Registration No. 333-17181
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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THE MONTANA POWER COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Montana 81-0170530
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
40 East Broadway
Butte, Montana 59701-9394
(406) 723-5421
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DANIEL T. BERUBE JERROLD P. PEDERS0N ELLEN M. SENECHAL
Chairman of the Board Vice President and Treasurer
and Chief Executive Chief Financial and The Montana Power
Officer Information Officer Company
The Montana Power The Montana Power 40 East Broadway
Company Company Butte, Montana
40 East Broadway 40 East Broadway 59701-9394
Butte, Montana Butte, Montana (406) 723-5421
59701-9394 59701-9394
(406) 723-5421 (406) 723-5421
ROBERT G. SCHUUR, ESQ.
JOHN T. HOOD, ESQ.
Reid & Priest LLP
40 West 57th Street
New York, New York
10019
(212) 603-2000
(NAMES AND ADDRESSES, INCLUDING ZIP CODES, AND TELEPHONE NUMBERS, INCLUDING
AREA CODES, OF AGENTS FOR SERVICE)
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Copy to:
M. DOUGLAS DUNN, ESQ.
ROBERT B. WILLIAMS, ESQ.
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
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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.
SUBJECT TO COMPLETION, DATED DECEMBER , 1996
$150,000,000
THE MONTANA POWER COMPANY
MEDIUM-TERM NOTES, SERIES B
DUE FROM 9 MONTHS TO 40 YEARS FROM DATE OF ISSUE
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The Montana Power Company (the "Company") may offer from time to time
up to $150,000,000 aggregate principal amount of its unsecured Medium-Term
Notes, Series B (the "Notes"), on terms to be determined at the time of
sale. The principal amounts, issue prices, original issue and maturity
dates, interest rates and interest payment dates, redemption or repayment
provisions, if any, and other material terms of the Notes will be set forth
in Pricing Supplements hereto. Each Note will bear interest at a fixed
rate and will mature from nine months to 40 years from its date of issue,
as selected by the purchasers and agreed to by the Company.
The Notes will be represented by either Global Notes, representing
beneficial interests in the Notes, registered in the name of a nominee of
The Depository Trust Company, as Depositary, or certificates issued in
definitive form, as specified in the applicable Pricing Supplement.
Beneficial interests in the Notes will be shown on, and transfers thereof
will be effected only through, records maintained by The Depository Trust
Company and its participants. Beneficial interests will be exchanged for
Notes in definitive form only under the limited circumstances described
herein under "Book-Entry System."
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR BY ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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PRICE AGENTS' PROCEEDS TO
TO PUBLIC(1) COMMISSIONS(2) COMPANY(2)(3)
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Per Note . . 100% .125%-.750% 99.875%-99.250%
$187,500- $149,812,500-
Total . . . . $150,000,000 $1,125,000 $148,875,000
(1) Unless otherwise specified in the applicable Pricing
Supplement, the price to the public will be 100% of the
principal amount.
(2) The Company will pay to the Agents a commission of from
.125% to .750%, depending on maturity, of the principal
amount of any Note sold through them as agents. Unless
otherwise specified in the applicable Pricing Supplement,
any Note sold to an Agent as principal will be purchased by
such Agent at a price equal to 100% of the principal amount
thereof less a percentage equal to the applicable
commission, and may be resold by such Agent to investors or
other purchasers at varying prices related to prevailing
market prices at the time of resale to be determined by such
Agent or, if so agreed, at a fixed offering price. The
Company may also sell Notes directly to investors in which
case no commission will be payable. The Company has agreed
to indemnify the Agents against certain liabilities,
including liabilities under the Securities Act of 1933. See
"Plan of Distribution."
(3) Before deduction of expenses payable by the Company
estimated at $225,000, including reimbursement of certain
expenses of the Agents.
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Offers to purchase Notes are being solicited, on a reasonable
best efforts basis, from time to time by the Agents on behalf of the
Company. Notes may be sold to the Agents on their own behalf at negotiated
discounts. The Company reserves the right to sell Notes directly to
investors on its own behalf. The Company reserves the right to withdraw,
cancel or modify the offering contemplated hereby without notice. The
Company or an Agent may reject an offer as a whole or in part. See "Plan
of Distribution".
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GOLDMAN, SACHS & CO.
J. P. MORGAN & CO.
LEHMAN BROTHERS
MORGAN STANLEY & CO.
INCORPORATED
The date of this Prospectus is , 199 .
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IN CONNECTION WITH THE DISTRIBUTION OF NOTES UNDERWRITTEN BY AN AGENT
ACTING AS PRINCIPAL, SUCH AGENT MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH
STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED HEREBY AT
LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON ANY OVER-THE-COUNTER MARKET OR OTHERWISE,
AND, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Securities and
Exchange Commission ("Commission") pursuant to the Securities Exchange Act
of 1934, as amended ("1934 Act"), are incorporated herein by reference:
1. Annual Report on Form 10-K for the year ended December 31,
1995 ("1995 10-K").
2. Quarterly Reports on Form 10-Q for the quarters ended March
31, June 30, and September 30, 1996.
