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As filed with the Securities and Exchange Commission on May 9, 2000
Registration No. 333-_____________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BLACK HILLS HOLDING CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
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South Dakota 4911 46-0458824
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-------------------------- ----------------------- ---------------------------
(Primary
(State or Other Jurisdiction Standard Industrial (I.R.S. Employer
of Incorporation or Classification Identification
Organization) Code Number) Number)
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625 Ninth Street
P.O. Box 1400
Rapid City, South Dakota 57709
(605) 721-1700
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
ROXANN R. BASHAM
Vice President - Finance and Corporate Secretary and Treasurer
625 Ninth Street
P.O. Box 1400
Rapid City, South Dakota 57709
(605) 721-1700
(Name, Address, Including Zip Code, and Telephone Number, Including Area
Code, of Agent For Service)
With copies to:
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JOHN K. NOONEY, ESQUIRE HOWARD L. MEYERS, ESQUIRE
Morrill Thomas Nooney & Braun LLP Morgan, Lewis & Bockius LLP
625 Ninth Street, Eighth Floor 1701 Market Street
P.O. Box 8108 Philadelphia, Pennsylvania 19103
Rapid City, South Dakota 57709-8108 ( 215) 963-5000
(605) 348-7516
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this registration statement and all
other conditions to the share exchange between the common shareholders of Black
Hills Corporation and Black Hills Holding Corporation pursuant to the Plan of
Exchange described in the Proxy Statement/Prospectus contained herein have been
satisfied or waived.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration for the same
offering: [ ]
CALCULATION OF REGISTRATION FEE
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Title Of Each Proposed Proposed
Class Of Maximum Aggre- Maximum Amount
Securities To Amount To Be Offering Price gate Offering Of Registra-
Be Registered Registered Per Share Price tion Fee
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Common Stock, 21,800,000 [$22.65625](1) [$493,906,250](1) $130,391.25
$1.00 par value
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(1) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(c) of the Securities Act of 1933,
as amended, on the basis of $22.65625 per share, the average high
($23.125) and low ($22.1875) prices of the common stock being exchanged
for the securities being registered hereunder, as reported on the New
York Stock Exchange for May 4, 2000.
(2) The registration fee was paid when the original S-4 was filed on May 10,
2000.
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 this Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
BLACK HILLS CORPORATION
625 Ninth Street
Rapid City, South Dakota 57701
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JUNE 20, 2000
May 8, 2000
Dear Shareholder:
You are invited to attend our annual meeting of shareholders of Black
Hills Corporation to be held on Tuesday, June 20, 2000 at 9:30 a.m. local time,
at the Journey Museum, 222 New York Street, Rapid City, South Dakota. The
purpose of our annual meeting is to consider and take action on the following:
1. Formation of a holding company and the exchange of Black Hills
Corporation common stock for common stock of the holding
company.
2. Election of three Class II Directors to serve until the annual
meeting of shareholders in 2003: Daniel P. Landguth, John R.
Howard and David C. Ebertz.
3. Ratification of Arthur Andersen LLP to serve as Black Hills
Corporation's independent auditors for the year 2000.
4. Any other business that properly comes before the annual
meeting.
The enclosed proxy statement and prospectus discuss the important
matters to be considered at this year's meeting. Our shareholders of record as
of May 1, 2000 can vote at the annual meeting.
Your vote is very important. Please sign, date and return the enclosed
proxy card in the envelope provided. If you own shares of common stock other
than the shares shown on the enclosed proxy, you will receive a proxy in a
separate envelope for each such holding. Please execute and return each proxy
received. To make sure that your vote is counted, you should allow enough time
for the postal service to deliver your proxy before the meeting.
Sincerely,
ROXANN R. BASHAM
Vice President - Finance
and Corporate Secretary/Treasurer
BLACK HILLS CORPORATION
625 Ninth Street
Rapid City, South Dakota 57701
PROXY STATEMENT
A proxy in the accompanying form is solicited by the Board of Directors
of Black Hills Corporation, a South Dakota corporation, to be voted at the
annual meeting of our shareholders to be held Tuesday, June 20, 2000, and at any
adjournment of the annual meeting.
