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PROSPECTUS
[NSP LOGO]
NORTHERN STATES POWER COMPANY
414 Nicollet Mall
Minneapolis, Minnesota 55401
(612) 330-7550
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
COMMON STOCK
($2.50 PAR VALUE)
Our Dividend Reinvestment and Stock Purchase Plan provides our common and
preferred shareholders, employees and customers with a convenient method of
purchasing shares of our common stock without payment of any brokerage
commission or service charge. In addition, if you are an individual of legal age
residing in Minnesota, North Dakota, South Dakota, Wisconsin or Michigan, you
may become a shareholder and a participant in the plan if you make a minimum
initial investment of $100.00. If you are a participant in the plan, you may
purchase additional shares of common stock by reinvesting dividends and/or
making cash payments. If you are an employee of the Company, you may also
participate through payroll deduction.
If you are a beneficial owner of shares held by a broker or other custodial
institution for your account, you may participate in the plan if your broker has
established procedures that permit its customers to participate in plans such as
ours. If you are not a shareholder, employee or customer of the Company and you
do not reside in Minnesota, North Dakota, South Dakota, Wisconsin or Michigan,
you may participate only after you become a shareholder by purchasing our common
or preferred stock through an independent broker.
The shares issued under the plan may be either new issue common stock or
common stock purchased on the open market. New issue common stock will be
purchased from the Company at the current market price on the investment date.
The price of common stock purchased on the market will be the weighted average
price at which shares are actually purchased.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this Prospectus is January 10, 2000.
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ABOUT THIS PROSPECTUS
This Prospectus is part of a registration statement that we filed with the
SEC. Under this process, we may, from time to time over the next several years,
sell up to 1,600,000 shares of our common stock. This Prospectus provides you
with a general description of the common stock we may offer. You should read
this Prospectus together with additional information described under the heading
"WHERE YOU CAN FIND MORE INFORMATION."
We believe we have included all information material to investors but
certain details that may be important for specific investment purposes have not
been included. To see more detail, you should read the exhibits filed with this
registration statement.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and copy
any document we file at the SEC's public reference room at 450 Fifth Street,
N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference room.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filing made with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
until we sell all of the securities.
- The Company's Annual Report on Form 10-K for the year ended December 31,
1998;
- The Company's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1999, June 30, 1999 and September 30, 1999; and
- The Company's Current Reports on Form 8-K dated March 24, 1999, March 26,
1999, April 6, 1999, April 23, 1999, June 24, 1999, June 28, 1999, July
15, 1999, July 21, 1999, July 27, 1999, September 14, 1999, October 14,
1999, November 8, 1999, November 18, 1999, November 23, 1999 and December
22, 1999.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Corporate Secretary
Northern States Power Company
414 Nicollet Mall
Minneapolis, MN 55401
(612) 330-7550
You should rely only on the information incorporated by reference or
provided in this Prospectus. We have not authorized anyone else to provide you
with different information. We are not making an offer of these securities in
any state where the offer is not permitted. You should not assume that the
information in this Prospectus is accurate as of any date other than the date on
the front of those documents.
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[NSP LOGO]
Northern States Power Company, a Minnesota corporation (the "Company"), is
an operating public utility engaged in the generation, transmission and
distribution of electricity in Minnesota, North Dakota and South Dakota. The
Company also distributes natural gas in Minnesota, North Dakota, South Dakota
and Arizona. Through our wholly-owned subsidiary, Northern States Power Company,
a Wisconsin corporation, we also engage in the generation, transmission and
distribution of electricity and the distribution of natural gas in Wisconsin and
Michigan.
Of the approximately 3.4 million people served by the Company and
NSP-Wisconsin, the majority are concentrated in the Minneapolis-St. Paul
Metropolitan area. In 1998, the Company and NSP-Wisconsin derived about 63
percent of their combined electric retail revenue from sales in the
Minneapolis-St. Paul Metropolitan area and about 53 percent of their gas
revenues from sales in the St. Paul area. The Company's and NSP-Wisconsin's
combined electric generation for 1998 was provided for by coal (60%), nuclear
(35%), and renewable and other fuels (5%). The Company currently operates three
nuclear units that were placed in service in 1971, 1973 and 1974. The Company
has no additional nuclear units under construction.
The Company's other primary subsidiaries include:
- NRG Energy, Inc., which operates and owns interests in independent,
non-regulated power and energy businesses in the United States and other
countries.
- Viking Gas Transmission Company, which owns and operates a 500-mile
interstate natural gas pipeline providing gas transportation services to
customers in the Upper Midwest from connections with three major
pipelines in the United States and Canada.
- Eloigne Company, which owns interests in affordable housing projects,
principally within the Company's service territory.