3. Current Reports on Form 8-K, dated January 5, January 23,
April 10, April 23, July 24, October 22 and December 11,
1996.
All documents subsequently filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the 1934 Act prior to the termination of the
offering hereunder shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such
documents. The documents which are incorporated by reference in this
Prospectus are sometimes hereinafter referred to as the "Incorporated
Documents."
Any statement contained in an Incorporated Document shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently filed
document which is deemed to be incorporated by reference herein 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 Prospectus.
The Company hereby undertakes to provide without charge to each
person, including any beneficial owner, to whom a copy of this Prospectus
has been delivered, on the written or oral request of any such person, a
copy of any or all of the documents referred to above which have been or
may be incorporated in this Prospectus by reference, other than exhibits to
such documents (unless such exhibits are specifically incorporated by
reference into such documents). Requests should be directed to Investor
Services, The Montana Power Company, 40 East Broadway, Butte, Montana
59701-9394, telephone (406) 496-5074.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the 1934
Act and in accordance therewith files reports and other information with
the Commission. Such reports and other information filed by the Company
can be inspected and copied at the public reference facilities maintained
by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the following Regional Offices of the Commission: Chicago
Regional Office, Citicorp Center, 500 West Madison, Suite 1400, Chicago,
Illinois 60661; and New York Regional Office, 7 World Trade Center, 13th
Floor, New York, New York 10048. Copies of such material can also be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. The Commission
also maintains a web site (http://www.sec.gov.) that contains reports,
proxy statements and other information regarding the Company. The Common
Shares of the Company are listed on the New York and Pacific Stock
Exchanges, where reports and other information concerning the Company may
be inspected.
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THE COMPANY
The Company and its subsidiaries conduct a number of diversified, but
related businesses. The Company's principal business is its Montana
electric and natural gas utility operation, which is conducted through both
its Energy Supply Division and its Energy and Communications Services
Division. This activity includes regulated utility operations involved in
the generation, purchase, transmission, and distribution of electricity,
and the production, purchase, transportation and distribution of natural
gas. The Company's non-regulated businesses are involved principally in
the mining and sale of coal; exploration for, and the development,
production, processing and sale of oil and natural gas; the sale of
telecommunication equipment and services; and independent power activities
that include the management of long-term power sales, and the development
of and investment in nonutility power projects and other energy-related
businesses. The Company was incorporated in 1961 under the laws of the
State of Montana, where its principal business is conducted, as the
successor to a New Jersey corporation incorporated in 1912. The principal
executive offices of the Company are located at 40 East Broadway, Butte,
Montana 59701-9394. Its telephone number is (406) 723-5421.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's historical ratio of
earnings to fixed charges for each of the periods presented:
Twelve
Months Ended
September 30, Years Ended December 31,
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1996 1995 1994 1993 1992 1991
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2.29(1) 1.96(1) 3.05 2.86 2.74 2.70
For purposes of computing the ratio of earnings to fixed charges,
earnings consist of net income plus current and deferred income taxes and
fixed charges. Fixed charges include interest and related amortization of
discount and premium on long-term debt and interest on short-term
borrowings. Fixed charges also include the implicit interest component of
the rental cost of the Company's share of
Colstrip Unit No. 4 and one-third of all rentals, excluding delay rentals
and rentals on joint-use property.
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(1) Excluding the effects of the implementation of SFAS No. 121 and the
writedown of a coal mining investment, effective October 1, 1995, the
ratio of earnings to fixed charges would have been 2.84x at December
31, 1995 and 3.16x at September 30, 1996.
USE OF PROCEEDS
Unless otherwise specified in the applicable Pricing Supplement, the
net proceeds received by the Company from the sale of the Notes offered
hereby will be used for general corporate purposes, including the
redemption, repayment or retirement of outstanding indebtedness of the
Company and the payment of expenditures relating to the Company's
construction program, including the repayment of short-term debt incurred
in connection with any of the foregoing. To the extent that the proceeds
from the sale of the Notes are not immediately so used, they will be
temporarily invested in short-term, interest-bearing obligations.
DESCRIPTION OF THE NOTES
The Notes will be issued under an Indenture, dated as of December 1,
1989 (such Indenture, originally executed and delivered and as thereafter
supplemented and amended, together with any constituent instruments
establishing the terms of particular Securities (as hereinafter defined),
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being herein called the "Indenture"), between the Company and Citibank,
N.A., as trustee (the "Trustee"). The statements under this heading do not
purport to be complete and are subject to the detailed provisions of the
Indenture, a copy of which has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part. Wherever particular
provisions of the Indenture or terms defined therein are referred to, such
provisions or definitions are incorporated by reference as a part of the
statements made herein and such statements are qualified in their entirety
by such reference.
GENERAL
The Indenture provides that, in addition to the Notes offered hereby,
additional debt securities (including both interest-bearing and original
issue discount securities) may be issued thereunder without limitation as
to the aggregate principal amount (Indenture, Section 301). The Notes and
all other debt securities hereafter issued under the Indenture are
collectively referred to as the "Securities". The Indenture does not limit
the amount of other debt, secured or unsecured, which may be issued by the
Company.