The enclosed form of proxy, when executed and returned, will be voted
as set forth therein. Any shareholder signing a proxy has the power to revoke
the proxy in writing, addressed to our secretary, or in person at the meeting at
any time before the proxy is exercised.
All shares represented by valid, unrevoked proxies will be voted at our
annual meeting. Shares voted as abstentions on any matter, or as "withhold
authority" as to votes for members of our Board of Directors, will be counted as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum at the meeting but will be counted as unvoted, although
present and entitled to vote, for purposes of determining the approval of each
matter as to which the shareholder has abstained. If a broker submits a proxy
which indicates that the broker does not have discretionary authority as to
certain shares to vote on one or more matters, those shares will be counted as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum at the meeting, but will not be considered as present and
entitled to vote with respect to such matters.
We will bear all costs of the solicitation. In addition to solicitation
by mail, our officers and employees may solicit proxies by telephone, fax, or in
person. Georgeson Shareholder Communications, Inc. has been retained to assist
in the solicitation of proxies at an anticipated cost of $4,000 plus
out-of-pocket expenses. Also, we will, upon request, reimburse brokers or other
persons holding stock in their names or in the names of their nominees for
reasonable expenses in forwarding proxies and proxy materials to the beneficial
owners of stock.
This proxy statement and the accompanying form of proxy are to be first
mailed on or about May 8, 2000. Our annual report to shareholders was previously
mailed to shareholders.
VOTING RIGHTS AND PRINCIPAL HOLDERS
Only our shareholders of record at the close of business on May 1,
2000, will be entitled to vote at the meeting. Our outstanding voting stock as
of such record date consisted of 21,390,949 shares of our common stock.
Each outstanding share of our common stock is entitled to one vote.
Cumulative voting is permitted in the election of our Board of Directors. Each
share is entitled to three votes, one each for the election of three directors,
and the three votes may be cast for a single person or may be distributed among
two or three persons.
We are not aware of any person or group who is the beneficial owner of
more than five percent of our common stock.
TABLE OF CONTENTS
COMMONLY ASKED QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING PROCESS.........1
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS...............................5
ITEM I:
PROPOSAL TO APPROVE THE FORMATION OF A HOLDING COMPANY AND PLAN OF EXCHANGE..6
Formation of a Holding Company.......................................6
Risk Factors.........................................................6
Where You Can Find More Information..................................7
Reasons for Formation of a Holding Company...........................8
Companies Subject to Share Exchange..................................8
Termination or Amendment of Plan of Exchange........................10
Conditions to Share Exchange........................................11
Dissenters Rights...................................................11
No Exchange of Stock Certificates...................................11
Dividend Reinvestment and Stock Purchase Plan.......................12
Employee Stock Purchase Plan........................................12
Benefit Plans.......................................................13
Listing of Common Stock of the Holding Company......................15
Transfer Agent and Registrar........................................15
Market Value of Our Common Stock....................................15
Dividend Policy.....................................................15
Directors and Executive Officers....................................16
Our Common Stock....................................................17
Common Stock of the Holding Company.................................17
Comparison of Holding Company Articles to Our Articles..............18
Treatment of Our Preferred Stock....................................18
Treatment of Our Indebtedness.......................................18
Certain Income Tax Consequences.....................................19
Exemption from Public Utility Holding Company Act of 1935...........20
Legal Opinions......................................................21
Experts........................................................... 21
ITEM II: ELECTION OF DIRECTORS...............................................22
Security Ownership of Management....................................24
The Board and Committees............................................25
Compensation Committee Interlocks and Insider Participation.........25
Directors' Fees.....................................................26
Executive Compensation..............................................26
Retirement Plans....................................................29
Retirement Benefits.................................................31
Employees'Stock Purchase Plan.......................................31
Retirement Savings Plan.............................................31
Severance Agreements................................................32
Stock Performance Graph.............................................33
ITEM III: APPOINTMENT OF INDEPENDENT AUDITORS................................34
ITEM IV: TRANSACTION OF OTHER BUSINESS.......................................34
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE..............................35
COMMONLY ASKED QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING PROCESS
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Q:.......Who is soliciting my proxy?
