registrant intends to enter into indemnification agreements with its directors
and officers to provide for indemnification to the maximum extent permitted by
law.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE.
(a) The following exhibits are filed herewith:
<TABLE>
<S> <C>
2 Agreement and Plan of Exchange, dated as of February 2, 1998 (Exhibit A to the
Proxy Statement and Prospectus).
3(a) Restated Articles of Incorporation of IDACORP, Inc. (Exhibit B to the Proxy
Statement and Prospectus).
3(b) Bylaws of Idaho Power Holding Company (IDACORP, Inc.)
3(c) Amended Bylaws of IDACORP, Inc. (Exhibit C to the Proxy Statement and
Prospectus).
3(d) Restated Articles of Incorporation of Idaho Power Company, as filed with the
Secretary of State of Idaho on June 30, 1989.
3(e) Statement of Resolution Establishing Terms of Flexible Auction Series A, Serial
Preferred Stock, Without Par Value (cumulative stated value of $100,000 per
share), of Idaho Power Company, as filed with the Secretary of State of Idaho
on November 5, 1991.
3(f) Statement of Resolution Establishing Terms of 7.07% Serial Preferred Stock,
Without Par Value (cumulative stated value of $100 per share) of Idaho Power
Company, as filed with the Secretary of State of Idaho on June 30, 1993.
3(g) Waiver resolution to Restated Articles of Incorporation of Idaho Power Company
adopted by shareholders on May 1, 1991.
3(h) By-laws of Idaho Power Company, as amended on June 30, 1989.
5(a) Opinion of Robert W. Stahman, Esq.
5(b) and 8 Opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P.
23(a) Consent of Robert W. Stahman, Esq. (included as part of Exhibit 5(a)).
</TABLE>
II-1
<PAGE>
<TABLE>
<S> <C>
23(b) Consent of LeBoeuf, Lamb, Greene & MacRae, L.L.P. (included as part of Exhibit
5(b) and 8).
23(c) Consent of Deloitte & Touche LLP.
24 Power of Attorney (included on page II-3).
99 Form of Proxy.
</TABLE>
(b) The financial statement schedule is incorporated by reference from Idaho
Power Company's Annual Report on Form 10-K for the year ended December 31, 1997.
ITEM 22. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) That, for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Exchange Act (and, where applicable, each filing of
an employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) 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.
(2) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this Registration
Statement, by any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other Items of the applicable form.
(3) That every prospectus (i) that is filed pursuant to paragraph (2)
immediately preceding, or (ii) that purports to meet the requirements of
section 10(a)(3) of the Securities Act and is used in connection with an
offering of securities subject to Rule 415, will be filed as part of an
amendment to the Registration Statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act, 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.
(4) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this
Form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the Registration Statement through the date of responding
to the request.
(5) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the Registration Statement when
it became effective.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions referred to in Item 20 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 Securities 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 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 and will be governed by the final adjudication of such issue.
II-2
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes any agent for
service named in this registration statement to execute in the name of each such
person, and to file with the Commission, any and all amendments, including
post-effective amendments, to the registration statement, and appoints any such
agent for service as attorney-in-fact to sign in his behalf individually and in
each capacity stated below and file any such amendments to the registration
statement and the issuer hereby confers like authority to sign and file in its
behalf.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Boise, and State of Idaho,
on the 13th day of March, 1998.
IDACORP, INC.
By /s/ JOSEPH W. MARSHALL
-------------------------------------
Joseph W. Marshall
CHAIRMAN OF THE BOARD
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 dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
/s/ JOSEPH W. MARSHALL Chairman of the Board March 13, 1998
- ------------------------------ (Principal Executive
(Joseph W. Marshall) Officer)
/s/ JAN B. PACKWOOD President and Director March 13, 1998
- ------------------------------
(Jan B. Packwood)
Vice President and March 13, 1998
/s/ J. LAMONT KEEN Treasurer (Principal
- ------------------------------ Financial and Accounting
(J. LaMont Keen) Officer)
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER NUMBER
- ------------- -------------
<S> <C> <C>
2 Agreement and Plan of Exchange, dated as of February 2, 1998 (Exhibit A to the Proxy
Statement and Prospectus).
3(a) Restated Articles of Incorporation of IDACORP, Inc. (Exhibit B to the Proxy Statement and
Prospectus).
3(b) Bylaws of Idaho Power Holding Company (IDACORP, Inc.).
3(c) Amended Bylaws of IDACORP, Inc. (Exhibit C to the Proxy Statement and Prospectus).
3(d) Restated Articles of Incorporation of Idaho Power Company, as filed with the Secretary of
State of Idaho on June 30, 1989.
3(e) Statement of Resolution Establishing Terms of Flexible Auction Series A, Serial Preferred
Stock, Without Par Value (cumulative stated value of $100,000 per share), of Idaho
Power Company, as filed with the Secretary of State of Idaho on November 5, 1991.
3(f) Statement of Resolution Establishing Terms of 7.07% Serial Preferred Stock, Without Par
Value (cumulative stated value of $100 per share) of Idaho Power Company, as filed with
the Secretary of State of Idaho on June 30, 1993.
3(g) Waiver resolution to Restated Articles of Incorporation of Idaho Power Company adopted by
shareholders on May 1, 1991.
3(h) By-laws of Idaho Power Company, as amended on June 30, 1989.
5(a) Opinion of Robert W. Stahman, Esq.
5(b) and 8 Opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P.
23(a) Consent of Robert W. Stahman, Esq. (included as part of Exhibit 5(a)).
23(b) Consent of LeBoeuf, Lamb, Greene & MacRae, L.L.P. (included as part of Exhibit 5(b) and
8).
23(c) Consent of Deloitte & Touche LLP.
24 Power of Attorney (included on page II-3).
99 Form of Proxy.
</TABLE>
<PAGE>
Exhibit 3(b)
Bylaws
of
Idaho Power Holding Company
Boise, Idaho
February 2, 1998
<PAGE>
Article I
OFFICE
Section 1.1 PRINCIPAL OFFICE. The Company shall maintain its
principal office in Boise, Idaho.
Section 1.2 REGISTERED OFFICE. The Company shall maintain a
registered office in the State of Idaho, as required by the Idaho Business
Corporation Act (the "Act").
Article II
SHAREHOLDERS
Section 2.1 ANNUAL MEETING OF SHAREHOLDERS. An annual meeting of
the shareholders shall be held on the first Wednesday of May or such other time
as may be designated by the Board of Directors.
Section 2.2 SPECIAL MEETINGS. A special meeting of the shareholders
may be called at any time by the President, a majority of the Board of Directors
or the Chairman of the Board. A special meeting of the shareholders also may be
called by the holders of not less than twenty percent (20%) of all the shares
entitled to vote on any issue proposed to be considered at the proposed special
meeting if such holders sign, date and deliver to the Secretary of the Company
one (1) or more written demands for the meeting describing the purpose or
purposes for which it is to be held. Upon receipt of one (1) or more written
demands for such proposed special meeting by the holders of not less than twenty
percent (20%) of all the shares entitled to vote on any issue proposed to be
considered at the proposed special meeting, the Secretary of the Company shall
be responsible for determining whether such demand or demands conform to the
requirements of the Act, the Articles of Incorporation and these Bylaws. After
making an affirmative determination, the Secretary shall prepare, sign and
deliver the notices required for such meeting. The shareholders' demand may
suggest a time and place for the meeting but the Board of Directors shall, by
resolution, determine the time and place of any such meeting.
Section 2.3 PLACE OF MEETINGS. All meetings of the shareholders
shall be held at the Company's principal office or at such other place as shall
be designated in the notice of such meetings.
Section 2.4 NOTICE OF SHAREHOLDERS' MEETING. Written notice of the
time and place of a meeting of the shareholders shall be mailed to each
shareholder entitled to receive notice under the Act: (a) not less than 10 days
nor more than 60 days prior to the date of an annual or special meeting of the
shareholders; or (b) if applicable, within 30 days after the date on which a
shareholder demand satisfying the requirements of Section 2.2 is delivered to
the Secretary of the Company. Every notice of an annual or special meeting of
shareholders shall be deemed duly served when the
<PAGE>
notice is deposited in the United States mail or with a private overnight
courier service, with postage prepaid and addressed to the shareholder at the
shareholder's address as it appears on the Company's records or if a shareholder
shall have filed with the Secretary of the Company a written request that the
notice be sent to some other address, then to such other address. If an annual
or special shareholders' meeting is adjourned to a different date, time or
place, notice need not be given of the new date, time or place if such new date,
time or place is announced at the meeting before adjournment. In any event, if
a new record date for the adjourned meeting is or must be determined, notice of
the adjourned meeting shall be given to persons who are shareholders as of the
new record date.
Section 2.5 WAIVER OF NOTICE. Any shareholder may waive any required
notice of the time, place, and purpose of any meeting of the shareholders by
telegram, telecopy, confirmed facsimile, or other writing, either before or
after such meeting has been held. Such waiver must be signed by the shareholder
entitled to the notice and be delivered to the Company for inclusion in the
minutes or filing with the corporate records. The attendance of any shareholder
at any shareholders' meeting shall constitute a waiver of: (a) any objection to
lack of notice or defective notice of the meeting, unless the shareholder at the
beginning of the meeting objects to holding the meeting or transacting business
at the meeting; and (b) any objection to consideration of a particular matter at
the meeting that is not within the purpose or purposes described in the meeting
notice, unless the shareholder objects to considering the matter when it is
presented.
Section 2.6 QUORUM OF SHAREHOLDERS. Unless the Articles of
Incorporation or the Act provide otherwise, a majority of the outstanding shares
entitled to vote on a particular matter at a meeting shall constitute a quorum
for purposes of action on that matter at the meeting. A share may be
represented at a meeting by the record holder thereof in person or by proxy.
Once a share is represented for any purpose at a meeting, it is deemed present
for quorum purposes for the remainder of the meeting and for any adjournment of
that meeting unless a new record date is or must be set for that adjourned
meeting. Whether or not a quorum is present, the meeting may be adjourned by a
majority vote of the shareholders present or represented. At any adjourned
meeting where a quorum is present, any business may be transacted that could
have been transacted at the meeting originally called.
Section 2.7 RECORD DATE FOR DETERMINATION OF SHAREHOLDERS. The Board
of Directors shall establish a record date for determining shareholders entitled
to notice of a shareholders' meeting, to vote or to take any other action, which
date shall not be more than 70 days before the meeting or action requiring a
determination of shareholders. A determination of shareholders is effective for
any adjournment of the meeting, unless a new record date is or must be set.
Section 2.8 SHAREHOLDERS' LIST FOR MEETING. The officer or agent in
charge of the stock transfer books for shares of the Company shall prepare an
alphabetical list of the names of all shareholders who are entitled to notice of
a shareholders' meeting. The list shall be arranged by voting group, and within
each voting group by class or series of shares, and show the address of and
number of shares held by each shareholder. The list shall be made available for
inspection by any
2
<PAGE>
shareholder, at least 10 days before the meeting for which the list was prepared
and continuing through the meeting, at the Company's principal office or at a
place identified in the meeting notice in the city where the meeting will be
held. The Company also shall make the list available at the shareholders'
meeting, and any shareholder is entitled to inspect the list at any time during
the meeting or any adjournment.
Section 2.9 TRANSACTION OF BUSINESS AT SHAREHOLDERS' MEETINGS.
2.9.1 TRANSACTION OF BUSINESS AT ANNUAL MEETING. Business
transacted at an annual meeting of shareholders may include all such business as
may properly come before the meeting. Nominations of persons for election to
the Board of Directors and the proposal of business to be considered by the
shareholders may be made at an annual meeting of shareholders: (a) pursuant to
the Company's notice of meeting; (b) by or at the direction of the Board of
Directors; or (c) by any shareholder who was a shareholder of record at the time
of giving of notice of the meeting, who is entitled to vote at the meeting and
who complies with the notice procedures set forth in this Section 2.9.1.
For nominations or other business to be properly brought before an
annual meeting by a shareholder, the shareholder must have given timely notice
thereof in writing to the Secretary of the Company and such other business must
otherwise be a proper matter for shareholder action. To be timely, a
shareholder's notice shall be delivered to the Secretary at the principal
executive offices of the Company not earlier than the close of business on the
90th day nor later than the close of business on the 60th day prior to the first
anniversary of the preceding year's annual meeting; provided, however, that in
the event that the date of the annual meeting is more than 30 days before or
more than 60 days after such anniversary date, notice by the shareholder to be
timely must be so delivered not earlier than the close of business on the 90th
day prior to such annual meeting and not later than the close of business on the
later of the 60th day prior to such annual meeting or the 10th day following the
day on which public announcement of the date of such meeting is first made by
the Company. In no event shall the public announcement of an adjournment of an
annual meeting commence a new time period for the giving of a shareholder's
notice as described above. Such shareholder's notice shall set forth: (a) as
to each person whom the shareholder proposes to nominate for election or
reelection as a director all information relating to such person that is
required to be disclosed in solicitations of proxies for election of directors
in an election contest, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and Rule 14a-11 thereunder (including such person's written
consent to being named in the proxy statement as a nominee and to serving as a
director if elected); (b) as to any other business that the shareholder proposes
to bring before the meeting, a brief description of the business desired to be
brought before the meeting, the reasons for conducting such business at the
meeting and any material interest in such business of such shareholder and the
beneficial owner, if any, on whose behalf the proposal is made; and (c) as to
the shareholder giving the notice and the beneficial owner, if any, on whose
behalf the nomination or proposal is made (i) the name and address of such
shareholder, as they appear on the Company's books, and of such beneficial
3
<PAGE>
owner and (ii) the class and number of shares of the Company which are owned
beneficially and of record by such shareholder and such beneficial owner.
2.9.2 TRANSACTION OF BUSINESS AT SPECIAL MEETING. Business
transacted at a special meeting of the shareholders shall be limited to the
purposes set forth in the notice of the special meeting. Nominations of persons
for election to the Board of Directors may be made at a special meeting of
shareholders at which directors are to be elected pursuant to the Company's
notice of meeting: (a) by or at the direction of the Board of Directors; or (b)
provided that the Board of Directors has determined that directors shall be
elected at such meeting, by any shareholder of the Company who is a shareholder
of record at the time of giving of notice of the meeting, who is entitled to
vote at the meeting and who complies with the notice procedures set forth in
this Section 2.9.2.
In the event the Company calls a special meeting of shareholders for
the purpose of electing one or more directors to the Board of Directors, any
such shareholder may nominate a person or persons, as the case may be, for
election to such position or positions as specified in the Company's notice of
meeting, if the shareholder's notice required by this Section 2.9.2 shall be
delivered to the Secretary at the principal executive offices of the Company not
earlier than the close of business on the 90th day prior to such special meeting
and not later than the close of business on the later of the 60th day prior to
such special meeting or the 10th day following the day on which public
announcement is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting. In
no event shall the public announcement of an adjournment of a special meeting
commence a new time period for the giving of a shareholder's notice as described
above. Such shareholder's notice shall set forth: (a) as to each person whom
the shareholder proposes to nominate for election or reelection as a director
all information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors in an election contest, or is
otherwise required, in each case pursuant to Regulation 14A under the Exchange
Act and Rule 14a-11 thereunder (including such person's written consent to being
named in the proxy statement as a nominee and to serving as a director if
elected); and (b) as to the shareholder giving the notice and the beneficial
owner, if any, on whose behalf the nomination or proposal is made, (i) the name
and address of such shareholder, as they appear on the Company's books, and of
such beneficial owner and (ii) the class and number of shares of the Company
which are owned beneficially and of record by such shareholder and such
beneficial owner.
2.9.3 GENERAL. Only such persons who are nominated in accordance
with the procedures set forth in this Section 2.9 shall be eligible to serve as
directors and only such business shall be conducted at a meeting of shareholders
as shall have been brought before the meeting in accordance with the procedures
set forth in this Section 2.9. The chairman of the meeting shall have the power
and duty to determine whether a nomination or any business proposed to be
brought before the meeting was made or proposed, as the case may be, in
accordance with the procedures set forth in this Section 2.9 and, if any
proposed nomination or business is not in compliance with this Section 2.9, to
declare that such defective proposal or nomination shall be disregarded, unless
otherwise provided by any applicable law.
4
<PAGE>
For purposes of this Section 2.9, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or comparable national news service or in a document publicly filed by the
Company with the Securities and Exchange Commission pursuant to Section 13, 14
or 15(d) of the Exchange Act.
Notwithstanding the foregoing provisions of this Section 2.9, a
shareholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in this Section 2.9. Nothing in this Section 2.9 shall be deemed to
affect any rights of: (a) the shareholders to request inclusion of proposals in
the Company's proxy statement pursuant to Rule 14a-8 under the Exchange Act; or
(b) the holders of any series of Preferred Stock to elect directors under
specified circumstances.
Section 2.10 ACTION BY WRITTEN CONSENT. Any action required or
permitted by the Act to be taken at an annual or special meeting of shareholders
may be taken without a meeting, without prior notice, and without a vote, if
consents in writing, setting forth the action so taken, are signed by the
holders of all of the outstanding shares of stock entitled to vote on the
matter.
Section 2.11 PRESIDING OFFICER. The Chairman of the Board shall act
as chairman of all meetings of the shareholders. In the absence of the Chairman
of the Board, the President, or in his or her absence, any Vice President
designated by the Board of Directors shall act as the chairman of the meeting.
Section 2.12 PROCEDURE. At each meeting of shareholders, the
chairman of the meeting shall fix and announce the date and time of the opening
and the closing of the polls for each matter upon which the shareholders will
vote at the meeting and shall determine the order of business and all other
matters of procedure. Except to the extent inconsistent with any such rules and
regulations as adopted by the Board of Directors, the chairman of the meeting
may establish rules, which need not be in writing, to maintain order and safety
and for the conduct of the meeting. Without limiting the foregoing, the
chairman of the meeting may: (a) determine and declare to the meeting that any
business is not properly before the meeting and therefore shall not be
considered; (b) restrict attendance at any time to bona fide shareholders of
record and their proxies and other persons in attendance at the invitation of
the chairman of the meeting; (c) restrict dissemination of solicitation
materials and use of audio or visual recording devices at the meeting; (d)
adjourn the meeting without a vote of the shareholders, whether or not there is
a quorum present; and (e) make rules governing speeches and debate, including
time limits and access to microphones.
The chairman of the meeting acts in his or her absolute discretion and
his or her rulings are not subject to appeal.
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Article III
BOARD OF DIRECTORS
Section 3.1 AUTHORITY. The Board of Directors shall have the
ultimate authority over the conduct and management of the business affairs of
the Company.
Section 3.2 NUMBER. The number of directors of the Company shall be
not less than two (2) nor more than four (4) as determined from time to time by
the vote of a majority of the Board of Directors. Unless otherwise provided by
the Act, the number of directors may be increased or decreased, beyond the
limits set forth above, only by an amendment to these Bylaws. No change in the
number of directors shall shorten the term of any director then in office.
Section 3.3 TERM. Each director shall hold office from the date of
his or her election and qualification until his or her successor shall have been
duly elected and qualified or until his or her earlier removal, resignation,
death or incapacity.
Section 3.4 ELIGIBILITY FOR ELECTIONS. No person who will be 70
years of age or more on or before an annual meeting shall be nominated to the
Board of Directors, and any directors who reach the age of 70 shall be
automatically retired from the Board of Directors.
Section 3.5 REGULAR MEETINGS OF THE BOARD. Regular meetings of the
Board of Directors may be held at times and places agreed on by a majority of
the directors at any meeting of the Board of Directors, and such regular
meetings may be held at such times and places without any further notice of the
date, time, place or purposes of such regular meetings.
Section 3.6 SPECIAL MEETINGS OF THE BOARD. Special meetings of the
Board of Directors may be called: (a) by, or at the request of, the Chairman of
the Board; or (b) by the Secretary of the Company at the written request of a
majority of the directors then in office. Special meetings of the Board of
Directors may be called on not less than 12 hours notice to each director, given
orally or in writing, either personally, by telephone (including by message or
by recording device), by facsimile transmission, by telegram or by telex, or on
not less than three (3) calendar days' notice to each director given by mail.
Notice of the special meeting of the Board of Directors shall specify the date,
time and place of the meeting. Actions taken at any such meeting shall not be
invalidated because of lack of notice if notice is waived as provided in Section
3.7.
Section 3.7 WAIVER OF NOTICE. A director may waive any required
notice before or after the date and time stated in the notice by written waiver
signed by the director entitled to the notice and filed with the minutes or
corporate records. In addition, a director's attendance at or participation in
a meeting waives any required notice to the director of the meeting unless the
director at the beginning of the meeting, or promptly upon the director's
arrival, objects to holding the meeting or transacting business at the meeting
and does not thereafter vote for or assent to action taken at the meeting.
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Section 3.8 PARTICIPATION BY TELECOMMUNICATION. Any director may
participate in any meeting of the Board of Directors through the use of any
means of communication by which all directors participating in the meeting may
simultaneously hear each other during the meeting. A director participating in
a meeting by this means shall be deemed to be present in person at the meeting.
Section 3.9 QUORUM OF DIRECTORS. A majority of the directors in
office immediately before the meeting begins shall constitute a quorum for the
transaction of business at any meeting of the Board of Directors.
Section 3.10 ACTION. If a quorum is present when the vote is taken,
the Board of Directors shall take actions pursuant to resolutions adopted by the
affirmative vote of: (a) a majority of the directors present at the meeting of
the Board of Directors; or (b) such greater number of the directors as may be
required by the Articles of Incorporation, these Bylaws or the Act.
Section 3.11 ACTION BY UNANIMOUS WRITTEN CONSENT. Any action
required or permitted to be taken at a Board of Directors' meeting may be taken
without a meeting if the action is taken by all members of the Board of
Directors. The action shall be evidenced by one (1) or more written consents
describing the action taken, signed by each director, and included in the
minutes or filed with the corporate records reflecting the action taken.
Section 3.12 SELECTION OF OFFICERS. The Board of Directors shall
select a Chairman of the Board of Directors, a President, a Vice President, a
Secretary and a Treasurer and such additional Vice Presidents, Assistant
Secretaries, Assistant Treasurers and other officers and agents as the Board of
Directors from time to time may deem advisable.