THE NOTES
All of the Notes will be unsecured and will rank pari passu with all
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other unsecured and unsubordinated indebtedness of the Company.
Substantially all of the Company's utility assets are subject to the lien
of its Mortgage and Deed of Trust securing its First Mortgage Bonds now or
hereafter to be outstanding.
Unless otherwise indicated in the applicable Pricing Supplement and
except under the circumstances described under "Book-Entry System" herein,
the Notes will be issued as one or more global notes (each a "Global
Note"), each of which will represent beneficial interests in such Notes
(each such beneficial interest being referred to herein as a "Book-Entry
Note"). All Book-Entry Notes having the same Original Issue Date (as
hereinafter defined), maturity date, redemption and repayment provisions
and interest rate will be represented by a single Global Note. Each Global
Note will be deposited with, or on behalf of, The Depository Trust Company
("DTC"), or such other depository as may be subsequently designated (the
"Depository") and registered in the name of a nominee of the Depository.
Beneficial interests in the Notes will be shown on and transfers thereof
will be effected through the records maintained by the Depository and its
participants. Beneficial interests will be exchanged for Notes in
definitive form only under the limited circumstances described under "Book-
Entry System." Unless otherwise indicated in the applicable Pricing
Supplement, Notes will be issued in denominations of $1,000 or any integral
multiple thereof.
The Notes will be offered on a continuous basis, will mature from nine
months to 40 years from their date of issue, and may be subject to
redemption at the option of the Company or be repayable by the Company at
the option of the registered holder (the "Holder") prior to maturity.
The Pricing Supplement with respect to each Note will describe the
following terms: (1) the price (expressed as a percentage of the aggregate
principal amount thereof) at which such Note will be issued; (2) the date
on which such Note will be issued (the "Original Issue Date"); (3) the date
on which such Note will mature; (4) the rate per annum at which such Note
will bear interest; (5) the date or dates from which any such interest
shall accrue; (6) the dates on which such interest will be payable (each an
"Interest Payment Date"); (7) if such Note may be redeemed at the option of
the Company, or repaid at the option of the Holder, prior to its maturity
date, a description of the terms for such redemption or repayment; and (8)
any other material terms of such Note.
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PAYMENT OF NOTES
Each Note will bear interest from its Original Issue Date or from
the most recent Interest Payment Date to which interest has been paid
or duly provided for until the principal amount thereof shall have
been paid or made available for payment. Interest on each Note will be
payable semi-annually on each Interest Payment Date, and at maturity;
provided, however, that the first payment of interest on any Note with an
Original Issue Date between a Record Date (as hereinafter defined) and an
Interest Payment Date shall be made on the second Interest Payment Date
succeeding the Original Issue Date, as specified in the applicable Pricing
Supplement.
Interest in respect of Book-Entry Notes will be payable by the Company
to the Depository and by the Depository to its Direct Participants (as
hereinafter defined). Payments to the holders of Book-Entry Notes will be
the responsibility of Direct and Indirect Participants (as hereinafter
defined). See "Book-Entry System" herein.
Interest payable on certificated Notes will be payable to the person
in whose name such Notes are registered at the close of business on the
Record Date with respect to each Interest Payment Date; provided, however,
that interest payable at maturity will be payable to the person to whom
principal shall be payable.
Unless otherwise specified in the applicable Pricing Supplement, (i)
the Record Date shall be the fifteenth calendar day preceding an Interest
Payment Date and (ii) interest on each Note will be computed on the basis
of a 360-day year or twelve 30-day months.
In case any Interest Payment Date, redemption or repayment date or
maturity date is not a Business Day, payment of the amounts due on such
date may be made on the next succeeding Business Day, and no interest will
accrue on such amounts for the period from and after such Interest Payment
Date, redemption or repayment date or maturity date, as the case may be
(Indenture, Section 107).
REDEMPTION
Any terms for optional or mandatory redemptions of Notes, including
any sinking fund or analogous provisions for the retirement of the Notes,
will be set forth in the Pricing Supplement. If redeemable, such Notes
will be redeemed only upon notice, by mail, not less than 30 nor more than
60 days prior to the date fixed for redemption. Any notice of optional
redemption may state that such redemption shall be conditional upon the
receipt by the Trustee, on or prior to the date fixed for such redemption,
of money sufficient to pay the principal of, and the premium, if any, and
interest on, such Notes and that if such money has not been so received,
such notice will be of no force or effect and the Company will not be
required to redeem such Notes (Indenture, Section 404).
REPAYMENT AT THE OPTION OF THE HOLDER
If so specified in the applicable Pricing Supplement, the Notes
will be repayable by the Company in whole or in part at the option of the
Holders thereof on the date or dates specified in such Pricing Supplement,
at 100% of their principal amount, together with accrued interest to the
date of repayment. For any Note to be repaid, the Company must receive such
Note at its office or agency in the Borough of Manhattan, The City of New
York (currently, the office of the Trustee), within the election period
specified in the Pricing Supplement, together with the form entitled
"Option to Elect Repayment" on the reverse of, or otherwise accompanying,
such Note duly completed. Any such election so received by the Company
within such period shall be irrevocable. The repayment option may be
exercised by the Holder of a Note for less than the entire principal amount
of such Note, provided that the principal amount to be repaid is equal to
$1,000 or an integral multiple of $1,000. All questions as to the
validity, eligibility (including time of receipt) and acceptance of any
Note for repayment will be determined by the Trustee and the Company, whose
determination will be final and binding.