- Energy Masters International Inc., which delivers natural gas and
electric products and services to commercial and industrial customers,
utilities, municipalities and energy marketers, and offers performance
contracting to customers nationwide.
- Seren Innovations, which builds communication networks to deliver
telephone, cable TV and high speed Internet and data services.
The Company and its subsidiaries collectively are referred to herein as
NSP.
NSP reported assets of $7.4 billion as of December 31, 1998, and revenues
of approximately $2.8 billion, operating income of $364 million and earnings per
common share from ongoing operations of $1.84 for the year ended December 31,
1998. For this same period, the earnings (loss) contributions of NRG, Eloigne
and Energy Masters were $.28, $.04 and $(.05) per common share.
The Company was incorporated in 1909 under the laws of Minnesota.
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PROPOSED MERGER
We have entered into an Agreement and Plan of Merger with New Century
Energies, Inc., a Delaware corporation ("NCE"), dated as of March 24, 1999 (the
"Merger Agreement"), providing for a strategic business combination of the two
companies. Pursuant to the Merger Agreement, NCE will be merged with and into
NSP, with NSP as the surviving corporation in the merger (the "Merger"). The
combined company will be called Xcel Energy. In the Merger, each share of New
Century Energies will be converted into the right to receive 1.55 shares of
common stock of Xcel Energy. NSP common and preferred shares will remain
outstanding after the Merger on a one-for-one basis as shares of Xcel Energy.
The Merger was approved by the shareholders of both NSP and NCE on June 28,
1999. Consummation of the Merger is subject to the satisfaction or waiver of
certain closing conditions, including, among others, the receipt of government
and other authorizations. The Merger is expected to take from 12 to 18 months
from the date of the Merger Agreement to complete.
Additional information concerning the Merger and the Merger Agreement,
including pro forma combined financial information, is included in our Current
Report on Form 8-K dated April 23, 1999, our proxy statement dated May 19, 1999,
and in our Quarterly Report on Form 10-Q for the quarter ended September 30,
1999 filed with the Commission and incorporated by reference into this
Prospectus.
DESCRIPTION OF THE PLAN
The following is a summary of the Plan:
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The purpose of the Plan is to provide our shareholders, employees and
customers with a convenient method of purchasing our common stock and of
systematically increasing their ownership interest in the Company without paying
any brokerage commissions or service charges. The Plan also offers other
individuals of legal age residing in Minnesota, North Dakota, South Dakota,
Wisconsin or Michigan an opportunity to become shareholders of the Company by
enrolling in the Plan.
1. HOW TO ENROLL
If you are eligible, you may join the Plan at any time by completing an
authorization form and returning it to us. You may obtain an authorization form
by sending a written request to Northern States Power Company, Shareholders
Department, 414 Nicollet Mall, Minneapolis, Minnesota 55401, or by calling us at
(612) 330-5560.
2. PARTICIPATION
If you are already a holder of record of Company common or preferred stock
or a beneficial owner of Company common or preferred stock held by a broker or
other custodial institution that has established procedures which permit you to
participate in the Plan, you are eligible to become a participant in the Plan.
If you are already a participant under the Plan, you are not required to
re-enroll. However, you must contact the Company's Shareholders Department to
request any changes in participation.
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If you are a customer or employee of the Company or an individual of legal
age residing in Minnesota, North Dakota, South Dakota, Wisconsin or Michigan,
you are also eligible to become a participant in the Plan if you make an initial
investment of at least $100 and complete the appropriate authorization form. A
maximum of $10,000 may be initially invested in the Plan.
3. HOW THE PLAN WORKS
You can reinvest dividends paid on full and fractional shares to acquire
additional shares under the Plan. You also may make optional cash payments of a
minimum of $25 per payment up to a $10,000 maximum per calendar quarter to
purchase stock. If you are an employee of the Company, you may authorize payroll
deductions to purchase shares.
Shares purchased with reinvested dividends, optional cash payments and
employee payroll deductions are held by the Plan until you request issuance of a
share certificate. Dividends paid on shares held by the Plan will be
automatically reinvested. You can also choose to reinvest all, a portion, or
none of the dividends earned on your certificated shares of common and/or
preferred stock.
You will not pay any brokerage fees, commissions or service charges in
connection with the Plan. All administrative service fees will be borne by the
Company. If you have 25 or less shares credited to your Plan account you can
request termination and a sale of all your Plan shares through the Company.
Full investment of funds will be made on your behalf. Fractions of shares,
as well as full shares, will be credited to your account. Regular Statements of
Account will provide simplified record keeping.
You can deposit common stock certificates for shares acquired through the
Plan or otherwise under the Share Deposit feature of the Plan.