A:.......The Board of Directors of Black Hills Corporation.
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Q:.......Where and when is the annual meeting?
A:.......9:30 a.m., Mountain Daylight Time, June 20, 2000 at the Journey Museum,
222 New York Street, Rapid City, South Dakota.
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Q:.......What am I voting on?
A: *Formation of a holding company and the exchange of our common stock
for common stock of the holding company.
*Election of three Class II Directors: Daniel P. Landguth, John R.
Howard and David C. Ebertz.
*Ratification of Arthur Andersen LLP as our independent auditors for
2000.
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Q: What factors did the Board of Directors consider in approving the
formation of the holding company and share exchange?
A: *A holding company structure will give us more financial, managerial
and organizational flexibility and will allow us to separate our
different businesses into regulated and unregulated businesses.
*Legally separate entities, such as subsidiaries of the holding
company, will make management of each business more accountable and
allow us to better evaluate the success of existing and new
businesses.
*The holding company structure will permit us to take advantage of
non-utility business opportunities more quickly, and permit more
flexibility in financing non-utility businesses.
*Legally separate entities will make business segment reporting,
required under Securities and Exchange Commission and financial
accounting rules, easier.
*The holding company structure will further separate utility ratepayers
from the financial risks of non-utility businesses.
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Q: Who can vote?
A: Holders of our common stock as of the close of business on the record
date, May 1, 2000, can vote at our annual meeting. Each share of our
common stock gets one vote. Cumulative voting is permitted in the
election of directors. Each share is entitled to three votes, one
each for the election of three directors, and the three votes may
be cast for a single person or may be distributed among two or three
persons.
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Q: How do I vote?
A: Sign and date each proxy card that you receive and return it in the
prepaid envelope. If we receive your signed proxy before the annual
meeting, we will vote your shares as you direct. You can specify on
your proxy whether your shares should be voted for all, some or none of
the nominees for director. You can also specify whether you approve,
disapprove or abstain from the other three proposals.
If you do not mark any sections, your proxy card will be voted:
o in favor of the election of the directors named in Proposal 2;
and
o in favor of Proposals 1 and 3.
You have the right to revoke your proxy any time before the meeting by:
o notifying our secretary in writing; or
o in person at the meeting at any time before the proxy is
exercised.
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Q: Who will count the vote?
A: Representatives of Norwest Bank Minnesota, N.A. will count the votes
and serve as judges of the election.
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Q: What constitutes a quorum?
A: As of the record date, May 1, 2000, 21,390,949 shares of our common
stock were issued and outstanding. In order to conduct the annual
meeting, more than one-half of the outstanding shares must be present
or be represented by proxy. This is referred to as a "quorum." If you
submit a properly executed proxy card, you will be considered as part
of the quorum. Proxies marked as abstaining on any proposal to be acted
on by shareholders will be treated as present at the annual meeting for
purposes of a quorum. Proxies marked as abstaining, however, will not
be counted as votes cast on that proposal. Abstaining proxies include
proxies containing broker non-votes.
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Q: What vote is needed for these proposals to be adopted?
A: More than one-half of shares present either in person or by proxy and
entitled to vote at the annual meeting must vote for a proposal in
order for it to be adopted. For the election of directors, abstentions
and votes "withheld" will be considered votes against the directors.
For all other proposals, abstentions and broker non-votes will not be
counted as "votes" cast.
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Q: Will shareholders have dissenters' rights?
A: Yes. Under South Dakota law, shareholders are permitted to dissent from
the share exchange and to have the fair value of their shares appraised
and paid to them in cash. To do this, shareholders must follow
prescribed procedures, including filing notices with us and refrain
from voting his shares in approval of the share exchange.
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Q: What should I do now?
A: You should mail your signed and dated proxy card in the enclosed
envelope as soon as possible, so that your shares will
be represented at the annual meeting.
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Q: Who conducts the proxy solicitation and how much will it cost?