So long as the Depository or the Depository's nominee is the Holder of
the Notes, the Depository or such nominee will be the only entity that can
exercise the repayment option, and repayment will be made in accordance
with the Depository's repayment procedures in effect at the time. See
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"Book-Entry System" herein. In order to ensure that the Depository or its
nominee will timely exercise a repayment option with respect to a
particular beneficial interest in the Notes, the Beneficial Owner of such
interest must instruct the broker or other Direct or Indirect Participant
through which it holds such interest to notify the Depository of its
election to exercise the repayment option. In addition, the Beneficial
Owner must effect delivery of such interest at the time such notice of
election is given to the Depository by causing the broker or other Direct
or Indirect Participant through which it holds such interest to transfer
such interest on the Depository's records to the Trustee. Different firms
have different deadlines for accepting instructions from their customers
and, accordingly, each Beneficial Owner should consult the broker or other
Direct or Indirect Participant through which it holds an interest in the
Notes in order to ascertain the deadline by which such instruction must be
given in order for timely notice to be delivered to the Depository.
EVENTS OF DEFAULT
The following constitute Events of Default under the Indenture with
respect to the Notes (which constitute a series of the Securities) and to
each other series of the Securities outstanding thereunder:
(a) failure to pay any interest on any Security of such series within
60 days after the same shall become due and payable;
(b) failure to pay the principal of or premium, if any, on any
Security of such series within 3 Business Days after the same
shall become due and payable, whether at a Maturity Date, upon
redemption (including redemptions pursuant to any sinking fund or
analogous provision for the retirement of any Security), by
declaration of acceleration or otherwise;
(c) failure to perform or a breach of any covenant or warranty of the
Company in the Indenture (other than a covenant or warranty
solely for the benefit of one or more series of Securities other
than such series) for 90 days after written notice to the Company
by the Trustee or to the Company and the Trustee by the Holders
of at least 25% in principal amount of the Securities of such
series outstanding under the Indenture as provided in the
Indenture;
(d) default under any bond, debenture, note or other evidence of
indebtedness of the Company for borrowed money (including
Securities of other series issued under the Indenture) or under
any mortgage, indenture or other instrument securing or
evidencing any indebtedness of the Company for borrowed money,
which default (1) shall constitute a failure to make any payment
in excess of $5,000,000 of the principal of, or interest on, such
indebtedness or (2) shall have resulted in such indebtedness in
an amount in excess of $10,000,000 becoming or being declared due
and payable prior to the date on which it would otherwise have
become due and payable, in either case without such payment
having been made, such indebtedness having been discharged, or
such acceleration having been rescinded or annulled, within a
period of 90 days after written notice to the Company by the
Trustee or to the Company and the Trustee by the Holders of at
least 25% in principal amount of the Securities of such series
outstanding under the Indenture as provided in the Indenture;
(e) certain events of bankruptcy, insolvency or reorganization; and
(f) any other Event of Default specified with respect to Securities
of such series (Indenture, Section 801).
No Event of Default with respect to any series of the Securities
necessarily will constitute an Event of Default with respect to any other
series.
REMEDIES
If an Event of Default with respect to any series of any Securities
shall have occurred and be continuing, then either the Trustee or the
Holders of not less than 33% in principal amount of the outstanding
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Securities of such series may declare the principal amount of all of the
Securities of such series to be due and payable immediately; provided,
however, that if any Event of Default occurs and is continuing with respect
to more than one series of Securities, the Trustee or the Holders of not
less than 33% in aggregate principal amount of the outstanding Securities
of all such series, considered as one class, shall have the right to make
such declaration of acceleration, and not the Holders of the Securities of
any one of such series (Indenture, Section 802).
At any time after the declaration of acceleration with respect to the
Securities of any series shall have been made and before a judgment or
decree for payment of the money due shall have been obtained, the Event of
Default giving rise to such declaration of acceleration shall, without
further act, be deemed to have been waived, and such declaration and its
consequences shall, without further act, be deemed to have been rescinded
and annulled, if (a) the Company shall have paid or deposited with the
Trustee a sum sufficient to pay (1) all overdue interest on all Securities
of such series; (2) the principal of and premium, if any, on any Securities
of such series which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates prescribed therefor
in such Securities; (3) interest upon overdue interest at the rate or rates
prescribed therefor in such Securities, to the extent that payment of such
interest is lawful; and (4) all compensation and reimbursement due to the
Trustee under the Indenture; and (b) any other Event or Events of Default
with respect to the Securities of such series, other than the nonpayment of
the principal of Securities of such series which has become due solely by
such declaration of acceleration, have been cured or waived as provided in
the Indenture (Indenture, Section 802).