4. HOW INVESTMENTS ARE MADE
Shares may come either from authorized but unissued common stock ("new
issue common stock") or from purchases of common stock of the Company made on
any securities exchange where the shares are traded, in the over-the-counter
market or in negotiated transactions. We will decide when the Plan will purchase
new issue common stock or when common stock will be purchased on the open
market. For open market purchases, First Trust National Association (the "NSP
Agent") will act as purchasing agent. As of the date of this Prospectus, shares
of common stock purchased for participants under the Plan are being purchased
from the Company as new issue common stock. We will not change our determination
to use new issue common stock or purchase shares on the open market more than
once in any twelve-month period. You will be notified of any change in the
source of shares.
You can acquire shares in the following manner:
DIVIDEND REINVESTMENT
Dividends may be reinvested to purchase either new issue common stock
or common stock on the open market. Common and/or preferred stock dividends
used to purchase new issue common stock will be invested on the 20th day of
each dividend payment month, being: January, April, July, and October, if
that date is a New York Stock Exchange trading day, or the first succeeding
date the New York Stock Exchange is open for trading during those months.
Common and/or preferred stock dividends will normally be used by the NSP
Agent to purchase common stock on the open market within 10 business
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days of the payment of a dividend, depending on market conditions.
DIVIDENDS ON SHARES HELD BY THE PLAN WILL ALWAYS BE REINVESTED.
You can authorize full or partial reinvestment of dividends on
certificated shares. To change participation to allow receipt of a dividend
from certified shares in cash, instead of automatically reinvesting that
dividend, the Company's Shareholders Department must receive a written
request on or before the record date established for the particular
dividend. If the request is received after the record date, the change will
begin with the next dividend.
CASH INVESTMENT OPTION -- OPTIONAL CASH PAYMENTS
You may, at any time, SEND CHECKS OR MONEY ORDERS ONLY (made payable
in U.S. dollars drawn on a U.S. bank) to make cash investments in the Plan.
Checks and money orders must be made PAYABLE TO "NSP AGENT". You may vary
cash investments from a minimum of $25 per payment up to a maximum of
$10,000 per calendar quarter.
We will process all payments on the date they are received. Payments
post-dated and received on or before that date will be accepted as of such
date. Cash payments are invested monthly on the 10th day of each month, if
that date is a New York Stock Exchange trading day, or the first succeeding
date the New York Stock Exchange is open for trading. In order to be
invested in a particular month, cash payments must be received on or before
the seventh day of such month, or if the seventh day is not a business day,
then on or before the first business day thereafter. Payments received
after such seventh day of the month will be invested on the investment date
in the next month. No interest will be paid on funds being held by us or
the NSP Agent.
Cash payments will be used to purchase either new issue common stock
or common stock purchased on the open market, as we determine. Cash
payments used to purchase new issue common stock will be invested on the
investment date of each month. Cash payments used to purchase common stock
on the open market will normally be purchased by the NSP Agent within 10
business days after the last business day of the previous month.
To be eligible for quarterly dividends on shares purchased with cash
investments, cash payments must be received by the seventh day of February,
March, May, June, August, September, November and December. Shares
purchased with cash payments in January, April, July and October will not
be eligible for that quarter's dividend.
You can request a refund of the current month's cash payment by
sending a written request to our Shareholders Department. The request must
be received at least two business days prior to the investment date.
Payments that are rejected by us will be returned to participants as
promptly as practicable.
PAYROLL DEDUCTION
If you are an employee who participants in the Plan, you may authorize
payroll deductions to purchase shares under the Plan. Deductions may be
made in addition to reinvestment of dividends and optional cash payments.
The combined total of payroll deductions and optional cash payments may not
exceed $10,000 in any calendar quarter. The minimum monthly payroll
deduction is $25.
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You can obtain a Payroll Deduction form from the Shareholders
Department. You may change or terminate payroll deductions at any time by
completing a new Payroll Deduction Authorization form. The commencement,
change or termination will become effective as soon as practicable after
receipt of the authorization form.
PRICE
The price per share of new issue common stock will be the current
market price of common stock as determined by us on the basis of the
average of the closing prices of common stock as reported by The Wall
Street Journal as New York Stock Exchange Composite Transactions on the
five trading days prior to the applicable investment date.
The price of shares purchased for the Plan on the open market will be
the weighted average price at which common stock is actually purchased.
We have no basis for estimating either the number of shares that will
be purchased under the Plan or the prices at which shares will be
purchased. You should be aware that since investment prices are determined
as of specified dates, you may lose any advantages otherwise available from
being able to select the timing of your investment.