A: We are asking for your proxy for the annual meeting and will pay all
the cost of asking for shareholder proxies. We have hired Georgesan
Shareholder Communications, Inc. to help us send out the proxy
materials and ask for proxies. Georgesan Shareholder Communications,
Inc.'s fee for these services is anticipated to be $4,000, plus out-
of-pocket expenses. We can ask for proxies through the mail or by
telephone, fax, or in person. We can use our directors, officers and
regular employees to ask for proxies. These people do not receive
additional compensation for these services. We will reimburse
brokerage houses and other custodians, nominees and fiduciaries for
their reasonable out-of-pocket expenses for forwarding solicitation
material to the beneficial owners of our common stock.
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Q: Can I change my vote after I have mailed my signed proxy card?
A: Yes. You can change your vote in one of three ways at any time before
your proxy is used. First, you can revoke your proxy by written
notice. Second, you can send a later dated proxy changing your vote.
Third, you can attend the meeting and vote in person.
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Q: How will my shares be voted if they are held in a broker's name?
A: Your broker may vote shares nominally held in its name, or in what is
commonly called "street name", only if you provide the broker with
written instructions on how to vote.
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Q: What happens if I do not give my broker instructions?
A: Absent your instructions, these shares will not be voted. Because
approval of the formation of the holding company and the share exchange
requires the holders of a majority of the outstanding shares of our
common stock vote "yes", the effect of not voting the shares is the
same as a "no" vote. Therefore, we urge you to instruct your broker
in writing to vote shares held in street name for the proposed
transaction.
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Q: Who should I call with questions?
A: If you have questions about the transaction, you should call Roxann R.
Basham, our Vice President - Finance and Secretary/Treasurer, at
(605) 721-1700.
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Q: When are the shareholder proposals for the annual meeting held in the
Year 2001 due?
A: In order to be considered, you must submit proposals for next year's
annual meeting in writing to our secretary at our home offices at 625
Ninth Street, P.O. Box 1400, Rapid City, South Dakota 57709, prior to
January 8, 2001.
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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 under the
captions, "Formation of a Holding Company", "Risk Factors", "Reasons for
Formation of a Holding Company", "Companies Subject to Share Exchange",
"Conditions to Share Exchange", "Listing of Common Stock of Holding Company",
"Dividend Policy", "Exemption from Public Utility Holding Company Act of 1935"
and elsewhere in this proxy statement. These forward-looking statements include,
among others, statements about the following:
* shareholder approval of the share exchange;
* the degree to which we will be able to pursue non-regulated
business opportunities;
* the effectiveness of our new organizational structure;
* whether the holding company will be subject to federal or state
regulations;
* our ability to obtain federal and state regulatory approval of the
share exchange;
* the approval of our listing application with the New York Stock
Exchange; and
* whether we will be able to pay dividends.
When used in this proxy statement, the words "anticipate", "believe",
"estimate", "expect", "intends", "will", and similar expressions are generally
intended to identify forward-looking statements. There are important factors
that could cause actual results to differ materially from those expressed or
implied by such forward-looking statements.
In addition, please see other factors under "Item 1: Proposal to
Approve the Formation of a Holding Company and Plan of Exchange - Risk Factors."
ITEM I:
PROPOSAL TO APPROVE THE FORMATION OF A HOLDING COMPANY AND PLAN OF EXCHANGE
Formation of a Holding Company
You are being asked to approve the formation of a holding company
through the exchange of our common stock for common stock of the holding
company. After the share exchange, Black Hills Corporation will become a wholly
owned subsidiary of the holding company. After we obtain the necessary
regulatory approvals, the holding company intends to separate and realign our
businesses into multiple subsidiaries. The manner and timing of separating these
businesses will depend on a number of factors, including the regulatory
approvals and the business judgment of our Board of Directors. Our shareholders
will not vote separately on the timing or manner of this realignment of our
businesses.