If an Event of Default with respect to the Securities of any series
shall have occurred and be continuing, the Holders of a majority in
principal amount of the outstanding Securities of such series will have the
right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee, with respect to the Securities of such series;
provided, however, that if an Event of Default shall have occurred and be
continuing with respect to more than one series of Securities, the Holders
of a majority in aggregate principal amount of the outstanding Securities
of all such series, considered as one class, shall have the right to make
such direction, and not the Holders of the Securities of any one of such
series; and provided, further, that (a) any such direction will not be in
conflict with any rule of law or with the Indenture and could not involve
the Trustee in personal liability in circumstances where indemnity would
not, in the Trustee's sole discretion, be adequate, and (b) the Trustee may
take any other action it deems proper which is not inconsistent with such
direction (Indenture, Section 812).
The right of a Holder of any Security of such series to institute a
proceeding with respect to the Indenture is subject to certain conditions
precedent, but each Holder has an absolute right to receive payment of
principal, premium, if any, and interest, if any, when due and to institute
suit for the enforcement of any such payment (Indenture, Sections 807 and
808).
The Indenture provides that the Trustee, within 90 days after the
occurrence of any default known to it thereunder with respect to the
Securities of a series, is required to give the Holders of the Securities
of such series notice of any default, unless cured or waived; provided,
however, that except in the case of a default in the payment of principal
of or premium or interest, if any, on any Securities of such series, the
Trustee may withhold such notice if the Trustee determines that it is in
the interest of such Holders to do so; and provided, further, that in the
case of an Event of Default of the character specified above in clause (c)
under "Events of Default", no such notice shall be given to such Holders
until at least 30 days after the occurrence thereof (Indenture, Section
902).
The Company will be required to furnish annually to the Trustee a
statement as to the performance by the Company of certain of its
obligations under the Indenture and as to any Event of Default thereunder
(Indenture, Section 605).
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
The Company will not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any Person unless (a) the corporation
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formed by such consolidation or into which the Company is merged or the
Person which acquires by conveyance or transfer, or which leases, the
property and assets of the Company substantially as an entirety is a Person
organized and existing under the laws of the United States of America, any
state thereof or the District of Columbia, and such Person shall expressly
assume, by a supplemental indenture, the due and punctual payment of the
principal of and premium and interest, if any, on all of the Securities
outstanding under the Indenture and the performance of all of the covenants
of the Company under the Indenture, (b) immediately after giving effect to
such transaction no Event of Default, and no event which after notice or
lapse of time or both would become an Event of Default, will have occurred
and be continuing, and (c) the Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel confirming that such
transaction is in compliance with the Indenture (Indenture, Section 1101).
MODIFICATION OF INDENTURE
Without the consent of any Holders, the Company and the Trustee may
enter into one or more supplemental indentures for any of the following
purposes:
(a) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the
Company in the Indenture and the Securities; or
(b) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities or tranche thereof or
to surrender any right or power conferred upon the Company by the
Indenture; or
(c) to add any additional Event of Default with respect to all or any
series of outstanding Securities; or
(d) to change or eliminate any provision of, or to add any new
provision to, the Indenture; provided that if such change,
elimination or addition will materially and adversely affect the
interests of the Holders of Securities of any series or tranche
thereof, such change, elimination or addition will become
effective with respect to such Securities only when they shall no
longer remain outstanding; or
(e) to provide collateral security for the Securities; or
(f) to establish the form or terms of Securities of any series or
tranche thereof as contemplated by the Indenture; or
(g) to evidence and provide for acceptance of the appointment of a
separate or successor trustee under the Indenture with respect to
the Securities of one or more series and to add to or change any
of the provisions of the Indenture as shall be necessary to
provide for or to facilitate the administration of the trusts
under the Indenture by more than one Trustee; or
(h) to provide for the procedures required to permit the utilization
of a noncertificated system of registration for any Securities;
or
(i) to cure any ambiguity, defect or inconsistency or to make any
other provisions with respect to matters and questions arising
under the Indenture, provided such action or other provisions
shall not adversely affect the interests of the Holders of
Securities of any series or tranche thereof in any material
respect (Indenture, Section 1201).
Other than as stated in the preceding paragraph, the consent of the
Holders or not less than a majority in principal amount of the Securities
of all series then outstanding under the Indenture, considered as one
class, is required for the purpose of adding any provisions to, or changing
in any manner or eliminating any of the provisions of, the Indenture
pursuant to a supplemental indenture; provided, however, that if less than
all of the series of Securities outstanding under the Indenture are
directly affected by a supplemental indenture, then the consent only of the
Holders of a majority in aggregate principal amount of the outstanding
Securities of all series so directly affected, considered as one class,
- 8 -
<PAGE>
will be required; and provided, further, that if the Securities of any
series shall have been issued in more than one tranche and if the proposed
supplemental indenture shall directly affect the rights of the Holders of
Securities of one or more, but less than all, of such tranches, then the
consent only of the Holders of a majority in aggregate principal amount of
the outstanding Securities of all tranches so directly affected, considered
as one class, shall be required; and provided, further, that no such
supplemental indenture shall, without the consent of the Holder of each
outstanding Security of each series or tranche directly affected thereby,
(a) change the stated maturity of, or any installment of principal of or
interest on, any Security, or reduce the principal thereof or the rate of
interest, or redemption premium thereon, or change the method of
calculating the rate of interest thereon, or otherwise change the terms of
the payment or place of payment of the principal thereof or interest or
redemption premium thereon, (b) reduce the percentage in principal amount
of the outstanding Securities of such series or tranche thereof required to
consent to any supplemental indenture or waiver under the Indenture or to
reduce the requirements for quorum and voting, (c) change any obligation of
the Company to maintain an office or agency at the place or places where
the principal of and premium and interest, if any, on the Securities of
such series are payable, or (d) modify certain of the provisions in the
Indenture relating to supplemental indentures and waivers of past defaults
(Indenture, Section 1202).