Section 3.13 POWERS AND DUTIES OF OFFICERS AND AGENTS. The powers
and duties of the officers and agents shall be determined by the Board of
Directors and these Bylaws.
Section 3.14 DELEGATION OF POWERS. For any reason deemed sufficient
by the Board of Directors, whether occasioned by absence or otherwise, the Board
may delegate all or any of the powers and duties of any officer to any other
officer or director, but no officer or director shall execute, verify or
acknowledge any instrument in more than one capacity unless specifically
authorized by the Board of Directors.
Section 3.15 APPOINTMENT OF EXECUTIVE COMMITTEE. At the same meeting
at which the Board of Directors selects the Chairman of the Board, the Board of
Directors shall appoint an Executive Committee consisting of two (2) or more
members, who shall serve at the pleasure of the Board of Directors. Such
appointments shall be made by a majority of all the directors in office when the
action is taken. Unless otherwise provided by the Act or further limited by a
resolution of the Board of Directors, the Executive Committee may exercise all
of the powers of the Board of Directors.
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Section 3.16 POWER TO APPOINT ADDITIONAL COMMITTEES OF THE BOARD.
The Board of Directors shall have the power to designate, by resolution, one (1)
or more additional committees and appoint members of the Board of Directors to
serve on them. To the extent provided in such resolution, such committees may
manage the business and affairs of the Company, unless otherwise provided by the
Act. Each committee shall have two (2) or more members, who shall serve at the
pleasure of the Board of Directors. A majority of the members of any committee
of the Board of Directors will constitute a quorum for any committee action.
Section 3.17 COMPENSATION. The Board of Directors may, by
resolution, authorize the payment to directors of compensation for the
performance of their duties. No such payment shall preclude any director from
serving the Company in any other capacity and receiving compensation therefor.
The Board of Directors may also, by resolution, authorize the reimbursement of
expenses incurred by directors in the performance of their duties.
Section 3.18 CONFLICTING INTEREST TRANSACTION. Any conflicting
interest transaction shall be governed by Sections 30-1-860 through 30-1-863 of
the Act.
Article IV
OFFICERS
Section 4.1 GENERAL. The officers of the Company shall consist of a
Chairman of the Board, a President, a Vice President, a Secretary, a Treasurer
and such additional Vice Presidents, Assistant Secretaries, Assistant Treasurers
and other officers and agents as the Board of Directors from time to time may
deem advisable. Each such officer shall hold office for a term of one year or
until his or her successor shall have been duly elected and qualified or until
his or her earlier resignation, retirement, removal from office, incapacity or
death. The Board of Directors may remove any officer or agent at any time, with
or without cause, unless otherwise provided by the Act or the Articles of
Incorporation. One person may hold two or more offices, except the offices of
President and Secretary.
Section 4.2 CHAIRMAN OF THE BOARD. The Chairman of the Board shall
be selected by and from the members of the Board of Directors. He or she shall
conduct all meetings of the Board of Directors and shall perform all duties
incident thereto.
Section 4.3 PRESIDENT. The President shall have general and active
management of the business of the Company and shall see that all orders and
resolutions of the Board of Directors are carried into effect. The President
shall have the general powers and duties of supervision and management usually
vested in the office of president of a corporation.
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Section 4.4 VICE PRESIDENTS. Each Vice President shall serve under
the direction of the President and shall perform such other duties as the Board
of Directors shall from time to time direct.
Section 4.5 SECRETARY. The Secretary of the Company shall serve
under the direction of the President and shall perform such other duties as the
Board of Directors shall from time to time direct, unless otherwise provided by
these Bylaws or determined by the Board of Directors. The Secretary shall be
responsible for preparing minutes of the directors' and shareholders' meetings
and for authenticating records of the Company. The Secretary shall safely keep
in his or her custody the seal of the Company and shall have authority to affix
the same to all instruments where its use is required. The Secretary shall give
all notices required by the Act, these Bylaws or any resolution of the Board of
Directors.
Section 4.6 TREASURER. The Treasurer shall serve under the direction
of the President and shall perform such other duties as the Board of Directors
shall from time to time direct. The Treasurer shall have custody of all
corporate funds and securities and shall keep in books belonging to the Company
full and accurate accounts of all receipts and disbursements. The Treasurer
shall deposit all monies, securities and other valuable effects in the name of
the Company in such depositories as may be designated for that purpose by the
Board of Directors and shall disburse the funds of the Company as may be ordered
by the Board of Directors. The Treasurer shall upon request report to the Board
of Directors on the financial condition of the Company.
Section 4.7 ASSISTANT SECRETARY AND ASSISTANT TREASURER. The
Assistant Secretary, in the absence or disability of the Secretary, shall
perform the duties and exercise the powers of the Secretary. The Assistant
Treasurer, in the absence or disability of the Treasurer, shall perform the
duties and exercise the powers of the Treasurer.
Article V
STOCK AND TRANSFERS
Section 5.1 CERTIFICATES FOR SHARES. Subject to the provisions of
Section 5.2, every shareholder shall be entitled to a certificate of the shares
to which the shareholder has subscribed, and each certificate shall be signed,
either manually or by facsimile, by any two (2) of the following: the Chairman
of the Board, the President, the Treasurer and the Secretary. Such certificate
may bear the seal of the Company or a facsimile thereof. Each certificate shall
state the name of the Company, the number and class of shares and the
designation of the series, if any, that the certificate represents. In case any
officer, transfer agent or registrar who has signed, or whose facsimile
signature has been placed upon, a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the Company with the same effect as if such person or entity were
such officer, transfer agent or registrar at the date of issue.
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Section 5.2 SHARES WITHOUT CERTIFICATES. The Company shall have the
power to authorize the issue of some or all of the shares of any or all of its
classes or series without certificates. The authorization shall not affect
shares already represented by certificates until they are surrendered to the
Company. Within a reasonable time after the issue or transfer of shares without
certificates, the Company shall send the shareholder a written statement of the
information required on certificates by the Act.
Section 5.3 TRANSFERABLE ONLY ON BOOKS OF THE COMPANY. Shares of the
capital stock of the Company shall be transferred on the books of the Company
only by the holder of the shares in person or by an attorney lawfully appointed
in writing and upon surrender of the certificates, if any, for the shares. A
record shall be made of every such transfer and issue. Whenever any transfer is
made for collateral security and not absolutely, the fact shall be so expressed
in the entry of such transfer.
Section 5.4 STOCK LEDGER. The Company shall maintain a stock ledger
that contains the name and address of each shareholder and the number of shares
of each class of the capital stock that the shareholder holds. The stock ledger
may be in written form or in any other form that can be converted within a
reasonable time into written form for visual inspection.
Section 5.5 REGISTERED SHAREHOLDERS. The Company shall have the
right to treat the registered holder of any share of its capital stock as the
absolute owner of such share and shall not be bound to recognize any equitable
or other claim to or interest in such share on the part of any other person,
whether or not the Company shall have express or other notice thereof, unless
otherwise required by any applicable law.
Article VI
INDEMNIFICATION
Section 6.1 DEFINED TERMS. Capitalized terms used in this Article VI
that are defined in Section 30-1-850 of the Act shall have the meaning given to
such terms under Section 30-1-850 of the Act.
Section 6.2 INSURANCE. The Company shall have the power to purchase
and maintain insurance, in such amounts as the Board of Directors may deem
appropriate, on behalf of any person who is a Director, Officer, employee or
agent against Liability and Expenses in connection with any Proceeding, to the
extent permitted under any applicable law.
Section 6.3 AGREEMENTS. The Company may enter into an
indemnification agreement with any Director, Officer, employee or agent, to the
extent permitted under any applicable law.
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Section 6.4 AMENDMENTS. Any amendment or repeal of this Article VI
shall not be retroactive in effect.
Section 6.5 SEVERABILITY. In case any provision in this Article VI
shall be determined at any time to be unenforceable in any respect, the other
provisions shall not in any way be affected or impaired thereby, and the
affected provision shall be given the fullest possible enforcement in the
circumstances.
Article VII
AMENDMENT OF BYLAWS
Section 7.1 AMENDMENT BY THE BOARD OF DIRECTORS. These Bylaws may
be amended, altered, changed, added to, repealed or substituted by the
affirmative vote of a majority of the Board of Directors, unless the Articles of
Incorporation, these Bylaws or the Act provide otherwise.
Section 7.2 AMENDMENT BY THE SHAREHOLDERS. Subject to the provisions
of Section 7.3, these Bylaws may be amended, altered, changed, added to,
repealed or substituted by the affirmative vote of a majority of all shares
entitled to vote thereon, if notice of the proposed amendment, alteration,
change, addition, repeal or substitution is contained in the notice of the
meeting.
Section 7.3 AMENDMENT OF CERTAIN PROVISIONS. Notwithstanding any
other provision of these Bylaws, (i) any amendment, alteration, change,
addition, repeal or substitution of this Section 7.3, Section 2.9 or Article III
of these Bylaws by the shareholders shall require the affirmative vote of two-
thirds of all shares entitled to vote thereon; and (ii) no change of the date
for the annual meeting of the shareholders shall be made by the shareholders
within the 30-day period preceding the date designated for the annual meeting
pursuant to Section 2.l, unless consented to in writing, as provided in Section
2.10, or approved at any meeting of the shareholders by a majority of all shares
entitled to vote thereon.
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Exhibit 3(d)
RESTATED
ARTICLES OF INCORPORATION
OF
IDAHO POWER COMPANY
ARTICLE 1. NAME. The name of the Corporation is Idaho Power Company and its
duration shall be perpetual.
ARTICLE 2. PURPOSES. The purposes of the Corporation are to:
1. buy, sell, lease and use machinery, generators, motors, lamps,
apparatus, devices, supplies and articles of every kind pertaining to or in any
wise connected with the production, use, distribution, regulation, control or
application of electricity or electrical apparatus for light, heat, power,
telegraph, telephone, railway, manufacturing and any and all other purposes; to
construct, acquire, purchase, use, sell or lease any works, construction or
plants or parts thereof connected with or involving the production, use,
distribution, regulation, control or application of electricity or electrical
apparatus for any of such purposes; to buy, acquire, lease, use, produce,
furnish and supply electricity or any other power or force, in any form and for
any purpose whatsoever;
2. acquire, build, construct, own, lease and operate railway
properties of all kinds and descriptions (including parks, places of amusement
and other usual or useful adjuncts to said railway property and business) and
with any kind of motive power, and to sell and lease the same;
3. manufacture, purchase, sell and distribute, for light, heat and
power and all other purposes, natural and artificial gas, and to acquire,
construct, purchase, own, maintain, operate, sell and lease all necessary and
convenient works, conduits, plants, apparatus and connections for holding,
receiving, purifying, manufacturing, selling, utilizing and distributing natural
or artificial gas; to manufacture and sell or otherwise dispose of chemicals or
other products derived wholly or in part from gas or gas works;
4. manufacture, purchase, sell and distribute steam and hot water
for heating and other purposes, and to acquire, construct, purchase, own,
maintain, operate, sell and lease all necessary and convenient works, plants,
apparatus and connections for manufacturing, selling and distributing steam and
hot water;
5. construct and acquire by purchase, lease or otherwise,
reservoirs, dams, canals, ditches, flumes, pipe lines and such other works,
plants, equipments, appliances and appurtenances as may be necessary, useful or
appropriate for impounding, storing, conveying, distributing and utilizing water
for power, irrigation, fire, sanitary, domestic, manufacturing
<PAGE>
and other uses, and to use, apply, sell and otherwise dispose of water for such
uses; to construct and to acquire by purchase, lease or otherwise, and to
operate hydraulic and other works, transmission plants, transmission lines,
transforming and distributing stations and distributing circuits and any and all
rights of way connected therewith or useful therefor; to transform the power
generated by hydraulic or other plants into electrical or other energy, and
transmit, use or otherwise dispose of the said electrical or other energy for
any and all purposes; to acquire any and all rights or other property necessary
or useful in connection with acquiring, owning and operating any or all of said
plants; and
6. acquire, buy, operate, lease and sell ice and refrigerating
plants; and to acquire, lease, hold, use and otherwise avail of such real and
personal estate, property, rights, privileges, grants, consents and franchises,
including inventions, patents, processes, stocks, bonds and other evidences of
indebtedness of persons, firms or corporations, and franchises or special grants
or privileges from cities, towns or other municipalities, as the company shall
deem requisite or advantageous in pursuance of any of its corporate purposes
above stated; and to mortgage, pledge, sell, convey or otherwise dispose of any
or all of the foregoing; and to undertake, contract for or carry on any business
or operation deemed by the Company incidental to, or in aid of, or advantageous
in pursuance of, any of its corporate purposes.
Nothing herein shall be deemed to limit or exclude any power, right or
privilege given to the Corporation by law, and it is not intended that the
Corporation shall exercise in any state any powers not permitted to it under the
law of such state.
ARTICLE 3. LOCATION AND REGISTERED AGENT. The address of the registered office
of this Corporation is PO Box 70, 1220 West Idaho Street, Boise, Idaho 83707,
and the name of the registered agent at this address is Robert W. Stahman. The
incorporator of this Corporation is Robert W. Stahman, whose address is PO Box
70, 1220 West Idaho Street, Boise, Idaho 83707.
ARTICLE 4. DIRECTORS. (a) The number of directors constituting the Board of
Directors of the Corporation shall be fixed from time to time exclusively by the
Board of Directors pursuant to a resolution adopted by affirmative vote of two-
thirds of the Continuing Directors (as defined in Article 8 of the Restated
Articles of Incorporation), but the number of directors shall be no less
than 9 and no greater than 15. The number of directors may be increased or
decreased, beyond the limits set forth above, only by an amendment to the
Restated Articles of Incorporation of the Corporation pursuant to Article 10 of
the Restated Articles of Incorporation of the Corporation.
The Board of Directors shall be divided into three classes as nearly equal
in number as may be. The initial term of office
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of each director in the first class shall expire at the annual meeting of
shareholders in 1990; the initial term of office of each director in the second
class shall expire at the annual meeting of shareholders in 1991; and the
initial term of office of each director in the third class shall expire at the
annual meeting of shareholders in 1992. At each annual election commencing at
the annual meeting of shareholders in 1990, the successors to the class of
directors whose term expires at that time shall be elected to hold office for a
term of three years to succeed those whose term expires, so that the term of one
class of directors shall expire each year. Each director shall hold office for
the term for which he is elected or appointed and until his successor shall be
elected and qualified or until his death, or until he shall resign or be
removed; provided, however, that no person who will be seventy (70) years of age
or more on or before the annual meeting shall be nominated to the Board of
Directors, and any directors who reach the age of seventy (70) shall be
automatically retired from the Board.
In the event of any increase or decrease in the authorized number of
directors, (i) each director then serving as such shall nevertheless continue as
a director of the class of which he is a member until the expiration of his
current term, or his earlier resignation, removal from office or death, and (ii)
the newly created or eliminated directorships resulting from such increase or
decrease shall be apportioned by the Board of Directors among the three classes
of directors so as to maintain such classes as nearly equal in number as may be.
(b) Newly created directorships resulting from any increase in the
authorized number of directors of any vacancies in the Board of Directors
resulting from death, resignation, retirement, disqualification, removal from
office or other cause shall be filled by a two-thirds vote of the directors then
in office, or a sole remaining director, although less than a quorum, and
directors so chosen shall hold office for a term expiring at the annual meeting
of shareholders at which the term of the class to which they have been elected
expires. If one or more directors shall resign from the Board effective as of a
future date, such vacancy or vacancies shall be filled pursuant to the
provisions hereof, and such new directorship(s) shall become effective when such
resignation or resignations shall become effective, and each director so chosen
shall hold office as herein provided in the filling of other vacancies.
(c) At a special meeting of shareholders called expressly for that
purpose, the entire Board of Directors or any individual directors may be
removed (i) without cause, by the unanimous vote of the outstanding shares
entitled to vote for directors, and (ii) for cause, by the affirmative vote of
two-thirds of the outstanding shares entitled to vote for directors. Except as
may otherwise be provided by law, cause for removal shall be construed to exist
only if: (x) the director whose removal is proposed has been convicted, or
granted immunity to testify where
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another has been convicted, of a felony by a court of competent jurisdiction and
such conviction is no longer subject to appeal; (y) such director has been
grossly negligent in the performance of his duties to the Corporation; or
(z) such director has been adjudicated by a court of competent jurisdiction to
be mentally incompetent, which mental incompetency directly affects his ability
as a director of the Corporation, and such adjudication is no longer subject to
appeal.
(d) Any directors elected pursuant to special voting rights of the 4%
Preferred Stock or Serial Preferred Stock, without par value, voting as a
separate class, shall be excluded from, and for no purpose be counted in, the
scope and operation of the foregoing provisions.
ARTICLE 5. MEETINGS OF SHAREHOLDERS. Meetings of the shareholders of the
Corporation may be held within or without the State of Idaho.
ARTICLE 6. AUTHORIZED STOCK.
A. The authorized stock of the Corporation is divided into four classes
which are designated (i) 4% Preferred Stock, (ii) Serial Preferred Stock, $100
par value, (iii) Serial Preferred Stock, without par value, and (iv) Common
Stock. The Corporation has the authority to issue 215,000 shares of 4%
Preferred Stock; 150,000 shares of Serial Preferred Stock, $100 par value;
3,000,000 shares of Serial Preferred Stock, without par value; and 50,000,000
shares of Common Stock. Each share of 4% Preferred Stock and each share of
Serial Preferred Stock, $100 par value, has a par value of one hundred dollars
($100). Each share of Common Stock has a par value of two and one-half dollars
($2.50). The aggregate par value of all shares of stock having a par value
which the Corporation has authority to issue is $161,500,000. The total number
of shares without par value which the Corporation has authority to issue is
3,000,000.
B. No shareholder of the corporation shall have any preemptive rights.
C. The relative rights, preferences and limitations of each class are as
follows:
1. 4% PREFERRED STOCK
The 4% Preferred Stock, PARI PASSU with the Serial Preferred Stock,
$100 par value, and the Serial Preferred Stock, without par value, is entitled
to the payment of dividends and to the distribution of assets in liquidation,
and has the following relative rights and preferences:
(a) DIVIDEND. The 4% Preferred Stock is entitled in preference
to the Common Stock to dividends at the rate of four per cent (4%) per annum,
payable quarterly, semi-annually or
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annually, as the Board of Directors may determine, and such dividends are
cumulative from and after August 1, 1944, or from the date of issue if issued
after August 1, 1944. The 4% Preferred Stock shall not receive any dividends
from profits in excess of its stated dividend rate of four per cent (4%) per
annum.
(b) REDEMPTION.
(1) The 4% Preferred Stock is subject to redemption at the
option of the Corporation in whole or in part at any time at one hundred and
four per cent (104%) of par plus any dividends unpaid to the date of redemption,
upon the vote of not less than a majority in interest of the outstanding shares
of the Common Stock at any corporate meeting or any meeting of the holders of
the Common Stock called for such purpose.
(2) Notice of the intention of the Corporation to redeem
the 4% Preferred Stock shall be mailed 30 days before the date of redemption to
each holder of the 4% Preferred Stock of record at his last known post office
address. From and after any such call for redemption of the 4% Preferred Stock
and deposit by the Corporation of the moneys required for such purpose, the
shares so to be redeemed shall no longer be considered as outstanding, and shall
not be entitled to vote or to be included in determining the total voting power
of the issued and outstanding shares of stock of the Corporation.
(c) LIQUIDATION. The 4% Preferred Stock shall have a preference
over the Common Stock in any distribution of assets, other than profits, until
the full par value thereof and the stated dividend rate per annum thereon from
August 1, 1944, or from the date of issue thereof if issued after August 1,
1944, shall have been paid by dividends or distribution. The 4% Preferred Stock
shall not receive any share in the distribution of assets in excess of said par
value and the amount of such accumulated dividends.
2. SERIAL PREFERRED STOCK, $100 PAR VALUE.
(a) The Serial Preferred Stock, $100 par value, in preference to
the Common Stock and PARI PASSU with the 4% Preferred Stock and the Serial
Preferred Stock, without par value, is entitled to the payment of dividends and
to the distribution of assets in liquidation. Shares of the Serial Preferred
Stock, $100 par value, may be divided into and issued in series. Each series
shall be so designated as to distinguish the shares thereof from the shares of
all other series and classes. All shares of the same series shall be identical
and all shares of the Serial Preferred Stock, $100 par value, shall be identical
except as to the following relative rights and preferences, as to which there
may be variations between different series:
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(1) DIVIDENDS. The rate of dividend and whether it is to
be cumulative, non-cumulative or partially-cumulative;
(2) REDEMPTION. Whether shares may be redeemed and, if so,
the redemption prices and the terms and conditions of redemption;
(3) LIQUIDATION. The amount payable upon shares in the
event of voluntary liquidation;
(4) SINKING FUND. Sinking fund provisions, if any, for the
redemption or purchase of shares;
(5) CONVERSION. The terms and conditions, if any, on which
shares may be converted into shares of any other class or into shares of any
series of the same or any other class, except a class having prior or superior
rights and preferences as to the payment of dividends or the distribution of
assets in liquidation; and
(6) VOTING RIGHTS. The voting rights, if any.
The Board of Directors hereby is expressly vested with authority to divide any
or all of the Serial Preferred Stock, $100 par value (other than the 7.68%
Series, the designation and relative rights and preferences of which are set
forth below), into series, to establish and designate each such series, and
within the limits set forth above and in accordance with law, to fix and
determine the relative rights and preferences of the shares of any series so
established.
