As filed with the Securities and Exchange Commission on June , 1997
Registration No.
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
The Montana Power Company
(Exact name of registrant as specified in its charter)
Montana 810170530
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
40 East Broadway
Butte, Montana 59701
(406) 7235421
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
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D. T. BERUBE, J. P. PEDERSON, M. E. ZIMMERMAN, Esq.
Chairman of the Board Vice President and Vice President and
and Chief Financial General Counsel
Chief Executive Officer and Information Officer The Montana Power Company
The Montana Power Company The Montana Power Company 40 East Broadway
40 East Broadway 40 East Broadway Butte, Montana 59701
Butte, Montana 59701 Butte, Montana 59701 (406) 7235421
(406) 7235421 (406) 7235421
MARY LOUISE WEBER, Esq.
Reid & Priest LLP
40 West 57th Street
New York, New York 10019
(212) 6032187
(Names, addresses, including zip codes, and telephone numbers, including
area codes, of agents for service)
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Approximate date of commencement of proposed sale to the
public: From time to time after this Registration Statement
becomes effective.
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box./ /
If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment
plans, check the following box./X/
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CALCULATION OF REGISTRATION FEE
=================================================================
PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM
EACH CLASS OFFERING AGGREGATE AMOUNT OF
OF SECURITIES AMOUNT TO BE PRICE PER OFFERING REGISTRATION
TO BE REGISTERED REGISTERED UNIT* PRICE* FEE
---------------- ---------- ------- -------- ----------
Common Stock . . 3,000,000 $22.563 $67,689,000 $20,511.88
shares
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*Estimated solely for the purpose of calculating the registration
fee.
Pursuant to Rule 429, the combined prospectus filed herewith also
relates to Registration No. 33-58403.
The registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
PROSPECTUS
THE MONTANA POWER COMPANY
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
______________ SHARES OF COMMON STOCK
Daniel T. Berube
Chairman of the Board
Dear Participant or Prospective Participant:
We are pleased to send you this Prospectus describing our
amended Dividend Reinvestment and Stock Purchase Plan, (the
"Plan"). The Plan amendments include (i) the investment of
optional cash payments twice a month, instead of monthly; (ii) an
increase in the initial cash payment for all new investors to
$100; (iii) the addition of non-shareholder residents of Arizona,
Florida, and North Carolina as eligible to join the Plan (iv) an
increase in the minimum optional cash payment to $25
(participants who elected automatic monthly electronic funds
transfer payments or employee payroll deductions of less than $25
prior to July __, 1997, will not be required to increase that
amount).
The Plan provides investors with a simple, cost effective,
and convenient method of acquiring shares of the Company's common
stock. Participation in the Plan is open to (i) shareholders of
record of the common and preferred stock of the Company, (ii) to
the extent described below, beneficial owners of the common and
preferred stock of the Company, (iii) employees of the Company
and its subsidiaries, and (iv) other interested investors who are
resident in the following states: Arizona, California, Colorado,
Florida, Georgia, Illinois, Louisiana, Minnesota, Montana, New
Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania,
South Dakota, Tennessee, Texas, Utah, and Wisconsin.
The Plan permits you to reinvest dividends on all or any
specified number of your shares of common and/or preferred stock
in additional shares of common stock, purchase shares of common
stock and deposit your common stock and preferred stock
certificates into your Plan account for safekeeping.
If your shares are held by a brokerage, bank, or other
intermediary account, you may participate only by reinvesting
your dividends to purchase a whole number of shares and only
through participation by your brokerage, banker or trustee.
If you are a shareholder of record and wish to join the
Plan, you may enroll at any time by completing an enrollment
form. Employees and other interested investors residing in the
states described above may also join the Plan by completing an
enrollment form and making an initial cash payment of $100. To
obtain these forms, contact the Investor Services Department at
The Montana Power Company, 40 E Broadway, Butte, MT 59701-9394 or
call (800) 245-6767 or 406-497-3014.
We suggest you retain this Prospectus for future reference.
Sincerely,
Daniel T. Berube
Chairman of the Board
<PAGE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR BY ANY
STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is ___________________.
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THE COMPANY
The Montana Power Company (the "Company") is the issuer of
the additional shares of common stock offered hereby. The
principal executive offices of the Company are located at 40 East
Broadway, Butte, Montana 59701-9394, telephone (800) 245-6767 or
(406) 497-3014.
AVAILABLE INFORMATION
The Company files reports and other information with the
Securities and Exchange Commission (the "Commission") under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
Reports, proxy statements and other information filed by the
Company can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C., as well as at
the following regional offices: 13th Floor, Seven World Trade
Center, New York, New York, and Suite 1400, 500 West Madison
Street, Chicago, Illinois. Copies of such material can be
obtained from the Public Reference Section of the Commission, at
450 Fifth Street, N. W., Washington, D.C. 20549, at prescribed
rates. The Commission also maintains a web site
(http://www.sec.gov) that contains reports, proxy statements and
other information relating to the Company. The common stock is
listed on the New York Stock Exchange and Pacific Exchange.
Reports, proxy statements and other information concerning the
Company can be inspected at such Exchanges.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Incorporated by reference in this Prospectus are the
following documents filed with the Commission:
The Company's Annual Report on Form 10-K for the year ended
December 31, 1996.
The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997.
The Company's Current Reports on Form 8-K, dated, January
28, February 21, February 28, and April 21, 1997.
All reports and other documents filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date of this Prospectus and prior to the termination of
this offering shall be deemed to be incorporated by reference in
this Prospectus and to be made a part hereof from the date of
filing of such reports and documents.
The Company, upon request, will provide, without charge a
copy of any or all of the documents referred to above which have
been or may be incorporated in this Prospectus by reference,
other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents.
Requests for such copies should be directed to the Investor
Services Department, The Montana Power Company, 40 East Broadway,
Butte, Montana 59701-9394, telephone (800) 245-6767 or (406) 497-
3014.
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USE OF PROCEEDS
Unless shares of common stock are purchased directly from
the Company, the Company will receive no proceeds from the
offering of common stock through the Plan. To the extent that
shares are purchased directly from the Company the net proceeds
are expected to be used for general corporate purposes. During
1996, the Company sold 37,176 shares under the Plan for which it
received $841,107. The Company has no basis for estimating the
number of shares of common stock that the Company will sell
through the Plan or the prices at which such shares will be sold.
THE PLAN
The Company's Dividend Reinvestment and Stock Purchase Plan
(the "Plan") is as follows:
PURPOSE
The purpose of the Plan is to provide a simple, cost
effective, and convenient way to acquire additional shares of the
Company's common stock and provide for the safekeeping of
certificates.
ADVANTAGES
Additional shares of common stock can be acquired by (a)
reinvesting all or a portion of the cash dividends you receive on
shares of common and/or preferred stock registered in your own
name, and (b) making optional cash payments of at least $25 per
payment but not more than $60,000 per year.
At present, there are no service charges for participating
in the Plan (see "Costs"). When shares are purchased from the
Company, you will not pay any commissions. When shares are
purchased for you on the open market or in negotiated
transactions through one or more broker-dealers, you will pay
commissions. Broker-dealers (the "Broker") are appointed by the
Company to act as independent agents for such purpose. Because
of the volume of shares purchased through the Plan, the
commissions should be less than those which you would pay if you
purchased the same number of shares yourself.
Full investment of funds is possible because the Plan
permits the purchase of fractions of shares, as well as whole
shares, to be credited to your account. In addition, dividends
and whole shares will be reinvested in additional shares.
You may authorize your bank to make a monthly payment from
your account to purchase shares each month. Employees may
authorize payroll deductions.
You may avoid the cumbersome safekeeping of certificates for
shares credited to your account, since all shares purchased
through the Plan are held by the Custodian (see
"Administration"). In addition, you may deposit your common and
preferred stock certificates into the Plan for safekeeping.
Regular statements of account provide simplified record keeping.
You may request that the shares of common stock held in your
account be sold or that certificates be issued for the shares of
common and/or preferred stock.
As described below, there are certain limitations upon
participation in the Plan if you are the beneficial owner
(beneficial owner) of shares registered in the names of
brokerages, banks or other intermediary account.
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DISADVANTAGES
You have no control over the price at which shares are
purchased or sold for your account since shares (i) are purchased
under the Plan on specified dates or during specified periods,
and (ii) are sold on dates determined by the broker after the
Plan Administrator has processed a request for sale. Therefore,
you bear the risk of fluctuations in the market price of the
common stock (See "Purchases," "Per Share Price" and "Sale of
Shares").
Optional cash payments must be received by the twelfth day
or the twenty-seventh day of any month to be invested on the next
purchase date (for purchases from the Company) or during the next
purchase period (for purchases on the open market). Optional cash
payments received after the twelfth day or the twenty-seventh day
of the month will be held until the second following purchase
date or purchase period. In no event will optional cash payments
remain uninvested more than thirty-five days after receipt by the
Plan Administrator. No interest will be paid to you on funds
held by the Plan Administrator pending investment under the Plan
(See "Purchases").
ADMINISTRATION
The Company, as the Plan Administrator, administers the
Plan, keeps records, sends statements of account to participants,
monthly, in the case of optional cash purchases, and quarterly,
in the case of dividend reinvestment, and performs other duties
relating to the Plan. The Company appoints the Broker who acts
as the independent agent of participants to purchase shares on
the open market or in negotiated transactions. The Company, as
Custodian of the Plan, holds shares acquired under the Plan and
shares deposited into the Plan for safekeeping. The Company may
resign as Plan Administrator or as Custodian at any time upon the
appointment of a successor. The Company believes that its
position as Plan Administrator, as compared with that of a
registered broker-dealer or federally insured banking
institution, poses no material risk for the following reasons:
(i) the Company has substantial experience in administering its
dividend reinvestment plan over the years, having served as
administrator of the plan since 1982, (ii) the Plan
Administrator's duties are limited to clerical and administrative
functions such as recordkeeping, processing of forms and
preparing and distributing regular statements of account and
(iii) a segregated trust or escrow account has been established
with a bank to hold cash payments received from participants
pending investment under the Plan.
All communications concerning the Plan should be directed by
mail or telephone to the Plan Administrator as follows:
Plan Administrator, Investor Services Department
The Montana Power Company
40 East Broadway
Butte, Montana 59701-9394
Telephone: (800) 245-6767
(406) 497-3014
Fax: (406) 497-3018
ENROLLMENT
Shareholders of Record Common and Preferred Shares are
registered in your name.
You may join the Plan by returning a completed Authorization
Form to the Plan Administrator, Investor Services Department.
Beneficial Owners Common and Preferred shares are held in
street name by brokerages, banks, or trustees.
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You may participate in the dividend reinvestment portion of
the Plan, if your brokerage, bank or trustee elects to join the
Plan on your behalf. Reinvestment of dividends is limited to the
purchase of whole shares. Optional cash payments may not be
made.
Brokerages, banks or trustees may participate on your behalf
by completing a Brokerage, Bank, or Trustee Authorization Form
and returning it to the Plan Administrator, Investor Services
Department. If the Plan Administrator receives written
instructions from a brokerage, bank or trustee shareholder by the
fifth business day following each dividend record date, the Plan
Administrator reinvests that dividend in accordance with those
instructions. The reinvestment of dividends is limited with
respect to each account designated on the brokerage, bank or
trustee Authorization form to the purchase of the largest number
of whole shares that can be purchased with the dividends
attributable to such account. Any funds remaining after
reinvestment are remitted to the brokerage, bank or trustee. A
dividend check is mailed to the brokerage, bank or trustee in the
usual manner for all shares for which reinvestment instructions
are not received by the Plan Administrator. Standing
instructions are not permitted.
Since the Plan Administrator does not maintain records as
to, or hold shares for the accounts of beneficial owners, you
must look to your brokerage, bank or trustee for records of your
participation and with respect to the sale of shares purchased
with reinvested dividends or the receipt of certificates.
If you are a beneficial owner and want to participate in the
Plan as a shareholder of record, contact your brokerage, bank or
trustee and request that some or all of your shares be
transferred to your name.
Each brokerage, bank or trustee shareholder who participates
in the Plan on your behalf is mailed a quarterly statement
showing each transaction. In addition, the brokerage, bank or
trustee shareholder receives one stock certificate registered in
its name for the total number of shares purchased, and a check
for the uninvested dividends.
Employees
Employees of the Company or any of its subsidiaries may join
the Plan by completing an Employee Authorization Form,
accompanied by a cash payment of not less than $100 nor more than
$60,000; and may choose to make regular optional cash payments
through payroll deductions by completing an Employee Payroll
Deduction Form. These forms are to be sent to the Plan
Administrator, Investor Services Department.
Payroll deductions must be in an even dollar amount, not
less than $25 per deduction and not more than $60,000 per year.
Payroll deductions may be increased, decreased (but not below
$25) or terminated by an employee at any time by signing a new
Employee Payroll Deduction Form and sending it to the Plan
Administrator by the tenth day of the month.
If you elected to make payroll deductions of less than $25
prior to July __, 1997, you will not be required to increase the
amount to $25.
Other Interested Investors
Other interested investors who are individuals domiciled, or
which are corporations or other legal entities whose principal
places of business are, in the States of Arizona, California,
Colorado, Florida, Georgia, Illinois, Louisiana, Minnesota,
Montana, New Mexico, New York, North Carolina, Ohio, Oregon,
Pennsylvania, South Dakota, Tennessee, Texas, Utah and Wisconsin,
or such other states in which the Company has satisfied the
requirements of the state's securities laws applicable to the
operation of the Plan, may join the Plan by completing an
Authorization Form and returning it to the Plan Administrator,
Investor Services Department. The form must be accompanied by a
cash payment of not less than $100 nor more than $60,000.
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Other interested investors located in foreign countries may
not join the Plan until they become either shareholders of record
or beneficial owners.
Enrollment Deadlines
If the Plan Administrator receives your Authorization Form
directing reinvestment of dividends on or prior to the dividend
record date, that dividend will be reinvested in accordance with
your instructions in shares of common stock and the new shares
will be credited to your account. If the Plan Administrator
receives your Authorization Form after the dividend record date,
that dividend will be paid in cash and reinvestment will begin
with the next dividend. For example, in the case of a common
stock dividend paid by the Company on May 1, for which the record
date was April 10, if the Authorization Form directing
reinvestment is received by the Plan Administrator on or prior to
April 10, the May 1 dividend will be reinvested in shares of
common stock and will be credited to your account. However, if
the Authorization Form is received by the Plan Administrator
after April 10, the May 1 dividend will be paid in cash and
reinvestment will not begin until the next dividend. The record
dates for the payment of dividends on common and preferred stock
are customarily three weeks prior to the dividend payment dates.
Common and preferred stock dividend payment dates usually are the
first days of February, May, August and November.
FORMS
Authorization Forms, Brokerage, Bank or Trustee
Authorization Forms, Employee Authorization Forms, Employee
Payroll Deduction Forms, Cash Payment Forms, Automatic Cash
Payment Forms, Safekeeping Authorization Forms and instructions
may be obtained, at any time, from the Plan Administrator,
Investor Services Department.
PURCHASES
Shares purchased under the Plan are either authorized but
unissued shares of common stock purchased from the Company or
outstanding shares purchased by the Broker in the open market or
through negotiated transactions. Periodically, the Company may
change the source of such purchases. In no event will optional
cash payments received for investment remain uninvested for more
than thirty-five days after receipt by the Plan Administrator.
Purchases from the Company
Reinvested Dividends
Shares purchased from the Company with reinvested common and
preferred stock dividends are purchased and credited to your
account as of each dividend payment date. Dividend payment dates
for both the common and preferred stock usually are the first
days of February, May, August and November.
Optional Cash Payments
Shares purchased from the Company with optional cash
payments are purchased and credited to your account twice a month
on the first and the fourteenth days (or the next business day).
If the Company receives your optional cash payment by the twelfth
day of the month, it will be invested on the fourteenth day. If
the Company receives your optional cash payment after the twelfth
day and by the twenty-seventh day of the month, it will be
invested on the first day of the following month. For example,
an optional cash payment received on or after April 13 will not
be invested until May 1 and an optional cash payment received on
or after April 28 will not be invested
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until May 14. You will not be paid interest on optional cash
payments held by the Plan Administrator until the next purchase
date.
Market Purchases
Reinvested Dividends
Shares purchased by the Broker with reinvested common stock
and preferred stock dividends are purchased during the periods
commencing three business days prior to the first days of
February, May, August and November and ending at the discretion
of the Broker. Purchases are credited to your account as of the
last day of the purchase period.