A supplemental indenture which changes or eliminates any covenant or
other provision of, or adds any new covenant or other provision to, the
Indenture which has expressly been included solely for the benefit of one
or more particular series of Securities or tranche thereof, or which
modifies the rights of the holders of Securities of such series or tranche
thereof with respect to such covenant or other provision, shall be deemed
not to affect the rights under the Indenture of the Holders of any
Securities of any other series or tranche thereof (Indenture, Section
1202).
DEFEASANCE
The Notes, or any portion of the principal amount thereof, will, at or
prior to the maturity thereof, be deemed to have been paid for purposes of
the Indenture (except as to any surviving rights such as rights of
registrations of transfer or exchange expressly provided for in the
Indenture), and the entire indebtedness of the Company in respect thereof
will be deemed to have been satisfied and discharged, if there shall have
been irrevocably deposited with the Trustee, in trust: (a) money in an
amount which will be sufficient, or (b) Government Obligations (as defined
below), which do not contain provisions permitting the redemption or other
prepayment thereof at the option of the issuer thereof, the principal of
and the interest on which when due, without any regard to reinvestment
thereof, will provide monies which, together with the money, if any,
deposited with or held by the Trustee, will be sufficient, or (c) a
combination of (a) and (b) which will be sufficient, to pay when due the
principal of and premium and interest, if any, due and to become due on the
Notes or such portion thereof on and prior to the maturity thereof,
together with an opinion of counsel to the effect that such deposit and
satisfaction and discharge shall not be deemed to be, or result in, a
taxable event to the Holders of such Notes or portions thereof for purposes
of Federal income taxes. "Government Obligations" means direct obligations
of, or obligations unconditionally guaranteed by, the United States of
America entitled to the benefit of the full faith and credit thereof, and
certificates, depositary receipts or other instruments which evidence a
direct ownership interest in such obligations or in any specific interest
or principal payments due in respect thereof (Indenture, Sections 101 and
701).
CONCERNING THE TRUSTEE
The Indenture grants to the Trustee a lien, superior to the rights of
the Holders of the Securities, on funds and property held by the Trustee
under the Indenture (other than funds and property held for the payment of
Securities which shall have been defeased) as security for the payment of
its fees and expenses as Trustee.
Citibank, N.A., together with certain other banks, is a party to
certain Credit Agreements with the Company and with its subsidiary, Entech,
Inc., pursuant to which Citibank and such other banks have lent money to
the Company and such subsidiary.
- 9 -
<PAGE>
LISTING
The Notes will not be listed on any national or regional securities
exchange.
BOOK-ENTRY SYSTEM
So long as the Depository, or its nominee, is the registered holder of
a Global Note, such Depository or its nominee, as the case may be, will be
considered the Holder of such Global Note for all purposes under the
Indenture, including notices and voting. Payments of principal of, and
premium, if any, and interest on, the Global Note will be made to the
Depository or its nominee, as the case may be. Accordingly, each person
owning a beneficial interest in a Global Note must rely on the procedures
of the Depository and if such person is not a Direct Participant, on
procedures of the Direct Participant through which such person holds its
interest, to exercise the rights of a Holder of such Note under the
Indenture.
The following is based solely on information furnished by DTC:
DTC will act a securities depositary for the Notes. The Notes
initially will be issued only as fully-registered securities registered in
the name of Cede & Co. (DTC's nominee).
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and
a "clearing agency" registered pursuant to the provisions of Section 17A of
the 1934 Act. DTC holds securities that its participants ("Participants")
deposit with DTC. DTC also facilitates the settlement among Participants
of securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement
of securities certificates. Direct Participants include securities brokers
and dealers, banks, trust companies, clearing corporations and certain
other organizations ("Direct Participants"). DTC is owned by a number of
its Direct Participants and by the NYSE, the American Stock Exchange, Inc.,
and the National Association of Securities Dealers, Inc. Access to the DTC
system is also available to others, such as securities brokers and dealers,
banks and trust companies that clear transactions through or maintain a
direct or indirect custodial relationship with a Direct Participant either
directly or indirectly ("Indirect Participants"). The rules applicable to
DTC and its Direct Participants and Indirect Participants are on file with
the Commission.
Purchases of Notes within the DTC system must be made by or through
Direct Participants, which will receive a credit for the Notes on DTC's
records. The ownership interest of each actual purchaser of each Note (a
"Beneficial Owner") is in turn to be recorded on the Participants' records.