5. STATEMENTS OF ACCOUNT
We will maintain an account for each Plan participant and will send
Statements of Account to each participant as soon as practicable after each
quarterly dividend reinvestment and each monthly cash investment. The Statements
detail dividends, cash payments, number of shares, price per share, taxable
dividend income and total number of accumulated shares. These Statements will
provide you with records of your purchases and should be retained for tax
purposes.
6. CERTIFICATES FOR SHARES
Normally, certificates for Plan shares are not issued to you unless
requested. Instead, the shares are credited to your Plan account and are shown
on the Statements of Account. This protects against loss, theft or destruction
of stock certificates, and reduces our administrative costs.
You can, however, request stock certificates for any number of full shares
credited to your Plan account. There is no charge for this service. A written
request must be made to our Shareholders Department by completing the back side
of the account correspondence stub attached to the Statements of Account or by
submitting a written request. A separate request must be made for each
certificate requested specifying the number of full shares to be issued.
Requests are processed as soon as practicable after receipt. Generally, the
certificates are issued within 10 business days after we receive the request.
Any remaining full and fractional shares will continue to be credited to your
account. Certificates for fractional shares will not be issued under any
conditions.
We reserve the right to suspend our policy of issuing certificates, other
than upon termination or partial withdrawal from the Plan, at any time.
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REGISTRATION OF SHARE CERTIFICATES
Certificates can be registered and issued in names other than your
name subject to compliance with any applicable laws. To do this, you must
complete an "Assignment Separate from Certificate" form and return it to
our Shareholders Department. This form must bear your signature with the
signature guaranteed by an eligible financial institution. Assignment forms
can be obtained from our Shareholders Department.
If you want shares issued or a transfer to be effective for a
particular dividend payment, the appropriate form must be received at least
five days before the record date established for that dividend.
Shares credited to your account may not be pledged and may not be
assigned, except to another Plan account. To pledge or assign shares, you
must make a written request for certificates to be issued.
DEPOSIT OF COMMON STOCK CERTIFICATES INTO THE PLAN
You can deposit any certificates for common stock of the Company into
the Plan, whether such certificates were issued under this Plan or
otherwise, at no cost. To take advantage of this feature, you must send
certificates for common stock to our Shareholders Department with a
completed "Share Deposit Letter of Transmittal" form which you can obtain
from our Shareholders Department. Shares of Common Stock represented by
such certificates are credited to your account under the Plan and dividends
on these shares are automatically reinvested in the same manner as Plan
shares. CERTIFICATES FOR PREFERRED STOCK OF THE COMPANY ARE NOT ELIGIBLE
FOR DEPOSIT.
We strongly recommend that registered or certified mail be used, along
with adequate insurance, should you choose to deposit certificates.
However, the method used to submit certificates to the Company is at your
option and risk. You should not endorse the certificates.
7. HOW TO MAKE A CHANGE IN PARTICIPATION
Any change in enrollment in the Plan or any change in the manner of
participation in the Plan is considered a change in participation. For example,
since dividends on Plan shares are always automatically reinvested, a request to
issue a stock certificate to receive such dividends in cash is considered a
change in participation. You may make this or any other change in participation
by completing the appropriate information on the back side of the account
correspondence stub attached to the Statements of Account or by sending a
separate written request to our Shareholders Department. The request must
indicate the number of shares affected by any change and provide instructions on
the new method of participation.
8. HOW TO TERMINATE PARTICIPATION
You may terminate participation at any time by submitting the appropriate
information on the back side of the account correspondence stub attached to the
Statements of Account or by submitting a separate written request to our
Shareholders Department.
When you terminate your participation or if we terminate the Plan, stock
certificates for full shares credited to your Plan account will be issued and
mailed directly to you along with a check covering the value of any fractional
shares. The fractional share check amount is based on the closing market price
of the common stock on the day before the day the termination request is
processed. For income tax purposes, the amount of the fractional share check is
taxable and is reported accordingly.
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A request for termination will be processed as soon as practicable after
receipt. A stock certificate for full shares and a check for the value of the
fractional share will normally be mailed within 10 days after receipt of the
request, unless the request is received during a dividend month, in which case
the stock certificate and check for the value of the fractional share will be
mailed by the end of the month. If the request to terminate is received by the
15th day of a dividend payment month, being: January, April, July and October,
the dividend that would have been reinvested in the Plan will be paid directly
to you in cash as soon as practicable. Any cash payments waiting for investment
will be returned as soon as practicable. Any subsequent dividends, if
applicable, will be paid in cash.
To cancel payroll deductions, you must complete a Payroll Deduction
Authorization form. Forms can be obtained from our Shareholders Department.
SELLING PLAN SHARES
To terminate participation and sell Plan shares (except if you have 25
or less shares as explained below), you must send a written request to the
Shareholders Department specifying that a stock certificate be issued to
you and indicating the number of Plan shares to be issued in certificated
form. You can then sell the certificated shares through a stockbroker or to
another buyer.