(b) The following provisions shall apply to the Serial Preferred
Stock, $100 par value, of all series:
(1) DIVIDENDS. The holders of shares of the Serial
Preferred Stock, $100 par value, of each series, PARI PASSU with the holders of
shares of the 4% Preferred Stock and the Serial Preferred Stock, without par
value, shall be entitled to receive dividends, payable when and as declared by
the Board of Directors, on such dates and at such rates as shall be determined
for the respective series, from the first day of the dividend period for the
respective series within which such shares shall have been originally issued or
from such other date as the Board of Directors may have determined for such
shares, before any dividends shall be declared or paid upon or set apart for the
Common Stock or any other class of stock over which the Serial Preferred Stock,
$100 par value, shall have preference as to the payment of dividends. Such
dividends shall be cumulative so that if, for any dividend period or periods,
dividends shall not have been paid or declared and set apart for payment upon
all of the then outstanding shares of Serial Preferred Stock, $100 par value, at
the rates and from the dates determined for the
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respective series, the deficiency shall be fully paid, or declared and set apart
for payment, before any dividends shall be declared or paid upon the Common
Stock or any other class of stock over which the Serial Preferred Stock, $100
par value, shall have preference as to the payment of dividends. Dividends
shall be declared and set apart for payment, or paid, on the Serial Preferred
Stock, $100 par value, for each dividend period during or for which dividends
shall have been declared and set apart for payment, or paid, on the 4% Preferred
Stock. Dividends shall not be declared and set apart for payment, or paid, on
the Serial Preferred Stock, $100 par value, of any one series for any dividend
period, unless dividends shall have been paid, or contemporaneously, shall have
been declared and set apart for payment, or paid, upon all of the then
outstanding shares of the Serial Preferred Stock, $100 par value, the Serial
Preferred Stock, without par value, and the 4% Preferred Stock for all dividend
periods terminating on the same or an earlier date.
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(2) REDEMPTION.
(A) At the option of the its Board of Directors, the
Corporation may redeem any series of the Serial Preferred Stock, $100 par value,
and each such series may be redeemed, as a whole or in part, at any time
(subject to such restrictions, if any, as may be set forth in the resolution of
the Board of Directors establishing such series) at the redemption price
specified for such series; provided, however, that not less than thirty nor more
than sixty days prior to the date fixed for redemption, a notice of the time and
place thereof shall be given to the holders of record of the shares of the
Serial Preferred Stock, $100 par value, so to be redeemed, by mail or
publication, in such manner as may be prescribed by resolution of the Board of
Directors; and provided further, that, in every case of redemption of less than
all of the outstanding shares of any one series of Serial Preferred Stock, $100
par value, the shares of such series to be redeemed shall be chosen by lot in
such manner as may be prescribed by resolution by the Board of Directors. At
any time after notice of redemption has been given, the Corporation may deposit
the aggregate redemption price with some bank or trust company in The City of
New York or in Boise, Idaho, named in such notice, payable on the date fixed for
redemption as aforesaid and in the amounts aforesaid to the respective orders of
the holders of the shares so to be redeemed, upon endorsement to the Corporation
or as otherwise may be required and surrender of the certificates for such
shares. Upon the deposit of such money as aforesaid, or, if no such deposit is
made, upon such redemption date (unless the Corporation defaults in making
payment of the redemption price as set forth in such notice), such holders shall
cease to be shareholders with respect to such shares, and from and after the
making of such deposit, or if no such deposit is made, after the redemption date
(the Corporation not having defaulted in making payment of the redemption price
as set forth in such notice), such holders shall have no interest in or claim
against the Corporation with respect to such shares, but shall be entitled only
to receive such moneys on the date fixed for redemption as aforesaid from such
bank or trust company, or, if no such deposit is made, from the Corporation,
without interest thereon, upon endorsement and surrender of the certificates as
aforesaid.
(B) In case the holder of any shares of the Serial
Preferred Stock, $100 par value, so redeemed shall not, within six years after
such deposit, claim the amount deposited as above stated for the redemption
thereof, the depositary shall upon demand pay over to the Corporation such
amounts so deposited, and the depositary, thereupon, shall be relieved from all
responsibility to the holder thereof. No interest on such deposit shall be
payable to any such holder.
(C) Shares of the Serial Preferred Stock, $100 par
value, which have been redeemed by the Corporation shall be restored to the
status of authorized but unissued shares of the Serial Preferred Stock, $100 par
value,
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without designation or relative rights, preferences or limitations as to series.
(D) Nothing herein contained shall limit any legal
right of the Corporation to purchase or otherwise acquire any of the shares of
the Serial Preferred Stock, $100 par value.
(3) LIQUIDATION. Upon any dissolution, liquidation or
winding up of the Corporation, whether voluntary or involuntary, the holders
of the then outstanding shares of the Serial Preferred Stock, $100 par value,
of each series, PARI PASSU with the holders of the then outstanding shares of
all other series of the Serial Preferred Stock, $100 par value, the Serial
Preferred Stock, without par value, and the 4% Preferred Stock, shall be
entitled to receive out of the assets of the Corporation, whether capital
surplus or other, before any distribution of such assets shall be made to the
holders of shares of the Common Stock or of any other class of stock as to
which the Serial Preferred Stock, $100 par value, has preference as to the
distribution of assets in liquidation, an amount per share (i) in the case of
voluntary liquidation, as specified in the resolution of the Board of
Directors fixing and determining the relative rights and preferences of the
shares of such series, or (ii) in the case of involuntary liquidation, equal
to the par value thereof. If the assets to be distributed in respect of the
Serial Preferred Stock, $100 par value, shall not be sufficient to pay the
full amounts that shall be determined to be payable on all the shares of the
Serial Preferred Stock, $100 par value, upon voluntary or involuntary
liquidation, such assets shall be distributed, to the extent available, as
follows: first, to the payment, PRO RATA, of $100 per share on each share of
the Serial Preferred Stock, $100 par value, outstanding irrespective of
series; second, to the payment of the accumulated dividends on such shares,
such payment to be made PRO RATA in accordance with the amount of accumulated
dividends on each such share; and, third, to the payment of any amounts in
excess of $100 per share plus accumulated dividends which may be payable on
the shares of any series in the event of voluntary liquidation, such payment
also to be made PRO RATA in accordance with the amounts, if any, so payable
on each such share. After full payment to the holders of the Serial
Preferred Stock, $100 par value, of such preferential amounts, the holders of
the Serial Preferred Stock, $100 par value, as such, shall have no right or
claim to any of the remaining assets of the Corporation. Without limiting
the right of the Corporation to distribute its assets or to dissolve,
liquidate or wind up in connection with any sale, merger or consolidation,
the sale of all the property of the Corporation to, or the merger or
consolidation of the Corporation into or with, any other corporation shall
not be deemed to be a distribution of assets or a dissolution, liquidation or
winding up for the purposes of this paragraph.
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(c) THE 7.68% SERIES. The following provisions shall apply only
to the first series of the Serial Preferred Stock, $100 par value, which is
designated as the 7.68% Series and consists of 150,000 shares. The relative
rights and preferences of the shares of the 7.68% Series, in those respects as
to which there are variations between different series of the Serial Preferred
Stock, $100 par value, are as follows:
(1) DIVIDENDS. The rate of dividends on shares of the
7.68% Series shall be 7.68% of par value per annum. Dividends shall be
cumulative from September 27, 1972. The initial dividend will be payable on
February 15, 1973, for the period commencing with September 27, 1972, and ending
January 31, 1973. Thereafter, dividends shall be payable on the 15th day of
February, May, August and November of each year or otherwise as the Board of
Directors may determine.
(2) REDEMPTION. Shares of the 7.68% Series shall be
redeemable at any time in whole or in part at the per share redemption prices of
$102.97 plus unpaid accumulated dividends, if any, to the date of redemption.
(3) LIQUIDATION. The amounts payable upon shares of the
7.68% Series in the event of voluntary liquidation is $100 per share plus
accumulated dividends, if any. In the event of any preferential payments, the
7.68% Series shall be entitled PRO RATA to such preferential payments.
(4) SINKING FUND. There is no sinking fund for the
redemption or purchase of shares of the 7.68% Series.
(5) CONVERSION. Shares of the 7.68% Series are not, by
their terms, convertible or exchangeable.
(6) VOTING RIGHTS. At all meetings of the shareholders,
each holder of shares of the 7.68% Series shall be entitled to one vote for each
share held by him.
3. SERIAL PREFERRED STOCK, WITHOUT PAR VALUE
(a) The Serial Preferred Stock, without par value, in preference
to the Common Stock and PARI PASSU with the 4% Preferred Stock, and the Serial
Preferred Stock, $100 par value, is entitled to the payment of dividends and to
the distribution of assets in liquidation. Shares of the Serial Preferred
Stock, without par value, may be divided into and issued in series. Each series
shall be so designated as to distinguish the shares thereof from the shares of
all other series and classes. All shares of the same series shall be identical
and all shares of the Serial Preferred Stock, without par value, shall be
identical except as to the following relative rights and preferences, as to
which there may be variations between different series:
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(1) DIVIDENDS. The rate of dividend and whether it is to
be cumulative, non-cumulative or partially-cumulative;
(2) REDEMPTION. Whether shares may be redeemed and, if so,
the redemption price and the terms and conditions of redemption;
(3) LIQUIDATION. The amount payable upon shares in the
event of voluntary or involuntary liquidation;
(4) SINKING FUND. Sinking fund provisions, if any, for the
redemption or purchase of shares;
(5) CONVERSION. The terms and conditions, if any, on which
shares may be converted into shares of any other class or into shares of any
series of the same or any other class, except a class having prior to superior
rights and preferences as to the payment of dividends or the distribution of
assets in liquidation; and
(6) VOTING RIGHTS. The voting rights, if any, in addition
to those specifically set forth in subsection D.1. of this Article.
The Board of Directors hereby is expressly vested with authority to divide any
or all of the Serial Preferred Stock, without par value, into series, to
establish and designate each such series, and within the limits set forth above
and in accordance with law, to fix and determine the relative rights and
preferences of the shares of any series so established.
(b) The following provisions shall apply to the Serial Preferred
Stock, without par value, of all series:
(1) DIVIDENDS. The holders of shares of the Serial
Preferred Stock, without par value, of each series, PARI PASSU with the holders
of shares of the 4% Preferred Stock and the Serial Preferred Stock, $100 par
value, shall be entitled to receive dividends, payable when and as declared by
the Board of Directors on such dates and at such rates as shall be determined
for the respective series, from the first day of the dividend period for the
respective series within which such shares shall have been originally issued or
from such other date as the Board of Directors may have determined for such
shares, before any dividends shall be declared or paid upon or set apart for the
Common Stock or any other class of stock over which the Serial Preferred Stock,
without par value, shall have preference as to the payment of dividends. Such
dividends shall be cumulative so that if, for any dividend period or periods,
dividends shall not have been paid or declared and set apart for payment upon
all of the then outstanding shares of Serial Preferred Stock, without par value,
at the rates and from the dates determined for the respective series, the
deficiency shall be fully paid, or declared and set apart for payment, before
any dividends shall be
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declared or paid upon the Common Stock or any other class of stock over which
the Serial Preferred Stock, without par value, shall have preference as to the
payment of dividends. Dividends shall be declared and set apart for payment, or
paid, on the Serial Preferred Stock, without par value, for each dividend period
during or for which dividends shall have been declared and set apart for
payment, or paid, on the 4% Preferred Stock. Dividends shall not be declared
and set apart for payment, or paid, on the Serial Preferred Stock, without par
value, of any one series for any dividend period, unless dividends shall have
been paid, or contemporaneously, shall have been declared and set apart for
payment, or paid, upon all of the then outstanding shares of the Serial
Preferred Stock, without par value, the Serial Preferred Stock, $100 par value,
and the 4% Preferred Stock for all dividend periods terminating on the same or
an earlier date.
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<PAGE>
(2) REDEMPTION.
(A) At the option of its Board of Directors, the
Corporation may redeem any series of the Serial Preferred Stock, without par
value, and each such series may be redeemed, as a whole or in part, at any time
(subject to such restrictions, if any, as may be set forth in the resolution of
the Board of Directors establishing such series) at the redemption price
specified for such series; provided, however, that not less than thirty nor more
than sixty days prior to the date fixed for redemption, a notice of the time and
place thereof shall be given to the holders of record of the shares of the
Serial Preferred Stock, without par value, so to be redeemed, by mail or
publication, in such manner as may be prescribed by resolution of the Board of
Directors; and provided further, that, in every case of redemption of less than
all of the outstanding shares of any one series of Serial Preferred Stock,
without par value, the shares of such series to be redeemed shall be chosen by
lot in such manner as may be prescribed by resolution of the Board of Directors.
At any time after notice of redemption has been given, the Corporation may
deposit the aggregate redemption price with some bank or trust company in The
City of New York or in Boise, Idaho, named in such notice, payable on the date
fixed for redemption as aforesaid and in the amounts aforesaid to the respective
orders of the holders of the shares so to be redeemed, upon endorsement to the
Corporation or as otherwise may be required and surrender of the certificates
for such shares. Upon the deposit of such money as aforesaid, or, if no such
deposit is made, upon such redemption date (unless the Corporation defaults in
making payment of the redemption price as set forth in such notice), such
holders shall cease to be shareholders with respect to such shares, and from and
after the making of such deposit, or if no such deposit is made, after the
redemption date (the Corporation not having defaulted in making payment of the
redemption price as set forth in such notice), such holders shall have no
interest in or claim against the Corporation with respect to such shares, but
shall be entitled only to receive such moneys on the date fixed for redemption
as aforesaid from such bank or trust company, or, if no such deposit is made,
from the Corporation, without interest thereon, upon endorsement and surrender
of the certificates as aforesaid.
(B) In case the holder of any shares of the Serial
Preferred Stock, without par value, so redeemed shall not, within six years
after such deposit, claim the amount deposited as above stated for the
redemption thereof, the depositary shall upon demand pay over to the Corporation
such amounts so deposited, and depositary, thereupon, shall be relieved from all
responsibility to the holder thereof. No interest on such deposit shall be
payable to any such holder.
(C) Shares of the Serial Preferred Stock, without par
value, which have been redeemed by the Corporation shall be restored to the
status of authorized but unissued shares of the Serial Preferred Stock, without
par value,
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without designation or relative rights, preferences or limitations as to series.
(D) Nothing herein contained shall limit any legal
right of the Corporation to purchase or otherwise acquire any of the shares of
the Serial Preferred Stock, without par value.
(3) LIQUIDATION. Upon any dissolution, liquidation or
winding up of the Corporation, whether voluntary or involuntary, the holders of
the then outstanding shares of the Serial Preferred Stock, without par value, of
each series, PARI PASSU with the holders of the then outstanding shares of all
other series of the Serial Preferred Stock, without par value, the Serial
Preferred Stock, $100 par value, and the 4% Preferred Stock, shall be entitled
to receive out of the assets of the Corporation, whether capital, surplus or
other, before any distribution of such assets shall be made to the holders of
the shares of the Common Stock or any other class of stock, as to which the
Serial Preferred Stock, without par value, has preference as to the distribution
of assets in liquidation, the amount per share in the case of voluntary
liquidation and the amount per share in the case of involuntary liquidation as
specified in the resolution of the Board of Directors fixing and determining the
relative rights and preferences of the shares of such series. If the assets to
be distributed in respect of the Serial Preferred Stock, without par value,
shall not be sufficient to pay the full amounts that shall be determined to be
payable on all of the shares of the Serial Preferred Stock, without par value,
upon voluntary or involuntary liquidation, such assets shall be distributed, to
the extent available, as follows: first, to the payment, PRO RATA on each share
of the Serial Preferred Stock, without par value, irrespective of series, of the
amount (exclusive of accumulated dividends, if any) specified by the Board of
Directors in its resolution establishing each such series as payable on each
such share in the event of involuntary liquidation; second, to the payment of
the accumulated dividends on each such share, such payment to be made PRO RATA
in accordance with the amount of such accumulated dividends; and third, to the
payment of any amounts, in excess of the amount fixed by the Board of Directors
to be payable on each such share in the event of involuntary liquidation, which
may be payable on the shares of any series in the event of voluntary
liquidation, such payments also to be made PRO RATA in accordance with the
amounts, if any, so payable on each such share. After full payment to the
holders of the Serial Preferred Stock, without par value, of such preferential
amounts, the holders of the Serial Preferred Stock, without par value, as such,
shall have no right or claim to any of the remaining assets of the Corporation.
Without limiting the right of the Corporation to distribute its assets or to
dissolve, liquidate or wind up in connection with any sale, merger or
consolidation, the sale of all the property of the Corporation to, or the merger
or consolidation of the Corporation into or with, any other
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corporation shall not be deemed to be a distribution of assets or a dissolution,
liquidation or winding up for the purposes of this paragraph.
(c) THE 9.50% SERIES, SERIAL PREFERRED STOCK, WITHOUT PAR VALUE.
There is hereby created the first series of the Company's Serial Preferred
Stock, Without Par Value, which shall be designated as the 9.50% Series, Serial
Preferred Stock, Without Par Value, which consists of 250,000 shares. The
rights and preferences of the shares of said series in those respects in which
the shares thereof may vary from shares of other series, shall be as follows:
(1) DIVIDENDS. The rate of dividends on shares of the
9.50% Series, Serial Preferred Stock, Without Par Value, shall be 9.50% of the
amount payable per share in the event of voluntary liquidation excluding any
accumulated dividends. Dividends shall be cumulative from July 8, 1976. The
initial dividend will be payable on August 20, 1976, for the period commencing
with July 8, 1976, and ending July 31, 1976. Thereafter, dividends shall be
payable on the 20th day of November, February, May and August of each year or
otherwise as the Board of Directors may determine.
(2) REDEMPTION. Shares of the 9.50% Series, Serial
Preferred Stock, Without Par Value, shall be redeemable at any time in whole or
in part at the per share redemption price of $104.75 through August 20, 1991,
and $101.00 thereafter, plus in each case, unpaid accumulated dividends, if any,
to the date of redemption.
(3) LIQUIDATION. The amount payable upon shares of the
9.50% Series, Serial Preferred Stock, Without Par Value, in the event of
voluntary or involuntary liquidation is $100 per share (to be referred to as the
"Stated Value") plus accumulated dividends, if any.
In the event of any preferential payments, the 9.50% Series, Serial Preferred
Stock, Without Par Value, shall be entitled PRO RATA to such preferential
payments.
(4) SINKING FUND. There is no sinking fund for the
redemption or purchase of shares of 9.50% Series, Serial Preferred Stock,
Without Par Value.
(5) CONVERSION. Shares of the 9.50% Series, Serial
Preferred Stock, Without Par Value, are not, by their terms, convertible or
exchangeable.
(6) VOTING RIGHTS. At all meetings of the shareholders,
each holder of shares of the 9.50% Series, Serial Preferred Stock, Without Par
Value, shall be entitled to one vote for each share held by the shareholder.
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4. COMMON STOCK
Each share of Common Stock is equal to every other share of Common
Stock in every respect. Subject to the rights of the holders of the 4%
Preferred Stock, the Serial Preferred Stock, $100 par value, the Serial
Preferred Stock, without par value, and any other class of stock of the
Corporation having preferential rights as to the payment of dividends or to the
distribution of assets in liquidation and in subordination thereto, the holders
of shares of the Common Stock alone shall receive all further dividends and
shares in distribution of assets.
D. CERTAIN VOTING RIGHTS AND RESTRICTIONS UPON CORPORATION ACTION.
Subject to the requirements of law, the voting rights of the
shareholders are as follows:
1. At all meetings of the shareholders (a) each holder of shares of
the 4% Preferred Stock shall be entitled to 20 votes for each such share held by
him, (b) each holder of shares of the Serial Preferred Stock, $100 par value,
and the Serial Preferred Stock, without par value, shall be entitled to such
vote, if any, for each such share held by him as shall have been granted to the
shareholders of the respective series by resolution of the Board of Directors
establishing that series, and (c) each holder of shares of the Common Stock
shall be entitled to one vote for each such share held by him, and each such
shareholder may vote or otherwise act either in person or by proxy; provided,
that (x) whenever and as often as dividends payable on the 4% Preferred Stock
shall be accumulated and unpaid in an amount equivalent to or exceeding four
quarterly dividends, the holders of shares of the 4% Preferred Stock shall be
entitled thereafter at each succeeding annual meeting of the shareholders to
elect the smallest number of directors necessary to constitute a majority of the
Board of Directors, and the remaining directors, subject to the rights of the
holders of the Serial Preferred Stock, without par value, set forth in clause
(z) below, shall be elected, as usual, by the holders of shares of the voting
stock of the Corporation without distinction as to class, until all such
accumulated unpaid dividends shall have been eliminated, (y) if and when the
profits available for dividends are in excess of such accumulated and unpaid
dividends on the 4% Preferred Stock, the declaration and payment of such
dividends shall not be unreasonably withheld, and (z) whenever and as often as
dividends payable on the Serial Preferred Stock, without par value, shall be
accumulated and unpaid in an amount equivalent to or exceeding six quarterly
dividends, the holders of the shares thereof shall be entitled thereafter, at
such succeeding annual meeting of the shareholders at which the holders of a
majority of the Serial Preferred Stock, without par value, are present and
voting in person or by proxy, to elect two directors from among those directors
who would otherwise be
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elected by the holders of shares of the voting stock of the Corporation without
distinction as to class, and the remaining directors, subject to the rights of
the holders of the 4% Preferred Stock set forth in clause (x) above, shall be
elected as usual by the holders of the voting shares of the Corporation without
distinction as to class, until all such accumulated and unpaid dividends shall
have been eliminated.
2. The Corporation shall not mortgage any of its fixed assets
without the approval of the holders of a majority of the shares of the Common
Stock and the holders of a majority of the shares of the 4% Preferred Stock as
are present at an annual or special meeting of the shareholders at which a
quorum is present, the notice of which meeting shall have contained a statement
of such proposal; provided, that such approval shall not be required in
connection with anything required or permitted to be done under the
Corporation's Mortgage and Deed of Trust, dated as of October 1, 1937.
3. The authorized stock of the Corporation shall not be increased
except as follows: (i) the authorized Common Stock may be increased at any time
upon the affirmative vote of the holders of shares of the 4% Preferred Stock and
the Common Stock entitling them to exercise a majority of the voting power;
(ii) the authorized 4% Preferred Stock may be increased, and any additional
class of stock ranking PARI PASSU with the 4% Preferred Stock may be authorized,
at any time, upon the affirmative vote of the holders of shares of the 4%
Preferred Stock and the Common Stock entitling them to exercise a majority of
the voting power, provided, that such vote shall include the affirmative vote of
the holders of a majority of the voting power of the outstanding shares of the
4% Preferred Stock; (iii) and any class of stock having preference over the 4%
Preferred Stock as to dividends or distribution of assets may be authorized upon
the affirmative vote of the holders of shares of the 4% Preferred Stock and
Common Stock entitling them to exercise a majority of the voting power, provided
that such vote shall include the affirmative vote of the holders of two-thirds
of the voting power of the outstanding shares of the 4% Preferred Stock.