Optional Cash Payments
Shares purchased by the Broker with optional cash payments
are purchased during two periods each month, beginning on the
thirteenth and twenty-eighth days of the month and ending at the
discretion of the Broker (except that in months in which a common
stock ex-dividend date occurs the purchase period will end on the
day before the ex-dividend date). If the Company receives your
optional cash payments by the twelfth day of the month, the
Broker will invest it during the period beginning on the
thirteenth day. If the Company receives your optional cash
payment after the twelfth day and by the twenty-seventh day of
the month, the Broker will invest it during the period beginning
on the twenty-eighth day. For example, an optional cash payment
received on or after April 13 will not be invested until the
purchase period beginning on April 28 and an optional cash
payment received on or after April 28 will not be invested until
the purchase period beginning May 13. You will not be paid
interest on optional cash payments held by the Plan Administrator
until the next purchase period. In no event will optional cash
payments remain uninvested for more than 35 days after receipt by
the Plan Administrator. Purchases are credited to your account
as of the last day of the purchase period.
The Broker will not purchase any shares in the open market
on any day on which the market price of the common shares will be
the basis for determining the price of shares purchased from the
Company. The number of shares purchased with reinvested
dividends and optional cash payments on any day during each
purchase period and the prices paid for such shares are
determined by the Broker.
Number of Common Shares Purchased
The number of shares purchased for you on any purchase date
or during any purchase period depends on (a) the amount of your
dividends to be reinvested and/or your optional cash payments to
be invested, and (b) the price of the shares of common stock
purchased, including, in the case of purchases made through the
Broker, the brokerage commissions. Your account is credited with
that number of shares, including any fractional share computed to
three decimal places, equal to the total amount of dividends
reinvested or optional cash payments invested on your behalf
divided by the applicable price per share. THE MANNER IN WHICH
THE PLAN OPERATES DOES NOT PERMIT THE PLAN ADMINISTRATOR TO HONOR
A REQUEST THAT A SPECIFIC NUMBER OF SHARES BE PURCHASED.
PER SHARE PRICE
Purchases from the Company
The per share price of shares purchased from the
Company is the average of the high and low prices of the
common stock quoted on the New York Stock Exchange (NYSE)
Composite Transaction listing on the applicable purchase
date or, if common stock is not traded on such day, on the
preceding day on which it is traded.
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Market Purchases
The per share price of shares purchased by the Broker
is the weighted average of the cost of all purchases of
common stock (including brokerage commissions) during the
applicable purchase period. The broker determines the prices
paid for all shares purchased.
CASH PAYMENTS
Optional Cash Payments
You may choose to make an optional cash payment by
sending a check or money order payable to The Montana Power
Company, together with a Cash Payment Form, to the Plan
Administrator, Investor Services Department. Payments may
vary in amount, but may not be less than $25 per payment nor
more than $60,000 per year. Cash Payment Forms are a part
of the Authorization Form and, in addition, are included
with each statement sent by the Plan Administrator.
Without withdrawing from the Plan, you may have your
optional cash payment returned by contacting the Plan
Administrator prior to the investment of that payment
(Purchase Period).
Optional cash payments received by the Company are
deposited promptly in a segregated trust or escrow bank
account. No interest will be paid to you on funds held by
the Plan Administrator pending investment. Any interest
earned on the account will be used to defray costs of
administering the Plan.
Automatic Cash Payments
You may elect to have monthly cash payments (not less
than $25) in a designated amount automatically charged
against your bank account by completing an Automatic Cash
Payment Form and sending it to the Plan Administrator,
Investor Services Department by the first day of any month.
The Plan Administrator will make the necessary arrangements
with your bank so that, on or about the twenty-seventh day
of each month, your bank account will be charged with the
amount designated on the Automatic Cash Payment Form. You
will not be required to write any checks or mail any
additional forms. You may discontinue the automatic cash
payments at any time by notifying the Plan Administrator,
Investor Services, by the tenth day of any month.
If you elected to make automatic monthly electronic
funds transfer payments of less than $25 prior to July __,
1997, you will not be required to increase the amount to
$25.
You may change the amount of your automatic cash
payment by completing a new Automatic Cash Payment Form and
sending it to the Plan Administrator, Investor Services
Department, by the tenth day of any month.
You may change the name of your bank or bank account
number, by completing a new Automatic Cash Payment Form and
sending it to the Plan Administrator, Investor Services
Department, by the first day of any month.
Employee Payroll Deduction
See "Employees" under "Enrollment" above.
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COSTS
Service Fees
At present, there are no service charges for participating
in the Plan. All costs of administration of the Plan are paid by
the Company. However, the Company reserves the right at any time
to charge an initial setup fee and quarterly handling fees.
Should the Company determine to charge such fees, you will be
notified ninety days in advance.
Other Fees
You will be charged a fee of $25 each time you request a
duplicate copy of cost basis information, or request a wire
transfer or next day delivery of the proceeds of any sale of
shares for your account (the $25 fee may be deducted from the
proceeds of the sale). A check made payable to the Montana Power
Company must accompany your request.
Commissions
When shares are purchased from the Company, you will not pay
any commissions on shares purchased through the Plan. When
shares are purchased through the Broker, you will pay commissions
on those shares. Because of the volume of shares purchased
through the Plan, commissions should be less than those which you
would otherwise pay if you purchased the same number of shares
yourself.
If you request that the Plan Administrator sell your
shares, you will pay any related brokerage commission and
applicable taxes.
WITHDRAWALS
Certificates
Shares of common stock purchased for you under the Plan and
your common and/or preferred stock certificates which have been
deposited in the Plan for safekeeping will be credited to your
Plan account.
Upon written request to the Plan Administrator, you may
request a certificate for any number of whole shares held in your
account. The Company will issue a certificate for such shares in
the same name(s) in which your account is maintained, unless
otherwise instructed. If you want the certificate to be issued
in a name other than the name in which your Plan account
registration is maintained, your signature(s) on the instructions
or stock power must be guaranteed by a guarantor who is a member
of or a participant in a Securities Transfer Association "STA"
recognized signature guarantee program. Any remaining full
shares and fraction of a share will continue to be held in your
account. Certificates for fractions of shares are not issued
under any circumstances.
If you participate in the Plan through your brokerage, bank
or trustee and want to obtain stock certificates for your shares
of common stock purchased on your behalf through the Plan,
contact your brokerage, bank or trustee and request that the
shares be transferred into your name.
Sale of Shares
Upon a written request, the Plan Administrator will instruct
the Broker to sell any number of whole shares of common stock
held in your account. However, no shares of common stock will be
sold beginning on the common stock ex-dividend date and ending on
the related dividend record date. The Plan Administrator, in its
discretion, may refuse to sell shares of common stock deposited
in the Plan for safekeeping or purchased with
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optional cash payments which have been in your account for less
than 90 days. You will receive the proceeds of the sale less
brokerage commissions and applicable taxes within 30 days of the
sale you request. If you request a wire transfer or next day
delivery of the sale proceeds, a $25 charge will be deducted from
the proceeds of the sale, unless your request is accompanied by a
check made payable to the Company. SHARES OF PREFERRED STOCK
HELD IN THE PLAN WILL NOT BE SOLD FOR YOU.
You can choose to sell your shares through a stockbroker of
your choice, in which case you should request a certificate for
your shares from the Plan Administrator.
Beneficial owners who want to sell shares of common stock
purchased through the Plan must contact their brokerages, banks
or trustees.
Withdrawal from the Plan
To withdraw from the Plan, send written notification to the
Plan Administrator. You may request, either (a) the issuance of
certificates for all of the whole shares of stock held in your
account and a cash payment for any fraction of a share, or (b)
the sale of all of the shares of common stock held in your
account, including any fraction of a share or (c) a combination
of the above. Shares will be sold in the manner described under
"Sale of Shares".
If you withdraw from the Plan before a purchase period
begins in any month, your optional cash payment, which the
Company may be holding to invest during that purchase period will
be returned. If your request is received after the purchase
period begins, any optional cash payment being held will be
invested during that purchase period. The Plan Administrator
would then withdraw those purchased shares as you requested.
If you are a beneficial owner participant and wish to
withdraw from participation in the Plan, contact your brokerage,
bank or trustee.
CHANGE IN MANNER OF PARTICIPATION
You may change the extent to which your dividends are
reinvested by completing a new Authorization Form specifying the
change and sending it to the Plan Administrator, Investor
Services Department. Changes become effective with respect to
the next dividend payment if the Authorization Form is received
by the Plan Administrator on or prior to the record date for that
dividend. Changes with respect to automatic cash payments may be
made in the manner described under "Cash Payments-Automatic Cash
Payments."
If you are a beneficial owner participant and wish to change
the extent to which you participate in the Plan you must contact
your brokerage, bank or trustee.
SAFEKEEPING OF STOCK CERTIFICATES AND BOOK ENTRY
Any Montana Power Company shareholder may deposit their common
stock or preferred stock certificate(s) into the Plan's
"safekeeping" service at no cost. Safekeeping is beneficial
because you no longer bear the risk and cost associated with the
loss, theft, or destruction of stock certificates. Certificates
representing shares to be deposited for safekeeping should be
sent, together with a completed Safekeeping Authorization Form,
by registered mail to the Plan Administrator, Investor Services
Department, The Montana Power Company, 40 East Broadway, Butte,
Montana 59701-9394. Certificates should not be endorsed. It is
suggested that you use registered mail when sending stock
certificates, declaring a value equal to 2% of the market value
of the shares on the date of mailing. This amount would be the
approximate cost of replacing the certificates should they be
lost in the mail. It is your
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<PAGE>
responsibility to retain records relative to the cost of any
shares represented by certificates deposited for safekeeping. A
Safekeeping Authorization Form may be obtained at any time by
request to the Plan Administrator.
Shares of stock purchased for you under the Plan will be
maintained in your Plan account for safekeeping in book entry
form.
PARTICIPANTS' ACCOUNTS AND REPORTS
The Plan Administrator maintains your account. All shares
purchased under the Plan or delivered by you for safekeeping are
credited to, and held in, your account.
In addition to a quarterly statement of your account, you
will receive a monthly statement following each purchase of
additional common shares, each sale of shares and each withdrawal
of certificates for shares and upon withdrawal from the Plan.
THESE STATEMENTS ARE YOUR CONTINUING RECORD OF THE COST OF SHARES
PURCHASED, THE BASIS FOR FEDERAL INCOME TAX PURPOSES, THE
PROCEEDS OF SALES AND THE AMOUNT OF DIVIDENDS REPORTABLE FOR
FEDERAL INCOME TAX PURPOSES, AND SHOULD BE RETAINED FOR INCOME
TAX PURPOSES. TO RECEIVE A DUPLICATE COPY OF THIS INFORMATION,
YOU MUST SUBMIT A CHECK IN THE AMOUNT OF $25 MADE PAYABLE TO THE
MONTANA POWER COMPANY. In addition, each participant receives
each revised Plan Prospectus and the same communications sent to
all shareholders, including the Company's Annual Report and any
Quarterly Reports to Shareholders, Notice of Annual Meeting and
Proxy Statement and tax information for reporting dividends paid.
Brokerages, banks and trustees participating in the Plan
receive from the Company, shortly after each dividend payment
date, a statement identifying the designated amount for
reinvestment and showing the number of shares with respect to
which dividends were to be reinvested, the total dividends paid,
the number of shares purchased, the total cost of the shares, the
amount of uninvested dividends remaining, the fair market
(taxable) value of the shares and the total dividends reportable
for Federal income tax purposes. With the statement, the
brokerage, bank or trustee receives one certificate registered
in its name for the total number of shares purchased for all of
the designated accounts and a check for the total amount of
uninvested dividends.
If your shares are held in street name, you must contact
your brokerage, bank or trustee for accounts and records of your
participation in the Plan.
SHARES PLEDGED
Shares held in the Plan cannot be pledged. If your shares
are to be pledged, contact the Plan Administrator to request a
certificate be issued in your name(s).
SHAREHOLDER VOTING
You will receive a proxy card for the total shares held in
your Plan account (includes certificates held in the Plan for
safekeeping) and shares held directly by you (certificates). If
a proxy card is returned properly signed and marked for voting,
the shares covered are voted as marked. If a proxy card is
returned properly signed, but without instructions as to the
manner shares are to be voted with respect to any item thereon,
the shares covered are voted in accordance with the
recommendations of the Company's Board of Directors. If the
proxy card is not returned, or if it is returned unexecuted or
improperly executed, the shares covered are not voted.
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RESPONSIBILITY OF THE PLAN ADMINISTRATOR, THE CUSTODIAN AND THE
BROKER
The Broker shall not have any responsibility with respect to
this Prospectus or the administration of the Plan. The Broker,
in acting as agent for the Plan participants, the Plan
Administrator, in administering the Plan, and the Custodian, in
holding shares under the Plan, are not liable for any act done in
good faith or for any good faith omission to act, including,
without limitation, any claim of liability (a) arising out of
failure to terminate your participation in the Plan upon your
death prior to receipt of legally sufficient instructions, and
(b) with respect to the prices at which shares are purchased or
sold for your account and the times at which such purchases or
sales are made. However, the foregoing in no way affects your
right to bring a cause of action based on alleged violations of
Federal securities laws.
THE COMPANY CANNOT ASSURE YOU OF PROFITS, OR PROTECT YOU
AGAINST LOSSES, ON THE SHARES PURCHASED UNDER THE PLAN, OR ASSURE
YOU OF FUTURE DIVIDENDS.
MODIFICATION OR TERMINATION OF PLAN; TERMINATION OF PARTICIPANTS
The Company reserves the right to suspend, modify or
terminate the Plan at any time and to interpret and regulate the
Plan as it deems necessary or desirable in connection with the
operation of the Plan.
The Company also reserves the right, at its discretion, to
terminate your participation in the Plan if your Plan account
contains less than one hundred shares. You would receive notice
of any such termination. In the event of any such termination,
your shares held under the Plan will be delivered or sold in the
manner described under "Withdrawal."
PARTICIPATION BY FOREIGN AND OTHER HOLDERS SUBJECT TO WITHHOLDING
Plan participants who are non-resident aliens or non-U.S.
corporations, trusts and estates and individuals are subject to
United States income tax withholding on dividends paid on shares
held in their account. The amount is determined in accordance
with U.S. Treasury regulations. Other holders of dividends may
be subject to United States back-up withholding. The dividends
will be reinvested or paid by check in an amount equal to the
dividends less the amount of tax required to be withheld.
Statements confirming purchases made for such participants will
indicate the net dividend reinvested and amount of tax withheld.
COMMUNICATIONS
All communications concerning the Plan should be directed to
the Plan Administrator as follows:
Plan Administrator, Investor Services Department
The Montana Power Company
40 East Broadway
Butte, Montana 59701-9394
Telephone: (800) 245-6767 or
(406) 497-3014
Fax: (406) 497-3018
TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN
The current Federal income tax consequences to a participant
in the Plan will be as follows:
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With respect to reinvested cash dividends used to purchase
authorized but unissued shares from the Company, a participant is
treated for Federal income tax purposes as having received a
distribution in an amount equal to the fair market value on the
dividend payment date of the full number of shares and any
fractional share purchased with reinvested dividends. The fair
market value of such shares on the dividend payment date will be
treated as dividend income to the participant to the extent of
current or accumulated earnings and profits of the Company, as
determined for Federal income tax purposes. The basis of the
shares so purchased is equal to the fair market value of such
shares on the dividend payment date.
With respect to reinvested cash dividends used to purchase
shares in the open market or through negotiated transactions, a
participant is treated for Federal income tax purposes as having
received a distribution in an amount equal to the cash used to
purchase the shares and to pay the brokerage commissions to
obtain the shares. Such distribution will be treated as dividend
income to the participant to the extent of current or accumulated
earnings and profits of the Company, as determined for Federal
income tax purposes. The basis of the shares so purchased is
equal to the amount of this distribution.
If you purchase shares with optional cash payments you will
not recognize taxable income upon such purchases. The basis of
shares purchased in this manner is the amount of the optional
cash payment.
You are not in receipt of taxable income upon the
distribution to you of certificates for shares purchased under
the Plan. Upon the subsequent sale of these shares, or upon the
sale by the Company of shares held for your account, you will
recognize capital gain or loss on the sale measured by the
difference between the amount you receive for the shares sold and
the amount at which the shares were purchased (tax basis).
The foregoing is a general statement of Federal income tax
consequences only. You should consult your own tax advisor as to
the specific application of the tax rules governing the Plan as
they relate to you. The statements of account sent to you should
be retained for this purpose.
DESCRIPTION OF COMMON STOCK
The following information is a summary of certain rights and
privileges of the common stock of the Company. The summary does
not purport to be complete. Reference is made to the Company's
Restated Articles of Incorporation, By-laws and Indenture (For
Unsecured Subordinated Debt Securities relating to Trust
Securities), dated as of November 1, 1996, from the Company to
The Bank of New York, as trustee (the "Subordinated Debt
Indenture"), which are exhibits to the Registration Statement of
which this Prospectus constitutes a part, for complete
statements. The following statements are qualified in their
entirety by such references.
AUTHORIZED AND OUTSTANDING STOCK: The Company has 125,000,000
authorized shares, without par value, divided into 5,000,000
shares of preferred stock and 120,000,000 shares of common stock.
