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Filed Pursuant to Rule 424(b)(3) and (c)
Registration Statement No. 333-02109
Prospectus Supplement dated January 3, 1997
Minnesota Power & Light Company
Dividend Reinvestment and Stock Purchase Plan
Supplement to Prospectus dated June 24, 1996
The following supplements the "Description of Common Stock" on pages 17 and 18
of the Prospectus:
Description of Preferred Share Purchase Rights
Reference is made to the Rights Agreement, dated as of July 24, 1996
(Rights Plan), included as an exhibit to the Company's Current Report on Form
8-K, dated August 2, 1996, between Minnesota Power & Light Company (Company) and
the Corporate Secretary of the Company, as Rights Agent. The description of the
preferred share purchase rights (Rights) set forth below does not purport to be
complete and is qualified in its entirety by reference to the Rights Plan.
Reference is also made to the laws of the State of Minnesota.
On July 24, 1996 the Board of Directors of the Company declared a
dividend distribution of one Right for each outstanding share of common stock,
without par value (Common Stock), of the Company to shareholders of record at
the close of business on July 24, 1996 (Record Date) and authorized the issuance
of one Right with respect to each share of Common Stock that becomes outstanding
between the Record Date and July 23, 2006 or such earlier time as the Rights are
redeemed. Except as described below, each Right, when exercisable, entitles the
registered holder to purchase from the Company one one-hundredth of a share of
Junior Serial Preferred Stock A, without par value (Preferred Stock), at a price
of $90 per one one-hundredth share (the Purchase Price), subject to adjustment.
Initially, the Rights will attach to all Common Stock certificates
representing shares then outstanding, and no separate Right Certificates will be
distributed. The Rights will be evidenced by the Common Stock certificates
together with a copy of the Summary of Rights Plan and not by separate
certificates until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
Acquiring Person) has acquired, or obtained the right to acquire, beneficial
ownership of 15 percent or more of the outstanding shares of Common Stock (the
Stock Acquisition Date) or (ii) 15 business days (or such later date as may be
determined by action of the Board of Directors of the Company (the Board of
Directors) prior to the time that any person becomes an Acquiring Person)
following the commencement of (or a public announcement of an intention to make)
a tender or exchange offer if, upon consummation thereof, such person or group
would be the beneficial owner of 15 percent or more of such outstanding shares
of Common Stock (the earlier of such dates being called the Distribution Date).
Until the Distribution Date, the Rights will be transferred with and
only with the Common Stock. Until the Distribution Date (or earlier redemption,
expiration or termination of the Rights), the transfer of any certificates for
Common Stock, with or without a copy of the Summary of Rights Plan, will also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificates. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights (Right
Certificates) will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and, thereafter, such separate Right
Certificates alone will evidence the Rights.
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Each whole share of Preferred Stock will have a minimum preferential
quarterly dividend rate equal to the greater of $51 per share or, subject to
anti-dilution adjustment, 100 times the dividend declared on the Common Stock.
In the event of liquidation, no distribution will be made to the holders of
Common Stock unless, prior thereto, the holders of the Preferred Stock have
received a liquidation preference of $100 per share, plus accrued and unpaid
dividends. Holders of the Preferred Stock will be entitled to notice of and to
vote at any meeting of the Company's shareholders. Each whole share of Preferred
Stock is entitled to one vote. Such shares do not have cumulative voting rights.
The Preferred Stock, together with the issued and outstanding shares of the
other preferred stocks of the Company, will be expressly entitled, as one class,
to elect a majority of directors (the Common Stock electing the minority)
whenever dividends on any of the preferred stocks shall be in default in the
amount of four quarterly payments and thereafter until all such dividends in
default shall have been paid. In the event of any merger, consolidation or other
transaction in which shares of Common Stock are exchanged for or converted into
other securities and/or property, each whole share of Preferred Stock will be
entitled to receive, subject to anti-dilution adjustment, 100 times the amount
into which or for which each share of Common Stock is so exchanged or converted.