4. So long as any shares of the 4% Preferred Stock shall remain
outstanding, no shares of the 4% Preferred Stock in excess of 60,587 shares and
no shares of stock of any class having relative rights and preferences equal or
superior to the relative rights and preferences of the 4% Preferred Stock with
respect to the payment of dividends or the distribution of assets in liquidation
shall be issued without the affirmative vote of the holders of a majority of the
voting power of the outstanding shares of the 4% Preferred Stock, unless the
earnings of the Corporation, for any twelve consecutive months within the
fifteen calendar months next preceding any such proposed transaction, available
for payment of interest on the Corporation's indebtedness (after deduction of
depreciation and all taxes) shall equal or exceed one and three-quarters (1-3/4)
times the
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aggregate of the Corporation's annual interest and preferred dividend
requirements after the proposed transaction. In making such calculations, there
may be included the earnings prior to the acquisition of any electric utility
property to be acquired from the proceeds of such shares to be issued.
5. So long as any shares of the Serial Preferred Stock, $100 par
value, shall remain outstanding, no shares of the Serial Preferred Stock, $100
par value, or of any class of stock having relative rights and preferences equal
or superior to the relative rights and preferences of the Serial Preferred
Stock, $100 par value, with respect to the payment of dividends or the
distribution of assets in liquidation shall be issued without the affirmative
vote of the holders of a majority of the then outstanding shares of the Serial
Preferred Stock, $100 par value, other than to refinance an equal par amount or
stated value of shares of the Serial Preferred Stock, $100 par value, and any
other class of stock having relative rights and preferences equal or superior to
the aforesaid relative rights and preferences of the Serial Preferred Stock,
$100 par value, unless the gross income of the Corporation for a period of
twelve (12) consecutive calendar months within the fifteen (15) calendar months
immediately preceding such issuance, determined in accordance with generally
accepted accounting practices (but in any event after deducting all taxes and
depreciation) shall have been at least at one and one-half (1-1/2) times the sum
of (i) the annual interest charges on all interest bearing indebtedness of the
Corporation outstanding in the hands of the public, and (ii) the annual dividend
requirements on all outstanding shares of the Serial Preferred Stock, $100 par
value, and any other class of stock of the Corporation having relative rights
and preferences equal or superior to the aforesaid relative rights and
preferences of the Serial Preferred Stock, $100 par value, including the shares
proposed to be issued; provided, that there shall be excluded from the foregoing
computation interest charges on all indebtedness and dividends on all shares of
the Serial Preferred Stock, $100 par value, or any other class of stock of the
Corporation having relative rights and preferences equal or superior to the
aforesaid relative rights and preferences of the Serial Preferred Stock, $100
par value, which are to be retired in connection with the issue of such
additional shares; and provided further, that in any case where such additional
shares of the Serial Preferred Stock, $100 par value, or any other class of
stock of the Corporation having relative rights and preferences equal or
superior to the aforesaid relative rights and preferences of the Serial
Preferred Stock, $100 par value, are to be issued in connection with the
acquisition of additional public utility property, the gross income of the
property to be so acquired, computed on the same basis as the gross income of
the Corporation, may be included on a PRO FORMA basis in making the foregoing
computation.
6. No amendment of the provisions of subsections D.1. or 2. of this
Article shall be made without the consent of the
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holders of at least two-thirds of the outstanding shares of the 4% Preferred
Stock, which consent may be expressed by each such shareholder either in writing
or by vote at an annual or special shareholders' meeting.
7. No amendment of the provisions of (i) subsections C.1. (a), (b)
or (c), (ii) the second sentence of subsection C.4., or (iii) subsections D.3.
and 4., of this Article, which shall adversely affect the rights of the holders
of outstanding shares of the 4% Preferred Stock or Common Stock as set forth in
such provisions, shall be made without the consent of the holders of all of the
outstanding shares of the 4% Preferred Stock and Common Stock outstanding at the
time of such amendment, which consent may be expressed by each shareholder
either in writing or by vote at an annual or special shareholders' meeting.
8. The holders of shares of the Serial Preferred Stock, $100 par
value, or of the Serial Preferred Stock, without par value, are not entitled to
vote as such shareholders, on any matter, except (i) as expressly provided
herein, (ii) as shall be provided by the Board of Directors in its resolutions
establishing each series thereof, and (iii) as expressly required by law.
9. The shareholders shall not have the right to cumulate votes in
the election of directors.
ARTICLE 7. CONVERTIBLE BONDS AND DEBENTURES. The Corporation may issue bonds
and debentures convertible into other bonds, other debentures or shares of stock
of the Corporation within such period and upon such terms and conditions as
shall be fixed by the Board of Directors.
ARTICLE 8. BUSINESS COMBINATIONS.
Part I. For the purposes of this ARTICLE 8, the following terms shall have
the meanings hereinafter set forth:
(a) "Affiliate" or "Associate" shall have the respective meaning
ascribed to such terms in the General Rules and Regulations under the Securities
Exchange Act of 1934 as in effect on January 1, 1986.
(b) A person shall be a "Beneficial Owner" of any Voting Stock:
(i) which such person or any of its Affiliates or Associates (as
herein defined) beneficially owns, directly or indirectly; or
(ii) which such person or any of its Affiliates or Associates has
(A) the right to acquire (whether such right is exercisable immediately or only
after the passage of time), pursuant to any agreement, arrangement or
understanding or upon
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the exercise of conversion rights, exchange rights, warrants or options, or
otherwise, or (B) the right to vote pursuant to any agreement, arrangement or
understanding; or
(iii) which is beneficially owned, directly or indirectly, by any
other person with which such person or any of its Affiliates or Associates has
any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of Voting Stock.
(c) "Business Combination" shall mean any of the following:
(i) any merger or consolidation of the Corporation or any
Subsidiary with (A) any Interested Shareholder, or (B) any other corporation
(whether or not itself an Interested Shareholder) which is, or after such merger
or consolidation would be, an Affiliate of an Interested Shareholder; or
(ii) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions) to or with
any Interested Shareholder or any Affiliate of any Interested Shareholder of any
assets of the Corporation or any Subsidiary having an aggregate Fair Market
Value of $5,000,000 or more but shall not include transactions between the
Corporation and its Subsidiaries; or
(iii) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of transactions) of any securities of
the Corporation or any Subsidiary to any Interested Shareholder or any Affiliate
of any Interested Shareholder in exchange for cash, securities or other property
(or a combination thereof) having an aggregate Fair Market Value of $5,000,000
or more; or
(iv) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of an Interested
Shareholder or any Affiliate of any Interested Shareholder; or
(v) any reclassification of securities (including any reverse
stock split), or recapitalization of the Corporation, statutory share exchange,
or any merger or consolidation of the Corporation with any of its Subsidiaries
or any other transaction (whether or not with or into or otherwise involving an
Interested Shareholder) which has the effect, directly or indirectly, of
increasing the proportionate share of the outstanding shares of any class of
equity or convertible securities of the Corporation or any Subsidiary which is
directly or indirectly owned by an Interested Shareholder or any Affiliate of
any Interested Shareholder.
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(d) "Continuing Director" shall mean any member of the Board of
Directors of the Corporation (the "Board") who is unaffiliated with, and not a
nominee of, the Interested Shareholder (as such term is used in the context of a
Business Combination) and was a member of the Board prior to the time that the
Interested Shareholder became an Interested Shareholder and any successor of a
Continuing Director who is unaffiliated with, and not a nominee of, the
Interested Shareholder and is designated to succeed a Continuing Director by
two-thirds of Continuing Directors then on the Board.
(e) "Fair Market Value" means:
(i) in the case of stock, the highest closing sale price
during the thirty-day period immediately preceding the date in question of a
share of such stock on the Composite Tape for the New York Stock Exchange --
Listed Stocks, or, if such stock is not quoted on the Composite Tape for the
New York Stock Exchange, or, if such stock is not listed on such Exchange, on
the principal United States securities exchange registered under the
Securities Exchange Act of 1934 on which such stock is listed, or, if such
stock is not listed on any such exchange, the highest last bid quotation with
respect to a share of such stock during the thirty-day period preceding the
date in question on the National Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ") or the NASDAQ National Market System
or, if NASDAQ and the NASDAQ National Market System are not then in use, any
other system then in use, or, if no such quotations are available, the fair
market value on the date in question of a share of such stock as determined
by two-thirds of the Continuing Directors in good faith; and
(ii) in the case of property other than cash or stock, the fair
market value of such property on the date in question as determined by a
majority of the Continuing Directors in good faith.
(f) "Institutional Voting Stock" shall mean any class or series of
Voting Stock which was issued to and continues to be held solely by one or
more insurance companies, pension funds, commercial banks, savings banks
and/or similar financial institutions or institutional investors.
(g) "Interested Shareholder" shall mean any person (other than the
Corporation or any Subsidiary) who or which:
(i) is the Beneficial Owner, directly or indirectly, of more than
10 percent of the voting power of the then outstanding Voting Stock; or
(ii) is an Affiliate of the Corporation and at any time within
the two-year period immediately prior to the date in question became the
Beneficial Owner, directly or indirectly,
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of 10 percent or more of the voting power of the then outstanding Voting Stock;
or
(iii) is an assignee of or has otherwise succeeded to any shares
of Voting Stock which were at any time within the two-year period immediately
prior to the date in question beneficially owned by any Interested Shareholder,
if such assignment or succession shall have occurred in the course of a
transaction or series of transactions not involving a public offering within the
meaning of the Securities Act of 1933.
For the purpose of determining whether a person is an Interested
Shareholder pursuant to this paragraph (g), the number of shares of Voting Stock
deemed to be outstanding shall include shares deemed owned through application
of paragraph (b) of this Part I but shall include any other shares of Voting
Stock which may be issuable pursuant to any agreement, arrangement or
understanding, or upon exercise of conversion rights, warrants or options, or
otherwise.
(h) In the event of any Business Combination in which the Corporation
survives, the phrase "consideration other than cash to be received" as used in
Sections (a) and (b) of Part II of this ARTICLE 8 shall include the shares of
Common Stock and/or the shares of any other class of outstanding Voting Stock
retained by the holders of such shares.
(i) A "person" shall mean any individual, firm, partnership, trust,
corporation or other entity.
(j) "Subsidiary" means any corporation of which a majority of any
class of equity security is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Interested
Shareholder set forth in paragraph (g) of this Part I, the term "Subsidiary"
shall mean only a corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the Corporation.
(k) "Voting Stock" shall mean each share of stock of the Corporation
generally entitled to vote in elections of directors.
A majority of the Continuing Directors of the Corporation shall have
the power and duty to determine, for the purposes of this ARTICLE 8, on the
basis of information known to them after reasonable inquiry, all facts necessary
to determine the applicability of the various provisions of this ARTICLE 8. Any
such determination made in good faith shall be binding and conclusive on all
parties.
Part II. Except as otherwise expressly provided in Part III of this
ARTICLE 8 and in addition to any other provision of law and as may otherwise be
set forth in these Restated Articles of
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Incorporation, the consummation of any Business Combination shall require that
all of the following conditions shall have been met:
(a) The aggregate amount of the cash and the Fair Market Value as of
the date of the consummation of the Business Combination of consideration other
than cash to be received per share by holders of Common Stock in such Business
Combination shall be at least equal to the highest of the following:
(i) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid by the
Interested Shareholder for any shares of Common Stock acquired by it (A) within
the two-year period immediately prior to the first public announcement of the
proposal of the Business Combination (the "Announcement Date") or (B) in the
transaction in which it became an Interested Shareholder, whichever is highest;
(ii) the Fair Market Value per share of Common Stock on the
Announcement Date or on the date on which the Interested Shareholder became an
Interested Shareholder (such latter date is referred to in this ARTICLE 8 as the
"Determination Date"), whichever is higher; and
(iii) (if applicable) the price per share equal to the Fair
Market Value per share of Common Stock determined pursuant to paragraph (ii)
above, multiplied by the ratio of (A) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid by the
Interested Shareholder for any shares of Common Stock acquired by it within the
two-year period immediately prior to the Announcement Date to (B) the Fair
Market Value per share of Common Stock on the first day in such two-year period
upon which the Interested Shareholder acquired any shares of Common Stock.
(b) The aggregate amount of the cash and the Fair Market Value as of
the date of the consummation of the Business Combination of consideration other
than cash to be received per share by holders of shares of any class of
outstanding Voting Stock other than Common Stock (and excluding any series or
class of Institutional Voting Stock), shall be at least equal to the highest of
the following (it being intended that the requirements of this paragraph (b)
shall be required to be met with respect to every such class of outstanding
Voting Stock, whether or not the Interested Shareholder has previously acquired
any shares of a particular class of Voting Stock):
(i) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid by the
Interested Shareholder for any shares of such class of Voting Stock acquired by
it (A) within the two-year period immediately prior to the Announcement Date, or
(B) in the transaction in which it became an Interested Shareholder, whichever
is higher;
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(ii) (if applicable) the highest preferential amount per share
to which the holders of shares of such class of Voting Stock are entitled in
the event of any voluntary or involuntary liquidation, dissolution or winding
up of the Corporation;
(iii) the Fair Market Value per share of such class of Voting
Stock on the Announcement Date or on the Determination Date, whichever is
higher; and
(iv) (if applicable) the price per share equal to the Fair Market
Value per share of such class of Voting Stock determined pursuant to paragraph
(iii) above, multiplied by the ratio of (A) the highest per share price
(including any brokerage commissions, transfer taxes and soliciting dealers'
fees) paid by the Interested Shareholder for any shares of such class of Voting
Stock acquired by it within the two-year period immediately prior to the
Announcement Date to (B) the Fair Market Value per share of such class of Voting
Stock on the first day in such two-year period upon which the Interested
Shareholder acquired any shares of such class of Voting Stock.
(c) The consideration to be received by holders of a particular class
of outstanding Voting Stock (including Common Stock) shall be in cash or in the
same form as the Interested Shareholder has previously paid for shares of such
class of Voting Stock. If the Interested Shareholder has paid for shares of any
class of Voting Stock with varying forms of consideration, the form of
consideration for such class of Voting Stock shall be either cash or the form
used to acquire the largest number of shares of such class of Voting Stock
previously acquired by it.
(d) After such Interested Shareholder has become an Interested
Shareholder and prior to the consummation of such Business Combination:
(i) except as approved by two-thirds of the Continuing Directors,
there shall have been no failure to declare and pay at the regular date therefor
any full quarterly dividends (whether or not cumulative) on the outstanding 4%
Preferred Stock, Serial Preferred Stock, $100 par value, or Serial Preferred
Stock, without par value;
(ii) there shall have been (A) no reduction in the annual rate of
dividends paid on the Common Stock (except as necessary to reflect any
subdivision of the Common Stock), except as approved by two-thirds of the
Continuing Directors, and (B) an increase in such annual rate of dividends as
necessary to reflect any reclassification (including any reverse stock split),
recapitalization, reorganization or any similar transaction which has the effect
of reducing the number of outstanding shares of the Common Stock, unless the
failure so to increase such annual rate is approved by two-thirds of the
Continuing Directors; and
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(iii) such Interested Shareholder shall have not become the
beneficial owner of any additional shares of Voting Stock except as part of the
transaction which results in such Interested Shareholder becoming an Interested
Shareholder.
(e) After such Interested Shareholder has become an Interested
Shareholder, such Interested Shareholder shall not have received the benefit,
directly or indirectly (except proportionately as a shareholder), of any loans,
advances, guarantees, pledges or other financial assistance or any tax credits
or other tax advantages provided by the Corporation, whether in anticipation of
or in connection with such Business Combination or otherwise.
(f) A proxy or information statement describing the proposed Business
Combination and containing the information specified for proxy or information
statements under the Securities Exchange Act of 1934 and the rules and
regulations thereunder (or any subsequent provisions replacing such Act, rules
or regulations) shall be mailed to shareholders of the Corporation at least
thirty days prior to the consummation of such Business Combination (whether or
not such proxy or information statement is required to be mailed pursuant to
such Act or subsequent provisions).
Part III. Unless the Business Combination shall have been approved by
two-thirds of the Continuing Directors, (a) the provisions of Part II of this
ARTICLE 8 shall be applicable to each particular Business Combination, and
(b) any such Business Combination shall be approved by the affirmative vote of
at least four-fifths of the voting power of all shares of Voting Stock
(considered for purposes of this ARTICLE 8 as one class, it being understood
that for purposes of this ARTICLE 8, each share of Voting Stock shall have the
number of votes granted to it pursuant to ARTICLE 6 of these Restated Articles
of Incorporation.
Part IV. Nothing contained in this ARTICLE 8 shall be construed to relieve
any Interested Shareholder from any fiduciary obligation imposed by law.
ARTICLE 9. SPECIAL MEETINGS OF SHAREHOLDERS. Special meetings of shareholders
of the Corporation may be called only by the Chairman of the Board of Directors,
the President, a majority of the Board of Directors, or the holders of not less
than four-fifths of the shares entitled to vote at the meeting.
ARTICLE 10. AMENDMENTS. Notwithstanding anything to the contrary contained in
these Restated Articles of Incorporation or the By-laws of the Corporation (and
notwithstanding the fact that a lesser percentage may be specified by law, these
Restated Articles of Incorporation or the By-laws of the Corporation), the
affirmative vote of the holders or at least four-fifths of the
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voting power of the then outstanding Voting Stock shall be required to amend,
alter, change or repeal, or to adopt any provision inconsistent with, ARTICLES
4, 8, 9 and 10 of these Restated Articles of Incorporation, provided that such
four-fifths vote shall not be required for any amendment, alteration, change or
repeal recommended to the shareholders by two-thirds of the Continuing
Directors, as defined in ARTICLE 8.
ARTICLE 11. AMENDMENT OF BY-LAWS. The Corporation's By-laws may be amended or
repealed or new by-laws may be made: (a) by the affirmative vote of the holders
of record of a majority of the outstanding capital stock of the Corporation
entitled to vote thereon, irrespective of class, given at any annual or special
meeting of the shareholders; provided that notice of the proposed amendment,
repeal or new by-law or by-laws be included in the notice of such meeting or
waiver thereof; or (b) by the affirmative vote of a majority of the entire Board
of Directors given at any regular meeting of the Board, or any special meeting
thereof.
ARTICLE 12. LIMITATION OR ELIMINATION OF DIRECTOR LIABILITY. No Director of
the Corporation shall be personally liable to the Corporation or its
shareholders for monetary damages for breach of fiduciary duty as a Director;
provided that this Article shall not limit or eliminate the liability of a
Director for any act or omission for which such limitation or elimination of
liability is not permitted under the Idaho Business Corporation Act. No
amendment to the Idaho Business Corporation Act that further limits or
eliminates the acts or omissions for which limitation or elimination of
liability is permitted shall affect the liability of a Director for any act or
omission which occurs prior to the effective date of such amendment.
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CERTIFICATION
THE FOREGOING RESTATED ARTICLES OF INCORPORATION of Idaho Power
Company constitute a full and complete amendment of each and every Article of
Incorporation of Idaho Power Migrating Corporation, (a corporation created to
effect the migration of Idaho Power Company's state of incorporation from Maine
to Idaho which, following completion of the migration, shall be called Idaho
Power Company, an Idaho corporation), as approved by the sole shareholder, Idaho
Power Company, on June 22, 1989, and by the shareholders of Idaho Power Company
at its annual meeting on May 3, 1989. The undersigned does hereby certify that
the above constitutes a full, true and correct copy of the Restated Articles of
Incorporation of Idaho Power Company as of the date indicated below, and that
said Articles have not been amended or rescinded and are in full force and
effect on the date hereof.
DATED this 30th day of June, 1989.
/s/ W W Anderson
-----------------------------------
W W Anderson
President & Chief Operating Officer Idaho Power
Company
ATTEST
/s/ Robert W Stahman
- -------------------------
Robert W Stahman
Secretary
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Exhibit 3(e)
STATEMENT OF RESOLUTION
ESTABLISHING TERMS OF NEW PREFERRED STOCK
FIRST: The name of the corporation is Idaho Power Company (the
"Corporation").
SECOND: The following resolution, establishing and designating a series of
shares and fixing and determining certain of the relative rights and
preferences thereof, was duly adopted by the Board of Directors of the
Corporation on October 30, 1991.