On May 30, 1997, 580,389 shares of the preferred stock and
54,625,540 shares of the common stock were issued and
outstanding. In addition, options to purchase 687,290 shares of
common stock under the Long-Term Incentive Plan were outstanding
on that date.
The common stock is without par value and nonassessable. It
is listed on the New York Stock Exchange and Pacific Exchange,
Inc.
VOTING RIGHTS: Each holder of the preferred and common stock of
the Company is entitled to vote cumulatively for the election of
Directors, and otherwise to one vote for each share held. The
Board of Directors has fourteen members, approximately one-third
of whom are elected at each annual meeting for a term of three
years. In general, the presence of a majority of the outstanding
shares of the preferred and common stock will constitute a
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<PAGE>
quorum at a meeting of shareholders; and the affirmative vote of
the majority of the shares present shall be the act of the
shareholders. Montana law requires (1) class voting upon such
matters as a change in the number of authorized shares or in the
relative rights and preferences of a class or series or the
creation of a new class of stock having superior rights and
preferences; and (2) the approval by two-thirds of the
outstanding shares of preferred and common stock of a merger,
consolidation or share exchange, the sale of all or substantially
all of the Company's assets, or the voluntary dissolution of the
Company. The Company's Restated Articles of Incorporation
require the affirmative vote of a majority of the outstanding
shares of the common stock (1) to redeem the preferred stock of
the $6 Series, the $4.20 Series or the $6.875 Series, and (2) the
affirmative vote of a majority of the outstanding shares of
preferred and common stock to create a new class of stock, or for
shareholder amendment of the By-laws. The Restated Articles of
Incorporation also require the affirmative vote of two-thirds of
the shares of the preferred stock voting at a meeting at which a
majority of the shares of the preferred stock shall be present to
(1) create a class of stock or to create any security convertible
into a class of stock ranking prior to the preferred stock, or
(2) to change the express terms of the preferred stock in a
manner substantially prejudicial to the holders thereof.
DIVIDEND RIGHTS: Each series of the preferred stock is entitled,
in preference to the common stock, to (a) cumulative dividends at
the annual rate established for that series and (b) mandatory
redemption payments if provided for that series. After full
provision for preferred stock dividends and mandatory redemption
payments, if any, the common stock is entitled to dividends
declared out of any remaining funds available therefor.
LIMITATIONS ON PAYMENT OF DIVIDENDS: The Company's Subordinated
Debt Indenture contains a restriction on the payment of cash
dividends on Common Stock if the Company were to elect to defer
payment of interest on the debentures issued thereunder.
LIQUIDATION RIGHTS: In liquidation, the preferred stock is
entitled, in preference to the common stock, to the amount per
share fixed by the Directors in the resolutions providing for the
issue of each particular series plus accumulated unpaid
dividends. Thereafter, the common stock is entitled to all
remaining assets.
PREEMPTIVE RIGHTS: Holders of the common stock do not have
preemptive rights.
CHANGE OF CONTROL: The Company's Restated Articles of
Incorporation include a fair price provision that is intended to
provide protection against coercive takeover tactics deemed by
the Board of Directors not to be in the best interests of all
shareholders. It provides that in the event of certain business
combinations, including mergers, consolidations,
recapitalizations, certain sales or hypothecations of assets,
liquidations and certain issuances of securities, involving a
person or entity who is or may become the beneficial owner of 10%
or more of the outstanding shares of the capital stock of the
Company entitled to vote generally in the election of Directors
(the "Voting Shares"), the amount of cash or other consideration
to be paid to holders of the common stock must be at least equal
to the higher of the highest price paid by the 10% shareholder in
connection with the acquisition of certain of its shares of
common stock or the highest quoted price of the common stock on
certain dates related to such acquisition. Similar provisions
apply to the acquisition of the preferred stock. The fair price
provision does not apply in the event that such a business
combination shall have been approved by either two-thirds of
certain directors who are not affiliated with the 10% shareholder
(the "Continuing Directors") or the holders of 70% of the Voting
Shares. In addition, unless a proposed business combination has
been approved by two-thirds of the Continuing Directors, certain
other requirements must be met, including the requirement that a
proxy or information statement describing the proposed business
combination be mailed to shareholders at least 30 days prior to
its consummation. The fair price provisions may not be amended
or repealed except by the vote of holders of at least 70% of the
Voting Shares unless the amendment or repeal is recommended by
two-thirds of the Continuing Directors.
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<PAGE>
PREFERRED SHARE PURCHASE RIGHTS: The holders of the common stock
have one preferred share purchase right (each a "Right") for each
share of common stock. Each Right, evidenced by and traded with
the shares of common stock, entitles the shareholder to purchase
one one-hundredth of a share of Participating Preferred Shares, A
Series, at an exercise price of $120.00, subject to certain
adjustments. The Rights will be exercisable only if a person or
group acquires 20% or more of the Company's Voting Shares or
announces a tender offer, the consummation of which would result
in the beneficial ownership by a person or group of 20% or more
of the Company's Voting Shares.
If any person or group acquires 20% or more of the
outstanding Voting Shares of the Company, each Right will entitle
its holder (other than such person or members of such group) to
purchase a number of shares of common stock or Participating
Preferred Shares, A Series, having a market value of twice the
Right's exercise price. If any person or group acquires between
20% and 50% of the outstanding Voting Shares of the Company, the
Board of Directors of the Company may, subject to requisite
regulatory approval, if any, require each outstanding Right to be
exchanged for one share of common stock or one one-hundredth of a
Participating Preferred Share, A Series (or assets in lieu
thereof).
In addition, after any person or group has acquired 20% or
more of the outstanding Voting Shares of the Company, the Company
may not consolidate or merge with, or sell 50% or more of its
assets or earning power to, any person or group, or engage in
certain "self-dealing" transactions with any person or group
owning 20% or more of the outstanding Voting Shares of the
Company, unless proper provision is made so that each Right would
thereafter entitle its holder to purchase a number of the
acquiring company's common shares having a market value at the
time of twice the Right's exercise price.
The Rights may be redeemed, at a redemption price of $.01
per Right, by the Board of Directors of the Company at any time
until any person or group has acquired 20% or more of the
outstanding Voting Shares of the Company. The Rights will expire
June 6, 1999.
TRANSFER AGENTS AND REGISTRARS: The Transfer Agents for the
common stock are the Company and First Chicago Trust Company of
New York. The Registrars are First Chicago Trust Company of New
York and First Bank Montana, National Association, Butte,
Montana.
EXPERTS
The consolidated financial statements incorporated in this
Prospectus by reference to the Company's Annual Report on Form
10-K for the year ended December 31, 1996, have been so
incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as
experts in auditing and accounting.
The statements made as to matters of law and legal conclusions
under (i) "Business-Utility Operations Regulation and Rates",
"Properties" "Legal Proceedings", and "Management's Discussion
and Analysis of Financial Condition and Results of Operation
Utility Operations Summary of Significant Regulatory Matters,
Liquidity and Capital Resources, and Environmental Issues", in
the Company's Annual Report on Form 10-K, incorporated herein by
reference, and (ii) under "Description of Common Stock" herein
have been reviewed by Michael E. Zimmerman, Esq., General Counsel
of the Company, and are set forth therein and herein upon the
authority of such Counsel, as expert. The statements made as to
matters of law and legal conclusions under "Tax Consequences of
Participation in the Plan" herein have been reviewed by Reid &
Priest LLP, tax counsel, and are set forth herein upon the
authority of such counsel, as expert. As of 5/29/97, Mr.
Zimmerman owned approximately 3,184 shares through the Company's
Retirement Savings Plan (401-K) and has been granted options to
purchase 24,200 additional shares at the market price existing on
the date of such grant. Mr. Zimmerman's shares, including the
underlying shares subject to options granted to him, had a fair
market value of approximately $619,563 on that date.
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<PAGE>
No person has been authorized to
give any information or to make any
representations other than those
contained in this Prospectus and, if
given or made, such information or
representations must not be relied upon
as having been authorized by the
Company. This Prospectus does not
constitute an offer to sell or a
solicitation of an offer to buy any
securities other than those specifically
offered hereby or in any circumstances
in which such offer or solicitations is
unlawful. Neither the delivery of this
Prospectus nor any sale hereunder, under
any circumstances, shall create any
implication that there has been no
change in the affairs of the Companmy or
its subsidiary since the date hereof or
that the information herein is correct
as of any time since its date.
TABLE OF CONTENTS
Page
The Company . . . . . . . . . . . . 3
Available Information . . . . . . . 3
Incorporation of Certain Documents by
Reference . . . . . . . . . . . . . 3
Use of Proceeds . . . . . . . . . . 4
The Plan . . . . . . . . . . . . . 4
Purpose . . . . . . . . . . . 4
Advantages . . . . . . . . . . 4
Disadvantages . . . . . . . . 5
Administration . . . . . . . . 5
Enrollment . . . . . . . . . . 5
Shareholders of Record . . 5
Beneficial Owners . . . . 5
Employees . . . . . . . . 6
Other Interested Investors
6
Enrollment Deadlines . . 7
Forms . . . . . . . . . . . . 7
Purchases . . . . . . . . . . 7
Purchases from the Company
7
Market Purchases . . . . 8
Number of Common Shares
Purchased . . . . . . . . . 8
Per Share Price . . . . . . . . 8
Purchases from the Company 8
Market Purchases . . . . . 9
Cash Payments . . . . . . . . . 9
Optional Cash Payments . . 9
Automatic Cash Payments . . 9
Employee Payroll Deduction 9
Costs . . . . . . . . . . . . 10
Service Fees . . . . . . 10
Other Fees . . . . . . . 10
Commissions . . . . . . . 10
Withdrawals . . . . . . . . . 10
Certificates . . . . . . 10
Sale of Shares . . . . . 10
Withdrawal from the Plan 11
Change in Manner of Participation
11
Safekeeping of Stock Certificates
and Book Entry . . . . . . . . 11
Participants' Accounts and Reports
12
Shares Pledged . . . . . . . . 12
Shareholder Voting . . . . . . 12
Responsibility of the Plan
Administrator, the Custodian
and the Broker . . . . 13
Modification or Termination of
Plan; Termination
of Participants . . . 13
Participation by Foreign and Other
Holders Subject
to Withholding . . . . 13
Communications . . . . . . . . 13
Tax Consequences of Participation in the
Plan . . . . . . . . . . . . . . . 13
Description of Common Stock . . . 14
Authorized and Outstanding
Stock . . . . . . . . . . 14
Voting Rights . . . . . . 14
Dividend Rights . . . . . 15
Liquidation Rights . . . 15
Preemptive Rights . . . . 15
Change of Control: . . . 15
Preferred Share Purchase
Rights . . . . . . . . . 15
Transfer Agents and
Registrars . . . . . . . 16
Experts . . . . . . . . . . . . . . 16
[column]
THE MONTANA POWER COMPANY
----------------
PROSPECTUS
----------------
DIVIDEND REINVESTMENT
AND
STOCK PURCHASE PLAN
________ ___, 1997
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
*Filing fee-Securities and Exchange Commission . . . $20,511.88
Stock exchange listing fees . . . . . . . . . . . . . 14,900.00
Legal fees . . . . . . . . . . . . . . . . . . . . . 20,000.00
Auditor's fees . . . . . . . . . . . . . . . . . . . 1,500.00
Printing . . . . . . . . . . . . . . . . . . . . . . 6,000.00
Miscellaneous . . . . . . . . . . . . . . . . . . . . 7,088.12
--------
Total expenses . . . . . . . . . . . . . . . . . $70,000.00
========
*Actual, others estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Restated Articles of Incorporation of the Company
provide for the indemnification of directors and officers to the
extent and in the manner provided in Sections 351451 through 351-
457, Montana Code Annotated, which Sections are as follows:
35-1-451. Definitions. As used in 35-1-451 through 35-1-459,
the following definitions apply:
(1) "Corporation" includes any domestic or foreign
predecessor entity of a corporation in a merger or other
transaction in which the predecessor's existence ceased upon
consummation of the transaction.
(2) (a) "Director" means an individual who is or was a
director of a corporation or an individual who, while a director
of a corporation, is or was serving at the corporation's request
as a director, officer, partner, trustee, employee, or agent of
another foreign or domestic corporation, partnership, joint
venture, trust, employee benefit plan, or other enterprise. A
director is considered to be serving an employee benefit plan at
the corporation's request if the director's duties to the
corporation include duties or services by him to the plan or to
participants in or beneficiaries of the plan.
(b) Director includes, unless the context requires
otherwise, the estate or personal representative of a
director.
(3) "Expenses" include attorneys' fees.
(4) "Liability" means the obligation to pay a judgment,
settlement, penalty, or fine, including an excise tax assessed
with respect to an employee benefit plan, or to pay reasonable
expenses incurred with respect to a proceeding.
(5) (a) "Official capacity" means:
(i) when used with respect to a director, the
office of director in a corporation; or
(ii) when used with respect to an individual other
than a director, as contemplated in 35-1-457, the office
in a corporation held by the officer or the employment
or agency relationship undertaken by the employee or
agent on behalf of the corporation.
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<PAGE>
(b) Official capacity does not include service for any
other foreign or domestic corporation or any partnership, joint
venture, trust, employee benefit plan, or other enterprise.
(6) "Party" includes an individual who was, is, or is
threatened to be made a named defendant or respondent in a
proceeding.
(7) "Proceeding" means any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal,
administrative or investigative and whether formal or informal.
35-1-452. Authority to indemnify.
(1) Except as provided in subsection (4), an individual
made a party to a proceeding because he is or was a director may
be indemnified against liability incurred in the proceeding if:
(a) he conducted himself in good faith;
(b) he reasonably believed:
(i) in the case of conduct in his official
capacity with the corporation, that his conduct was in
the corporation's best interests; and
(ii) in all other cases, that his conduct was at
least not opposed to the corporation's best interests;
and
(c) in the case of any criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful.
(2) A director's conduct with respect to an employee
benefit plan for a purpose the director reasonably believed to be
in the interests of the participants in and beneficiaries of the
plan is conduct that satisfies the requirement of subsection
(1)(b)(ii).
(3) The termination of a proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent is not, of itself, a determination that the director
did not meet the standard of conduct described in this section.
(4) A corporation may not indemnify a director under this
section:
(a) in connection with a proceeding by or in the right
of the corporation in which the director was adjudged liable
to the corporation; or
(b) in connection with any other proceeding charging
improper personal benefit to the director, whether or not
involving action in the director's official capacity, in
which the director was adjudged liable on the basis that
personal benefit was improperly received by the director.
(5) Indemnification permitted under this section in
connection with a proceeding by or in the right of the
corporation is limited to reasonable expenses incurred in
connection with the proceeding.
35-1-453. Mandatory indemnification. Unless limited by its
articles of incorporation, a corporation shall indemnify a
director who was wholly successful, on the merits or otherwise,
in the defense of any proceeding to which the director was a
party because he is or was a director of the corporation, against
reasonable expenses incurred by the director in connection with
the proceeding.
35-1-454. Advance for expenses.
(1) A corporation may pay for or reimburse the reasonable
expenses incurred by a director who is a party to a proceeding in
advance of final disposition of the proceeding if:
(a) the director furnishes the corporation a written
affirmation of the director's good faith belief that the
director has met the standard of conduct described in 35-1-
452;
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<PAGE>
(b) the director furnishes the corporation a written
undertaking, executed personally or on the director's
behalf, to repay the advance if it is ultimately determined
that the director did not meet the standard of conduct
described in 35-1-452; and
(c) a determination is made that the facts then known
to those making the determination would not preclude
indemnification under 35-1-451 through 35-1-459.
(2) The undertaking required by subsection (1)(b) must be
an unlimited general obligation of the director but need not be
secured and may be accepted without reference to financial
ability to make repayment.
(3) Determinations and authorizations of payments under
this section must be made in the manner specified in 35-1-456.
35-1-455. Court ordered indemnification. Unless a
corporation's articles of incorporation provide otherwise, a
director of the corporation who is a party to a proceeding may
apply for indemnification to the court conducting the proceeding
or to another court of competent jurisdiction. On receipt of an
application, the court, after giving any notice the court
considers necessary, may order indemnification if it determines
that the director:
(1) is entitled to mandatory indemnification under 35-1-453,
in which case the court shall also order the corporation to pay
the director's reasonable expenses incurred in obtaining
court ordered indemnification; or
(2) is fairly and reasonably entitled to indemnification in
view of all the relevant circumstances, whether or not the
director met the standard of conduct set forth in 35-1-452 or was
adjudged liable as described in 35-1-452(4). If the director was
adjudged liable as described in 35-1-452(4), the director's
indemnification is limited to reasonable expenses incurred.
35-1-456. Determination and authorization of indemnification.
(1) A corporation may not indemnify a director under 35-1-452
unless authorized in the specific case after a determination has
been made that indemnification of the director is permissible in
the circumstances because the director has met the standard of
conduct set forth in 35-1-452.