Beneficial Owners will not receive written confirmation from DTC of their
purchases, but Beneficial Owners are expected to receive written
confirmations providing details of the transactions, as well as periodic
statements of their holdings, from the Participants through which the
Beneficial Owners purchased Notes. Transfers of ownership interests in the
Notes are to be accomplished by entries made on the books of Participants
acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in the Notes, except in
the event that use of the book-entry system for the Notes is discontinued.
To facilitate subsequent transfers, all Global Notes deposited by
Direct Participants with DTC are registered in the name of DTC's nominee,
Cede & Co. The deposit of Global Notes with DTC and their registration in
the name of Cede & Co. effect no change in beneficial ownership. DTC has
no knowledge of the actual Beneficial Owners of the Notes. DTC's records
reflect only the identity of the Direct Participants to whose accounts such
Notes are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings
on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants and by
Participants and Indirect Participants to Beneficial Owners will be
- 10 -
<PAGE>
governed by arrangements among them, subject to any statutory or regulatory
requirements that may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of
the Notes are being redeemed, DTC's practice is to determine by lot the
amount of the interest of each Direct Participant in such issue to be
redeemed.
Neither DTC nor Cede & Co. will itself consent or vote with respect to
Notes. Under its usual procedures, DTC would mail an Omnibus Proxy to the
Company as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Notes are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Notes will be made to DTC.
DTC's practice is to credit Direct Participants' accounts on the relevant
payment date in accordance with their respective holdings shown on DTC's
records unless DTC has reason to believe that it will not receive payments
on such payment date. Payments by Participants to Beneficial Owners will
be governed by standing instructions and customary practices, as is the
case with securities held for the account of customers in bearer form or
registered in "street name," and such payments will be the responsibility
of such Participant and not of DTC, the Agents or the Company, subject to
any statutory or regulatory requirements to the contrary that may be in
effect from time to time. Payment of principal and interest to DTC is the
responsibility of the Trustee, disbursement of such payments to Direct
Participants is the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners is the responsibility of Participants.
DTC may discontinue providing its services as securities depositary
with respect to the Notes at any time by giving reasonable notice to the
Company and the Trustee. Additionally, the Company may decide to
discontinue use of the system of book-entry transfers through DTC with
respect to the Notes. Under such circumstances, in the event that a
successor securities depositary should not be obtained, Notes in
certificated form would be printed and delivered.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Company believes to be
reliable, but the Company takes no responsibility for the accuracy thereof.
- 11 -
<PAGE>
LEGAL MATTERS
The validity of the Notes offered hereby will be passed upon for the
Company by Michael E. Zimmerman, Esq., General Counsel of the Company and
by Reid & Priest LLP, New York, New York, and for the Agents by Milbank,
Tweed, Hadley & McCloy, New York, New York. However, all matters of
Montana law will be passed upon only by Mr. Zimmerman.
EXPERTS
The consolidated financial statements incorporated in this Prospectus
by reference to the Company's Annual Report on Form 10-K for the year ended
December 31, 1995, have been so incorporated in reliance on the report of
Price Waterhouse LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
The statements made as to matters of law and legal conclusions under
"Business Utility Division Regulation and Rates" and "Business Environment"
in the Company's Annual Report on Form 10-K incorporated herein by
reference have been reviewed by Michael E. Zimmerman, Esq., General Counsel
of the Company, and are set forth therein and herein upon the authority of
such Counsel as expert. As of September 30, 1996, Mr. Zimmerman owned
2,762 shares of the Company's common stock and held options to purchase
24,200 additional shares at the market price existing on the date of grant.
Mr. Zimmerman's shares of common stock, including the shares subject to
option, have a current fair market value of approximately $576,300.
PLAN OF DISTRIBUTION
Subject to the terms and conditions set forth in the Distribution
Agreement with respect to the Notes (the "Distribution Agreement"), the
Notes will be offered on a continuing basis by the Company through Goldman
Sachs & Co., J. P. Morgan Securities Inc., Lehman Brothers Inc. and Morgan
Stanley & Co. Incorporated (the "Agents") who have agreed to use reasonable
best efforts to solicit purchases of the Notes. The Company has reserved
the right to appoint other agents, dealers or underwriters as Agents under
the Distribution Agreement or as Agents with respect to a particular
issuance of Notes. Any such additional Agents will enjoy all the rights and
benefits, and be subject to all of the obligations, of an Agent as set
forth in the Distribution Agreement.
The Company will have the sole right to accept offers to purchase
Notes and may reject any proposed purchase of Notes in whole or in part.
The Agents shall have the right in their discretion reasonably exercised,
to reject any offer to purchase Notes, in whole or in part. The Company
will pay the Agents a commission of from .125% to .750% of the principal
amount of Notes, depending upon maturity, for sales made through them as
Agents (except that the Company and any Agent may agree to a higher
commission for sales of Notes with maturities in excess of 30 years).
The Company may also sell Notes to the Agents as principals for their
own accounts at a discount to be agreed upon at the time of sale, or the
purchasing Agents may receive from the Company a commission or discount
equivalent to that set forth on the cover page hereof in the case of any
such principal transaction in which no other discount is agreed upon. Such
Notes may be resold to investors and other purchasers at varying prices
related to prevailing market prices at the time of such resale, as
determined by the Agents or, if so agreed, at a fixed public offering
price. The Company reserves the right to sell Notes directly on its own
behalf. No commission will be payable on any Notes sold directly by the
Company.