RESOLVED, That pursuant to Section 30-1-16 of the Idaho Business
Corporation Act and to the power vested in the Board of Directors by Article
6.C.3 of the Restated Articles of Incorporation, as amended, of the Corporation,
the third series of the Corporation's Serial Preferred Stock, Without Par Value,
is hereby created and the Restated Articles of Incorporation, as amended, of the
Corporation are further amended by the addition to the provisions of Article
6.C.3 of such Restated Articles of Incorporation, as amended, of the following
paragraph (e) immediately before the heading "4. Common Stock":
e. FLEXIBLE AUCTION SERIES A, SERIAL PREFERRED STOCK, WITHOUT PAR
VALUE. There is hereby created the third series of the Corporation's Serial
Preferred Stock, Without Par Value, which shall be designated as the Flexible
Auction Series A, Serial Preferred Stock, Without Par Value (hereafter in this
paragraph (e) referred to as the "Auction Preferred Stock"), which consists of
500 shares. The rights and preferences of the shares of said series, in those
respects in which the shares thereof may vary from shares of other series, shall
be as follows:
PART I
(i) As used in this paragraph (e) the following terms shall have the
following meanings, whether used in the singular or plural, unless the context
or use indicates another or different meaning or intent:
"APPLICABLE 'AA' COMPOSITE COMMERCIAL PAPER RATE", as of any date and
with respect to any Long-Term Dividend Period, shall mean (a) in the case
of any Long-Term Dividend Period having a term less than 70 days, the
interest
<PAGE>
equivalent of the 60-day rate, (b) in the case of any Long-Term Dividend
Period having a term 70 days or more but less than 85 days, the arithmetic
average of the interest equivalent of the 60-day and 90-day rates, (c) in
the case of any Long-Term Dividend Period having a term 85 days or more but
less than 120 days, the interest equivalent of the 90-day rate, (d) in the
case of any Long-Term Dividend Period having a term 120 days or more but
less than 148 days, the arithmetic average of the interest equivalent of
the 90-day and 180-day rates, (e) in the case of any Long-Term Dividend
Period having a term 148 days or more but less than 210 days, the interest
equivalent of the 180-day rate, (f) in the case of any Long-Term Dividend
Period having a term 210 days or more but less than 238 days, the
arithmetic average of the interest equivalent of the 180-day and 270-day
rates, and (g) in the case of any Long-Term Dividend Period having a term
238 or more days, the interest equivalent of the 270-day rate, on
commercial paper placed on behalf of issuers whose corporate bonds are
rated "AA" by S&P or "Aa" by Moody's, or the equivalent of either or both
of such ratings by such agencies or such rating by another rating agency,
as made available on a discount basis or otherwise, by the Federal Reserve
Bank of New York for the Business Day immediately preceding such date or in
the event that the Federal Reserve Bank of New York does not make available
any such rate, then the arithmetic average of such rates, as quoted on a
discount basis or otherwise by the Commercial Paper Dealers, to the Trust
Company for the close of business on the Business Day next preceding such
date. If any Commercial Paper Dealer does not quote a rate required to
determine the "AA" Composite Commercial Paper Rate, the "AA" Composite
Commercial Paper Rate shall be determined on the basis of the quotation or
quotations furnished by the remaining Commercial Paper Dealer and any
Substitute Commercial Paper Dealer or Substitute Commercial Paper Dealers
selected by the Corporation to provide such rate or rates not being
supplied by any Commercial Paper Dealer or Commercial Paper Dealers, as the
case may be, or, if the Corporation does not select any such Substitute
Commercial Paper Dealer or Substitute Commercial Paper Dealers, by the
remaining Commercial Paper Dealer. For the purpose of this definition, any
arithmetic average shall be rounded to the nearest one-thousandth (.001) of
one percent.
"APPLICABLE RATE" means the rate per annum in effect from time to time
at which dividends on the Auction Preferred Stock are payable during
Dividend Periods subsequent to the initial Dividend Period, as provided in
paragraph (ii)(B) below.
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"APPLICABLE TREASURY RATE" as of any date and with respect to Auction
Preferred Stock with a Long-Term Dividend Period of one year or more, means
the interest equivalent of the rate for direct obligations of the United
States Treasury having an original maturity which is equal to, or next
lower than, the length of such Long-Term Dividend Period, as published
weekly by the Federal Reserve Board in "Federal Reserve Statistical Release
H.15(519)-Selected Interest Rates", or any successor publication by the
Federal Reserve Board within five Business Days preceding such date. In the
event that the Federal Reserve Board does not publish such weekly per annum
interest rate, or if such release is not yet available, the Applicable
Treasury Rate will be the arithmetic average of the secondary market bid
rates as of approximately 3:30 p.m., New York City time, on the Business
Day next preceding such date, of the U.S. Government Securities Dealers
obtained by the Trust Company (or, under certain circumstances, the
Corporation) for the issue of direct obligations of the United States
Treasury, in an aggregate principal amount of at least $1,000,000, with a
remaining maturity equal to, or next lower than, the length of such Long-
Term Dividend Period. If any U.S. Government Securities Dealer does not
quote a rate required to determine the Applicable Treasury Rate, the
Applicable Treasury Rate shall be determined on the basis of the quotation
or quotations furnished by the remaining U.S. Government Securities Dealer
or any Substitute U.S. Government Securities Dealer or Substitute U.S.
Government Securities Dealers selected by the Corporation to provide such
rate or rates not being supplied by any U.S. Government Securities Dealer
or U.S. Government Securities Dealers, as the case may be, or, if the
Corporation does not select any such Substitute U.S. Government Securities
Dealer or Substitute U.S. Government Securities Dealers, by the remaining
U.S. Government Securities Dealer; provided, that in the event the
Corporation is unable to cause such quotations to be furnished to the Trust
Company (or, if applicable, the Corporation) by such sources, the
Corporation may cause the Applicable Treasury Rate to be furnished to the
Trust Company (or, if applicable, the Corporation) by such alternative
source or sources as the Corporation in good faith deems to be reliable.
For the purpose of this definition, any arithmetic average shall be
rounded to the nearest one-thousandth (.001) of one percent.
"AUCTION" means each periodic implementation of the Auction
Procedures.
"AUCTION DATE" means the Business Day next preceding the first day of
each Dividend Period after the initial Dividend Period.
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"AUCTION PROCEDURES" means the procedures for conducting Auctions set
forth in Part II.
"BUSINESS DAY" means a day on which the New York Stock Exchange is
open for trading and which is not a day on which banking institutions in
New York City are authorized or required by law or executive order to
close.
"CHARTER" means the Corporation's Restated Articles of Incorporation,
as amended.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMERCIAL PAPER DEALERS" means Goldman, Sachs & Co. and Shearson
Lehman Brothers Inc. or, in lieu thereof, their respective successors or
affiliates.
"CORPORATION" means Idaho Power Company, a corporation of the State of
Idaho, or its successors.
"DATE OF ORIGINAL ISSUE" means the date on which the Corporation
originally issues the Auction Preferred Stock.
"DEFAULT RATE" has the meaning set forth in paragraph (ii)(B) below.
"DIVIDEND PAYMENT DATE" has the meaning set forth in paragraph
(ii)(A)(6) below.
"DIVIDEND PERIOD" has the meaning set forth in paragraph (ii)(A)(7)
below.
"DIVIDEND PERIOD DAYS" has the meaning set forth in paragraph
(ii)(A)(5) below.
"DIVIDEND QUARTER" has the meaning set forth in paragraph (ii)(A)(6)
below.
"DIVIDEND RATE" means the rate per annum in effect from time to time
at which dividends on the Auction Preferred Stock are payable as provided
in paragraphs (ii)(A) and (B) below.
"DIVIDENDS-RECEIVED DEDUCTION" has the meaning set forth in paragraph
(ii)(A)(4) below.
"EXISTING HOLDER" of any shares of Auction Preferred Stock means a
person who has signed a Master Purchaser's
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Letter and is listed as the beneficial owner of such shares of Auction
Preferred Stock in the records of the Trust Company.
"INITIAL DIVIDEND PAYMENT DATE" means the date specified in paragraph
(ii)(A)(7) below.
"INITIAL DIVIDEND PERIOD" has the meaning set forth in paragraph
(ii)(A)(7) below.
"INTEREST EQUIVALENT" means the equivalent yield on a 360-day basis of
a discount-basis security to an interest-bearing security.
"LATE CHARGE" has the meaning set forth in paragraph (ii)(B) below.
"LONG-TERM DIVIDEND PERIOD" means any Dividend Period designated by
the Corporation pursuant to paragraph (ii)(A)(8) below which may be any
period greater than 49 days and consisting of a number of days evenly
divisible by seven (or such number of days as shall result from the
adjustment set forth in paragraph (ii)(A)(5) below) but not exceeding 25
years.
"MASTER PURCHASER'S LETTER" means a letter from a prospective
purchaser of Auction Preferred Stock in which such prospective purchaser
agrees to certain conditions.
"MAXIMUM APPLICABLE RATE" means (a) in the case of a Short-Term
Dividend Period, a per annum rate equal to the Rate Multiple multiplied by
the 60-day "AA" Composite Commercial Paper Rate in effect on the related
Auction Date and (b) in the case of a Long-Term Dividend Period, a per
annum rate equal to the Rate Multiple multiplied by the Reference Rate in
effect on the related Auction Date, but, in either case, such rate shall
not exceed 16% per annum.
"MINIMUM HOLDING PERIOD" has the meaning set forth in paragraph
(ii)(A)(4) below.
"MOODY'S" means Moody's Investors Service, Inc., or its successor, so
long as such agency (or successor) is in the business of rating securities
of the type of the Auction Preferred Stock.
"NORMAL DIVIDEND PAYMENT DATE" has the meaning set forth in paragraph
(ii)(A)(1) below.
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"NOTICE OF LONG-TERM DIVIDEND PERIOD" has the meaning set forth in
paragraph (ii)(A)(8) below.
"NOTICE OF REVOCATION" has the meaning set forth in paragraph
(ii)(A)(8) below.
"RATE MULTIPLE", when used with respect to shares of Auction Preferred
Stock on an Auction Date, means the percentage, determined as set forth
below, based on the prevailing rating of the Auction Preferred Stock in
effect at the close of business on the Business Day immediately preceding
such Auction Date:
PREVAILING RATING RATE
MULTIPLE
AA/aa or Above . . . . . . . . . . . . . . . . . 120%
A/a. . . . . . . . . . . . . . . . . . . . . . . 175%
BBB/baa. . . . . . . . . . . . . . . . . . . . . 200%
Below BBB/baa. . . . . . . . . . . . . . . . . . 250%
For purposes of this definition, the "prevailing rating" of Auction
Preferred Stock shall be (a) AA/aa or Above, if the Auction Preferred Stock
has a rating of AA- or better by S&P and aa3 or better by Moody's, or the
equivalent of both of such ratings by such agencies or a substitute rating
agency or substitute rating agencies selected as provided below, (b) if not
AA/aa or Above, then A/a, if the Auction Preferred Stock has a rating of A-
or better by S&P and a3 or better by Moody's or the equivalent of both of
such ratings by such agencies or a substitute rating agency or substitute
rating agencies selected as provided below, (c) if not AA/aa or Above or
A/a, then BBB/baa, if the Auction Preferred Stock has a rating of BBB- or
better by S&P and baa3 or better by Moody's or the equivalent of both of
such ratings by such agencies or a substitute rating agency or substitute
rating agencies selected as provided below, and (d) if not AA/aa or Above,
A/a or BBB/baa, then Below BBB/baa. For purposes of the foregoing, the
"prevailing rating" of the Auction Preferred Stock will be based upon the
lower of two ratings provided by S&P and Moody's or a substitute rating
agency or agencies. The Corporation shall take all reasonable action
necessary to enable S&P and Moody's to provide a rating for the Auction
Preferred Stock. If either or both of S&P or Moody's shall not make such a
rating available, the Corporation shall select a nationally recognized
statistical rating organization (as that term is used in the rules and
regulations of the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended) or two
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nationally recognized statistical rating organizations to act as substitute
rating agency or substitute rating agencies, as the case may be.
"REFERENCE RATE" means, as of any date and with respect to any
Long-Term Dividend Period having a term of (a) 50 days or more and less
than 270 days, the Applicable "AA" Composite Commercial Paper Rate, (b) 270
days or more and less than one year, the higher of the 270-day Applicable
"AA" Composite Commercial Paper Rate and the one-year Applicable Treasury
Rate and (c) one year or more, the Applicable Treasury Rate.
"S&P" means Standard & Poor's Corporation, or its successor, so long
as such agency (or successor) is in the business of rating securities of
the type of the Auction Preferred Stock.
"SECURITIES DEPOSITORY" means The Depository Trust Company, together
with any successor securities depository selected by the Corporation which
agrees to follow the procedures required to be followed by such securities
depository in connection with shares of Auction Preferred Stock.
"SEVEN-DAY DIVIDEND PERIOD" means a Dividend Period arising under the
circumstances set forth in paragraph (ii)(A)(9) below.
"SHORT-TERM DIVIDEND PERIOD" has the meaning set forth in paragraph
(ii)(A)(7) below.
"60-DAY 'AA' COMPOSITE COMMERCIAL PAPER RATE", as of any date and with
respect to any Short-Term Dividend Period, means (a) the interest
equivalent of the 60-day rate on commercial paper placed on behalf of
issuers whose corporate bonds are rated "AA" by S&P or "Aa" by Moody's or
the equivalent of either or both of such ratings by such agencies or
another rating agency, as such 60-day rate is made available on a discount
basis or otherwise by the Federal Reserve Bank of New York for the Business
Day immediately preceding such date, or (b) in the event that the Federal
Reserve Bank of New York does not make available such a rate, then the
arithmetic average of the interest equivalent of the 60-day rate on
commercial paper placed on behalf of such issuers, as quoted on a discount
basis or otherwise by the Commercial Paper Dealers to the Trust Company for
the close of business on the Business Day immediately preceding such date.
If any Commercial Paper Dealer does not quote a rate required to determine
the
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60-day "AA" Composite Commercial Paper Rate, the 60-day "AA" Composite
Commercial Paper Rate shall be determined on the basis of the quotation or
quotations furnished by the remaining Commercial Paper Dealer and any
Substitute Commercial Paper Dealer or Substitute Commercial Paper Dealers
selected by the Corporation to provide such rate or rates not being
supplied by any Commercial Paper Dealer or Commercial Paper Dealers, as the
case may be, or, if the Corporation does not select any such Substitute
Commercial Paper Dealer or Substitute Commercial Paper Dealers, by the
remaining Commercial Paper Dealer. If the Board of Directors of the
Corporation, however, shall adjust the number of Dividend Period Days, in
the event of a change in the Minimum Holding Period, then (a) if the
Dividend Period Days shall be fewer than 70 days, such rate shall be the
interest equivalent of the 60-day rate on such commercial paper, (b) if the
Dividend Period Days shall be 70 or more days but fewer than 85 days, such
rate shall be the arithmetic average of the interest equivalent of the
60-day and 90-day rates on such commercial paper and (c) if the Dividend
Period Days shall be 85 or more days but fewer than 99 days, such rate
shall be the interest equivalent of the 90-day rate on such commercial
paper. For the purpose of this definition, any arithmetic average shall be
rounded to the nearest one-thousandth (.001) of one percent.
"SUBSTITUTE COMMERCIAL PAPER DEALER" means any commercial paper
dealer, the principal office of which is located in New York City, that is
a nationally recognized leading dealer in the domestic commercial paper
market, provided that no such dealer may be the Corporation or an affiliate
of the Corporation.
"SUBSTITUTE U.S. GOVERNMENT SECURITIES DEALER" means any dealer in
United States Treasury obligations, the principal office of which is
located in New York City, that is a nationally recognized leading dealer in
the market for United States Treasury obligations, provided that no such
dealer may be the Corporation or an affiliate of the Corporation.
"TRUST COMPANY" means Bankers Trust Company, together with any
successor bank or trust company or other entity entering into an agreement
similar to that between Bankers Trust Company and the Corporation.
"U.S. GOVERNMENT SECURITIES DEALER" means Goldman, Sachs & Co. and
Shearson Lehman Brothers Inc., or, in lieu thereof, their respective
affiliates or successors.
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(ii) DIVIDENDS. (A) The rate of dividend on shares of the Auction
Preferred Stock is hereby fixed and determined at the dividend rate from time to
time in effect as provided in subparagraph (B) of this paragraph (ii).
(1) Dividends on the shares of Auction Preferred Stock shall
accumulate from the Date of Original Issue. Dividends in respect of a
Short-Term Dividend Period shall be payable commencing on the initial
Dividend Payment Date and thereafter, except as provided in clause (2)
below, on each seventh Thursday following the preceding Dividend Payment
Date. Dividends in respect of a Seven-Day Dividend Period, occurring in
connection with an Auction (whether or not held) pursuant to clause (9)
below, shall be payable, except as provided below in clause (2), on the
seventh day following the Business Day next succeeding the day on which
such Auction occurs (or was to have occurred). Dividends in respect of a
Long-Term Dividend Period shall be payable, except as provided in clause
(3) below, on the day following the last day of such Long-Term Dividend
Period and, if occurring prior thereto, on the first day of the fourth
month after the commencement of such Long-Term Dividend Period and
quarterly thereafter on the first day of each succeeding third month. Each
day on which dividends on shares of Auction Preferred Stock would be
payable as determined as set forth in this clause (1) but for adjustments
set forth below in this paragraph (ii)(A) is referred to herein as a
"Normal Dividend Payment Date".
(2) In the case of dividends payable in respect of a Short-Term
Dividend Period or a Seven-Day Dividend Period, if:
(I)(x) the Securities Depository shall continue to make
available to its members and participants the amounts due as dividends
on shares of Auction Preferred Stock in next-day funds on the dates on
which such dividends are payable and (y) a Normal Dividend Payment
Date is not a Business Day, or the day next succeeding such Normal
Dividend Payment Date is not a Business Day, then dividends shall be
payable on the first Business Day preceding such Normal Dividend
Payment Date that is next succeeded by a Business Day; or
(II)(x) the Securities Depository shall make available to its
members and participants the amounts due as dividends on shares of
Auction Preferred Stock in immediately available funds on the dates on
which such dividends are payable (and the Securities Depository shall
have so advised the Trust Company) and (y) a Normal Dividend Payment
Date is not a Business Day, then dividends shall be payable on the
first
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Business Day following such Normal Dividend Payment Date.
(3) In the case of dividends payable in respect of a Long-Term
Dividend Period, if:
(I)(x) the Securities Depository shall continue to make
available to its members and participants the amounts due as dividends
on shares of Auction Preferred Stock in next-day funds on the dates on
which such dividends are payable and (y) a Normal Dividend Payment
Date is not a Business Day, or the day next succeeding such Normal
Dividend Payment Date is not a Business Day, then dividends shall be
payable on the first Business Day following such Normal Dividend
Payment Date that is next succeeded by a Business Day; or
(II)(x) the Securities Depository shall make available to its
members and participants the amounts due as dividends on shares of
Auction Preferred Stock in immediately available funds on the dates on
which such dividends are payable (and the Securities Depository shall
have so advised the Trust Company) and (y) a Normal Dividend Payment
Date is not a Business Day, then dividends shall be payable on the
first Business Day following such Normal Dividend Payment Date.
(4) Notwithstanding clauses (1), (2) and (3) above, if the date on
which dividends on shares of Auction Preferred Stock would be payable as
determined as set forth in clause (1), (2) or (3) above is a day that would
result in the number of days between successive Auction Dates (determined
by excluding the first Auction Date and including the second Auction Date)
not being at least equal to the then current minimum holding period
(currently set forth in Section 246(c) of the Code) (the "Minimum Holding
Period") required for taxpayers to be entitled to the Dividends-Received
Deduction on preferred stock ("Dividends-Received Deduction"), then, except
in the case of a Seven-Day Dividend Period, dividends on such shares shall
be payable, if subclause (I) of either of clause (2) or (3) would be
applicable, on the first Business Day following such date on which
dividends would be so payable that is next succeeded by a Business Day or,
if subclause (II) of either of clause (2) or (3) would be applicable, on
the first Business Day following such day on which dividends would be so
payable, that in either case results in the number of days between such
successive Auction Dates (determined as set forth in this clause (4)) being
at least equal to the then current Minimum Holding Period.
(5) Notwithstanding clauses (1), (2), (3) and (4) above, in the event
of a change in law altering the Minimum Holding
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Period, the Board of Directors of the Corporation may adjust the period of
time between Dividend Payment Dates so as to adjust uniformly the number of
days (such number of days without giving effect to the adjustments referred
to in clauses (2) and (3), being herein referred to as "Dividend Period
Days") in Dividend Periods commencing after the date of such change in law
to equal or exceed the then current Minimum Holding Period, provided that
the number of Dividend Period Days shall not exceed by more than nine days
the length of such then current Minimum Holding Period and shall be evenly
divisible by seven, and the maximum number of Dividend Period Days, as
adjusted pursuant to this clause (5), in no event shall exceed 98 days.
This clause (5) shall not apply to a Seven-Day Dividend Period except to
the extent that the Minimum Holding Period, as altered, exceeds the
aggregate number of Dividend Period Days in such Seven-Day Dividend Period
and the next preceding Dividend Period. Upon any such change in the number
of Dividend Period Days as a result of a change in law, the Corporation
will give notice through the Trust Company of such change to all Existing
Holders of Auction Preferred Stock.
(6) Each date on which dividends on Auction Preferred Stock shall be
payable as determined as set forth above shall be referred to herein as a
"Dividend Payment Date". If applicable, the period from the preceding
Dividend Payment Date to the next Dividend Payment Date during a Long-Term
Dividend Period is herein referred to as a "Dividend Quarter". Although
any particular Dividend Payment Date may not occur on the originally
scheduled Normal Dividend Payment Date because of the foregoing
adjustments, each succeeding Dividend Payment Date shall be, subject to
such adjustments, the date determined as set forth in clause (1) above as
if each preceding Dividend Payment Date had occurred on the respective
originally scheduled Normal Dividend Payment Date.
(7) The initial Dividend Payment Date for the Auction Preferred Stock
shall be January 9, 1992 (the "initial Dividend Payment Date") and the
initial Dividend Period shall have a number of Dividend Period Days equal
to the number of days from (and including) the Date of Original Issue to
(but excluding) the initial Dividend Payment Date (the "initial Dividend
Period"). After the initial Dividend Period, each subsequent Dividend
Period shall (except for the adjustments described in clauses (2), (3) and
(4) above) be 49 days (each such 49-day period, subject to any adjustment
as a result of a change in law lengthening the Minimum Holding Period as
described in clause (5) above, being herein referred to as a "Short-Term
Dividend Period"), unless as described in clause (8) below, the Corporation
exercises its right to specify that any such subsequent Dividend Period
will be a Long-Term Dividend Period and unless, as provided in clause (9)
below, any Dividend Period shall be a Seven-Day Dividend Period (each such
Short-Term
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Dividend Period, Long-Term Dividend Period and Seven-Day Dividend Period,
together with the initial Dividend Period, being referred to herein as a
"Dividend Period"). After the initial Dividend Period, each successive
Dividend Period shall commence on the Dividend Payment Date following the
preceding Dividend Period and shall end (I) in the case of a Short-Term
Dividend Period or a Seven-Day Dividend Period, on and include the day
preceding the next Dividend Payment Date and (II) in the case of a
Long-Term Dividend Period, on the last day of the Long-Term Dividend Period
specified by the Corporation in the related Notice of Long-Term Dividend
Period.