If you wish to terminate and have 25 or less shares credited under the
Plan, you may sell all, but not less than all, your Plan shares through the
Company, without the issuance of a certificate and without payment of a
brokerage fee. You must submit a request for a sale of 25 or less shares by
completing the information on the back side of the account correspondence
stub attached to the Statements of Account or by submitting a separate
written request to the Shareholders Department. Unless the shares are
needed to meet Plan requirements, we will place a sale order for such
shares with a fiduciary institution selected by us within 10 days after
receipt. If the shares being sold by you are needed to meet Plan
requirements, those shares will be purchased by the Plan. In either case,
you will receive the proceeds of the sale, less any backup withholding tax,
within 10 days after the sale. The price of the Plan shares being sold will
be the market price of the common stock on the day of the sale.
After termination, you can re-enroll in the Plan by completing the
appropriate authorization form. However, we reserve the right to reject any
enrollment forms on the grounds of excessive joining and termination. Such
reservation is intended to minimize unnecessary administrative expense and
to encourage use of the Plan as a long-term investment service.
9. OTHER INFORMATION
STOCK SPLITS
Should we declare a stock split, the number of additional shares you
receive will be based on the number of shares in your Plan account.
Additional full and fractional shares that result from a stock split will
be credited to your Plan account. Stock split shares issued with respect to
certificated shares held by you will be mailed directly to you in the same
manner as to shareholders who are not participating in the Plan.
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VOTING AT THE ANNUAL MEETING OF SHAREHOLDERS
We will vote the shares participating in the Plan (those certificated
and those credited to a Plan account) in accordance with your signed
proxies, or you can vote in person at the annual meeting.
PROCEEDS FROM THE SALE OF NEW ISSUE COMMON STOCK
Proceeds received from the sale of new issue common stock will be used
for general corporate purposes.
COMPANY RESPONSIBILITY IN ADMINISTERING THE PLAN
In administering the Plan, we are not liable for any good faith act or
omission to act, including, without limitation, any claim of liability (a)
arising out of failure to terminate participants' accounts upon death prior
to receipt of notice in writing of such death; (b) with respect to the
prices at which the shares are purchased or sold and the time such
purchases or sales are made; or (c) as to the value of the shares acquired
for participants. We reserve the right to interpret and regulate the Plan
as we deem desirable or necessary in connection with the Plan's operation.
We will have no responsibility beyond the exercise of ordinary care
for any action taken or omitted pursuant to the Plan nor will we have any
duties or responsibilities except those expressly stated in this
prospectus.
You should recognize that neither the Company nor the NSP Agent can
assure you of a profit or protect you against a loss on shares purchased or
sold by you under the Plan.
COMPANY'S RIGHT TO TERMINATE THE PLAN
While we expect to continue the Plan indefinitely, we reserve the
right to suspend or terminate the Plan at any time. We reserve the right to
terminate your Plan account if you are unwilling to abide by the rules and
provisions of the Plan. We also reserve the right to make modifications to
the Plan. Any such suspension, termination or modification will be
announced to you in advance.
10. FEDERAL INCOME TAX INFORMATION
The information set forth below is only a summary and does not claim to be
a complete description of all tax consequences of participation in the Plan. The
description may be affected by future legislation, IRS rulings and regulations,
or court decisions. This summary only addresses tax consequences to you if you
are a United States resident or citizen holding the stock as a capital asset.
This summary does not address all the consequences that may be relevant to you
based on your individual circumstances. Accordingly, you should consult with
your own tax advisors with respect to the federal, state, and local and foreign
tax consequences of participation in the Plan.
What are the federal income tax consequences of participation in the Plan?
For tax purposes, your reinvested dividends are treated in the same manner
they would have been treated had you received them in cash on the applicable
dividend payment date. In addition, brokerage commissions paid by us for you if
shares are acquired through open market transactions are treated as taxable
dividend income and are reported accordingly.
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You will not realize any taxable income when stock certificates for full
shares are issued from your Plan account. However, you will realize gain or loss
when the shares are sold either at your request through the Company or by you
after certificates have been issued. The amount of the gain or loss is the
difference between the amount you receive for the shares and the cost basis of
the shares. In addition, if you terminate participation, you will realize gain
or loss upon receipt of the check covering the value of the fractional share.
Any gain or loss will be long term capital gain or loss if you have held the
shares, including the time they are held for you in the Plan, for more than 1
year.
How will you be notified of your taxable dividend income?
We will report the dividend income to you and to the IRS on Form 1099-Div.
The brokerage commission paid by us will be included as dividend income. When
your Plan account is terminated and shares are sold through us, we will also
report the proceeds from the sale to you and to the IRS on Form 1099-B.