The shares of Preferred Stock are not redeemable by the Company.
The Rights are not exercisable until the Distribution Date and will
expire at the earliest of (i) July 23, 2006 (Final Expiration Date), (ii) the
redemption of the Rights by the Company as described below, and (iii) the
exchange of all Rights for Common Stock as described below.
In the event that any person (other than the Company, its affiliates or
any person receiving newly-issued shares of Common Stock directly from the
Company) becomes the beneficial owner of 15 percent or more of the then
outstanding shares of Common Stock, each holder of a Right will thereafter have
a right to receive, upon exercise at the then current exercise price of the
Right, Common Stock (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the exercise price
of the Right. The Rights Plan contains an exemption for any issuance of Common
Stock by the Company directly to any person (for example, in a private placement
or an acquisition by the Company in which Common Stock is used as
consideration), even if that person would become the beneficial owner of 15
percent or more of the Common Stock, provided that such person does not acquire
any additional shares of Common Stock.
In the event that, at any time following the Stock Acquisition Date,
the Company is acquired in a merger or other business combination transaction or
50 percent or more of the Company's assets or earning power are sold, proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon exercise at the then current exercise price of the Right,
common stock of the acquiring or surviving company having a value equal to two
times the exercise price of the Right.
Notwithstanding the foregoing, following the occurrence of any of the
events set forth in the preceding two paragraphs (the Triggering Events), any
Rights that are, or (under certain circumstances specified in the Rights Plan)
were, beneficially owned by any Acquiring Person will immediately become null
and void.
The Purchase Price payable, and the number of shares of Preferred Stock
or other securities or property issuable, upon exercise of the Rights, are
subject to adjustment from time to time to prevent dilution, among other
circumstances, in the event of a stock dividend on, or a subdivision, split,
combination, consolidation or reclassification of, the Preferred Stock or the
Common Stock, or a reverse split of the outstanding shares of Preferred Stock or
the Common Stock.
At any time after the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 15 percent or more of the
outstanding Common Stock and prior to the acquisition by such person or group of
50 percent or more of the outstanding Common Stock, the Board of Directors may
exchange the Rights (other than Rights owned by such person or group, which have
become void), in whole or in part, at an exchange ratio of one share of Common
Stock per Right (subject to adjustment).
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With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least one
percent in the Purchase Price. The Company will not be required to issue
fractional shares of Preferred Stock or Common Stock (other than fractions in
multiples of one one-hundredths of a share of Preferred Stock) and, in lieu
thereof, an adjustment in cash may be made based on the market price of the
Preferred Stock or Common Stock on the last trading date prior to the date of
exercise.
At any time after the date of the Rights Plan until the time that a
person becomes an Acquiring Person, the Board of Directors may redeem the Rights
in whole, but not in part, at a price of $.01 per Right (Redemption Price),
which may (at the option of the Company) be paid in cash, shares of Common Stock
or other consideration deemed appropriate by the Board of Directors. Upon the
effectiveness of any action of the Board of Directors ordering redemption of the
Rights, the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
Issuance of Preferred Stock or Common Stock upon exercise of the Rights
will be subject to any necessary regulatory approvals. Until a Right is
exercised, the holder thereof, as such, will have no rights as a shareholder of
the Company, including, without limitation, the right to vote or to receive
dividends. As of the date hereof, one million shares of Preferred Stock have
been reserved for issuance in the event of exercise of the Rights.
The provisions of the Rights Plan may be amended by the Company, except
that any amendment adopted after the time that a person becomes an Acquiring
Person may not adversely affect the interests of holders of Rights.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on the Rights being redeemed or a substantial
number of Rights being acquired, and under certain circumstances the Rights
beneficially owned by such a person or group may become void. The Rights should
not interfere with any merger or other business combination approved by the
Board of Directors because, if the Rights would become exercisable as a result
of such merger of business combination, the Board of Directors may, at its
option, at any time prior to the time that any person becomes an Acquiring
Person, redeem all (but not less than all) of the then outstanding Rights at the
Redemption Price.
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