(8) On or prior to the tenth day but not more than 45 days prior to
an Auction Date, the Corporation may, at its sole option, by telephonic and
written notice (a "Notice of Long-Term Dividend Period") to the Trust
Company and the Securities Depository, designate any Dividend Period as a
Long-Term Dividend Period. Any Notice of Long-Term Dividend Period may be
revoked by the Corporation in its sole discretion on or prior to the third
Business Day prior to the related Auction Date by telephonic and written
notice (a "Notice of Revocation") to the Trust Company and the Securities
Depository. If the Corporation does not give a Notice of Long-Term
Dividend Period with respect to the next succeeding Dividend Period, or
gives a Notice of Revocation with respect thereto, such next succeeding
Dividend Period (subject to the exception stated in clause (9)(II) below)
shall be a Short-Term Dividend Period.
(9) In the event that (I) the Corporation has given a Notice of
Long-Term Dividend Period with respect to the next succeeding Dividend
Period, but Sufficient Clearing Bids are not made in the related Auction,
such next succeeding Dividend Period will, notwithstanding such Notice of
Long-Term Dividend Period, commence on the Dividend Payment Date next
succeeding the relevant Auction Date and end on the day preceding the next
succeeding Dividend Payment Date, which, subject to adjustment as provided
above, will be the seventh day thereafter (such seven day Dividend Period
being herein referred to as a "Seven-Day Dividend Period") and (II) an
Auction is not held on an Auction Date for any reason other than the
discontinuation of Auctions due to the failure of the Corporation to pay
the full amount of any dividends to be paid on any Dividend Payment Date or
the full redemption price for any share of Auction Preferred Stock called
for redemption on any redemption date, and any such failure shall not have
been cured within three Business Days thereafter, the next succeeding
Dividend Period shall be a Seven-Day Dividend Period. The Dividend Period
next succeeding a Seven-Day Dividend Period shall be a Short-Term Dividend
Period unless an Auction is not held on the Auction Date included within
such Seven-Day Dividend Period for the reasons specified in clause (9)(II)
above, in which case the next succeeding Dividend Period shall be a
Seven-Day Dividend Period.
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(10) Dividends on the Auction Preferred Stock, if any and to the
extent declared, shall be paid on each Dividend Payment Date in funds
legally available on such date. The Corporation shall by the close of
business on the Business Day prior to each Dividend Payment Date deposit
with the Trust Company funds sufficient to pay dividends then payable on
such Dividend Payment Date with irrevocable instructions to the Trust
Company to make such payment to the holder or holders of record.
(11) Each dividend shall be payable to the holder or holders of
record of the Auction Preferred Stock as of the close of business on the
Business Day immediately preceding the applicable Dividend Payment Date.
So long as the shares of Auction Preferred Stock are held of record by the
nominee of the Securities Depository, dividends will be paid to the nominee
of the Securities Depository on each Dividend Payment Date.
(B) The dividend rate on the Auction Preferred Stock may not under any
circumstances exceed 16% per annum. The dividend rate on the Auction Preferred
Stock (1) for the initial Dividend Period shall be 4.60% per annum and (2) for
each subsequent Dividend Period shall be the Applicable Rate for such Dividend
Period. The "Applicable Rate" for each such Dividend Period shall be the rate
per annum determined pursuant to Part II below. Notwithstanding the foregoing,
(I) the Applicable Rate on the Auction Preferred Stock during any Seven-Day
Dividend Period shall be (x) if such Seven-Day Dividend Period occurs pursuant
to paragraph (ii)(A)(9)(I) above, the greatest of (aa) the Maximum Applicable
Rate on the Auction Date for a Short-Term Dividend Period, (bb) the Maximum
Applicable Rate on the Auction Date for a Long-Term Dividend Period having a
term equal to the term specified in the Notice of Long-Term Dividend Period
given in respect of such Auction Date and (cc) the Applicable Rate in effect for
the Dividend Period during which such Auction Date occurred, and (y) if such
Seven-Day Dividend Period occurs pursuant to paragraph (ii)(A)(9)(II) above, the
Maximum Applicable Rate for a Short-Term Dividend Period determined as of the
Auction Date next preceding such Seven-Day Dividend Period; and (II) in the
event and during the continuance of any failure of the Corporation to pay the
full amount of any dividends or the full amount of any redemption price, (x)
until such time as the full amount due (including any Late Charge for up to 5
days with respect to each Dividend Payment Date or redemption date with respect
to which such failure occurred, as described in this subparagraph (B) below)
shall have been paid to the Trust Company, Auctions shall be discontinued, (y)
if such dividends or redemption price were to be paid in respect of a Long-Term
Dividend Period, such Long-Term Dividend Period shall cease and a Short-Term
Dividend Period shall be deemed to have commenced on the Dividend Payment Date
or the redemption date, as the case may be, in respect of which such failure
occurred and (z) the
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Applicable Rate for each Dividend Period (including without limitation a
Short-Term Dividend Period which occurs pursuant to subclause (y) above)
commencing on or after any such Dividend Payment Date or redemption date, as the
case may be, shall be equal to the Default Rate for such Dividend Period. The
foregoing shall continue until there shall occur a Dividend Payment Date at
least one Business Day prior to which the full amount of any dividends payable
on each Dividend Payment Date, and the full amount of any redemption price then
due (including in each case any Late Charge for up to five days with respect to
each Dividend Payment Date or redemption date in respect of which such failure
occurred, as described in the next succeeding paragraph), shall have been paid
to the Trust Company, and thereupon Auctions shall resume on the terms stated
herein for the Dividend Periods commencing with such Dividend Payment Date. With
respect to any such failure, the "Default Rate" shall be the higher of 250% of
the 60-day "AA" Composite Commercial Paper Rate, determined as of the date of
such failure, and (I) if the Corporation has failed timely to pay dividends in
respect of a Short-Term Dividend Period, a Long-Term Dividend Period or a
Seven-Day Dividend Period, the dividend rate in effect for the Short-Term
Dividend Period, Long-Term Dividend Period or Seven-Day Dividend Period, as the
case may be, in respect of which such failure occurred, or (II) if the
Corporation has failed timely to pay the redemption price of shares called for
redemption, the dividend rate in effect for the Dividend Period immediately
preceding the applicable redemption date.
Any failure referred to in this subparagraph (B) above with respect to
the shares of Auction Preferred Stock shall be deemed to be cured if as of 12:00
noon, New York City time, on the third Business Day next succeeding any such
failure, the Corporation shall have paid to the Trust Company (1) in the case of
a failure to pay dividends, the full amount of the dividends to be paid for the
Dividend Period with respect to which such failure occurred, plus a Late Charge
in an amount equal to the product of (I) 250% of the 60-day "AA" Composite
Commercial Paper Rate on the date of occurrence of such failure, (II) a
fraction, the numerator of which shall be the number of days during which such
failure exists and is not cured in accordance with this sentence (including the
day such failure occurs and excluding the day such failure is cured) (but not to
exceed 5 days) and the denominator of which shall be 360, and (III) the full
amount of the dividends originally required to be paid for the Dividend Period
as to which such failure occurred (a "Late Charge"), or (2) in the case of a
failure to pay the redemption price, the full amount of the aggregate redemption
price for the shares of Auction Preferred Stock that have been called for
redemption, plus accumulated and unpaid dividends from the date of redemption to
the date of such cure, plus an amount equal to the product of (I) 250% of the
60-day "AA" Composite Commercial Paper Rate on the Business Day on which the
Corporation was required to pay the
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aggregate redemption price to the Trust Company, (II) a fraction, the numerator
of which shall be the number of days during which such failure exists and is not
cured in accordance with this sentence (including the day such failure occurs
and excluding the day such failure is cured) (but not to exceed 5 days) and the
denominator of which shall be 360, and (III) the aggregate stated value of the
shares of Auction Preferred Stock called for redemption. Upon any such cure,
Auctions shall be resumed on the Auction Date on or after the date such cure was
effected on the terms stated herein for Dividend Periods commencing after such
Auction Date.
The amount of dividends per share of the Auction Preferred Stock
payable for each Dividend Period (or for each Dividend Quarter during any
Long-Term Dividend Period) shall be computed by multiplying the Applicable Rate
for each Dividend Period by a fraction, the numerator of which shall be the
number of days in the Dividend Period (or Dividend Quarter) (calculated by
counting the first day thereof and the last day thereof) such share was
outstanding and the denominator of which shall be 360 and multiplying the amount
so obtained by $100,000.
(iii) REDEMPTION. Shares of the Auction Preferred Stock shall be
redeemable at the option of the Corporation in whole or in part on the last
Dividend Payment Date in respect of any Dividend Period at a redemption price of
$100,000 per share, plus, in each case, unpaid accumulated dividends, if any, to
the date of redemption.
If the Corporation calls shares of the Auction Preferred Stock for
redemption, such shares called for redemption will not be included in the
Auction that would normally take place on the Business Day preceding the
redemption date.
(iv) LIQUIDATION. The amount payable upon shares of the Auction Preferred
Stock in the event of voluntary or involuntary liquidation is $100,000 per share
(to be referred to as the "Stated Value") plus unpaid accumulated dividends, if
any.
In the event of any preferential payments, the Auction Preferred Stock
shall be entitled PRO RATA to such preferential payments.
(v) SINKING FUND. There is no sinking fund for the redemption or purchase
of shares of the Auction Preferred Stock.
(vi) CONVERSION. Shares of the Auction Preferred Stock are not, by their
terms, convertible or exchangeable.
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PART II
(a) CERTAIN DEFINITIONS. Capitalized terms not defined in this Part II
shall have the respective meanings specified in Part I above. As used in this
Part II, the following terms shall have the following meanings, unless the
context otherwise requires:
(i) "AFFILIATE" shall mean any Person known to the Trust Company to
be controlled by, in control of or under common control with the
Corporation.
(ii) "AGENT MEMBER" shall mean the member of or participant in the
Securities Depository that will act on behalf of a Bidder and is identified
as such in such Bidder's Master Purchaser's Letter.
(iii) "AUCTION" shall mean the periodic implementation of the
procedures set forth in this Part II.
(iv) "AUCTION DATE" shall mean the Business Day next preceding the
first day of each Dividend Period after the initial Dividend Period.
(v) "AUCTION PREFERRED" shall mean shares of Flexible Auction Series
A, Serial Preferred Stock of the Corporation subject to an Auction on any
Auction Date.
(vi) "AVAILABLE AUCTION PREFERRED" shall have the meaning specified
in section (d)(i) below.
(vii) "BID" shall have the meaning specified in section (b)(i) below.
(viii) "BIDDER" shall have the meaning specified in section (b)(i)
below.
(ix) "BID EXCESS" shall have the meaning specified in section
(c)(iv)(B)(1) below.
(x) "BROKER-DEALER" shall mean any broker-dealer or other entity
permitted by law to perform the functions required of a Broker-Dealer in
this Part II that has been selected by the Corporation to perform such
functions and has entered into a Broker-Dealer Agreement with the Trust
Company that remains effective.
(xi) "BROKER-DEALER AGREEMENT" shall mean an agreement between the
Trust Company and a Broker-Dealer pursuant to which such Broker-Dealer
agrees to follow the procedures specified in this Part II.
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(xii) "EXISTING HOLDER" when used with respect to shares of Auction
Preferred shall mean a Person who has signed a Master Purchaser's Letter
and is listed as the beneficial owner of such shares of Auction Preferred
in the records of the Trust Company.
(xiii) "HOLD ORDER" shall have the meaning specified in section
(b)(i) below.
(xiv) "MASTER PURCHASER'S LETTER" shall mean a letter addressed to
the Corporation, the Trust Company, a Broker-Dealer and others in which a
Person agrees, among other things, to offer to purchase, purchase, offer to
sell and/or sell shares of Auction Preferred as set forth in this Part II.
(xv) "ORDER" shall have the meaning specified in section (b)(i)
below.
(xvi) "OUTSTANDING" shall, for purposes of this Part II, mean, as of
any date, shares of Auction Preferred theretofore issued by the Corporation
except, without duplication, (A) any shares of Auction Preferred
theretofore cancelled or delivered to the Trust Company for cancellation,
or redeemed by the Corporation, (B) any shares of Auction Preferred as to
which the Corporation or any Affiliate thereof (other than an Affiliate
which is a Broker-Dealer) shall be an Existing Holder and (C) any shares of
Auction Preferred represented by any certificate in lieu of which a new
certificate has been executed and delivered by the Corporation.
(xvii) "PERSON" shall mean and include an individual, a partnership,
a corporation, a trust, an unincorporated association, a joint venture or
other entity or a government or any agency or political subdivision
thereof.
(xviii) "POTENTIAL HOLDER" shall mean any Person, including any
Existing Holder, (A) who shall have executed a Master Purchaser's Letter
and (B) who may be interested in acquiring shares of Auction Preferred (or,
in the case of an Existing Holder, additional shares of Auction Preferred).
(xix) "SECURITIES DEPOSITORY" shall mean The Depository Trust Company
and its successors and assigns, or any other securities depository selected
by the Corporation which agrees to follow the procedures required to be
followed by such securities depository in connection with shares of Auction
Preferred.
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(xx) "SELL EXCESS" shall have the meaning specified in section
(c)(iv)(C)(i) below.
(xxi) "SELL ORDER" shall have the meaning specified in section (b)(i)
below.
(xxii) "SUBMISSION DEADLINE" shall mean 1:00 p.m., New York City
time, on any Auction Date or such other time on any Auction Date by which
Broker-Dealers are required to submit Orders to the Trust Company as
specified by the Trust Company from time to time.
(xxiii) "SUBMITTED BID" shall have the meaning specified in section
(d)(i) below.
(xxiv) "SUBMITTED HOLD ORDER" shall have the meaning specified in
section (d)(i) below.
(xxv) "SUBMITTED ORDER" shall have the meaning specified in section
(d)(i) below.
(xxvi) "SUBMITTED SELL ORDER" shall have the meaning specified in
section (d)(i) below.
(xxvii) "SUFFICIENT CLEARING BIDS" shall have the meaning specified
in section (d)(i) below.
(xxviii) "WINNING BID RATE" shall have the meaning specified in
section (d)(i) below.
(b) ORDERS BY EXISTING HOLDERS AND POTENTIAL HOLDERS.
(i) Prior to the Submission Deadline on each Auction Date:
(A) each Existing Holder may submit to a Broker-Dealer
information as to:
(1) the number of Outstanding shares, if any, of Auction
Preferred held by such Existing Holder which such Existing Holder
desires to continue to hold without regard to the Applicable Rate
for the next succeeding Dividend Period;
(2) the number of Outstanding shares, if any, of Auction
Preferred that such Existing Holder desires to sell, provided
that the Applicable Rate for the next succeeding Dividend Period
shall be less than the rate per annum specified by such Existing
Holder; and/or
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(3) the number of Outstanding shares, if any, of Auction
Preferred held by such Existing Holder which such Existing Holder
offers to sell without regard to the Applicable Rate for the next
succeeding Dividend Period; and
(B) each Broker-Dealer, using a list of Potential Holders that
shall be maintained by such Broker-Dealer in good faith for the
purpose of conducting a competitive Auction, shall contact Potential
Holders, including Persons that are not Existing Holders, on such list
to determine the number of shares, if any, of Auction Preferred that
each such Potential Holder offers to purchase, provided that the
Applicable Rate for the next succeeding Dividend Period shall not be
less than the rate per annum specified by such Potential Holder.
For the purposes hereof, the communication to a Broker-Dealer of the
information referred to in this section (b)(i) is hereinafter referred to as an
"ORDER" and each Existing Holder and each Potential Holder placing an Order is
hereinafter referred to as a "BIDDER"; an Order containing the information
referred to in clause (A)(1) of this section (b)(i) is hereinafter referred to
as a "HOLD ORDER"; an Order containing the information referred to in clause
(A)(2) or (B) of this section (b)(i) is hereinafter referred to as a "BID"; and
an Order containing the information referred to in clause (A)(3) of this section
(b)(i) is hereinafter referred to as a "SELL ORDER".
(ii) (A) A Bid by an Existing Holder shall constitute an irrevocable
offer to sell:
(1) the number of Outstanding shares of Auction Preferred
specified in such Bid if the Applicable Rate determined on such
Auction Date shall be less than the rate per annum specified in
such Bid;
(2) the number of Outstanding shares of Auction Preferred
specified in such Bid or a lesser number of Outstanding shares of
Auction Preferred to be determined as set forth in section
(e)(i)(D) if the Applicable Rate determined on such Auction Date
shall be equal to the rate per annum specified in such Bid; or
(3) the number of Outstanding shares of Auction Preferred
specified in such Bid or a lesser number of Outstanding shares of
Auction Preferred to be
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determined as set forth in section (e)(ii)(C) if the rate per
annum specified in such Bid shall be higher than the Maximum
Applicable Rate and Sufficient Clearing Bids do not exist.
(B) A Sell Order by an Existing Holder shall constitute an
irrevocable offer to sell:
(1) the number of Outstanding shares of Auction Preferred
specified in such Sell Order; or
(2) the number of Outstanding shares of Auction Preferred
specified in such Sell Order or a lesser number of Outstanding
shares of Auction Preferred to be determined as set forth in
section (e)(ii)(C) if Sufficient Clearing Bids do not exist.
(C) A Bid by a Potential Holder shall constitute an irrevocable
offer to purchase:
(1) the number of Outstanding shares of Auction Preferred
specified in such Bid if the Applicable Rate determined on such
Auction Date shall be higher than the rate per annum specified in
such Bid; or
(2) the number of Outstanding shares of Auction Preferred
specified in such Bid or a lesser number of Outstanding shares of
Auction Preferred to be determined as set forth in section
(e)(i)(E) if the Applicable Rate determined on such Auction Date
shall be equal to the rate per annum specified in such Bid.
(iii) On each Auction Date, the Trust Company will determine the
60-day "AA" Composite Commercial Paper Rate or the Reference Rate, as the
case may be, and the Maximum Applicable Rate and will notify each
Broker-Dealer of each such rate not later than 9:30 a.m., New York City
time on such Auction Date (or such other time on such Auction Date as
specified by the Trust Company).
(c) SUBMISSION OF ORDERS BY BROKER-DEALERS TO TRUST COMPANY.
(i) Each Broker-Dealer shall submit in writing to the Trust Company
prior to the Submission Deadline on each Auction Date all Orders obtained
by such Broker-Dealer and shall specify with respect to each Order:
(A) the name of the Bidder placing such Order;
(B) the aggregate number of shares of Auction Preferred that are
the subject of such Order;
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(C) to the extent that such Bidder is an Existing Holder:
(1) the number of shares, if any, of Auction Preferred
subject to any Hold Order placed by such Existing Holder;
(2) the number of shares, if any, of Auction Preferred
subject to any Bid placed by such Existing Holder and the rate
specified in such Bid; and
(3) the number of shares, if any, of Auction Preferred
subject to any Sell Order placed by such Existing Holder; and
(D) to the extent that such Bidder is a Potential Holder, the
rate and the number of shares of Auction Preferred specified in such
Potential Holder's Bid.
(ii) If any rate specified in any Bid contains more than three
figures to the right of the decimal point, the Trust Company shall round
such rate up to the next higher one-thousandth (.001) of 1%.
(iii) If an Order or Orders covering all of the Outstanding shares of
Auction Preferred held by an Existing Holder is not submitted to the Trust
Company prior to the Submission Deadline, the Trust Company shall deem a
Hold Order to have been submitted on behalf of such Existing Holder
covering the number of Outstanding shares of Auction Preferred held by such
Existing Holder and not subject to Orders submitted to the Trust Company.
(iv) If one or more Orders covering in the aggregate more than the
number of Outstanding shares of Auction Preferred held by an Existing
Holder are submitted to the Trust Company, such Orders shall be considered
valid as follows and in the following order of priority:
(A) any Hold Order submitted on behalf of such Existing Holder
shall be considered valid up to and including the number of
Outstanding shares of Auction Preferred held by such Existing Holder;
provided that if more than one Hold Order is submitted on behalf of
such Existing Holder and the number of shares of Auction Preferred
subject to such Hold Orders exceeds the number of Outstanding shares
of Auction Preferred held by such Existing Holder, the number of
shares of Auction Preferred subject to such Hold Orders shall be
reduced PRO RATA so that such Hold Orders shall cover the number of
Outstanding shares of Auction Preferred held by such Existing Holder.
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<PAGE>
(B) (1) any Bid shall be considered valid up to and including
the excess (the "Bid Excess") of the number of Outstanding shares of
Auction Preferred held by such Existing Holder over the number of
shares of Auction Preferred subject to Hold Orders referred to in
section (c)(iv)(A); and
(2) subject to clause (1) above, if more than one Bid with
the same rate is submitted on behalf of such Existing Holder and
the number of Outstanding shares of Auction Preferred subject to
such Bids is greater than the Bid Excess, the number of shares of
Auction Preferred subject to such Bids shall be reduced PRO RATA
so that such Bids shall cover the number of shares of Auction
Preferred equal to the Bid Excess; and
(3) subject to clause (1) above, if more than one Bid with
different rates is submitted on behalf of such Existing Holder,
such Bids shall be considered valid in the ascending order of
their respective rates up to and including the Bid Excess, and in
any such event the number, if any, of such Outstanding shares
subject to Bids not valid under this clause (B) shall be treated
as the subject of a Bid by a Potential Holder; and
(C) (1) any Sell Order shall be considered valid up to and
including the excess (the "Sell Excess") of the number of Outstanding
shares of Auction Preferred held by such Existing Holder over the
number of shares of Auction Preferred subject to Hold Orders referred
to in section (c)(iv)(A) and Bids referred to in section (c)(iv)(B);
and
(2) subject to clause (1) above, if more than one Sell
Order is submitted on behalf of such Existing Holder and the
number of Outstanding shares of Auction Preferred subject to such
Sell Orders is greater than the Sell Excess, the number of shares
of Auction Preferred subject to such Sell Orders shall be reduced
PRO RATA so that such Sell Orders shall cover the number of
shares of Auction Preferred equal to the Sell Excess.
(v) If more than one Bid is submitted on behalf of any Potential
Holder, each Bid submitted shall be a separate Bid with the rate and number
of shares of Auction Preferred therein specified.
(d) DETERMINATION OF SUFFICIENT CLEARING BIDS, WINNING BID RATE AND
APPLICABLE RATE.