In addition, the Agents may offer the Notes they have purchased as
principal to other dealers. The Agents may sell Notes to any dealer at a
discount and, unless otherwise specified in the applicable Pricing
Supplement, such discount allowed to any dealer may include all or part of
the discount to be received from the Company. Unless otherwise indicated in
the applicable Pricing Supplement, any Note sold to an Agent as principal
will be purchased by such Agent at a price equal to 100% of the principal
amount thereof less a percentage equal to the commission applicable to any
- 12 -
<PAGE>
agency sale of a Note of identical maturity. After the initial public
offering of Notes to be resold to investors and other purchasers, the
public offering price (in the case of Notes to be resold at a fixed public
offering price), concession and discount may be changed.
The Agents, as agents or principals, may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933 (the
"Act"). The Company has agreed to indemnify the Agents against certain
liabilities, including liabilities under the Act. The Company has agreed to
reimburse the Agents for certain expenses.
The Agents may sell Notes to or through dealers who may resell to
investors, and the Agents may pay all or part of their discount or
commission to such dealers. Such dealers may be deemed to be "underwriters"
within the meaning of the Act.
Unless otherwise indicated in the applicable Pricing Supplement,
payment of the purchase price of Notes will be required to be made in
immediately available funds in The City of New York.
Goldman, Sachs & Co., J. P. Morgan Securities Inc., Lehman Brothers
Inc. and Morgan Stanley & Co. Incorporated and other Agents, if any, may be
customers of, engage in transactions with, and perform services for the
Company in the ordinary course of business.
The Notes are a new issue of securities with no established trading
market and will not be listed on any securities exchange. It has not
presently been established whether any Agent acting as principal will make
a market in such securities. If a market in the Notes is made by an Agent,
such market making may be discontinued at any time without notice. No
assurance can be given as to the existence or liquidity of the secondary
market for the Notes.
DELAYED DELIVERY ARRANGEMENTS
If so indicated in a Prospectus Supplement relating to the Notes, the
Company will authorize dealers or other persons acting as the Company's
agents to solicit offers by certain institutions to purchase the Notes from
the Company pursuant to contracts providing for payment and delivery on a
future date. Institutions with which such contracts may be made include
commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and others,
but in all cases such institutions must be approved by the Company. The
obligations of any purchaser under any such contract will not be subject to
any conditions except that the purchase of the Notes shall not at the time
of delivery be prohibited under the laws of the jurisdiction to which such
purchaser is subject. The dealers and such other persons will not have any
responsibility in respect of the validity or performance of such contracts.
- 13 -
<PAGE>
=========================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR THE
DOCUMENTS INCORPORATED BY REFERENCE HEREIN IN CONNECTION WITH THE OFFER
CONTAINED HEREIN AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE
AGENTS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES
DESCRIBED IN THIS PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITATION OF ANY
OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.
---------------------------
TABLE OF CONTENTS
Prospectus
PAGE
----
Incorporation of Certain Documents
by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Available Information . . . . . . . . . . . . . . . . . . . . . . . 2
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Ratio of Earnings to Fixed Charges . . . . . . . . . . . . . . . . 3
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Description of the Notes . . . . . . . . . . . . . . . . . . . . . 3
Book-Entry System . . . . . . . . . . . . . . . . . . . . . . . . . 10
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . 12
=========================================================================
=========================================================================
$150,000,000
THE MONTANA POWER
COMPANY
MEDIUM-TERM NOTES,
SERIES B
DUE FROM 9 MONTHS TO 40 YEARS
FROM DATE OF ISSUE
----------------
PROSPECTUS
----------------
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
LEHMAN BROTHERS
MORGAN STANLEY & CO.
INCORPORATED
=========================================================================
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this amendment to registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the Municipality of Butte-
Silver Bow, and State of Montana, on the 11th day of December, 1996.
THE MONTANA POWER COMPANY
By: /s/ Ellen M. Senechal
------------------------------
(Ellen M. Senechal, Attorney
in fact)
Pursuant to the requirements of the Securities Act of 1933, this
amendment to registration statement has been signed below by the
following persons in the capacities and on the date indicated.
Signature Title Date
--------- ----- ----
Chairman of the
D.T. Berube Board, Chief
(Principal Executive Officer) Executive Officer
and Director
Vice President and
J. P. Pederson Chief Financial
(Principal Financial and and Information
Accounting Officer) Officer
and Director
By: /s/ Ellen M. Senechal December 11, 1996
------------------------------
Ellen M. Senechal
(Attorney in fact)
Directors
---------
T. H. Adams, A. F. Cain, R. D. Corette, K. Foster,
R. P. Gannon, C. T. Hibbard, D. P. Lambros, J. R. Jester,
C. Lehrkind, III, J. P. Lucas, A. K. Neill, N. E. Vosburg
By: /s/ Ellen M. Senechal December 11, 1996
-------------------------------
Ellen M. Senechal
(Attorney in fact)