What is the federal tax basis of Plan shares?
The tax basis of your Plan shares acquired after 1985 is equal to your
purchase price as indicated on your statements.
The tax basis of your shares acquired under the Plan in calendar years 1982
through 1985 will depend on whether you excluded reinvested dividends up to $750
($1,500 in the case of a joint return) per tax year under certain provisions of
the Economic Recovery Tax Act of 1981. If you excluded qualified dividends, the
tax basis for the resulting shares will be zero. If you did not exclude the
dividends, the tax basis will be the purchase price as indicated on your
statements.
How does the Company invest and report dividends subject to federal backup
withholding or foreign tax withholding?
We will invest an amount equal to the dividends less the amount of tax
withheld. The net dividend will purchase shares. The Statements sent to
participants subject to tax withholding will not indicate the amount of tax
withheld, but will show the net dividend reinvested by us. For IRS reporting
purposes, the amount of the dividend withheld will be included in the dividend
income of participants subject to backup withholding or foreign participants
subject to foreign withholding.
11. EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K of Northern States Power Company for
the year ended December 31, 1998, have been so incorporated in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
The consolidated balance sheets of New Century Energies and subsidiaries as
of December 31, 1998 and 1997, and the related consolidated statements of
income, shareholders' equity, and cash flows for each of the three years in the
period ended December 31, 1998, and schedule incorporated by reference in this
prospectus have been audited by Arthur Andersen LLP, independent public
accountants, as set forth in their report. The financial statements and
supporting schedule referred to above have been included herein in reliance upon
the authority of that firm as experts in giving said report.
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12. LEGAL OPINION
A legal opinion in connection with shares issued under the Plan was
rendered by Gary R. Johnson, Vice President and General Counsel of the Company.
Mr. Johnson is the beneficial owner of 82,249 shares of the Company's common
stock.
13. INDEMNIFICATION
The Company's Bylaws contain provisions for indemnification of our
directors and officers consistent with the provisions of Section 302A.521 of the
Minnesota Statutes. The Company's Restated Articles of Incorporation also
contain provisions limiting the liability of our directors in certain instances.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, we have been informed 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.
14. ADDITIONAL INFORMATION
For further information and assistance please write:
Northern States Power Company
Shareholders Department
414 Nicollet Mall
Minneapolis, MN 55401
or call: 330-5560 from the Minneapolis-St. Paul area; or 1-800-527-4677
toll-free from other locations.
DESCRIPTION OF COMMON STOCK
GENERAL
The capital stock of the Company consists of two classes: common stock, par
value $2.50 per share (350,000,000 shares currently authorized of which
154,341,721 shares were outstanding as of October 31, 1999); and preferred
stock, par value $100 per share (7,000,000 shares authorized, of which the
following series were outstanding as of October 31, 1999: $3.60
Series -- 275,000 shares; $4.08 Series -- 150,000 shares; $4.10
Series -- 175,000 shares; $4.11 Series -- 200,000 shares; $4.16
Series -- 100,000 shares; and $4.56 Series -- 150,000 shares). If the merger
with New Century Energies is completed, the combined company's charter will
authorize one billion shares of common stock, approximately 330 million of which
would have been outstanding after the merger if it had occurred on March 24,
1999. The Board of Directors is authorized to provide for the issue from time to
time of preferred stock in series and, as to each series, to fix the
designation, dividend rates and times of payment, redemption price, and
liquidation price or preference as to assets in voluntary liquidation.
Cumulative dividends, redemption provisions and sinking fund requirements, to
the extent that some or all of these features are or may be present when
preferred stock is issued, could have an adverse effect on the availability of
earnings for distribution to the holders of the common stock or for other
corporate purposes.
The statements under this caption, except as otherwise indicated, are
summaries of certain provisions of the Restated Articles of Incorporation of the
Company as amended. These summaries are not complete. We have filed our Restated
Articles of Incorporation as an exhibit to this registration statement.
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DIVIDEND RIGHTS
Before we can pay any dividends on the common stock, the holders of our
preferred stock are entitled to receive their dividends at the respective rates
provided for the shares of their series. In addition, we may not, except in
certain limited circumstances, declare or pay any dividends on the common stock
if we have deferred payment of interest on our Junior Subordinated Debentures
that were issued in connection with the Trust Originated Preferred Securities
(TOPrS) issued and sold by our subsidiary trust, NSP Financing I.