(2) The determination must be made:
(a) by the board of directors by majority vote of a
quorum consisting of directors not at the time parties to
the proceeding;
(b) if a quorum cannot be obtained under subsection
(2)(a), by majority vote of a committee designated by the
board of directors, in which designated directors who are
parties may participate, consisting solely of two or more
directors not at the time parties to the proceeding;
(c) by special legal counsel:
(i) selected by the board of directors or its
committee in the manner prescribed in subsection (2)(a)
or (2)(b); or
(ii) if a quorum of the board of directors cannot
be obtained under subsection (2)(a) and a committee
cannot be designated under subsection (2)(b), selected
by majority vote of the full board of directors in
which selected directors who are parties may
participate; or
(d) by the shareholders, but shares owned by or voted
under the control of directors who are at the time parties
to the proceeding may not be voted on the determination.
(3) Authorization of indemnification and evaluation as to
reasonableness of expenses must be made in the same manner as the
determination that indemnification is permissible, except that if
the determination is made by special legal counsel, authorization
of indemnification and evaluation as to reasonableness of
expenses must be made by those entitled under subsection (2)(c)
to select counsel.
35-1-457. Indemnification of officers, employees, and agents.
Unless a corporation's articles of incorporation provide
otherwise:
II-3
<PAGE>
(1) an officer of the corporation who is not a director is
entitled to mandatory indemnification under 35-1-453 and is
entitled to apply for court ordered indemnification under 35-1-455
to the same extent as to a director;
(2) the corporation may indemnify and advance expenses
under 35-1-451 through 35-1-459 to an officer, employee, or agent of
the corporation who is not a director to the same extent as to a
director; and
(3) a corporation may also indemnify and advance expenses
to an officer, employee, or agent who is not a director to the
extent, consistent with public policy, that may be provided by
its articles of incorporation, bylaws, general or specific action
of its board of directors, or contract.
* * * * * *
The bylaws of the Company further provide that the foregoing
right of indemnification shall not exclude or restrict any other
rights or actions which any director or officer may have, and
shall be available whether or not the director or officer
continues to hold such office at the time of incurring such
expense or discharging such liability.
The Company has insurance covering its expenditures which
might arise in connection with the lawful indemnification of its
directors and officers for their liabilities and expenses and
insuring officers and directors of the Company against certain
other liabilities and expenses.
II-4
<PAGE>
ITEM 16. LIST OF EXHIBITS.
INCORPORATED BY REFERENCE
Exhibit No. Previous Filing Exhibit Designation
3(a) -- Restated Articles of
Incorporation, as amended.
3(b) -- Bylaws, as amended.
4(a) -- Rights Agreement dated as of 33-42882 4(d)
June 6, 1989, between The
Montana Power Company and
First Chicago Trust Company
of New York, as Rights Agent.
4(b) -- Indenture (For Unsecured 333-17181 4(d)
Subordinated Debt Securities
relating to Trust Securities),
dated as of November 1, 1996,
from the Company to The Bank of
New York, as Trustee
4(c) -- Officer's Certificate dated 333-17181 4(e)
November 6, 1996 establishing
the Company's Junior Subordinated
Deferrable Interest Debentures,
8.45% Series due 2036
5(a) -- Opinion of Michael E.
Zimmerman, Esq.
5(b)
and 8 -- Opinion of Reid & Priest LLP.
23(a) -- Consent of Price Waterhouse LLP.
23(b) -- Consent of Michael E.
Zimmerman, Esq. (included in
Exhibit 5(a)).
23(c) -- Consent of Reid & Priest LLP
(included in Exhibit 5(b)).
24 -- Power of Attorney (See page II-6).
II-5
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this
registration statement (or the most recent post-
effective amendment thereof) which, individually
or in the aggregate, represent a fundamental
change in the information set forth in the
registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously
disclosed in the registration statement or any
material change to such information in the
registration statement;
provided, however, that paragraphs (i) and (ii) above do not
apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(4) That, for purposes of determining any liability under
the Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference
in the registration statement shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
provisions described under Item 15 above, or otherwise, the
registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer of controlling person of
the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
POWER OF ATTORNEY
Each director and/or officer of the registrant whose
signature appears below hereby appoints each of the Agents for
Service named in this registration statement as his or her
attorney-in-fact to sign in his or her name and behalf, in any
and all capacities stated below, and to file with the Securities
and Exchange Commission, any and all amendments, including post-
effective amendments, to this registration statement, and the
registrant hereby also appoints each such Agent for Service as
its attorney-in-fact with like authority to sign and file any
such amendments in its name and behalf.
II-6
<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 registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the Municipality of Butte-Silver Bow, and State of Montana, on
the 9th day of June, 1997.
THE MONTANA POWER COMPANY
By /s/ D. T. Berube
-------------------
D.T. Berube, Chairman
of the Board and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed below by the
following persons in the capacities and on the date indicated.
Signature Title Date
/s/ D. T. Berube
-------------------
D. T. Berube Chairman of the Board, June 9, 1997
(Principal Executive Chief Executive Officer
Officer)
/s/ J. P. Pederson
-------------------
J. P. Pederson Vice President and June 9, 1997
(Principal Financial and Chief Financial
Accounting Officer) Information Officer
& Director
/s/ T. H. Adams
--------------------
T. H. Adams Director June 9, 1997
/s/ A. F. Cain
--------------------
A. F. Cain Director June 9, 1997
/s/ R. D. Corette
--------------------
R. D. Corette Director June 9, 1997
/s/ K. Foster
-------------------- Director June 9, 1997
K. Foster
/s/ R. P. Gannon
--------------------
R. P. Gannon Vice Chairman of the
Board and President
& Director June 9, 1997
/s/ B. D. Harris
--------------------
B. D. Harris Director June 9, 1997
/s/ C. T. Hibbard
--------------------
C. T. Hibbard Director June 9, 1997
II-7
<PAGE>
/s/ J. R. Jester
--------------------
J. R. Jester Director June 9, 1997
/s/ D. P. Lambros
--------------------
D. P. Lambros Director June 9, 1997
/s/ C. Lehrkind III
--------------------
C. Lehrkind, III Director June 9, 1997
/s/ A. K. Neill
--------------------
A. K. Neill Director June 9, 1997
/s/ N. E. Vosburg
--------------------
N. E. Vosburg Director June 9, 1997
II-8
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
No. Description
------- ---------------------------
3(a) -- Restated Articles of Incorporation, as amended.
3(b) -- Bylaws, as amended.
5(a) -- Opinion of Michael E. Zimmerman, Esq.
5(b)
and 8 -- Opinion of Reid & Priest LLP.
23(a) -- Consent of Price Waterhouse LLP.
23(b) -- Consent of Michael E. Zimmerman, Esq. (included in
Exhibit 5(a)).
23(c) -- Consent of Reid & Priest LLP
(included in Exhibit 5(b)).
24 -- Power of Attorney (See page II-6).
Exhibit 3(a)(i)
06/13/88
RESTATED ARTICLES OF INCORPORATION
OF
THE MONTANA POWER COMPANY
Pursuant to the provisions of Section 58 of the Montana
Business Corporation Act, the undersigned Corporation adopts the
following Restated Articles of Incorporation:
ARTICLE I. The name of the Corporation is The Montana Power
Company.
ARTICLE II. The objects and purposes for which The Montana
Power Company is formed are as follows:
To manufacture, produce, generate, store, acquire, purchase,
sell, control, use, dispose of, transmit, distribute and supply
electricity and electrical energy or any other power or force in
any form and for any purpose whatsoever;
To purchase, lease or otherwise acquire, hold, use, operate,
sell, lease, or otherwise dispose of machinery, generators,
motors, plants, apparatus, devices and supplies of every kind
pertaining to or otherwise connected with the production, use,
transmission, distribution, regulation, control or application of
electricity or electrical energy;
To transform power generated by hydraulic or other plants
into electrical or other energy for any and all purposes;
To purchase, mine, produce, process, sell, distribute, use,
lease, or otherwise acquire, use, or dispose of coal, coal mines,
coal properties, machinery, appliances, and equipment of every
kind and nature whatsoever used or useful in connection with the
mining, production, transportation, use, sale or disposition of
coal, coal mines or coal properties;
To purchase, lease or otherwise acquire, hold, use, operate,
sell, lease or otherwise dispose of all water rights, water
powers and water privileges;
To construct, purchase or otherwise acquire, hold, use,
operate, sell, lease or otherwise dispose of hydraulic, electric
<PAGE>
and other works, plants, buildings, machinery, equipment, pipe
lines, distributing systems, transmission lines, dams, flumes,
ditches, canals, apparatus, devices or processes for use in
connection with such works;
To acquire, buy, hold, own, sell, lease, exchange, dispose
of, transmit, distribute, deal in, use, manufacture, produce,
furnish and supply bus service, natural or artificial gas, light,
heat, ice, refrigeration, water and steam in any form and for any
purposes whatsoever, and any power or force or energy in any form
and for any purposes whatsoever;
To construct, purchase, lease or otherwise acquire, hold,
use, operate, sell, lease or otherwise dispose of natural gas,
manufactured gas, gas works, gas plants, gas transmission
systems, distributing systems, gas reserves, gas rights, gas
storage fields and facilities and all properties of any kind
whatsoever used or useful in the gas business, together with
licenses, permits, authorizations or consents of every kind and
nature whatsoever which may be used or useful in connection with
any or all of the foregoing;
To purchase or otherwise acquire, hold, use, operate, sell,
lease or otherwise dispose of machinery, engines, mechanical
devices and articles of every character and description;
To acquire, build, construct, equip, own and operate street
railways and other railway properties of all kinds and
descriptions and with any kind of motive power, and to sell and
lease the same, but the powers in this paragraph set forth shall
be exercised only in connection with and as part of the other
objects and purposes referred to in this Article;
To purchase or otherwise acquire, hold, use, operate, sell,
lease, or otherwise dispose of such real and personal estate,
property rights, rights-of-way, easements, privileges, grants,
consents and franchises, individually or in association with
others, as may be necessary for or appropriate to or useful in
connection with the business and purposes of the company;
To apply for, purchase or otherwise acquire, and to hold,
use, own, operate and to sell, assign or otherwise dispose of,
and to grant or receive licenses in respect of or otherwise to
turn to account any and all inventions, improvements, patents,
patent rights, processes, trademarks and trade names, secured by
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<PAGE>
or issued under the laws of the United States of America or of
any other government or country;
To acquire by purchase or otherwise, and to hold, invest in,
sell, or otherwise dispose of the shares, bonds, debentures and
other evidences of indebtedness of any persons, firms,
associations and corporations, including the Corporation created
by these Articles; and when owner of any such shares, bonds,
debentures, securities or other obligations, to exercise all the
rights, powers and privileges of ownership, including the right
to vote thereon for any and all purposes; to aid in any manner
any corporation whose shares, bonds, debentures or other
obligations are owned or held by it, or in the shares, bonds,
debentures, securities or other obligations of which it is in any
way interested; and to guarantee the shares, bonds, debentures,
securities or other act or thing for the preservation,
protection, improvement or enhancement of the value of any such
shares, bonds, debentures, securities or obligations;
To construct, operate and maintain facilities for the
service of water to the public;
Without limitation to hold, purchase, mortgage and convey
real and personal property of every kind and description in any
state or territory of the United States or elsewhere;
In general, to do all such things as are incidental or
conducive to the accomplishment of the foregoing purposes, and to
engage in any and all lawful business whatever necessary or
convenient therefor, with all rights, privileges and powers now
or hereafter granted by the State of Montana to corporations.
ARTICLE III. Unless and until changed in the manner
provided by law, the address of the registered office of the
Corporation in the State of Montana is 40 East Broadway, Butte,
and the name of its registered agent at such address is R. M.
Ralph.
ARTICLE IV. The period of duration of this Corporation
shall be perpetual.
ARTICLE V. The number of Directors of this Corporation
shall be fixed by the Bylaws, but shall be not less than three
(3) nor more than eighteen (18). In the absence of a Bylaw
fixing the number of directors, the number of Directors
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<PAGE>
shall be eleven (11).
ARTICLE VI. 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, however, that this Article VI shall not eliminate or
limit the liability of a Director to the extent provided by
applicable law (a) for a breach of the Director's duty of loyalty
to the Corporation or its shareholders, (b) for acts or omissions
that constitute willful misconduct, recklessness, or a knowing
violation of law, (c) under 35-1-409 of the Montana Code
Annotated, (d) for a transaction from which the Director derives
an improper personal benefit, or (e) for any act or omission
occurring prior to the effective date of this Article VI. No
amendment to or repeal of this Article VI shall apply to or have
any effect on the liability or alleged liability of any Director
of the Corporation for or with respect to any acts or omissions
of such Director occurring prior to such amendment or repeal.
ARTICLE VII. The aggregate number of shares which the
Corporation has authority to issue is 65,000,000 shares without
nominal or par value, consisting of 5,000,000 Preferred shares
and 60,000,000 Common shares.
At the date hereof, the aggregate number of shares, issued
and unissued, itemized by class and series, if any, within each
class is as follows:
Issued Unissued Total
------ -------- -----
Common 23,750,936 36,249,064 60,000,000
Preferred:
$6.00 Series 159,589
$4.20 Series 60,000
$2.15 Series 1,200,000
Undesignated 3,580,411 5,000,000
(a) The Preferred shares shall be issued from time to time
in one or more series. The shares of any such series shall bear
such distinctive serial designation as shall be stated and
expressed in the resolution or resolutions providing for the
issue of such shares from time to time adopted by the Board of
Directors; and in such resolution or resolutions providing for
the issue of shares of each particular series, the Board of
Directors is expressly empowered to fix:
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<PAGE>
1. The dividend rate for the particular series, and
the date or dates from which dividends on shares of such
series shall be cumulative;
2. The terms on which the shares of the particular
series may be redeemed;
3. The amount which shall be paid to the holders of
shares of the particular series in the case of dissolution
or any distribution of assets; and
4. The terms or amount of any sinking fund provided
for the purchase or redemption of the shares of the
particular series.
All of the Preferred shares of any one series shall be
identical in all respects, except as to the dates from which
dividends thereon shall be cumulative; and all of the Preferred
shares shall be of equal rank, regardless of series, and shall be
identical in all respects except as herein otherwise provided.
(b) The holders of Preferred shares at the time outstanding
shall be entitled to receive dividends when and as declared by
the Board of Directors, out of the surplus or net profits of the
Corporation, payable in the case of each series at the annual
dividend rate for that particular series theretofore fixed by the
Board of Directors as hereinbefore provided. Such dividends on
Preferred shares shall be cumulative from the date or dates
theretofore fixed for the purpose by the Board of Directors, as
hereinbefore provided, so that if dividends on all outstanding
shares of each particular series of the Preferred shares, at the
annual dividend rate fixed by the Board of Directors, as
hereinbefore provided, shall not have been paid or declared and
set apart for payment for all past dividend periods and for the
current dividend periods, the deficiency shall be fully paid or
dividends equal thereto declared and set apart for payment at
said rate, but without interest, before any dividends on the
Common shares shall be paid or declared and set apart for
payment. No dividends shall be paid or declared and set apart
for payment on any series of Preferred shares for any particular
dividend period unless at the same time all unpaid dividends, if
any, on all the outstanding Preferred shares for all dividend
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<PAGE>
periods terminating prior to or concurrently with the termination
of such particular dividend period shall be paid or declared and
set apart for payment thereon. Dividends may be paid upon the
Common shares only when dividends at the respective annual
dividend rates fixed by the Board of Directors, as hereinbefore
provided, upon all the outstanding Preferred shares shall have
been paid or declared and set apart for payment for all past
dividend periods and for the then current dividend periods, but
whenever there shall have been paid or declared and set apart for
payment all such dividend upon the Preferred shares, as
aforesaid, then dividends upon the Common shares may be declared
payable then or thereafter out of any surplus or net profits then
remaining. The holders of shares of each series of the Preferred
shares shall not be entitled to receive any dividends thereon
other than the aforesaid dividends at the annual dividend rate
for the particular series fixed by the Board of Directors, as
hereinbefore provided.
Dividends may also be declared and paid in cash out of
depletion reserves in the manner and to the extent provided by
law.
(c) In the event of any liquidation, dissolution or winding
up of the affairs of the Corporation or any distribution of
capital, whether voluntary or involuntary, the holders of
Preferred shares at the time outstanding shall be entitled to be
paid the amount fixed by the Board of Directors, as hereinbefore
provided, before any distribution or payment shall be made to the
holders of Common shares. The holders of the Preferred shares
shall not be entitled to receive any distributive amounts upon
the liquidation, dissolution or winding up of the affairs of the
Corporation or upon any distribution of capital other than the
distributive amounts at the rates for the respective series fixed
by the Board of Directors, as hereinbefore provided, but, after
such payment to the holders of the Preferred shares, the
remaining assets and funds of the Corporation (subject to the
rights of any class of shares hereafter authorized) shall be
divided and distributed among the holders of the Common shares
alone according to their respective shares.