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<PAGE>
(i) Not earlier than the Submission Deadline on each Auction Date,
the Trust Company shall assemble all Orders submitted or deemed submitted
to it by the Broker-Dealers (each such Order as submitted or deemed
submitted by a Broker-Dealer being hereinafter referred to individually as
a "SUBMITTED HOLD ORDER", a "SUBMITTED BID" or a "SUBMITTED SELL ORDER", as
the case may be, or as a "SUBMITTED ORDER") and shall determine:
(A) the excess of the total number of Outstanding shares of
Auction Preferred over the number of Outstanding shares of Auction
Preferred that are the subject of Submitted Hold Orders (such excess
being hereinafter referred to as the "Available Auction Preferred");
(B) from the Submitted Orders whether the number of Outstanding
shares of Auction Preferred that are the subject of Submitted Bids by
Potential Holders specifying one or more rates equal to or lower than
the Maximum Applicable Rate exceeds or is equal to the sum of:
(x) the number of Outstanding shares of Auction Preferred
that are the subject of Submitted Bids by Existing Holders
specifying one or more rates higher than the Maximum Applicable
Rate; and
(y) the number of Outstanding shares of Auction Preferred
that are subject to Submitted Sell Orders
(if such excess or such equality exists (other than because the
number of shares of Auction Preferred in clauses (x) and (y) is
each zero because all of the Outstanding shares of Auction
Preferred are the subject of Submitted Hold Orders), such
Submitted Bids by Potential Holders being hereinafter referred to
collectively as "Sufficient Clearing Bids"); and
(C) if Sufficient Clearing Bids exist, the lowest rate specified
in the Submitted Bids (the "WINNING BID RATE") which if:
(1) each Submitted Bid from Existing Holders specifying the
Winning Bid Rate and all other Submitted Bids from Existing
Holders specifying lower rates were rejected, thus entitling such
Existing Holders to continue to hold such shares of Auction
Preferred that are the subject of such Submitted Bids; and
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<PAGE>
(2) each Submitted Bid from Potential Holders specifying
the Winning Bid Rate and all other Submitted Bids from Potential
Holders specifying lower rates were accepted, thus requiring the
Potential Holders to purchase the shares of Auction Preferred
that are the subject of such Submitted Bids,
would result in such Existing Holders continuing to hold an aggregate
number of Outstanding shares of Auction Preferred that, when added to
the number of Outstanding shares of Auction Preferred to be purchased
by such Potential Holders, would equal not less than the Available
Auction Preferred.
(ii) Promptly after the Trust Company has made the determinations
pursuant to section (d)(i), the Trust Company shall advise the Corporation
of the Maximum Applicable Rate and, based on such determinations, the
Applicable Rate for the next succeeding Dividend Period as follows:
(A) if Sufficient Clearing Bids exist, that the Applicable Rate
for the next succeeding Dividend Period shall be equal to the Winning
Bid Rate so determined;
(B) if Sufficient Clearing Bids do not exist (other than because
all of the Outstanding shares of Auction Preferred are the subject of
Submitted Hold Orders), then (a) if the Corporation has not given a
Notice of Long-Term Dividend Period with respect to the next
succeeding Dividend Period or has given Notice of Revocation with
respect thereto, then the Applicable Rate for such next succeeding
Dividend Period will be the Maximum Applicable Rate on the Auction
Date for a Short-Term Dividend Period and (b) if the Corporation has
given a Notice of Long-Term Dividend Period with respect to the next
succeeding Dividend Period and has not given a Notice of Revocation
with respect thereto, then such next succeeding Dividend Period will,
notwithstanding such Notice of Long-Term Dividend Period, be a
Seven-Day Dividend Period, and the Applicable Rate for such next
succeeding Dividend Period will be the greatest of (1) the Maximum
Applicable Rate on the Auction Date for a Short-Term Dividend Period,
(2) the Maximum Applicable Rate on the Auction Date for a Long-Term
Dividend Period having a number of Dividend Period Days equal to the
number of Dividend Period Days specified in such Notice of Long-Term
Dividend Period, and (3) the dividend rate in effect for the Dividend
Period during which such Auction occurred; or
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<PAGE>
(C) if all of the Outstanding shares of Auction Preferred are
the subject of Submitted Hold Orders, then the Applicable Rate for the
next succeeding Dividend Period shall (1) in the case of a Short-Term
Dividend Period, be equal to 59% of the 60-day "AA" Composite
Commercial Paper Rate in effect on such Auction Date; and (2) in the
case of a Long-Term Dividend Period, 59% of the Reference Rate in
effect on such Auction Date.
(e) ACCEPTANCE AND REJECTION OF SUBMITTED BIDS AND SUBMITTED SELL ORDERS
AND ALLOCATION OF SHARES. Existing Holders shall continue to hold shares of
Auction Preferred that are the subject of Submitted Hold Orders and, based on
the determinations made pursuant to section (d)(i), the Submitted Bids and
Submitted Sell Orders shall be accepted or rejected and the Trust Company shall
take such other action as set forth below:
(i) If Sufficient Clearing Bids have been made, subject to the
provisions of section (e)(iii), Submitted Bids and Submitted Sell Orders
shall be accepted or rejected in the following order of priority and all
other Submitted Bids shall be rejected:
(A) the Submitted Sell Orders of Existing Holders shall be
accepted and the Submitted Bid of each of the Existing Holders
specifying any rate that is higher than the Winning Bid Rate shall be
accepted, thus requiring each such Existing Holder to sell the shares
of Auction Preferred that are the subject of such Submitted Bid;
(B) the Submitted Bid of each of the Existing Holders specifying
any rate that is lower than the Winning Bid Rate shall be rejected,
thus entitling each such Existing Holder to continue to hold the
shares of Auction Preferred that are the subject of such Submitted
Bid;
(C) the Submitted Bid of each of the Potential Holders
specifying any rate that is lower than the Winning Bid Rate shall be
accepted;
(D) the Submitted Bid of each of the Existing Holders specifying
a rate that is equal to the Winning Bid Rate shall be rejected, thus
entitling each such Existing Holder to continue to hold the shares of
Auction Preferred that are the subject of such Submitted Bid, unless
the number of Outstanding shares of Auction Preferred subject to all
such Submitted Bids shall be greater than the number of shares of
Auction Preferred ("remaining shares") equal to the excess of
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the Available Auction Preferred over the number of shares of Auction
Preferred subject to Submitted Bids described in sections (e)(i)(B)
and (e)(i)(C), in which event the Submitted Bids of each such Existing
Holder shall be accepted, and each such Existing Holder shall be
required to sell shares of Auction Preferred, but only in an amount
equal to the difference between (1) the number of Outstanding shares
of Auction Preferred then held by such Existing Holder subject to such
submitted Bid and (2) the number of shares of Auction Preferred
obtained by multiplying (x) the number of remaining shares by (y) a
fraction, the numerator of which shall be the number of Outstanding
shares of Auction Preferred held by such Existing Holder subject to
such Submitted Bid and the denominator of which shall be the sum of
the number of Outstanding shares of Auction Preferred subject to such
Submitted Bids made by all such Existing Holders that specified a rate
equal to the Winning Bid Rate; and
(E) the Submitted Bid of each of the Potential Holders
specifying a rate that is equal to the Winning Bid Rate shall be
accepted, but only in an amount equal to the number of shares of
Auction Preferred obtained by multiplying the difference between the
Available Auction Preferred and the number of shares of Auction
Preferred subject to Submitted Bids described in sections (e)(i)(B),
(e)(i)(C) and (e)(i)(D) by a fraction, the numerator of which shall be
the number of Outstanding shares of Auction Preferred subject to such
Submitted Bid and the denominator of which shall be the sum of the
number of Outstanding shares of Auction Preferred subject to such
Submitted Bids made by all such Potential Holders that specified rates
equal to the Winning Bid Rate.
(ii) If Sufficient Clearing Bids have not been made (other than
because all of the Outstanding shares of Auction Preferred are subject to
Submitted Hold Orders), subject to the provisions of sections (e)(iii) and
(e)(iv), Submitted Orders shall be accepted or rejected as follows in the
following order of priority and all other Submitted Bids shall be rejected:
(A) the Submitted Bid of each Existing Holder specifying any
rate that is equal to or lower than the Maximum Applicable Rate shall
be rejected, thus entitling such Existing Holder to continue to hold
the shares of Auction Preferred that are the subject of such Submitted
Bid;
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(B) the Submitted Bid of each Potential Holder specifying any
rate that is equal to or lower than the Maximum Applicable Rate shall
be accepted, thus requiring such Potential Holder to purchase the
shares of Auction Preferred that are the subject of such Submitted
Bid; and
(C) the Submitted Bids of each Existing Holder specifying any
rate that is higher than the Maximum Applicable Rate shall be accepted
and the Submitted Sell Orders of each Existing Holder shall be
accepted, in both cases only in an amount equal to the difference
between (1) the number of Outstanding shares of Auction Preferred then
held by such Existing Holder subject to such Submitted Bid or
Submitted Sell Order and (2) the number of shares of Auction Preferred
obtained by multiplying (x) the difference between the Available
Auction Preferred and the aggregate number of shares of Auction
Preferred subject to Submitted Bids described in sections (e)(ii)(A)
and (e)(ii)(B) by (y) a fraction, the numerator of which shall be the
number of Outstanding shares of Auction Preferred held by such
Existing Holder subject to such Submitted Bid or Submitted Sell Order
and the denominator of which shall be the number of Outstanding shares
of Auction Preferred subject to all such Submitted Bids and Submitted
Sell Orders.
(iii) If, as a result of the procedures described in section (e)(i)
or (e)(ii), any Existing Holder would be entitled or required to sell, or
any Potential Holder would be entitled or required to purchase, a fraction
of a share of Auction Preferred on any Auction Date, the Trust Company
shall, in such manner as, in its sole discretion, it shall determine, round
up or down the number of shares of Auction Preferred to be purchased or
sold by any Existing Holder or Potential Holder on such Auction Date so
that the number of shares purchased or sold by each Existing Holder or
Potential Holder on such Auction Date shall be whole shares of Auction
Preferred.
(iv) If Sufficient Clearing Bids have not been made (other than
because all of the Outstanding shares of Auction Preferred are subject to
Submitted Hold Orders) in an Auction relating to a Long-Term Dividend
Period, all Submitted Bids and all Submitted Sell Orders shall be rejected,
thus requiring each Existing Holder to continue to hold the shares of
Auction Preferred held by such Existing Holder immediately prior to such
Auction.
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(v) If all of the Outstanding shares of Auction Preferred are the
subject of Submitted Hold Orders, all Submitted Bids shall be rejected.
(vi) Based on the results of each Auction, the Trust Company shall
determine the aggregate number of shares of Auction Preferred to be
purchased and the aggregate number of shares of Auction Preferred to be
sold by Potential Holders and Existing Holders on whose behalf each
Broker-Dealer submitted Bids or Sell Orders, and, with respect to each
Broker-Dealer, to the extent that such aggregate number of shares to be
purchased and such aggregate number of shares to be sold differ, determine
to which other Broker-Dealer or Broker-Dealers acting for one or more
purchasers such Broker-Dealer shall deliver, or from which other
Broker-Dealer or Broker-Dealers acting for one or more sellers such
Broker-Dealer shall receive, as the case may be, shares of Auction
Preferred.
(f) MISCELLANEOUS. The Board of Directors may interpret the provisions of
this Part II to resolve any inconsistency or ambiguity which may arise or be
revealed in connection with the Auction Procedures provided for herein and their
interpretation shall be binding. An Existing Holder (A) may sell, transfer or
otherwise dispose of shares of Auction Preferred only pursuant to a Bid or Sell
Order in accordance with the procedures described in this Part II to or through
a Broker-Dealer or to a Person that has delivered a signed copy of a Master
Purchaser's Letter to the Trust Company, provided that in the case of all
transfers other than pursuant to Auctions such Existing Holder, its
Broker-Dealer or its Agent Member advises the Trust Company of such transfer,
and (B) shall have the beneficial ownership of the shares of Auction Preferred
held by it maintained in book-entry form by the Securities Depository in the
account of its Agent Member, which in turn will maintain records of such
Existing Holder's beneficial ownership. The Company and its Affiliates shall
not submit any Order in any Auction except as set forth in the next sentence.
Any Broker-Dealer that is an affiliate of the Company may submit Orders in
Auctions but only if such Orders are not for its own account, except that if
such affiliated Broker-Dealer holds shares of Auction Preferred for its own
account, it must submit a Sell Order in the next Auction with respect to such
shares of Auction Preferred.
(g) HEADINGS OF SUBDIVISIONS. The headings of the various subdivisions of
this Part II are for convenience of reference only and shall not affect the
interpretation of any of the provisions hereof.
Dated: November 5, 1991
IDAHO POWER COMPANY
By: /s/ Larry R. Gunnoe
------------------------------
Larry R. Gunnoe, President
By: /s/ Robert Stahman
------------------------------
Robert Stahman, Secretary
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Exhibit 3(f)
STATEMENT OF RESOLUTION
ESTABLISHING TERMS OF NEW PREFERRED STOCK
FIRST: The name of the corporation is Idaho Power Company (the "Company").
SECOND: The following resolution, establishing and designating a series of
shares and fixing and determining certain of the relative rights and
preferences thereof, was duly adopted by the Board of Directors of the
Company on June 24, 1993.
RESOLVED, That, pursuant to Section 30-1-16 of the Idaho Business
Corporation Act and to the power vested in the Board of Directors by Article
6.C.3 of the Restated Articles of Incorporation, as amended, of the Company, the
fourth series of the Company's Serial Preferred Stock, Without Par Value, is
hereby created, and the Restated Articles of Incorporation, as amended, of the
Company are further amended by the addition to the provisions of Article 6.C.3
of such Restated Articles of Incorporation, as amended, of the following
paragraph (f) immediately before the heading "4. Common Stock":
(f) THE 7.07% SERIES, SERIAL PREFERRED STOCK, WITHOUT PAR VALUE.
There is hereby created the fourth series of the Company's Serial Preferred
Stock, Without Par Value, which shall be designated as the 7.07% Series, Serial
Preferred Stock, Without Par Value, which consists of 250,000 shares. The
rights and preferences of the shares of said series, in those respects in which
the shares thereof may vary from shares of other series, shall be as follows:
(i) DIVIDENDS. The rate per annum of dividends on shares of the 7.07%
Series, Serial Preferred Stock, Without Par Value, shall be 7.07% of the amount
payable per share in the event of voluntary liquidation excluding any
accumulated dividends.
Dividends shall be cumulative from the date of original issuance of the
shares. The initial dividend if declared will be payable on August 20, 1993,
for the period commencing with and including the date of original issuance of
the shares through and including August 19, 1993. Thereafter, dividends if
declared shall be payable on the 20th day of February, May, August and November
of each year or otherwise as the Board of Directors may determine.
(ii) REDEMPTION. Shares of the 7.07% Series, Serial Preferred Stock,
Without Par Value, shall not be redeemable prior to July 1, 2003, but shall be
redeemable at the option of the Company, in whole or in part, at any time on or
after July 1, 2003, at the per share redemption price of $103.535
through June 30, 2004; $103.182 thereafter
through June 30, 2005; $102.828 thereafter
<PAGE>
through June 30, 2006; $102.475 thereafter
through June 30, 2007; $102.121 thereafter
through June 30, 2008; $101.768 thereafter
through June 30, 2009; $101.414 thereafter
through June 30, 2010; $101.061 thereafter
through June 30, 2011; $100.707 thereafter
through June 30, 2012; $100.354 thereafter
through June 30, 2013; and $100 thereafter;
plus, in each case, unpaid accumulated dividends, if any, to the date of
redemption.
(iii) LIQUIDATION. The amount payable upon shares of the 7.07% Series,
Serial Preferred Stock, Without Par Value, in the event of voluntary or
involuntary liquidation is $100 per share (to be referred to as the "Stated
Value") plus accumulated dividends, if any.
In the event of any preferential payments, the 7.07% Series, Serial
Preferred Stock, Without Par Value, shall be entitled PRO RATA to such
preferential payments.
(iv) SINKING FUND. There is no sinking fund for the redemption or
purchase of shares of 7.07% Series, Serial Preferred Stock, Without Par Value.
(v) CONVERSION. Shares of the 7.07% Series, Serial Preferred Stock,
Without Par Value, are not, by their terms, convertible or exchangeable.
Dated: June 30, 1993
IDAHO POWER COMPANY
By: /s/ Larry R. Gunnoe
-----------------------------
Larry R. Gunnoe, President
By: /s/ Robert Stahman
-----------------------------
Robert Stahman, Secretary
<PAGE>
Exhibit 3(g)
WAIVER RESOLUTION TO RESTATED ARTICLES OF INCORPORATION OF
IDAHO POWER COMPANY ADOPTED BY SHAREHOLDERS ON MAY 1, 1991
RESOLVED, That during the period commencing May 1, 1991, and
terminating December 31, 2000, shares of the 4% Preferred Stock or of any class
of stock having relative rights and preferences equal or superior to the
relative rights and preferences of the 4% Preferred Stock with respect to the
payment of dividends or the distribution of assets in liquidation may be issued
provided that the gross income of the Company for a period of twelve (12)
consecutive calendar months within the fifteen (15) calendar months immediately
preceding such issuance, determined in accordance with generally accepted
accounting practices (but in any event after deduction of all taxes and
depreciation) shall have been at least one and one-half (1-1/2) times the sum of
(i) the annual interest charges on all interest bearing indebtedness of the
Company outstanding in the hands of the public, and (ii) the annual dividend
requirements on all outstanding shares of the 4% Preferred Stock and any other
class of stock of the Company having relative rights and preferences equal or
superior to the aforesaid relative rights and preferences of the 4% Preferred
Stock including the shares proposed to be issued; provided, that there shall be
excluded from the foregoing computation interest charges on all indebtedness and
dividends on all shares of the 4% Preferred Stock or any other class of stock of
the Company having relative rights and preferences equal or superior to the
aforesaid relative rights and preferences of the 4% Preferred Stock which are to
be retired in connection with the issuance of such additional shares; and
provided further, that in any case where such additional shares of the 4%
Preferred Stock or any other class of stock of the Company having relative
rights and preferences equal or superior to the aforesaid relative rights and
preferences of the 4% Preferred Stock are to be issued in connection with the
acquisition of additional public utility property, the gross income of the
property to be so acquired, computed on the same basis as the gross income of
the Company, may be included on a PRO FORMA basis in making the foregoing
computation.
<PAGE>
Exhibit 3(h)
Effective June 30, 1989
BY-LAWS
of
IDAHO POWER COMPANY
As Amended
________________________
SECTION 1. The annual meeting of the shareholders of the Company for
the election of Directors and the transaction of such other corporate business
as may properly come before such meeting, shall be held at Boise, Idaho, or at
such other place as the Board of Directors may designate, such place to be
stated in the notice of meeting, on the first Wednesday in May in each year,
unless such day is a legal holiday, in which case such meeting shall be held on
the day following.
SECTION 2. Special meetings of the shareholders of the Company may be
called only by the Chairman of the Board of Directors, the President, a majority
of the Board of Directors, or the holders of not less than four-fifths of the
shares entitled to vote at the meeting, at such time, and at Boise, Idaho, or
such other place, as may be stated in the call and notice.
SECTION 3. Notice of the time and place of every meeting of
shareholders shall be mailed by the Secretary at least ten days previous
thereto, to each shareholder of record at his last known post office address,
but meetings may be held without notice if all shareholders are present, or if
notice is waived before or after the meeting by those not present.
The Board of Directors are hereby authorized to fix a day, not more
than fifty days prior to the day of holding any meeting of shareholders, as the
day as of which shareholders entitled to notice and to vote at such meetings
shall be determined and only shareholders of record at the close of business on
such day shall be entitled to notice of or to vote at such meeting.
<PAGE>
SECTION 4. The holders of shares of the capital stock entitling them
to exercise a majority of the voting power must be present in person or by proxy
at each meeting of the shareholders to constitute a quorum, less than a quorum
having power to adjourn.
SECTION 5. Certificates of stock shall be of such form and device as
the Board of Directors may elect, and shall be signed by the President or a Vice
President and by the Secretary or Assistant Secretary, but where any such
certificate is manually signed by a transfer agent or by a registrar other than
the Company itself or an employee of the Company serving in either of those
capacities, the signatures of any such officer or officers and the seal of the
Company upon such certificate may be facsimiles, engraved or printed. The stock
of the Company shall be transferable or assignable on the books of the Company
by the holders in person or by attorney or surrender of the certificates
therefor. The Board of Directors may appoint one or more transfer agents and
registrars of the stock. The books for the transfer of the stock of the Company
may be closed for such periods before and during the payment of dividends, not
to exceed thirty days, and the holding of meetings of shareholders, not to
exceed forty days, as the Board of Directors may from time to time determine,
and no transfer of stock made during such a period shall be binding upon the
Company.
SECTION 6A. The number of Directors constituting the Board of
Directors of the Company shall be fixed from time to time exclusively by the
Board of Directors pursuant to a resolution adopted by affirmative vote of two-
thirds of the Continuing Directors (as defined in Article 8 of the Restated
Articles of Incorporation), but the number of Directors shall be no less than 9
and no greater than 15. The number of Directors may be increased or decreased,
beyond the limits set forth above, only by an amendment to the Restated Articles
of Incorporation of the Company pursuant to Article 10 of the Restated Articles
of Incorporation of the Company. Six members of the Board of Directors shall
constitute a quorum for the transaction of all business except (1) the election
of members of the Executive Committee, for which purpose a majority of all of
the Directors shall constitute a quorum, and (2) the filling of vacancies in the
Board of Directors, which provision is set forth below.
The Board of Directors shall be divided into three classes as nearly
equal in number as may be. The initial term of office of each Director in the
first class shall expire at the annual meeting of shareholders in 1990; the
initial term of office of each Director in the second class shall expire at the
annual meeting of shareholders in 1991; and the initial term of office of each
Director in the third class shall expire at the annual meeting of shareholders
in 1992. At each annual election commencing at the annual meeting of
shareholders in 1990, the successors to the class of Directors whose term
expires at that time shall be elected to hold office for a term of three years
to succeed those whose term expires, so that the term of one class of Directors
shall expire each year. Each Director shall hold office for the term for which
he is elected or appointed and until his successor shall be elected and
qualified or until his death, or until he shall resign or be removed; provided,
however, that no person who will be seventy (70) years of age or more on or
before the annual meeting shall be nominated to the Board of Directors, and any
Directors who reach the age of seventy (70) shall be automatically retired from
the Board.