LIMITATIONS ON PAYMENT OF DIVIDENDS ON AND ACQUISITIONS OF COMMON STOCK
So long as any shares of preferred stock are outstanding, dividends (other
than dividends payable in common stock) or distributions on, or acquisitions for
value of common stock
- may not exceed 50% of net income for a prior twelve-month period, after
deducting dividends on any preferred stock during the period, if the sum
of the capital represented by the common stock, premiums on capital stock
(restricted to premiums on common stock only by SEC orders), and surplus
accounts is less than 20% of the sum of the total capital, premiums on
capital stock, surplus accounts and long-term debt,
- may not exceed 75% of net income for such twelve-month period, as
adjusted, if such capitalization ratio is 20% or more but less than 25%,
and
- if such capitalization ratio exceeds 25%, such dividends, distributions
or acquisitions may not reduce such ratio to less than 25% except to the
extent permitted by the provisions described in the above two bullet
points.
In our Trust Indenture dated February 1, 1937, as supplemented (the "Trust
Indenture"), securing our First Mortgage Bonds, we have agreed that the sum of
- all dividends and distributions on the common stock after September 30,
1954 (other than in common stock), and
- the cost of all shares of common stock acquired by us after that date
will not exceed the sum of (a) the earned surplus of the Company and certain of
our former subsidiary companies consolidated, at September 30, 1954, and (b) the
net income earned after September 30, 1954, after adjusting for all preferred
stock dividends after that date and all proper charges and credits to earned
surplus made after that date. In computing net income for this purpose, if 15%
of the consolidated gross operating revenues of such companies exceeds the
aggregate of the amounts expended for maintenance and provided for depreciation,
such excess will be deducted from net income. These provisions are not expected
to impair our ability to pay dividends in the foreseeable future.
Our Supplemental and Restated Trust Indenture dated May 1, 1988 (the
"Restated Indenture") amends and restates the Trust Indenture. The Restated
Indenture will not become effective and operative until all First Mortgage Bonds
of each series issued under the Trust Indenture prior to July 1989 have been
retired or, subject to certain limitations, until the holders of the requisite
principal amount of such First Mortgage Bonds shall have consented to the
amendments contained in the Restated Indenture (the "Effective Date"). The
Restated Indenture will replace the dividend restriction described in the
preceding paragraph with the requirement that
- the sum of: (i) all dividends and distributions on the common stock after
the Effective Date (other than in common stock) and (ii) the net payments
for common stock after the Effective Date (i.e., the
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<PAGE> 14
amount, if any, by which the payments made for the purchase or other
acquisition of our common stock after the Effective Date exceeds the
considerations received by us after the Effective Date from the sale of
common stock)
- will not exceed the sum of (i) the retained earnings of the Company at
the Effective Date, and (ii) an amount equal to the net income of the
Company earned after the Effective Date, after deducting all preferred
stock dividends after the Effective Date.
In computing net income for the purpose of this amended covenant, we will
deduct the amount, if any, by which, the actual expenditures or charges for
ordinary repairs and maintenance and the charges for reserves, renewals,
replacements, retirements, depreciation and depletion since one year before the
Effective Date are less than 2.50% of our completed depreciable property.
VOTING RIGHTS
The holders of shares of preferred stock of the $3.60 Series are entitled
to three votes for each share held, and the holders of common stock and
preferred stock of all other series are entitled to one vote for each share held
on all matters submitted to a vote of our stockholders; provided that when
dividends payable on the preferred stock of any series outstanding are in
default in an amount equivalent to the amount payable thereon during the
immediately preceding twelve-month period, and until such default has been
remedied, the holders of shares of preferred stock, voting as a class and
without regard to series, are entitled to elect the smallest number of directors
necessary to constitute a majority of the Board of Directors and the holders of
shares of common stock, voting as a class, are entitled to elect the remaining
directors of the Company.
The affirmative vote or consent of the holders of various specified
percentages of preferred stock is required to effect certain changes in the
capital structure of the Company and certain other transactions that might
affect their rights. Except to the extent required by law, holders of common
stock do not vote as a class in case of any modification of their rights.
CHANGE OF CONTROL
Our By-laws and the Minnesota Business Corporation Act, as amended (the
"Minnesota BCA"), contain provisions that could discourage or make more
difficult a change of control of the Company. Such provisions are designed to
protect our shareholders against coercive, unfair or inadequate tender offers
and other abusive takeover tactics and to encourage any person contemplating a
business combination with the Company to negotiate with our Board of Directors
for the fair and equitable treatment of all of our shareholders.
ELECTION OF DIRECTORS. In electing directors, shareholders may cumulate
their votes in the manner provided in the Minnesota BCA. The Board of Directors
is divided into three classes as nearly equal in number as possible with
staggered terms of office so that only approximately one-third of the directors
are elected at each annual meeting of shareholders. The existence of a
classified Board along with cumulative voting rights may make it more difficult
for a group owning a significant amount of the Company's voting securities to
effect a change in the majority of the Board than would be the case if
cumulative voting did not exist.