(d) A consolidation, merger or amalgamation of the
Corporation with or into any other corporation or corporations
shall not be deemed a distribution of assets of the Corporation
within the meaning of any of the provisions hereof.
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<PAGE>
(e) Except as hereinafter otherwise provided, each holder
of record of Preferred or Common shares shall be entitled to one
vote for each share of stock held by him, except that holders of
Preferred shares shall not be entitled to notice of or to vote at
any annual or special meeting of shareholders called for the
purpose of redeeming the whole or any part of the Preferred
shares at the time outstanding, and except that at all elections
for Directors, each holder of Preferred or Common shares shall be
entitled to as many votes as shall equal the number of his
Preferred or Common shares multiplied by the number of Directors
to be elected, and may cast all of such votes in person or by
proxy for a single Director, or may distribute them among the
number to be voted for, or any two or more of them as he may see
fit.
(f) No holder of Preferred shares shall be entitled as
such, as a matter of right, to subscribe for or purchase any part
of any new or additional issue of stock of any class whatsoever,
or of securities convertible into stock of any class whatsoever,
whether now or hereafter authorized or whether issued for cash,
for a consideration other than cash or by way or dividend.
(g) Upon any issue for money or other consideration of any
shares of the Corporation that may be authorized from time to
time, no holder of shares, irrespective of the kind of such
shares, shall have any preemptive or other right to subscribe
for, purchase or receive any proportionate or other share of the
shares so issued, but the Board of Directors may dispose of all
or any portion of such shares as and when it may determine free
of any such rights, whether by offering the same to shareholders
or by sale of other disposition, as said Board may deem
advisable.
(h) The Corporation may redeem the whole or any part of the
Preferred shares at the time outstanding, or the whole or any
part of any series thereof, at any time or from time to time,
upon the terms fixed by the Board of Directors as hereinbefore
provided for the redemption of the Preferred shares to be
redeemed; provided, however, that no Preferred shares of the
$6 Series, the $4.20 Series or the $2.15 Series shall be redeemed
-7-
<PAGE>
without either the written consent, or the affirmative vote at
any annual meeting or at any special meeting called for that
purpose, of the holders of record of a majority of the Common
shares issued and outstanding. If less than all of the shares of
any particular series of the Preferred shares are to be redeemed,
the shares of such series to be redeemed shall be selected in
such manner as the Board of Directors or the Executive Committee
shall determine. The Board of Directors by the vote or consent
of two-thirds (2/3) of all of the members thereof shall have the
power to select for redemption any particular share or shares of
the Preferred shares to be redeemed, designating the share or
shares of such Preferred shares so selected by the number or
numbers appearing on the then outstanding certificate or
certificates representing the shares so selected. Notice of
intention of the Corporation to redeem Preferred shares and of
the date and place of redemption shall be mailed not less than
thirty (30) days (or in case the Board of Directors shall have
fixed a longer period as hereinbefore provided, then not less
than such longer period) before the date of redemption to each
holder of record of the shares to be redeemed, at his last known
post office address as shown by the records of the Corporation.
The holders of any Preferred shares so called for redemption
shall, on the redemption date specified in such notice, cease to
be shareholders of the Corporation with respect to such shares
and all rights with respect to such Preferred shares so called
for redemption shall, on such redemption date, cease and
terminate except only the right of the holders thereof to receive
the redemption price therefor without interest.
At any time after such notice of redemption of any Preferred
shares has been mailed or otherwise given, the Corporation may
deposit, or may cause its nominee to deposit, the aggregate
redemption price (or the portion thereof not already paid in the
redemption of shares so to be redeemed) with any bank or trust
company in the State of Montana having a capital and undivided
surplus of not less than $500,000 named in a notice mailed to
holders of the shares called for redemption and represented by
certificates not theretofore surrendered, payable in the proper
amounts to the respective orders of the record holders of such
shares to be redeemed on endorsement, if required, and surrender
of their certificates for said shares, and from and after the
-8-
<PAGE>
making of such deposit said holders shall have no interest in or
claim against the Corporation or its nominee, with respect to
said shares, but shall be entitled only to receive said moneys
from said bank or trust company, without interest, on
endorsement, if required, and surrender of their certificates as
aforesaid. The Corporation shall be entitled to receive from any
such bank or trust company the interest, if any, allowed by said
bank or trust company on any moneys deposited as in this
paragraph provided, and the holders of any shares so redeemed
shall have no claim to any such interest. Any moneys so
deposited and remaining unclaimed at the end of six years from
the date fixed for redemption shall, if thereafter requested by
resolution of the Board of Directors or of the Executive
Committee, be repaid to the Corporation, and in the event of such
repayment to the Corporation, such holders of record of the
shares so redeemed as shall not have made claim against such
moneys prior to such repayment to the Corporation, shall be
deemed to be unsecured creditors of the Corporation for an amount
equivalent to the amount deposited as above-stated for the
redemption of such shares and so repaid to the Corporation, but
shall in no event be entitled to any interest. If such deposit
shall be made by the nominee of the Corporation, as aforesaid,
such nominee shall upon such deposit become the owner of the
shares with respect to which such deposit is made, and
certificates for shares may be issued to such nominee in evidence
of such ownership.
The Corporation may require any shares so called for
redemption to be delivered, duly assigned to a nominee of the
Corporation upon payment by such nominee in the manner
hereinabove provided of all amounts payable on such redemption
with respect to said shares. Any shares delivered to or acquired
by the nominee of the Corporation under the provisions hereof
shall be converted into or exchanged for such other securities of
the Corporation and on such terms as on or before such delivery
or acquisition may have been provided by the Corporation in
accordance with the next three paragraphs hereof.
The Corporation from time to time may resell any of its own
shares purchased or otherwise acquired by it as herein provided
for at such price as may be fixed by its Board of Directors or
Executive Committee.
The Corporation, in order to acquire funds with which to
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<PAGE>
redeem any Preferred shares of any class, may issue and sell
shares of any class then authorized but unissued, bonds, notes,
evidences of indebtedness or other securities.
The Board of Directors of the Corporation may at any time
authorize the conversion or exchange of the whole or any
particular share or shares of the outstanding Preferred shares of
any class, with the consent of the holder or holders thereof,
into or for shares of any other class at the time of such consent
authorized but unissued and may fix the terms and conditions upon
which such conversion or exchange may be made; provided that
without the consent of the holders of record of two-thirds (2/3)
of the Common shares outstanding given at a meeting of the
holders of the Common shares called and held as provided by the
Bylaws or given in writing without a meeting, the Board of
Directors shall not authorize the conversion or exchange of any
Preferred shares of any class into or for Common shares or
authorize the conversion or exchange of any Preferred shares of
any class into or for Preferred shares of any other class, if by
such conversion or exchange the amount which the holders of the
shares so converted or exchanged would be entitled to receive
either as dividends or shares in distribution of assets in
preference to the Common shares would be increased.
The Board of Directors shall have full power and authority,
subject to the limitations and provisions herein contained, to
prescribe the manner in which and the terms and conditions upon
which Preferred shares shall be redeemed from time to time.
(i) Except as herein otherwise provided, upon the vote of a
majority of all of the Directors of the Corporation and of the
holders of record of a majority of the total number of shares
then issued and outstanding and entitled to vote on such question
as herein stipulated, irrespective of class (or if the vote of a
larger number or different proportion of shares is required by
the laws of the State of Montana, notwithstanding the above
agreement of the shareholders of the Corporation to the contrary,
then upon the vote of the larger number or different proportion
of shares so required), the Corporation may from time to time
create or authorize one or more other classes of shares with such
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preferences, designations, rights, privileges, powers,
restrictions, limitations and qualifications as may be determined
by said vote, which may be the same as or different from the
preferences, designations, rights, privileges, powers,
restrictions, limitations and qualifications of the classes of
shares of the Corporation then authorized. Any vote authorizing
the creation of a new class of shares may provide that all moneys
payable by the Corporation with respect to any class of shares
thereby authorized shall be paid in the money of any foreign
country named therein or designated by the Board of Directors
pursuant to authority therein granted. Any such vote may
authorize any shares of any class then authorized but unissued to
be issued as shares of such new class or classes.
So long as any of the Preferred shares are outstanding, the
Corporation shall not, without the consent (given by a vote at a
meeting called for that purpose) of the holders of at least two-
thirds of the total number of the Preferred shares then
outstanding.
1. Create or authorize any new shares ranking prior
to the Preferred shares as to dividends, in liquidation,
dissolution, winding up or distribution, or create or
authorize any security convertible into such shares; or
2. Amend, alter, change or repeal any of the express
terms of the Preferred shares then outstanding in a manner
substantially prejudicial to the holders thereof.
(j) All shares of the Corporation without nominal or par
value, whether authorized by these Articles or by subsequent
increase of capital or pursuant to any amendment hereof, may be
issued from time to time for such consideration as may be fixed
from time to time by the Board of Directors, and authority to the
Board of Directors so to fix such consideration is hereby granted
by the shareholders; and any and all shares so issued, the full
consideration for which shall have been paid or delivered, shall
be conclusively deemed to be fully paid and nonassessable and the
holders thereof shall not be liable to the Corporation or its
creditors in respect thereof.
At the time of the issue of any shares without nominal or
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par value, the Board of Directors may determine conclusively in
the exercise of their reasonable discretion what capital
valuation shall be placed upon any property (other than money)
acquired by the Corporation in payment upon original issue of any
of its shares without nominal or par value.
(k) The Corporation may issue securities, notes, bonds,
debentures or other obligations convertible into shares of any
class, in the amounts and on such terms as may be provided by
resolution of the Board of Directors; provided, however, that the
shares issued upon conversion thereof shall not have prior or
superior rights and preferences to the shares of any class
outstanding at the time the convertible securities, notes, bonds,
debentures or other obligations are issued, and the issuance of
such shares shall not substantially prejudice the holders of
shares of any class outstanding at the time such convertible
securities, notes, bonds, debentures or other obligations are
issued.
1. The Corporation may issue notes, bonds, debentures
and other obligations of the Corporation in such amounts and
upon such terms and conditions as may be authorized by
resolution of the Board of Directors.
ARTICLE VIII. Unless the laws of the State of Montana
otherwise provide, any action which at any meeting of
shareholders requires the vote, assent or consent of two-
thirds (2/3) in interest of all the shareholders or of two-
thirds (2/3) in interest of each class of shareholders
having voting powers, or which requires such assent or
consent in writing to be filed, may be taken upon the assent
of and the assent given and filed of two-thirds (2/3) in
interest of the shareholders present and voting at such
meeting in person or by proxy; provided that where assent by
classes is required, such assent shall be given by two-
thirds (2/3) in interest of each class so present and
voting.
ARTICLE IX. The Board of Directors may appoint from the
Directors an Executive Committee, of which a majority shall
constitute a quorum, and to such extent as shall be provided in
the Bylaws, such Executive Committee shall have and may exercise
all of the delegable powers of the Board of Directors, including
power to cause the seal of the Corporation to be affixed to all
papers that may require it.
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<PAGE>
The power of appointment of committees (other than the
Executive Committee) and of Officers (other than the President,
the Vice Presidents, the Secretary and the Treasurer) and other
persons employed by the Company may to the extent permitted by
the Bylaws be delegated by the Board of Directors to the
President or to the Executive Committee.
The Board of Directors shall have the power from time to
time to fix and to determine and to vary the amount of the
working capital of the Corporation, and to direct and determine
the use and disposition of any surplus or net profits over and
above the capital paid in.
The Board of Directors from time to time shall determine
whether and to what extent, and at what times and places and
under what conditions and regulations, the accounts and books of
the Corporation, or any of them, shall be open to the inspection
of the shareholders, and no shareholder shall have any right to
inspect any account or book or document of the Corporation,
except as conferred by Statute or authorized by the Board of
Directors, or by a resolution of the shareholders.
ARTICLE X. The shareholders may alter or amend the Bylaws
of the Corporation by a majority vote (or if required by the laws
of the State of Montana, a larger number or different proportion
of the shares outstanding) of all the outstanding shares of the
Corporation entitled to vote given at any meeting duly held as
provided in the Bylaws, the notice of which includes notice of
the proposed alterations or amendment. The Board of Directors
may also alter or amend the Bylaws at any time by affirmative
vote of a majority (or if required by the laws of the State of
Montana, a larger number or different proportion of the members
of the Board of Directors) of the Board of Directors given at a
duly convened meeting of the Board of Directors, the notice of
which includes notice of the proposed alterations or amendments,
subject to the power of shareholders to change or repeal such
Bylaws; provided that the Board of Directors shall not make or
alter any Bylaw fixing their qualifications or changing the
number of shares required to constitute a quorum for a
shareholders' meeting.
ARTICLE XI. A. In addition to any affirmative vote
required by law or under any other provision of these Restated
Articles of Incorporation, and except as otherwise expressly
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provided in paragraph B., a Business Combination (as hereinafter
defined) shall require the affirmative vote of the holders of at
least 70 percent of the outstanding shares of Capital Stock (as
hereinafter defined) of the Corporation entitled to vote
generally in the election of Directors ("Voting Shares"). Such
affirmative vote shall be required notwithstanding the fact that
no vote may be required, or that some lesser percentage may be
specified, by law or in any agreement with any national
securities exchange or otherwise.
B. The provisions of paragraph A. of this Article shall
not be applicable to any particular Business Combination, and
such Business Combination shall require only such affirmative
vote as is required by law and any other provision of these
Restated Articles of Incorporation, if all of the conditions
specified in subparagraphs 1. or 2. shall have been satisfied:
1. The Business Combination shall have been approved
by two-thirds (whether such approval is made prior to or
subsequent to the acquisition of beneficial ownership of the
Voting Shares that caused the 10% Shareholder [as
hereinafter defined] to become a 10% Shareholder) of the
Continuing Directors (as hereinafter defined); or
2. All of the following conditions shall have been met:
(a) The aggregate amount of the cash and the Fair
Market Value (as hereinafter defined) 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 shares in such Business Combination shall be at least
equal to the highest amount determined under clauses (i) and
(ii) below:
(i) (if applicable) The highest per share price
(including any brokerage commissions, transfer taxes
and soliciting dealers' fees) paid by or on behalf of
the 10% Shareholder for any Common shares in connection
with the acquisition by the 10% Shareholder of
beneficial ownership of Common shares (A) within the
two-year period immediately prior to the first public
announcement of the proposed Business Combination (the
"Announcement Date") or (B) in the transaction in which
it became a 10% Shareholder, whichever is higher; and
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(ii) The Fair Market Value per Common share on the
Announcement Date or on the date on which the
10% Shareholder became a 10% Shareholder (such latter
date referred to in this Article as the "Determination
Date"), whichever is higher.
All per share prices and Fair Market Values
shall be adjusted to reflect any intervening stock
splits, stock dividends and reverse stock splits.
(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 or
series of outstanding Capital Stock, other than Common
shares, shall be at least equal to the highest amount
determined under clauses (i), (ii) and (iii) below:
(i) (if applicable) The highest per share price
(including any brokerage commissions, transfer taxes
and soliciting dealers' fees) paid by or on behalf of
the 10% Shareholder for any share of such class or
series of Capital Stock in connection with the
acquisition by the 10% Shareholder of beneficial
ownership of shares of such class or series of Capital
Stock (A) within the two-year period immediately prior
to the Announcement Date or (B) in the transaction in
which it became a 10% Shareholder, whichever is higher.
(ii) The Fair Market Value per share of such class
or series of Capital Stock on the Announcement Date or
on the Determination Date, whichever is higher; and
(iii) (if applicable) The highest preferential
amount per share to which the holders of shares of such
class or series of Capital Stock would be entitled in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the corporation,
regardless of whether the Business Combination to be
consummated constitutes such an event.
All per share prices and Fair Market Values
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<PAGE>
shall be adjusted for intervening stock splits, stock
dividends and reverse stock splits.
The provisions of this subparagraph (b) shall
be required to be met with respect to every class or
series of outstanding Capital Stock, whether or not the
10% Shareholder has previously acquired beneficial
ownership of any shares of a particular class or series
of Capital Stock.
(c) The consideration to be received by holders of a
particular class or series of outstanding Capital Stock
(including Common shares) shall be cash or in the same form
as previously has been paid by or on behalf of the
10% Shareholder in connection with its direct or indirect
acquisition of beneficial ownership of shares of such class
or series of Capital Stock. If the consideration so paid
for shares of any class or series of Capital Stock varied as
to form, the form of consideration for such class or series
of Capital Stock shall be either cash or the form used to
acquire beneficial ownership of the largest number of shares
of such class or series of Capital Stock previously acquired
by the 10% Shareholder.
(d) After such 10% Shareholder has become a
10% 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) in accordance with the
terms of the outstanding Preferred shares;
(ii) there shall have been (A) no reduction in the
annual rate of dividend paid on the Common shares
(except as necessary to reflect any stock split, stock
dividend or subdivision of the Common Shares), except
as shall have been 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
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of outstanding Common shares, unless the failure so to
increase such annual rate shall have been approved by
two-thirds of the Continuing Directors; and
(iii) such 10% Shareholder shall have not become
the beneficial owner of any additional Voting Shares
except as part of the transaction which results in such
10% Shareholder becoming a 10% Shareholder and except
in a transaction that, after giving effect thereto,
would not result in any increase in the
10% Shareholder's percentage beneficial ownership of
any class or series of Capital Stock.