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In the event of any increase or decrease in the authorized number of
Directors, (i) each Director then serving as such shall nevertheless continue as
a Director of the class of which he is a member until the expiration of his
current term, or his earlier resignation, removal from office or death, and (ii)
the newly created or eliminated directorships resulting from such increase or
decrease shall be apportioned by the Board of Directors among the three classes
of Directors so as to maintain such classes as nearly equal in number as may be.
Newly created directorships resulting from any increase in the
authorized number of Directors or any vacancies in the Board of Directors
resulting from death, resignation, retirement, disqualification, removal from
office or other cause shall be filled by a two-thirds vote of the Directors then
in office, or a sole remaining Director, although less than a quorum, and
Directors so chosen shall hold office for a term expiring at the annual meeting
of shareholders at which the term of the class to which they have been elected
expires. If one or more Directors shall resign from the Board effective as of a
future date, such vacancy or vacancies shall be filled pursuant to the
provisions hereof, and such new directorship(s) shall become effective when such
resignation or resignations shall become effective, and each Director so chosen
shall hold office as herein provided in the filling of other vacancies.
At a special meeting of shareholders called expressly for that
purpose, the entire Board of Directors or any individual Directors may be
removed (i) without cause, by the unanimous vote of the outstanding shares
entitled to vote for Directors, and (ii) for cause, by the affirmative vote of
two-thirds of the outstanding shares entitled to vote for Directors. Except as
may otherwise by provided by law, cause for removal shall be construed to exist
only if: (x) the Director whose removal is proposed has been convicted, or
granted immunity to testify where another has been convicted, of a felony by a
court of competent jurisdiction and such conviction is no longer subject to
appeal; (y) such Director has been grossly negligent in the performance of his
duties to the Company; or (z) such Director has been adjudicated by a court of
competent jurisdiction to be mentally incompetent, which mental incompetency
directly affects his ability as a Director of the Company, and such adjudication
is no longer subject to appeal.
Any Directors elected pursuant to special voting rights of the 4%
Preferred Stock or Serial Preferred Stock, without par value, voting as a
separate class, shall be excluded from, and for no purpose be counted in, the
scope and operation of the foregoing provisions.
B.(i) OBLIGATION TO INDEMNIFY. The Company shall indemnify any
person (and his heirs, executors, administrators or other legal representatives)
who was or is party to (or is threatened to be made a party to) or was or is a
witness in (or is threatened to be made a witness in) any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (including without limitation any suit, action or proceeding by or
in the right of the Company to procure a judgment in its favor) by reason of the
fact that he (or his testator or intestate) is or was a Director, officer,
employee or agent of the Company, or is or was serving at the request of the
Company as a Director, officer, trustee, partner, fiduciary,
3
<PAGE>
employee or agent of another corporation, of any type or kind, domestic or
foreign, or any partnership, joint venture, trust, pension or other employee
benefit plan or any other entity or enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding or
any appeal therein; provided, however, that no indemnification shall be made
pursuant to this Subsection (i) (a) if a judgment or other final adjudication
adverse to such person shall have established that such person did not act
honestly or in the reasonable belief that his actions were in or not opposed to
the Company's or its shareholders' best interests; or (b) in an action or
proceeding by or in the right of the Company to procure a judgment in its favor
in which that person is finally adjudicated to be liable to the Company;
however, the Company will indemnify that person in the suits described in (b)
for such amounts as the court in which the action, suit or proceeding was
brought shall determine in view of all the circumstances of the case the person
to be fairly and reasonably entitled.
(ii) ADVANCEMENT OF EXPENSES. The Company shall pay any expenses
incurred by a Director, officer, agent or employee of the Company in defending
any such action, suit or proceeding in advance of the final disposition thereof
if a majority vote of a quorum of disinterested Directors or a board-designated
independent counsel determines that the person seeking indemnification has not
acted dishonestly, or without a reasonable belief that his actions were in or
not opposed to the Company's or its shareholders' best interests and upon
receipt of (a) an undertaking by or on behalf of such person to repay such
advances to the extent of the amount to which such person shall ultimately be
determined not to be entitled, and (b) an affirmation that the person has met
the standard of conduct set forth above.
(iii) NONEXCLUSIVITY. The rights to indemnification and to the
advancement of expenses and any other benefits provided by, or granted pursuant
to, Subsections (i) and (ii) of this Section shall not be deemed exclusive of
any other rights to which a person seeking indemnification or advancement of
expenses may be or hereafter become entitled whether contained in (a) a
resolution of the shareholders of the Company, (b) a resolution of the Board of
Directors, or (c) an agreement, duly authorized by the Board of Directors,
providing for such indemnification; provided, however, that no indemnification
contemplated by this Subsection (iii) may be made if such indemnification would
be unlawful.
(iv) INSURANCE. The Company may purchase and maintain insurance on
behalf of any person who is or was a Director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a Director,
officer, trustee, partner, fiduciary, employee or agent of another corporation,
partnership, joint venture, trust, pension or other employee benefit plan or any
other entity or enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the Company would have the power to indemnify him against such
liability under this Section 6B.
(v) INSURANCE OFFSET AGAINST INDEMNITY. The Company's indemnity of
any person who is or was a Director, officer, agent or employee of the Company,
or is or was serving
4
<PAGE>
in any capacity in any other entity or enterprise at the request of the Company,
shall be reduced by any amounts such person may collect as indemnification (a)
under any policy of insurance purchased and maintained on his behalf by the
Company, and (b) from such other entity or enterprise.
(vi) AFFILIATES; MERGERS; ETC. For the purposes of this Section,
references to the "Company" shall include any subsidiary or affiliated
corporation, any predecessor of the Company and all constituent corporations
absorbed in a consolidation or merger as well as the resulting or surviving
corporation so that any person who is or was a Director, officer, employee or
agent of such a constituent corporation or is or was serving at the request of
such constituent corporation as a Director, officer, trustee, partner,
fiduciary, employee or agent of another corporation, partnership, joint venture,
trust, pension or other employee benefit plan or other entity or enterprise
shall stand in the same position under the provisions of this Section 6B with
respect to the resulting or surviving corporation as he would if he had served
the resulting or surviving corporation in the same capacity.
(vii) CONTRACT RIGHT. All rights to indemnification and to the
advancement of expenses granted under Subsections (i), (ii) and (iii) of this
Section 6B shall be deemed to arise out of a contract between the Company and
the Director, officer, agent or employee of the Company who serves in such
capacity at any time while these By-laws are in effect. No repeal or
modification of these By-laws shall affect any rights or obligations theretofore
existing.
(viii) LIMITATION. Nothing contained in this Section 6B, or
elsewhere in these By-laws, shall operate to require the Company to indemnify
any person if such indemnification shall be for any reason contrary to
applicable law.
C. The provisions of each paragraph or subsection of 6A or 6B of
these By-laws shall be separable and if any provision or portion thereof shall
for any reason be inapplicable or ineffective, this shall not affect any other
provision or portion or the application, validity or effectiveness thereof.
SECTION 7. Meetings of the Board of Directors shall be held at the
time fixed by resolution of the Board or upon call of the president or Vice
President or Chairman of the Board. The Secretary or officer performing his
duties shall give five days' notice of all meetings of Directors, provided that
a meeting may be held without notice immediately after the annual election, and
notice need not be given of regular meetings held at times fixed by resolution
of the Board. Meetings may be held at any time without notice if all the
Directors are present, or if those not present waive notice, either before or
after the meeting.
SECTION 8. The Board of Directors, as soon as may be after the
election in each year, shall appoint one of their number Chairman of the Board,
and one of their number President of the Company, and shall also appoint one or
more Vice Presidents, a Secretary and a Treasurer,
5
<PAGE>
and shall, from time to time, appoint such other officers as they may deem
proper. The same person may be appointed to more than one office.
Vacancies in the office of President may be filled by the Board of
Directors at any meeting at which a majority of the Directors shall be present.
SECTION 9. The Board of Directors, as soon as may be after the
election in each year, shall appoint an Executive Committee to consist of the
Chairman of the Board, the President and such number of Directors as the Board
may from time to time determine. Such Committee shall have and may exercise all
of the powers of the Board during the intervals between its meetings, which may
be lawfully delegated, subject to such limitations as may be provided by
resolution of the Board. The Board shall have the power at any time to change
the membership of such Committee and to fill vacancies in it. The Executive
Committee may make rules for the conduct of its business and may appoint such
Committees and assistants as it may deem necessary. The Board may from time to
time determine by resolution the number of members of such Committee required to
constitute a quorum. The Chairman of the Board shall be the Chairman of the
Executive Committee.
During the intervals between the meetings of the Executive Committee,
the Chairman of the Board shall possess and may exercise such of the powers
vested in the Executive Committee as from time to time may be conferred upon him
by resolution of the Board of Directors or the Executive Committee.
SECTION 10. A Director of this Company shall not be disqualified by
his office from dealing or contracting with the Company, either as vendor,
purchaser or otherwise, nor shall any transactions or contract of this Company
be void or voidable by reason of the fact that any Director, or any firm of
which any Director is a member, or any corporation of which any Director is a
shareholder or Director, is in any way interested in such transaction or
contract, PROVIDED that any such transaction or contract is or shall be
authorized, ratified or approved either (1) by vote of a majority of a quorum of
the Board of Directors or of the Executive Committee, without counting in such
majority or quorum any Director so interested, or being a member of a firm so
interested, or a shareholder or a Director of a corporation so interested, or
(2) by vote at a shareholder's meeting of the holders of shares of the capital
stock entitling them to exercise a majority of the voting power, or by a writing
or writings signed by such holders; nor shall any Director be liable to account
to the Company for any profit realized by him from or through any transaction or
contract of this Company, authorized, ratified or approved as aforesaid, by
reason of the fact that he, or any firm of which he is a member, or any
corporation of which he is a shareholder or Director, was interested in such
transaction or contract. Nothing herein contained shall create any liability in
the events above described or prevent the authorization, ratification or
approval of such contracts or transactions in any other manner provided by law.
6
<PAGE>
SECTION 11. The term of office of all officers shall be one year, or
until their respective successors are chosen and qualified, but any officer may
be removed from office at any time by the Board of Directors.
SECTION 12. The officers of the Company shall have such duties as
usually pertain to their offices respectively, as well as such power and duties
as may from time to time be conferred by the Board of Directors.
SECTION 13. The shareholders may alter or amend these By-laws (except
as set forth in the next sentence) by affirmative vote of the holders of shares
of the capital stock entitling them to exercise a majority of the voting power,
irrespective of class, at any annual meeting or upon notice at any special
meeting. However, Section 2 of these By-laws may be altered, amended, changed
or repealed only by the affirmative vote of the holders of at least four-fifths
of the voting power of the then outstanding voting stock of the Company,
provided that such four-fifths vote shall not be required for any amendment,
alteration, change or repeal recommended to the shareholders by two-thirds of
the Continuing Directors (as defined in Article 8 of the Company's Restated
Articles of Incorporation).
SECTION 14. In the event of emergency conditions following a
catastrophe or disaster, the following provisions shall apply, other provisions
of these by-laws notwithstanding: In the case of any vacancy or vacancies in
the Board of Directors, the remaining Directors, although less than a majority
or a quorum, by affirmative majority vote, may elect a successor or successors
to hold office until the next annual meeting of the shareholders of the Company
and until his or their successors shall be elected and qualified. If only one
Director remains, he shall forthwith appoint two additional Directors, and the
three shall thereupon fill the remaining vacancies. The Directors so appointed
and elected shall fill any vacancies which may exist among the officers of the
Company, including the President, a Vice President, Treasurer and Secretary, and
shall also fill any vacancies which may exist on the Executive Committee. When
deemed necessary during any such emergency conditions, notices may be given and
Directors and members of the Executive Committee may vote and act by telephone,
mail or other means of direct communication, but meetings shall be held and
Directors and the Executive Committee shall vote and act in the regular manner
if reasonably practicable. If the event that a quorum of either the Board of
Directors or the Executive Committee cannot readily be convened, then all the
powers and duties of the Board of Directors shall vest in an Emergency
Management Committee which shall consist of all readily available members of the
Board of Directors and the officers of the Company who are not Directors, but
the Emergency Management Committee shall act only when necessary, at times when
the Board of Directors or Executive Committee cannot readily be convened or act
as hereinabove set forth; provided, however, that if the Emergency Management
Committee shall take action in good faith, such action shall be valid as if
taken by the Board of Directors or Executive Committee although it may
subsequently develop that at the time such action was taken the conditions
requisite for action by the Emergency Management Committee did not in fact
exist.
7
<PAGE>
Exhibit 5(a)
IDACORP, Inc.
1221 W. Idaho Street
Boise, Idaho 83702
P.O. Box 70
Boise, Idaho 83707
Robert W. Stahman
Vice President, General
Counsel and Secretary
March 13, 1998
IDACORP, Inc.
1221 West Idaho Street
Boise, Idaho 83702
Ladies and Gentlemen:
I have acted as counsel to IDACORP, Inc., an Idaho corporation (the
"Company"), in connection with the proposed formation of a holding company
structure for Idaho Power Company, an Idaho corporation ("Idaho Power"), through
a statutory share exchange (the "Share Exchange") between Idaho Power and the
Company, pursuant to an Agreement and Plan of Exchange (the "Exchange
Agreement").
This opinion is being rendered in connection with the filing by the
Company of a Registration Statement on Form S-4 (the "Registration Statement")
related to the registration under the Securities Act of 1933, as amended (the
"Act"), of 38,500,000 shares of common stock, without par value, of the Company
(the "Company Common Stock") to be issued in the Share Exchange.
For purposes of this opinion, I have examined originals or copies,
certified or otherwise identified to my satisfaction, of (i) the Exchange
Agreement; (ii) the Registration Statement; (iii) the Articles of Incorporation
and Bylaws of the Company, as in effect on the date hereof and as to be amended
immediately prior to consummation of the Share Exchange; (iv) resolutions
adopted by the Board of Directors of the Company relating to the Share Exchange
and the issuance and delivery of the Company Common Stock in connection
therewith; and (v) such other documents, certificates and other records as I
have deemed necessary or appropriate.
Based upon the foregoing, and subject to the qualifications
hereinafter expressed, I am of the opinion that:
(1) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Idaho; and
<PAGE>
(2) The Company Common Stock will be validly issued, fully paid and
non-assessable when (i) the Registration Statement shall have
become effective under the Act; (ii) the Company's Board of
Directors shall have taken appropriate action to authorize the
issuance of the Company Common Stock; (iii) Idaho Power
shareholders shall have approved the Share Exchange; (iv) Idaho
Power shall have received all necessary regulatory approvals
required to consummate the Share Exchange; and (v) the Share
Exchange shall have been consummated in accordance with the terms
of the Exchange Agreement and the laws of the State of Idaho.
I am a member of the Idaho Bar and do not hold myself out as an expert
on the laws of any other state. Except as set forth in paragraph 2(iv) above,
my opinions expressed above are limited to the laws of the State of Idaho and
the federal laws of the United States.
I hereby consent to the filing of this opinion as Exhibit 5(a) to the
Registration Statement and to the references made to me under the caption "LEGAL
OPINIONS" in said Registration Statement and the Proxy Statement and Prospectus
constituting a part thereof.
Very truly yours,
/s/ Robert W. Stahman
Robert W. Stahman
<PAGE>
Exhibit 5(b) and 8
LeBoeuf, Lamb, Greene &
MacRae, L.L.P.
125 W. 55th Street
New York, NY 10019
March 13, 1998
IDACORP, Inc.
1221 West Idaho Street
Boise, Idaho 83702
Ladies and Gentlemen:
We have acted as counsel to IDACORP, Inc., an Idaho corporation (the
"Company"), in connection with the proposed formation of a holding company
structure for Idaho Power Company, an Idaho corporation ("Idaho Power"), through
a statutory share exchange (the "Share Exchange") between Idaho Power and the
Company, pursuant to an Agreement and Plan of Exchange (the "Exchange
Agreement").
This opinion is being rendered in connection with the filing by the
Company of a Registration Statement on Form S-4 (the "Registration Statement")
relating to the registration under the Securities Act of 1933, as amended (the
"Act"), of 38,500,000 shares of common stock, without par value, of the Company
(the "Company Common Stock") to be issued in the Share Exchange.
For purposes of this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the Exchange
Agreement; (ii) the Registration Statement; (iii) the Articles of Incorporation
and Bylaws of the Company, as in effect on the date hereof and as to be amended
immediately prior to consummation of the Share Exchange; (iv) resolutions
adopted by the Board of Directors of the Company relating to the Share Exchange
and the issuance and delivery of the Company Common Stock in connection
therewith; and (v) such other documents, certificates and other records as we
have deemed necessary or appropriate.
Based upon the foregoing, and subject to the qualifications
hereinafter expressed, we are of the opinion that:
(1) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Idaho; and
(2) The Company Common Stock will be validly issued, fully paid and
non-assessable when (i) the Registration Statement shall have
become effective under the Act; (ii) the Company's Board of
Directors shall have taken appropriate action to authorize the
<PAGE>
IDACORP, Inc.
March 13, 1998
Page Two
issuance of the Company Common Stock; (iii) Idaho Power
shareholders shall have approved the Share Exchange; (iv) Idaho
Power shall have received all necessary regulatory approvals
required to consummate the Share Exchange; and (v) the Share
Exchange shall have been consummated in accordance with the terms
of the Exchange Agreement and the laws of the State of Idaho.
We are further of the opinion that the statements contained in the
Proxy Statement and Prospectus constituting part of the Registration Statement
under the caption "Proposal No. 2 - HOLDING COMPANY PROPOSAL - United States
Federal Income Tax Consequences" describing certain Federal income tax
consequences to holders of Idaho Power common stock, as qualified therein,
constitute an accurate description, in general terms, of the indicated Federal
income tax consequences of the Share Exchange.
We express no opinion as to matters of law other than the Federal law
of the United States. To the extent the opinions expressed above are dependent
upon matters governed by the law of the State of Idaho, we have relied, with
your consent, upon the opinion of even date herewith rendered to you by Robert
W. Stahman, Esq.
We hereby consent to the filing of this opinion as Exhibit 5(b) and 8
to the Registration Statement and to the references to our firm under the
captions "Proposal No. 2 - HOLDING COMPANY PROPOSAL - United States Federal
Income Tax Consequences" and "LEGAL OPINIONS" in said Registration Statement and
the Proxy Statement and Prospectus constituting a part thereof.
Very truly yours,
/s/ LeBoeuf, Lamb, Greene & MacRae, L.L.P.
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
<PAGE>
EXHIBIT 23(C)
INDEPENDENT AUDITORS' CONSENT
IDACORP, Inc.:
We consent to the incorporation by reference in this Registration Statement
of IDACORP, Inc. on Form S-4 of our report dated January 30, 1998 appearing in
the Annual Report on Form 10-K of Idaho Power Company for the year ended
December 31, 1997 and to the reference to us under the heading "Experts" in the
Proxy Statement and Prospectus, which is part of this Registration Statement.
Deloitte & Touche LLP
March 13, 1998
Boise, Idaho
<PAGE>
Exhibit 99
PROXY
IDAHO POWER COMPANY
ANNUAL MEETING OF SHAREHOLDERS
MAY 6, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
PROPERLY EXECUTED PROXIES WILL BE VOTED AS MARKED AND, IF NOT MARKED, PROXIES
RECEIVED WILL BE VOTED "FOR" PROPOSAL (1), ELECTION OF MANAGEMENT'S NOMINEES
FOR DIRECTORS, "FOR" PROPOSAL (2), APPROVAL OF THE HOLDING COMPANY PROPOSAL,
AND "FOR" PROPOSAL (3), RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE LLP
AS INDEPENDENT AUDITOR FOR THE FISCAL YEAR 1998.
The undersigned hereby appoints Joseph W. Marshall and Robert W. Stahman, and
each of them, proxies with full power of substitution to vote for the
undersigned at the Annual Meeting of Shareholders of Idaho Power Company, and
at any adjournments thereof, on the matters set forth in the Proxy Statement
and such other matters as may come before the meeting; and hereby directs
that this proxy be voted in accordance with the instructions herein.
PLEASE DATE, SIGN AND PROMPTLY MAIL IN THE SELF-ADDRESSED RETURN ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. PLEASE SO INDICATE
FOLLOWING YOUR SIGNATURE IF YOU ARE SIGNING IN A REPRESENTATIVE CAPACITY. IF
SHARES ARE HELD JOINTLY, BOTH OWNERS SHOULD SIGN.
______________________________________________________________________________
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSALS REGARDING:
(1) ELECTION OF DIRECTORS: ROBERT D. BOLINDER; JON H. MILLER; GENE C.
ROSE; PHIL SOULEN
FOR WITHHOLD
All nominees listed above / / Authority to vote for / /
(except as marked to the all nominees listed above
contrary to the right)
(INSTRUCTIONS: To withhold authority to vote for any individual nominee,
write that nominee's name on the line provided below.)
- ------------------------------------------------------------------------------
______________________________________________________________________________
<PAGE>
(2) Approval of the formation of a holding company and an Agreement and Plan
of Exchange, whereby IDACORP, Inc., an Idaho corporation formed by Idaho
Power, will become the parent company of Idaho Power.
FOR / / AGAINST / / ABSTAIN / /
(3) Ratification of the selection of Deloitte & Touche LLP as Independent
Auditor for the fiscal year ending December 31, 1998
FOR / / AGAINST / / ABSTAIN / /
If you wish to have any comments forwarded to the Company, you must mark
this box and then write your comments on the reverse side of this form. / /
Special Action:
Discontinue Annual Report mailing for this account: / /
_______________________ ____________________
ACCOUNT NUMBER SHARES
PLEASE MARK ALL CHOICES LIKE THIS: /X/
SIGNATURE ______________________ DATE ______________