BY-LAW PROVISIONS. Our By-laws require advance notice of the introduction
by shareholders of business at annual or special meetings of shareholders of the
Company. For any such proposal to be properly brought before an annual or
special meeting, a shareholder must comply with the shareholder proposal
requirements under the federal proxy rules or deliver a written notice to the
Corporate Secretary not less than 20 days nor
14
<PAGE> 15
more than 90 days prior to the scheduled annual or special meeting, provided
that if the date of such meeting is not disclosed at least 30 days in advance, a
shareholder notice will be timely delivered if received by the close of business
on the tenth day following the earlier of the day on which notice of the date of
the scheduled meeting was mailed or the day on which public disclosure of the
meeting date occurred. The required notice from a shareholder must contain (i) a
description of the proposed business and the reasons for conducting such
business, (ii) the name and address of each shareholder supporting the proposal
as it appears on our books, (iii) the class and number of shares beneficially
owned by each such shareholder, and (iv) a description of any financial or other
interest or each such shareholder in the proposal.
MINNESOTA BCA. Section 302A.671 of the Minnesota BCA applies to potential
acquirers of 20% or more of the Company's voting shares. Section 302A.671
provides in substance that shares acquired by such acquirer will not have any
voting rights unless (a) the acquisition is approved by (i) a majority of the
voting power of all shares of the Company entitled to vote and (ii) a majority
of the voting power of all shares of the Company entitled to vote excluding all
shares owned by the acquirer or by any officer of the Company, or (b) the
acquisition (i) is pursuant to an all-cash tender offer for all of the voting
shares of the Company, (ii) results in the acquirer becoming the owner of at
least a majority of the outstanding voting shares of the Company, and (iii) has
been approved by a committee of disinterested directors.
Section 302A.673 of the Minnesota BCA generally prohibits public Minnesota
corporations, including the Company, from engaging in any business combination
with a person or entity owning 10% or more of the Company's voting shares for a
period of four years after the date of the transaction in which such person or
entity became a 10% shareholder unless the business combination or the
acquisition resulting in 10% ownership was approved by a committee of
disinterested directors prior to the date such person or entity became a 10%
shareholder.
Section 302A.675 of the Minnesota BCA provides in substance that a person
or entity making a takeover offer (an "offeror") for the Company is prohibited
from acquiring any additional Company shares within two years following the last
purchase of shares pursuant to a takeover offer with respect to that class
unless (i) the acquisition is approved by a committee of disinterested directors
before the purchase of any shares by the offeror pursuant to a takeover offer or
(ii) shareholders of the Company are afforded, at the time of the acquisition, a
reasonable opportunity to dispose of their shares to the offeror upon
substantially equivalent terms as those provided in the earlier takeover offer.
LIQUIDATION RIGHTS
In the event of liquidation, after the holders of all series of preferred
stock have received $100 per share in the case of involuntary liquidation, and
the then applicable redemption prices in the case of voluntary liquidation, plus
in either case an amount equal to all accumulated and unpaid dividends, the
holders of the common stock are entitled to the remaining assets.
PREEMPTIVE AND SUBSCRIPTION RIGHTS
No holder of stock of the Company has the preemptive right to purchase or
subscribe for any additional capital stock of the Company.
Our common stock is listed on the New York Stock Exchange, the Chicago
Stock Exchange and the Pacific Exchange. The Transfer Agent for the common stock
is the Company and the Registrar is Norwest Bank Minnesota, N.A.
15
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
About This Prospectus................ 2
Where You Can Find More
Information........................ 2
NSP.................................. 3
Proposed Merger...................... 4
Description of the Plan.............. 4
How to Enroll...................... 4
Participation...................... 4
How the Plan Works................. 5
How Investments are Made........... 5
Statements of Account.............. 7
Certificates for Shares............ 7
How to Make a Change in
Participation.................... 8
How to Terminate Participation..... 8
Other Information.................. 9
Federal Income Tax Information..... 10
Experts............................ 11
Legal Opinion...................... 12
Indemnification.................... 12
Additional Information............. 12
Description of Common Stock.......... 12
</TABLE>
---------------------------
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. NO ONE HAS BEEN AUTHORIZED TO PROVIDE YOU WITH
DIFFERENT INFORMATION. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN
THIS PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT
COVER OF THE DOCUMENT. SECURITIES ARE NOT BEING OFFERED IN ANY STATE OR
JURISDICTION WHERE THE OFFER IS NOT PERMITTED.
------------------------
PROSPECTUS
------------------------
[NSP LOGO]
NORTHERN STATES
POWER COMPANY
(A MINNESOTA CORPORATION)
Dividend Reinvestment and
Stock Purchase Plan