(e) After such 10% Shareholder has become a
10% Shareholder, such 10% Shareholder shall not have:
(i) 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; or
(ii) made any major change in the Corporation's
business or equity capital structure without the
approval of two-thirds of the Continuing Directors.
(f) A proxy or information statement describing the
proposed Business Combination and complying with the
requirements of the Securities Exchange Act of 1934 and the
rules and regulations thereunder (or any subsequent
provisions replacing such Act, rules or regulations) shall
have been mailed to holders of outstanding Voting Shares of
the Corporation at least thirty (30) 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). The proxy
or information statement shall contain on the first page
thereof, in a prominent place, any statement as to the
advisability (or inadvisability) of the Business Combination
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that the Continuing Directors, or any of them, may choose to
make and, if deemed advisable by a majority of the
Continuing Directors, the opinion of an investment banking
firm selected by a majority of the Continuing Directors as
to the fairness (or lack thereof) of the terms of the
Business Combination from a financial point of view to the
holders of the outstanding Voting Shares other than the
10% Shareholder and its Affiliates or Associates (as
hereinafter defined).
C. For the purposes of this Article:
1. The term "Business Combination" shall mean:
(a) any merger, consolidation or share exchanges of the
Corporation or any Subsidiary (as hereinafter defined) with:
(i) any 10% Shareholder, or
(ii) any other company (whether or not such other
company is a 10% Shareholder) which is, or after such
merger or consolidation would be, an Affiliate or
Associate of a 10% Shareholder; or
(b) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition or security arrangement,
investment, loan, advance, guarantee, agreement to purchase,
agreement to pay, extension of credit, joint venture
participation or other arrangement (in one transaction or a
series of transactions) with or for the benefit of any
10% Shareholder or any Affiliate or Associate of any
10% Shareholder involving any assets, securities or
commitments of the Corporation or any Subsidiary having an
aggregate Fair Market Value and/or involving aggregate
commitments of five million dollars ($5,000,000) or more;
(c) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any 10% Shareholder or any Affiliate or
Associate of any 10% Shareholder in exchange for cash,
securities or other property (or a combination thereof)
having an aggregate Fair Market Value of five million
dollars ($5,000,000) or more;
(d) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation proposed by or
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on behalf of any 10% Shareholder or any Affiliate or
Associate of any 10% Shareholder;
(e) any reclassification of any securities of the
Corporation (including any reverse stock split),
recapitalization or reorganization of the Corporation,
merger or consolidation of the Corporation with any
Subsidiary, or any other transaction (whether or not with or
otherwise involving a 10% Shareholder or any Affiliate or
Associate of any 10% Shareholder) that 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
that is beneficially owned by any 10% Shareholder or any
Affiliate or Associate of any 10% Shareholder; or
(f) any other transaction or series of transactions
that is similar in purpose or effect to, or any agreement,
contract or other arrangement providing for any one or more
of the actions specified in the foregoing subparagraphs (a)
through (e).
2. A "person" shall mean any individual, firm, corporation
or other entity and shall include any group comprised of any
person and any other person with whom such person or any
Affiliate or Associate of such person has any agreement,
arrangement or understanding, directly or indirectly, for the
purpose of acquiring, holding, voting or disposing of Capital
Stock.
3. "10% Shareholder" shall mean, in respect of any
Business Combination, any person or Affiliate or Associate (other
than the Corporation or any Subsidiary and other than any profit
sharing, employee stock ownership or other employee benefit plan
of the Corporation or any Subsidiary or any trustee or fiduciary
of any such plan when acting in such capacity) who or which, as
of the record date for the determination of shareholders entitled
to notice of and to vote on such Business Combination, or
immediately prior to the consummation of any such transaction:
(a) is the beneficial owner, directly or indirectly,
of not less than ten percent of the Voting Shares; or
(b) is an Affiliate or Associate of the Corporation
and at any time within three (3) years prior thereto was the
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beneficial owner, directly or indirectly, of not less than
ten percent of the then outstanding Voting Shares; or
(c) is an assignee or has otherwise succeeded to
control of any Voting Shares of the Corporation which were
at any time within three (3) years prior thereto
beneficially owned by any 10% 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.
4. A person shall be the "beneficial owner" of any Voting
Shares:
(a) which such person or any of its Affiliates and
Associates beneficially owns, directly or indirectly; or
(b) which such person or any of its Affiliates or
Associates has, directly or indirectly
(i) 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 the exercise of conversion
rights, exchange rights, warrants, options, or
otherwise, or
(ii) the right to vote pursuant to any agreement,
arrangement or understanding; or
(c) which are beneficially owned, directly or
indirectly, by any other person with which such first
mentioned 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 Voting
Shares.
5. Voting Shares shall include shares deemed beneficially
owned through application of subparagraph 4 above but shall not
include any Voting Shares which may be issuable pursuant to any
agreement, arrangement or understanding or upon exercise of
conversion rights, warrants, options, or otherwise.
6. "Continuing Director" shall mean any member of the
Board of Directors who is not an Affiliate or Associate or
representative of the 10% Shareholder and who was a member of the
Board of Directors of the Corporation prior to the date as of
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<PAGE>
which any 10% Shareholder acquired in excess of five percent of
the then outstanding Voting Shares, or a person designated
(before his initial election as a Director) as a Continuing
Director by a majority of the then Continuing Directors.
7. In the event of any Business Combination in which the
Corporation survives, the phrase "consideration other than cash
to be received" shall mean Common shares and/or the shares of any
other class of outstanding Voting Shares of the Corporation
retained by the holders of such shares.
8. "Affiliate" and "Associate" shall have the respective
meanings given those terms in Rule l2b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in
effect on January 1, 1986.
9. "Subsidiary" means any company 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 10% Shareholder set forth in subparagraph 3 of this
paragraph C., the term "Subsidiary" shall mean only a company of
which a majority of each class of equity security is owned,
directly or indirectly, by the Corporation.
10. The term "Capital Stock" shall mean all capital stock
of this Corporation authorized to be issued from time to time
under these Articles of Incorporation as amended from time to
time.
11. The term "Fair Market Value" means:
(a) in the case of shares, the highest closing sale
price during the 30-day period immediately preceding the
date in question of such a share on the New York Stock
Exchange; and
(b) in the case of property other than cash or shares,
the fair market value of such property on the date in
question as determined by a majority of Continuing Directors
then on the Board.
D. A majority of the Continuing Directors shall have the
power and duty to determine for the purposes of this Article on
the basis of information known to them:
1. The number of Voting Shares beneficially owned by
any person,
2. Whether a person is an Affiliate or Associate of
another,
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3. Whether a person has an agreement, arrangement or
understanding with another as to the matters referred to in
subparagraph 4 of paragraph C. of this Article,
4. Whether the assets which are the subject of any
Business Combination have an aggregate Fair Market Value of
five million dollars ($5,000,000) or more, and
5. Any other matters with respect to which a
determination is required under this Article. Any such
determinations made in good faith shall be binding and
conclusive on all parties.
E. Consideration for shares to be paid to any shareholder
pursuant to this Article shall be the minimum consideration
payable to the shareholder and shall not limit a shareholder's
right under any provision of law or otherwise to receive greater
consideration for any shares of the Corporation.
F. The fact that any Business Combination complies with
the provisions of subparagraph B.2. of this Article shall not be
construed to impose any fiduciary duty, obligation or
responsibility on the Board of Directors, or any member thereof,
to approve such Business Combination or recommend its adoption or
approval to the shareholders of the Corporation, nor shall such
compliance limit, prohibit or otherwise restrict in any manner
the Board, or any member thereof, with respect to evaluations of
or actions and responses taken with respect to such Business
Combination.
G. Notwithstanding any other provisions of these Restated
Articles of Incorporation or the Bylaws of the Corporation any
amendment, alteration, change or repeal of this Article shall
require the affirmative vote of the holders of at least
70 percent of the then outstanding Voting Shares; provided that
this paragraph G. shall not apply to, and such 70 percent vote
shall not be required for, any amendment, alteration, change or
repeal recommended to the shareholders by two-thirds of the
Continuing Directors.
H. Nothing contained in this Article shall be construed to
relieve any 10% Shareholder from any fiduciary obligation imposed
by law.
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<PAGE>
ARTICLE XII. These Restated Articles of Incorporation
correctly set forth without change the corresponding provisions
of the Articles of Incorporation as heretofore amended and hereby
amended, and supersede the original articles of incorporation and
all amendments thereto.
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Dated June 10, 1988
/s/ John Carl
-----------------------------------
Vice President
/s/ Patricia L. duToit
-----------------------------------
Assistant Secretary
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ARTICLES OF AMENDMENT AND CERTIFICATE
OF ADOPTION OF RESTATED ARTICLES OF INCORPORATION
OF
THE MONTANA POWER COMPANY
Pursuant to Sections 35-1-209 and 35-1-213, M.C.A., the
undersigned corporation hereby makes the following statement:
FIRST: The name of the corporation is THE MONTANA POWER
COMPANY.
SECOND: The annexed Restated Articles of Incorporation of
THE MONTANA POWER COMPANY were adopted by the shareholders on
May 10, 1988.
THIRD: The number of shares outstanding, and the number of
shares of each class entitled to vote thereon was:
Class No. of Shares
------ -------------
Common 23,750,936
Preferred 1,419,589
----------
Total 24,170,525
FOURTH: (a) The number of shares voted for and against the
Restatement of the Articles of Incorporation was:
No. Voted Against
No. Voted for Restated Restated Articles
Class Articles of Incorporation of Incorporation
------ ------------------------- -----------------
All Classes 19,901,320 755,210
No class of shares is entitled to vote as a class on the
Restatement of the Articles of Incorporation.
(b) The number of shares voted for and against the
Amendment to the Articles of Incorporation adding a new
Article VI, relating to the liability of Directors, and
renumbering the existing Article VI and those following was:
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No. Voted for No. Voted Against
Class the Amendment the Amendment
----- ------------- ---------------
All Classes 19,901,320 755,210
No class of shares is entitled to vote as a class on the
Amendment to the Articles of Incorporation.
FIFTH: Neither the Restated Articles of Incorporation nor
the Amendment to the Articles of Incorporation provide for an
exchange, reclassification or cancellation of issued shares.
DATED: June 10, 1988
THE MONTANA POWER COMPANY
By /s/ John Carl
-------------------------------
Vice President
(SEAL)
By /s/ T. O. McElwain
-------------------------------
Assistant Secretary
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<PAGE>
STATE OF MONTANA )
) ss.
County of Silver Bow )
I, the undersigned Notary Public, do hereby certify that on
this 10th day of June 1988, personally appeared before me John
Carl, who, being by me first duly sworn, declared that he is a
Vice President of THE MONTANA POWER COMPANY, that he signed the
foregoing document as Vice President of the Corporation, and that
the statements therein contained are true.
/s/ Jessica G. Eyde
---------------------------------
Notary Public for the State of
(SEAL) Montana
Residing at Butte, Montana
My Commission expires 10-29-88
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ARTICLES OF AMENDMENT
TO THE
OF
THE MONTANA POWER COMPANY
Pursuant to the provisions of Section 35-1-209, MCA, the
undersigned corporation adopts the following Articles of
Amendment to its Articles of Incorporation.
FIRST: The name of the corporation is THE MONTANA POWER
COMPANY.
SECOND: The following amendment to its Articles of
Incorporation was adopted by the shareholders of the corporation
on May 8, 1990, in the manner prescribed by the Montana Business
Corporation Act.
The first paragraph of Article VI of the Restated Articles
of Incorporation of the corporation is amended to read as
follows:
"The aggregate number of shares which the corporation
has authority to issue is 125,000,000 shares without nominal
or par value, consisting of 5,000,000 Preferred shares and
120,000,000 Common shares."
THIRD: The number of Common shares of the corporation
outstanding at the time of such adoption was 49,613,012 Common
shares having no par value; and the number of such shares
entitled to vote thereon was 49,456,153. The number of Preferred
shares of the corporation outstanding at the time of such
adoption was 1,419,589 Preferred shares having no par value; and
the number of such shares entitled to vote thereon was 1,419,589.
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FOURTH: The vote to increase the number of authorized
Common shares was as follows:
For Against
------------------ --------------------
Common 39,015,717 2,267,098
Preferred 1,074,899 54,306
------------------ --------------------
Total 40,090,616 2,321,404
DATED: May 15, 1990
THE MONTANA POWER COMPANY
/s/ John Carl
------------------------------
Vice Presiden
(SEAL)
/s/ T. O. McElwain
------------------------------
Assistant Secretary
STATE OF MONTANA )
) ss.
County of Silver Bow )
I, the undersigned Notary Public, do hereby certify that on
this 15th day of May 1990, personally appeared before me John
Carl, who, being by me first duly sworn, declared that he is a
Vice President of THE MONTANA POWER COMPANY, that he signed the
foregoing document as Vice President of the Corporation, and that
the statements therein contained are true.
/s/ Jessica G. Eyde
------------------------------
Notary Public for the State of
Montana
(SEAL) Residing at Butte, Montana
My Commission expires 10/29/91
--------
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ARTICLES OF AMENDMENT
TO THE
RESTATED ARTICLES OF INCORPORATION
OF
THE MONTANA POWER COMPANY
Pursuant to the provisions of Section 35-1-619, Montana Code
Annotated, the undersigned corporation adopts the following
Articles of Amendment to its Restated Articles of Incorporation.
FIRST: The name of the corporation is THE MONTANA POWER
COMPANY.
SECOND: On August 24, 1993 and October 26, 1993, the Board
of Directors of the corporation established and designated a
Fourth Series of Preferred Stock, determining with respect to
such Series the dividend rate, periods and payment dates, the
redemption prices and the amount to be paid in the event of
liquidation, dissolution or winding up of the affairs of the
corporation or any distribution of its capital, and authorized
the amendment to the Restated Articles of Incorporation set forth
below under THIRD.
THIRD: The text of the amendment so authorized is as
follows, and will be inserted as a new, undesignated subparagraph
at the end of Section (a) of Article VII of the Restated Articles
of Incorporation:
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Fourth Series
-------------
The Fourth Series of Preferred Stock of the Company (the
"Fourth Series"), consists of 500,000 shares designated as
"Preferred Stock, $6.875 Series," and has the relative rights,
preferences and limitations as set fourth in these Restated
Articles of Incorporation, and as follows:
(A) The dividend rate for the Fourth Series shall be $6.875
per share per annum; quarterly periods ending January 31, April
30, July 31 and October 31 of each year hereby are established as
the regular dividend periods for the shares of such Series and
dividends for such periods shall be payable, in arrears, on
February 1, May 1, August 1, and November 1 of each year;
provided, however, the first dividend shall be payable, in
arrears, on February 1, 1994, for the period from the date of the
original issue through January 31, 1994; and dividends on shares
of the Fourth Series shall be cumulative from the date of
original issue;
(B) The shares of the Fourth Series shall not be redeemable
prior to November 1, 2003; the shares shall be redeemable, at the
option of the Company, in whole or in part, at any time upon not
less than thirty (30) days' notice, on and after November 1,
2003, at the redemption prices per share set forth below, plus,
in each case, accumulated but unpaid dividends to the date of
redemption:
31
<PAGE>
Redemption Period Price
------------------------------------------ -------------
November 1, 2003 to October 31, 2004 $103.438
November 1, 2004 to October 31, 2005 $103.094
November 1, 2005 to October 31, 2006 $102.750
November 1, 2006 to October 31, 2007 $102.406
November 1, 2007 to October 31, 2008 $102.063
November 1, 2008 to October 31, 2009 $101.719
November 1, 2009 to October 31, 2010 $101.375
November 1, 2010 to October 31, 2011 $101.031
November 1, 2011 to October 31, 2012 $100.688
November 1, 2012 to October 31, 2013 $100.344
November 1, 2013 and there after $100.000
(c) The amount which shall be paid to the holders of shares
of the Fourth Series in the event of any liquidation, dissolution
or winding up of the affairs of the Company or any distribution
of its capital, whether voluntary or involuntary, before any
distribution or payment shall be made to the holders of Common
Stock, shall be $100 per share, plus accumulated but unpaid
dividends.
32
<PAGE>
Fourth: Shareholder approval of these Articles of
Amendment is not required.
DATED: October 26, 1993
THE MONTANA POWER COMPANY
/s/ P. K. Merrell
-----------------------------
Vice President and Secretary
(SEAL)
/s/ R. M. Ralph
-----------------------------
Assistant Secretary
STATE OF MONTANA )
) ss.
County of Silver Bow )
I, the undersigned, Notary Public, do hereby certify that on
this 26th day of October, 1993, personally appeared before me P.