Black Hills Corporation and Black Hills Holding Corporation, the
proposed holding company, have entered into a plan of exchange. A copy of the
plan of exchange is attached as Exhibit A and is incorporated in this proxy
statement and prospectus by reference. The plan of exchange provides that,
subject to the approval of our shareholders, each share of our common stock will
be exchanged for one share of common stock of the holding company, a South
Dakota corporation.
o Before the share exchange, all the shares of common stock of the
holding company are owned by Black Hills Corporation. As a result,
Black Hills Holding Corporation is a wholly owned subsidiary of Black
Hills Corporation.
o If our shareholders approve the share exchange, the share exchange will
become effective on the date specified in the Articles of Exchange
filed with the South Dakota Secretary of State.
o On the effective date, each share of our common stock will be exchanged
for a share of common stock of the holding company. As a result, all of
our common shareholders will become common shareholders of Black Hills
Holding Corporation, the holding company. All the shares of common
stock of the holding company held by Black Hills Corporation will be
canceled.
o After the share exchange, Black Hills Corporation will be a wholly
owned subsidiary of Black Hills Holding Corporation, the holding
company. Black Hills Corporation debt securities and other financial
obligations will continue to be obligations of Black Hills Corporation.
See "Treatment of Our Indebtedness" on page 17.
o At the conclusion of the share exchange, Black Hills Corporation will
change its name to "Black Hills Power and Light Company", and the
holding company will change its name to "Black Hills Corporation."
Risk Factors
o Unregulated Businesses May Involve More Risk
The formation of a holding company allows us to pursue, through
separate subsidiaries, business opportunities in markets that are
both regulated and unregulated. Unregulated businesses may involve
more risk than those of Black Hills Corporation, which is
primarily a regulated utility. The value of a common shareholder's
investment in the holding company could be adversely affected
because of the greater risk of these businesses.
o Dividends on the Holding Company Common Stock Depend on Dividends Paid
on Our Common Stock
Before and after the share exchange, the holding company will have
few assets of its own. After the share exchange, Black Hills
Corporation, as a subsidiary of the holding company, will continue
as an operating company and will be, at least initially, the
holding company's largest source of income. Black Hills
Corporation will own, either directly or indirectly, most of the
operating assets. When the restructuring takes effect, it is
expected that dividends on the holding company common stock will
be declared and paid on the same schedule and rate currently
followed for dividends on our common stock. Subsequently, holding
company dividends will depend on the future earnings and financial
condition of the holding company and its subsidiaries. For more
information on the restriction of Black Hills Corporation's
ability to pay dividends, see "Dividend Policy" on page 15.
Where You Can Find More Information
We are currently the parent company of Black Hills Holding Corporation.
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. Our Securities and
Exchange Commission filings are available to the public over the Internet at the
Securities and Exchange Commission's web site at http://www.sec.gov. You may
also read and copy, at the Securities and Exchange Commission's rates, any
document we file at the Securities and Exchange Commission's public reference
rooms. There are Securities and Exchange Commission public reference rooms at
450 Fifth Street, N.W., Washington, D.C. 20549, and the Securities and Exchange
Commission's regional offices at Suite 1300, 7 World Trade Center, New York, New
York 10048 and at 500 West Madison Street, Chicago, Illinois 60661. Please call
the Securities and Exchange Commission at 1-800-SEC-0330 for more information on
the public reference rooms. Reports, proxy statements and other information
filed by us may also be inspected at the New York Stock Exchange.
The Securities and Exchange Commission allows us to "incorporate by
reference" the information that we file with them. This means that we can
disclose important business and financial information to you by referring you to
those documents without including the information in or delivering the
information with this proxy statement and prospectus. The information
incorporated by reference is an important part of this proxy statement and
prospectus, and information that is filed later with the Securities and Exchange
Commission will automatically update and replace this information. We
incorporate by reference the documents listed below and any future filings made
with the Securities and Exchange Commission under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended, until all of our
common stock is exchanged for the common stock of the holding company. The
information in the following documents are incorporated by reference:
o Annual Report to the Securities and Exchange Commission on Form 10-K for the
year ended December 31, 1999, as amended.
You can receive a copy of these filings without the exhibits, at no
cost, by writing or telephoning us at:
Black Hills Corporation
625 Ninth Street
Rapid City, South Dakota 57709
Attention: Corporate Secretary
(605) 721-1700
To receive this information in time for our 2000 annual meeting, you
must request it no later than June 13, 2000, five business days prior to the
date of our 2000 annual meeting.