K. Merrell, who, being by me first sworn, declared that she is
Vice President and Secretary of THE MONTANA POWER COMPANY, that
she signed the foregoing document as Vice President and Secretary
of the corporation, and that the statements therein contained are
true.
(SEAL)
/s/ Jessica G. Eyde
----------------------------------------
Notary Public for the State of Montana
Residing at Butte, Montana
My Commission expires 10/29/94.
33
<PAGE>
ARTICLES OF AMENDMENT
TO THE RESTATED ARTICLES OF INCORPORATION
OF
THE MONTANA POWER COMPANY
Pursuant to the provisions of Section 35-1-230, MCA, the
undersigned corporation adopts the following Articles of
Amendment to its Articles of Incorporation.
FIRST: The name of the corporation is The Montana Power
Company.
SECOND: The following amendment to the corporation's
Restated Articles of Incorporation was adopted by the
shareholders of the corporation on May 30, 1995, in the manner
prescribed by the Montana Business Corporation Act.
Article V of the Restated Articles of Incorporation of the
corporation is amended so that the following paragraph is added
at the end thereof:
"Notwithstanding anything contained in these
Articles (including Article VIII hereof) or in the
Bylaws of the Corporation to the contrary (and
notwithstanding the fact that a lesser percentage
may be specified by law, these Articles or the
Bylaws of the Corporation), any amendment,
alteration, change or repeal of, or the adoption
of any provision inconsistent with, this Article V
or Section 11 of the Bylaws of the Corporation by
shareholders shall require the affirmative vote of
the holders of at least two-thirds of the shares
of the Corporation entitled to vote thereon."
THIRD: The number of Common shares of the corporation
outstanding at the record date was 53,819,717 common shares; and
the number of such shares entitled to vote on the amendment was
53,819,717. The number of Preferred shares of the corporation
outstanding at the record date was 1,919,589; and the number of
such shares entitled to vote on the amendment was 1,919,589.
34
<PAGE>
FOURTH: The number of voting shares represented at the
meeting were:
Common 46,452,016 Preferred 1,625,787
FIFTH: The vote on the Amendment was as follows:
For Against
-------- ----------
Common and Preferred Total: 37,635,330 5,941,380
DATED: June 9, 1995.
THE MONTANA POWER COMPANY
/s/ P. K. Merrell
-----------------------------------
Vice President
(SEAL)
/s/ R. M. Ralph
------------------------------------
Assistant Secretary
STATE OF MONTANA )
ss.
County of Silver Bow )
I, the undersigned Notary Public, do hereby certify that on
this 9th day of June, 1995, personally appeared before me P. K.
Merrell, who, being by me first duly sworn, declared that she is
a Vice President of THE MONTANA POWER COMPANY, that she signed
the foregoing document as Vice President of the Corporation, and
that the statements therein contained are true.
/s/ Jessica G. Eyde
-----------------------------------------
Notary Public for the State of Montana
(SEAL) Residing at Butte, Montana
My Commission expires 10/29/98
35
<PAGE>
ARTICLES OF AMENDMENT
TO THE RESTATED ARTICLES OF INCORPORATION
OF
THE MONTANA POWER COMPANY
Pursuant to the provisions of Section 35-1-230, MCA, the
undersigned corporation adopts the following Articles of
Amendment to its Articles of Incorporation.
FIRST: The name of the corporation is The Montana Power
Company.
SECOND: The following amendment to the corporation's
Restated Articles of Incorporation was adopted by the
shareholders of the corporation on May 14, 1996, in the manner
prescribed by the Montana Business Corporation Act.
Article VI of the Restated Articles of Incorporation of the
corporation is amended
to read as follows:
No Director of the Corporation shall be personally
liable to the Corporation or its shareholders for money
damages for any actions taken or any failure to take
any action, as a Director, except liability for: (a)
the amount of a financial benefit received by a
Director to which the Director is not entitled; (b) an
intentional infliction of harm on the corporation or
its shareholders; (c) a violation of 35-1-713 of the
Montana Code Annotated; or, (d) an intentional
violation of criminal law. No amendment to or repeal
of this Article VI shall apply to or have any effect on
the liability or alleged liability of any Director of
the Corporation for or with respect to any acts or
omissions of such Director occurring prior to such
amendment or repeal.
THIRD: The number of Common shares of the corporation
outstanding at the record date was 54,632,075 common shares; and
the number of such shares entitled to vote on the amendment was
54,632,075. The number of Preferred shares of the corporation
36
<PAGE>
outstanding at the record date was 1,919,589; and the number of
such shares entitled to vote on the amendment was 1,919,589.
FOURTH: The number of voting shares represented at the
meeting were:
Common 47,509,562 Preferred 1,621,807
FIFTH: The vote on the Amendment was as follows:
For Against
----- -----------
Common and Preferred Total: 43,561,574 4,475,104
DATED: June 13, 1996.
THE MONTANA POWER COMPANY
/s/ Robert P. Gannon
--------------------------------------
Vice Chairman of the Board and
President
(SEAL)
/s/ Rose Mary Ralph
--------------------------------------
Assistant Secretary
STATE OF MONTANA )
ss.
County of Silver Bow )
I, the undersigned Notary Public, do hereby certify that on
this 13th day of June, 1996, personally appeared before me R. P.
Gannon, who, being by me first duly sworn, declared that he is
Vice Chairman of the Board and President of THE MONTANA POWER
COMPANY, that he signed the foregoing document as Vice Chairman
of the Board and President of the Corporation, and that the
statements therein contained are true.
37
<PAGE>
/s/ Lauri A. Yelenich
------------------------------------------
Notary Public for the State of Montana
(SEAL) Residing at Butte, Montana
My Commission Expires: 9/1/96
38
BYLAWS
OF
THE MONTANA POWER COMPANY
Adopted on : August 22, 1995
As Amended on : August 27, 1996 & May 12, 1997
<PAGE>
THE MONTANA POWER COMPANY
AMENDED BYLAWS
Article Amendment Date of
Amendment
11 The affairs of the Corporation shall May 12, 1997
be managed by a Board of fourteen
(14) Directors.
11 The affairs of the Corporation shall August 27, 1996
be managed by August 27, 1996 a Board
of fifteen (15) Directors. The
Directors shall be divided into three
groups, each as nearly equal in
number as possible. Each group of
Directors shall stand for election
upon expiration of their terms.
Directors shall hold office for a
term of three (3) years or until a
successor is duly elected and
qualified.
<PAGE>
THE MONTANA POWER COMPANY
CERTIFICATION OF RESOLUTION
I, R. M. Ralph, Assistant Secretary of The Montana Power
Company, a corporation, hereby certify that the following is a
full, true and correct copy of Resolution duly adopted by the
Board of Directors of The Montana Power Company at a meeting duly
called and held May 12, 1997 and that said Resolution is in full
force and effect as of the date of this certificate.
RESOLVED, that effective May 14, 1997, the first sentence of
Section 11 of the Bylaws of The Montana Power Company is hereby
amended to reduce the number of Directors to fourteen (14) as
follows:
SECTION 11. The affairs of the Corporation shall be
managed by a Board of fourteen (14) Directors.
IN WITNESS WHEREOF, I have hereunto set my hand and the Seal
of said Corporation this 12th day of May, 1997.
/s/ R. M. Ralph
--------------------------------
R. M. Ralph, Assistant Secretary
(SEAL)
<PAGE>
THE MONTANA POWER COMPANY
CERTIFICATION OF RESOLUTION
I, R. M. Ralph, Assistant Secretary of The Montana Power
Company, a corporation, hereby certify that the following is a
full, true and correct copy of Resolution duly adopted by the
Board of Directors of The Montana Power Company at a meeting duly
called and held August 27, 1996 and that said Resolution is in
full force and effect as of the date of this certificate.
RESOLVED, that effective August 27, 1996, the first
sentence of Section 11 of the Bylaws of The Montana Power
Company is hereby amended to reduce the number of Directors
to fifteen (15) as follows:
SECTION 11. The affairs of the Corporation shall be
managed by a Board of fifteen (15) Directors.
IN WITNESS WHEREOF, I have hereunto set my hand and the Seal
of said Corporation this 11th day of November, 1996.
/s/ R. M. Ralph
---------------------------------
R. M. Ralph, Assistant Secretary
(SEAL)
<PAGE>
As Adopted August 22, 1995
BYLAWS
OF
THE MONTANA POWER COMPANY
SECTION 1. Principal Office. The principal office of the
----------------
corporation is 40 East Broadway, Butte, State of Montana. The
Corporation may also have offices at such other places within or
without the State of Montana as the Board of Directors shall from
time to time determine.
SECTION 2. Location of Shareholders Meetings. Meetings of
---------------------------------
the shareholders and meetings of the Board of Directors shall be
held in Butte, Montana, or, upon resolution by the Board of
Directors, may be held at another place, within or without the
State of Montana.
SECTION 3. Shareholder Meetings.
(A) Annual Meeting of Shareholders.
------------------------------
(1) The annual meeting of the shareholders of the
Corporation for the election of Directors and such other
business as shall properly come before such meeting shall be
held on (a) the second Tuesday in May in each year, unless
that date is a legal holiday, in which case such meeting
shall be held on the first day thereafter which is not a
legal holiday, or (b) at such other date and/or time as may
be fixed by resolution of the Board of Directors.
Nominations of persons for election to the Board of
Directors of the Corporation and the proposal of business to
<PAGE>
be considered by the shareholders may be made at an annual
meeting of shareholders (a) pursuant to the Corporation's
notice of meeting delivered pursuant to Section 5 of these
Bylaws, (b) by the Board of Directors pursuant to a
resolution duly adopted or (c) by any shareholder of the
Corporation who is entitled to vote at the meeting, who
complied with the notice procedures set forth in clauses (2)
and (3) of paragraph (A) of this Bylaw and who was a
shareholder of record at the time such notice is delivered
to the Secretary of the Corporation.
(2) For nominations or other business to be properly
brought before an annual meeting by a shareholder pursuant
to clause (c) of paragraph (A) (1) of this Bylaw, the
shareholder must have given timely notice thereof in writing
to the Secretary of the Corporation. To be timely, a
shareholder's notice shall be delivered to the Secretary at
the principal executive offices of the Corporation not less
than 120 days in advance of the anniversary date of the
release of the Corporation's proxy statement made in
connection with the previous annual meeting; provided,
however, that in the event that the date of the annual
meeting is advanced by more than twenty days, or delayed by
more than seventy days, from the anniversary date of the
previous annual meeting, notice by the shareholder to be
timely must be so delivered not later than the close of
business on the later of the 120th day prior to such annual
meeting or the tenth day following the day on which public
announcement of the date of such meeting is first made.
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
<PAGE>
solicitations of proxies for election of Directors, or is
otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), including such person's written consent to
being named in the proxy statement of the nominator 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 Corporation's books, and
of such beneficial owner and (ii) the class and number of
shares of the Corporation which are owned beneficially and
of record by such shareholder and such beneficial owner.
(3) Notwithstanding anything in the second sentence of
paragraph (A) (2) of this Bylaw to the contrary, in the
event that the number of Directors to be elected to the
Board of Directors is increased and the public announcement
naming all of the nominees for Director or specifying the
size of the increased Board of Directors is not made by the
Corporation at least ten days prior to the date by which
shareholders proposals and nominations must be received by
the Corporation, a shareholder's notice required by this
Bylaw shall also be considered timely, but only with respect
to nominees for any new positions created by such increase,
if it shall be delivered to the Secretary at the principal
executive offices of the Corporation not later than the
<PAGE>
close of business on the tenth day following the day on
which such public announcement is first made by the
Corporation.
(B) Special Meeting of Shareholders. Only such business
-------------------------------
shall be conducted at a special meeting of shareholders as
shall have been brought before the meeting pursuant to the
Corporation's notice of meeting pursuant to Section 5 of
these Bylaws. 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 Corporation's notice of meeting (i) by or at the
direction of the Board of Directors or (ii) by any
shareholder of the Corporation who is entitled to vote at
the meeting, who complies with the notice procedures set
forth in this Bylaw and who is a shareholder of record at
the time such notice is delivered to the Secretary of the
Corporation. Nominations by shareholders of persons for
election to the Board of Directors may be made at such a
special meeting of shareholders if a shareholder's notice as
described in the third sentence of paragraph (A) (2) of this
Section 3 of the Bylaws shall be delivered to the Secretary
at the principal executive offices of the Corporation not
later than the close of business on the later of the
seventieth day prior to such special meeting or the tenth
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.
(C) General.
-------
(1) Only persons who are nominated in accordance with
the procedures set forth in this Bylaw shall be eligible to
serve as Directors and only such business shall be conducted
at a meeting of shareholders as shall have been brought
<PAGE>
before the meeting in accordance with the procedures set
forth in this Bylaw. Except as otherwise provided by the
laws of the State of Montana, the Restated Articles of
Incorporation of the Corporation or these Bylaws, 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 in accordance with
the procedures set forth in this Bylaw and, if any proposed
nomination or business is not in compliance with this Bylaw,
to declare that such defective proposal or nomination shall
be disregarded.
(2) For purposes of this Bylaw, "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
Corporation with the Securities and Exchange Commission
pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this
Bylaw, 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 Bylaw. Nothing in this Bylaw shall be deemed to
affect any rights of shareholders to request inclusion of
proposals in the Corporation's proxy statement pursuant to
Rule 14a-8 under the Exchange Act.
SECTION 4. Call of Special Meetings of Shareholders. Special
----------------------------------------
meetings of the shareholders of the Corporation may be held upon
the call of the Board of Directors, Chairman of the Board, Vice
Chairman of the Board, Chief Executive Officer, President, or
<PAGE>
holders of at least ten percent (10%) of the number of shares
outstanding and entitled to vote thereat, in Butte, Montana.
SECTION 5. Notice of Shareholders Meetings. Notice of every
-------------------------------
meeting of shareholders shall be mailed by the Secretary at least
ten (10) days before the meeting, to each holder of record of
shares entitled to vote thereat, to The last known post office
address appearing upon the records of the Corporation (unless
there is provided under the laws of the State of Montana a
different provision for notice of meeting) provided, however,
that if a shareholder waives notice thereof in writing before or
after the meeting, notice of the meeting to such shareholder is
unnecessary and that notice to employee shareholders may be sent
to their work addresses through intercompany mail.
SECTION 6. Shareholder Meeting Quorum. The holders of a
--------------------------
majority of the number of shares of the Corporation entitled to
vote, present in person or by proxy, shall constitute a quorum,
but less than a quorum shall have power to adjourn any meeting
from time to time, or to a day certain.
SECTION 7. Shareholder Voting. At every meeting of
------------------
shareholders, each holder of shares entitled to vote thereat
shall be entitled to one vote for each share held and may vote
and otherwise act in person or by proxy.
SECTION 8. List of Shareholders. Not less than two (2)
--------------------
business days after notice has been given of a meeting of the
shareholders, a full list of the holders of shares entitled to
vote at such meeting, arranged in alphabetical order, with the
residence of each and the number of such shares held by each,
shall be prepared by the Secretary or Officer designated by the
Board of Directors and filed in the principal office of the
<PAGE>
Corporation, which shall, at all times during the usual hours of
business and during the meeting or vote, be kept open to the
examination of any shareholder.
SECTION 9. Form of Certificates. Share certificates shall be
--------------------
of such form and device as the Board of Directors may determine,
and shall be signed by the Chairman of the Board of Directors,
Vice Chairman, Chief Executive Officer, President or a Vice
President and the Secretary or an Assistant Secretary, and sealed
with the seal of the Corporation, but where such certificates are
signed by a transfer agent or an assistant transfer agent and a
registrar, the signatures of the Chairman of the Board of
Directors, Vice Chairman of the Board, the Chief Executive
Officer, President, Vice President, Secretary or Assistant
Secretary and the seal of the Corporation may be facsimiles.
SECTION 10. Share Transfer. The shares of the Corporation
--------------
shall be transferable or assignable on the books of the
Corporation by the holders in person or by attorney on the
surrender of the certificates therefor. The Board of Directors
may appoint one or more transfer agents and registrars of the
shares. The Books for the transfer of the shares may be closed
for such period before and during any meeting of shareholders,
the payment of any dividend, the allotment of rights or the date
when any change or conversion or exchange of shares shall go into
effect, not to exceed seventy (70) days at any one time, as the
Board of Directors may from time to time determine.
SECTION 11. Directors
---------
(A) Number and Terms. The affairs of the Corporation shall
----------------
be managed by a Board of sixteen (16) Directors.
<PAGE>
(1) The Directors shall be divided into three groups,
---
each as nearly equal in number as possible. Each group of
Directors shall stand for election upon expiration of their
terms. Directors shall hold office for a term of three (3)
years or until a successor is duly elected and qualified;
provided, however, that at the annual meeting of
shareholders to be held in May 1996, seven (7) Directors
shall be elected with six Directors serving a term of three
(3) years and one (1) Director serving a term of two (2)
years.
(2) The number of Directors may be increased or
decreased from time to time by amendment to these Bylaws
duly adopted by the Directors, but no increase or decrease
shall exceed thirty percent (30%) of the number provided for
immediately before the change if that number was fixed by
the shareholders. No decrease in the number of Directors
shall have the effect of shortening the term of any
incumbent Director. The classification and term of
Directors may be changed from time to time by amendment to
the Bylaws duly adopted by the Directors, but no such change
shall affect the term of any incumbent director.
B. Removal by Shareholders. The shareholders at any meeting,
--------------------------
by the vote of two-thirds of the number of shares outstanding and
entitled to vote for the election of Directors, may remove any
Director and fill the vacancy. If less than the entire Board is
to be removed, no Director may be removed if the votes cast
against the Director s removal would be sufficient to elect the
Director if then cumulatively voted at an election of the class
of Directors of which the Director is a part.
<PAGE>
C. Vacancies. Vacancies in the Board of Directors may be
----------
filled by the Board at any meeting at which a quorum is present.
If the Directors remaining in office are fewer than a quorum, the
vacancy may be filled by the vote of a majority of the Directors
remaining in office. Any Director appointed by the Board to fill
a vacancy created in the Board of Directors by virtue of an
increase in the number of Directors shall hold office until the
next regular annual meeting of the shareholders at which time the
shareholders shall elect a person to fill such office.
D. Indemnification. The Company shall indemnify each present
------------------
or future Director and Officer of the Company in the manner
provided in Sections 35-1-451 through 35-1-459, M.C.A. The
foregoing right of indemnification shall not exclude or restrict
any other rights or actions which any Director or Officer may
have, and shall be available whether or not the Director or
Officer continues to hold such office at the time of incurring
such expense or discharging such liability.
SECTION 12. Director Meetings. Meetings of the Board of
-----------------
Directors shall be held at the times fixed by resolution of the
Board or upon call of the Chairman of the Board, Vice Chairman of
the Board, the Chief Executive Officer, the President or any two
Directors. The Secretary shall give reasonable notice (which
need not exceed two days) 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 in writing either before or
after the meeting. Notice by mail, facsimile or telegraph to the
usual business or residence address of the Director not less than
<PAGE>
the time above specified before the meeting shall be sufficient.
A majority of the Board shall constitute a quorum, but any number
less than a quorum may adjourn the meeting from time to time, or
to a day certain.
SECTION 13. Designation of Officers. The Board of Directors,
-----------------------
as soon as may be convenient after the election of Directors in
each year, shall elect one of their number Chairman of the Board
and may elect one of their number as Vice Chairman of the Board.
The Board shall also elect a President. The Board shall either
designate any one of these Officers as Chief Executive Officer of
the Corporation, or elect a Chief Executive Officer separately.
The Board shall also elect a Secretary, a Treasurer, a
Controller, one or more Vice Presidents, one or more Assistant
Secretaries, one or more Assistant Treasurers, one or more
Assistant Controllers, and such other Officers as they deem
proper.
Any two or more offices may be held by the same person. The
term of office of all Officers shall be until the next election
of Directors and until their respective successors are chosen and
qualified, but any Officer may be removed from office and any
office may be abolished at any time by the Board of Directors.
Vacancies in the offices shall be filled by the Board of
Directors, save that the Chairman of the Board, the Chief
Executive Officer or the President may from time to time appoint
one or more Assistant Secretaries and one or more Assistant
Treasurers, or may remove such officers; provided that the Board
shall be notified of such appointments or removals at the next
following meeting of the Board.
SECTION 14. Duties of Officers. The powers and duties of the
------------------
Officers of the Corporation shall be as follows:
<PAGE>
A. Chief Executive Officer. The person designated by the
---------------------------
Board to be the Chief Executive Officer of the Corporation, under
the direction of the Board of Directors, shall have general
authority over all the affairs of the Corporation, and over all
other Officers, agents and employees of the Company. In the
event of the absence or disability of the Chief Executive
Officer; a) if the Chief Executive Officer is also Chairman of
the Board, then the provision made for that office shall govern,
and b) if the Chief Executive Officer is separately elected, then
the Chairman of the Board shall perform the duties of that office
until the absence ceases, the disability is removed or the Board
of Directors has named a successor.
B. Chairman of the Board. The Chairman of the Board shall
------------------------
preside at all meetings of the shareholders and at all meetings
of the Board of Directors, and shall also have authority to call
special meetings of the Board of Directors, of the Executive
Committee, and of any other standing or special committee
appointed by or upon the authority of the Board of Directors.
The Chairman of the Board shall call meetings of the Executive
Committee when requested by two of its members, and shall do and
perform all acts and things incident to the position of Chairman.
At the request of the Chairman, in the case of absence, or upon a
determination of temporary disability of the Chairman by the
Board of Directors, the duties of that office will be performed
by the following officers, selected in the following order:
1) Chief Executive Officer, 2) Vice Chairman of the Board, and
3) President.
C. Vice Chairman. A Vice Chairman of the Board shall have
-----------------
such duties and authority as may be assigned by the Board of
Directors or the Chief Executive Officer.
D. President. The President shall have such duties and
-------------
authority as may be assigned by the Board of Directors or the
Chief Executive Officer.
<PAGE>
E. Vice President. Each Vice President shall have such
------------------
authority and shall perform such duties as shall from time to
time be assigned by the Board of Directors or the Chief Executive
Officer.
F. Treasurer. The Treasurer shall have custody of all moneys
-------------
and funds of the Corporation, and shall cause to be kept full and
accurate records of receipts and disbursements of the
Corporation. The Treasurer shall deposit all moneys and other
valuables of the Corporation in the name and to the credit of the
Corporation in such depositaries as may be designated by the
Board of Directors, and shall disburse such funds of the
Corporation as have been duly approved for disbursement. The
Treasurer shall perform such other duties as may from time to
time be prescribed by the Board of Directors or the Chief
Executive Officer.
G. Assistant Treasurer. The Assistant Treasurers shall
-----------------------
perform such duties as may be assigned from time to time by the
Chief Executive Officer or by the Treasurer. In the absence or
disability of the Treasurer, the duties of that office shall be
performed by the Assistant Treasurer designated by the Chief
Executive Officer.
H. Controller. The Controller shall be the Administrative
--------------
Officer in charge of accounting functions of the Corporation.
The Controller shall perform such other duties as may from time
to time be prescribed by the Board of Directors, or by the Chief
Executive Officer.
I. Assistant Controller. The Assistant Controllers shall
------------------------
perform such duties as may be assigned from time to time by the
Chief Executive Officer or by the Controller. In the absence or
disability of the Controller, the duties of that office shall be
performed by the Assistant Controller designated by the Chief
Executive Officer.
<PAGE>
J. Secretary. The Secretary shall attend all meetings of the
-------------
Board of Directors and of the Executive Committee and all
meetings of the shareholders, and shall record the minutes of all
proceedings in books to be kept for that purpose. The Secretary
shall be responsible for maintaining a proper share register and
stock transfer books for all classes of shares issued by the
Corporation and shall give, or cause to be given, all notices
required either by law or by the Bylaws. The Secretary shall
keep the seal of the Corporation in safe custody and shall affix
the seal of the Corporation to any instrument requiring it and
shall attest the same. The Secretary shall have such other
duties as may be prescribed by the Board of Directors or the
Chief Executive Officer.
K. Assistant Secretary. The Assistant Secretaries shall
-----------------------
perform such duties as may be assigned from time to time by the
Chief Executive Officer or by the Secretary. In the absence or
disability of the Secretary, the duties of that office shall be
performed by the Assistant Secretary designated by the Chief
Executive Officer.
L. Other. Such other Officers as may from time to time be
---------
appointed by the Board of Directors shall have such duties and
authority as may be assigned to them from time to time by the
Board or by the Chief Executive Officer.
SECTION 15. Board Committees.
-----------------
A. Executive Committee. The Board of Directors, as soon as
-----------------------
may be convenient after the election of Directors in each year,
may by a resolution passed by a majority of the whole Board
appoint three or more of their number to constitute an Executive
Committee which, subject to the provisions of the charter of the
Corporation and of the Bylaws, shall have and may exercise during
the intervals between the meetings of the Board all of the powers
<PAGE>
vested in the Board in the management of the business, affairs
and property of the Corporation, except as limited by these
Bylaws, the Articles of Incorporation, the laws of the State of
Montana, or a resolution of the Board of Directors. 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. A
majority of the members of said Committee shall constitute a
quorum.
B. Other Committees. The Board of Directors, by resolution
--------------------
adopted by a majority of the full Board of Directors, may
designate, from time to time, from among its members one or more
committees, in addition to the Executive Committee, each of
which, to the extent provided by resolution adopted by a majority
of the full Board of Directors, shall have and may exercise all
of the authority of the Board of Directors, except to the extent
that the authority of any such committee expressly shall be
limited by the provisions of these Bylaws, of the Articles of
Incorporation or of the laws of the State of Montana.
SECTION 16. Miscellaneous Board Authority. The Board of
-----------------------------
Directors is authorized:
(A) Banking. To select such depositaries as they shall
-------
deem proper for the funds of the Corporation. All checks, drafts
or orders for the payment of money against such deposited funds
and all notes and acceptances shall be signed and countersigned
by persons to be specified by the Board of Directors or the
Executive Committee.
(B) Director Compensation. To authorize the payment of
---------------------
compensation to the Directors for services to the Corporation,
including fees for attendance at meetings of the Board of
Directors and of the Executive Committee and all other committees
and to determine the amount or basis of such compensation and
fees;
<PAGE>
(C) Record Dates. To fix (in lieu of closing the stock
------------
transfer books, as authorized by Section 10) in advance a date,
not exceeding seventy (70) days before and during any meetings of
shareholders, the payment of any dividend, the allotment of
rights, or the date when any change or conversion or exchange of
shares shall go into effect, as a record date for the
determination of the shareholders entitled to notice of and to
vote at any such meeting, or entitled to receive payment of any
such dividend, or any such allotment of rights, or exercise such
rights, as the case may be, notwithstanding any transfer of any
shares on the books of the Corporation after any such record date
fixed as aforesaid.
SECTION 17. Corporate Seal. The corporate seal of the
--------------
corporation shall be in such form as the Board of Directors shall
prescribe.
SECTION 18. Amendment of Bylaws. Either the Board of
-------------------
Directors or the shareholders entitled to vote for the election
of Directors may alter or amend these Bylaws at any meeting duly
held as above provided, the notice of which includes notice of
the proposed amendment. Any such alteration or amendment shall
be made in accordance with Section 35-1-234, M.C.A.
SECTION 19. Disposition of Assets.
----------------------
A. Disposition in Ordinary Course of Business. The Board of
---------------------------------------------
Directors shall have authority to sell, lease, exchange or
otherwise dispose of, the whole or any part of the property and
assets of every kind and description of the Corporation in the
ordinary and usual course of business, for property, cash, or for
the whole or any part of the capital stock of any other corpora-
tion, whether domestic or foreign, or otherwise, as the Board may
<PAGE>
determine, and upon such terms and conditions as the Board may
determine. Said Board shall have plenary powers in carrying out
the authority herein granted.
B. Mortgage or Pledge. The Board may mortgage or pledge any
----------------------
or all the property and assets of the Corporation, whether or not
in the usual and regular course of business, upon such terms and
conditions, and for such consideration, which may consist in
whole or in part of money or property, real or personal,
including shares of any other corporation, domestic or foreign,
as shall be authorized by the Board of Directors.
C. Disposition of All or Substantially All Assets. The Board
--------------------------------------------------
may, by resolution, recommend the sale, lease, exchange or other
disposition of all or substantially all the property and assets
of the Corporation, and direct the submission of the resolution
to a vote of the shareholders at either a regular or special
meeting. Written notice shall be given each shareholder, whether
or not entitled to vote at such meeting, at least thirty
(30) days before such meeting, and shall state that the purpose,
or one of the purposes, is to consider the proposed sale, lease,
exchange, or other disposition. At such meeting, the affirmative
vote of holders of two-thirds (2/3) of the shares entitled to
vote thereat is required to authorize such sale, lease, exchange
or other disposition. Nevertheless, the Board may thereafter
abandon such sale, lease, exchange or other disposition without
further shareholder action. SECTION 20. Office of the
-------------
Corporation. There is an administrative organization within the
------------
corporation called the Office of the Corporation, consisting of
such persons as the Chief Executive Officer may designate. The
function of the Office of the Corporation is to provide
supervision, policy direction and corporate services for all
branches of the business of the Company and its subsidiaries.
<PAGE>
SECTION 21. Corporate Acquisition of its Own Shares.
---------------------------------------
The Company may acquire its own shares, and shares so
acquired shall constitute authorized and issued shares.
Exhibit 5(a)
June 9, 1997
The Montana Power Company
40 East Broadway
Butte, MT 59701
Ladies and Gentlemen:
With respect to the Registration Statement to be filed with the
Securities and Exchange Commission pursuant to the Securities Act
of 1933, as amended, on or about the date of this letter,
contemplating the sale by The Montana Power Company (the
"Company") of not to exceed 3,000,000 additional shares of its no
par value Common Stock (the "Stock") pursuant to the Company's
Dividend Reinvestment and Stock Purchase Plan (the "Plan"), I am
of the opinion that:
1. The Company is a corporation duly organized and validly
existing under the laws of the state of Montana and
qualified to do business in the states of Idaho and Wyoming.
2. All of the outstanding shares of the Company's stock have
been legally and validly issued, and are fully paid and
nonassessable.
3. All action necessary to make any authorized but unissued
shares of the Stock which may be purchased from the Company
pursuant to the Plan legally and validly issued, fully paid
and nonassessable will have been taken when:
a. the Registration Statement shall have become effective;
b. the issuance and sale of the Stock shall have been
authorized by an appropriate order or orders of the
Public Service Commission of Montana;
c. appropriate action shall have been taken by the
Company's Board of Directors with respect to the
issuance and sale of the Stock; and
d. the Stock shall have been issued and delivered for the
consideration contemplated in the Registration
Statement.
I am a member of the Bar of the State of Montana, but not of the
States of Idaho and Wyoming. In rendering this opinion, I have
made such review of the laws of the states of Idaho and Wyoming
and have had such consultations with counsel qualified to
practice in such states as I believe to be necessary to render
this opinion.
I hereby consent to the use of this opinion as an exhibit to the
Registration Statement, and the use of my name, as counsel,
therein.
Very truly yours,
/s/ Michael E. Zimmerman
Michael E. Zimmerman
Vice President and
General Counsel
Exhibits 5(b) and 8
REID & PRIEST LLP
40 West 57th Street
New York, NY 10019-4097
Telephone 212 603-2000
Fax 212 603-2001
June 9, 1997
The Montana Power Company
40 East Broadway
Butte, Montana 59701
Ladies and Gentlemen:
With respect to the Registration Statement to be
filed with the Securities and Exchange Commission pursuant
to the Securities Act of 1933, as amended, on or about the
date hereof, contemplating the sale by The Montana Power
Company of 3,000,000 shares of its Common Stock pursuant to
the Company's Dividend Reinvestment and Stock Purchase
Plan, we are of the opinion that:
1. The Company is a corporation duly organized
and validly existing under the laws of the State of Montana
and qualified to do business in the States of Idaho and
Wyoming.
2. All action necessary to make any authorized
but unissued shares of the Stock which may be purchased
from the Company pursuant to the Plan legally and validly
issued, fully paid and nonassessable will have been taken
when:
(a) the Registration Statement shall have
become effective;
(b) the issuance and sale of the Stock
shall have been authorized by an appropriate
order or orders of the Public Service Commission
of Montana;
(c) appropriate action shall have been
taken by the company's Board of Directors with
respect to the issuance and sale of the Stock;
and
(d) the Stock shall have been issued and
delivered for the consideration contemplated in
the Registration Statement.
3. The statements made in the Registration
Statement under the heading, "Tax Consequences of
Participation in the Plan", constitute an accurate general
description of the Federal income tax consequences to
participants of participation in the Plan.
We are members of the Bar of the State of New
York and do not hold ourselves out as experts on the laws
of any other state. In giving this opinion, we have relied
as to matters of Montana, Idaho and Wyoming law upon the
opinion addressed to you, of even date herewith, of Michael
E. Zimmerman, Esq., Vice President and General Counsel of
the Company.
We hereby consent to the use of this opinion as
an exhibit to the Registration Statement, and the use of
our name, as counsel, therein.
Very truly yours,
/s/ Reid & Priest LLP
REID & PRIEST LLP
Exhibit 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Prospectus constituting part of this Registration Statement on
Form S-3 of our report dated February 6, 1997, except as to
paragraphs 3 and 5 of Note 2, which are as of February 21, 1997,
appearing on page 51 of The Montana Power Company's Annual Report
on Form 10-K for the year ended December 31, 1996. We also
consent to the references to us under the headings "Experts" in
such Prospectus.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Portland, Oregon
June 9, 1997