You should not assume that our business affairs have not changed since
the date of this proxy statement and prospectus just because this proxy
statement and prospectus is delivered to you or a sale is made hereunder.
Reasons for Formation of a Holding Company
The traditional utility company structure has the electric utility
business, which is comprised of the generation, transmission and distribution
business, and the unregulated businesses in one company. We believe that this
traditional structure is inadequate for meeting the business demands of a
competitive energy marketplace. We believe that a holding company structure is a
better structure. The holding company structure is a well-established form of
organization for companies conducting different lines of business, particularly
both regulated and unregulated businesses.
o A holding company structure will give us more financial, managerial and
organizational flexibility and will allow us to separate our different
businesses into regulated and unregulated businesses.
o Legally separate entities, such as subsidiaries of the holding company,
will make management of each business more accountable and allow us to
better evaluate the success of existing and new businesses.
o The holding company structure will permit us to take advantage of
non-utility business opportunities more quickly, and permit more
flexibility in financing non-utility businesses.
o Legally separate entities will make business segment reporting,
required under Securities and Exchange Commission and financial
accounting rules, easier.
o The holding company structure will further separate utility
ratepayers from the financial risks of non-utility businesses.
o Forming a holding company will not impair our operation of our electric
utility business.
o We continue to be committed to providing high-quality electric utility
service in our franchised territory.
o Forming a holding company will not, in any way, affect our
responsibilities, qualifications or authority to operate and maintain
our electric utility assets.
The Board of Directors believes that the benefits of going to a holding
company structure outweigh the costs. The costs include:
o The financial cost of obtaining the necessary approvals of regulatory
agencies and other parties and registering the common stock of the
holding company.
o The financial and administrative cost of complying with the Securities
and Exchange Commission reporting obligations for both the holding
company and Black Hills Corporation. After the share exchange, each
company will have publicly held securities and, therefore, each will be
required to file reports with the Securities and Exchange Commission.
Companies Subject to Share Exchange
Black Hills Corporation. Incorporated under the laws of South Dakota in
1941, we are an energy and communications company primarily consisting of three
principal business units: regulated electric, independent energy and
communications. Our mission statement is to provide quality energy and
communications products and services at competitive prices in targeted markets
to build value for our shareholders and customers and create opportunities for
our employees. We operate our businesses as follows:
* Public utility electric operations under the assumed name of Black
Hills Power and Light Company;
* Independent energy businesses through our direct and indirect
subsidiaries:
* Wyodak Resources related to coal;
* Black Hills Exploration and Production related to oil and
natural gas;
* Energy marketing through Enserco Energy, Inc. related to
natural gas;
* Black Hills Energy Resources, Inc. related to crude oil;
* Black Hills Coal Network, Inc. related to coal;
* Independent power activities through Black Hills Generation
and Black Hills Energy Capital; and
* Communication operations through Black Hills Fiber Systems, Inc., Black
Hills FiberCom, LLC and DAKSOFT, Inc.
Our utility operations include the generation, purchase, transmission,
distribution and sale of electric power and energy to approximately 57,700
customers in 11 counties in western South Dakota, northeastern Wyoming and
southeastern Montana, an area with a population estimated at 165,000. The
largest community served is Rapid City, South Dakota, a major retail, wholesale
and health care center, with a population, including environs, estimated at
75,000.
This chart shows our corporate structure before the share exchange:
[INSERT GRAPH]
Black Hills Holding Corporation. Black Hills Holding Corporation was
incorporated in South Dakota on April 28, 2000 for the purpose of carrying out
the share exchange. Black Hills Holding Corporation is a direct, wholly owned
subsidiary of ours. On the effective date, Black Hills Holding Corporation will
become our parent.
Currently, Black Hills Holding Corporation has few assets and has not
engaged in any business operations. All our business operations conducted by us
and our subsidiaries immediately before the effective date will continue to be
conducted by Black Hills Corporation and its subsidiaries immediately after the
effective date. The only difference is that Black Hills Corporation will be a
subsidiary of Black Hills Holding Corporation. Our consolidated assets and
liabilities and those of our subsidiaries immediately before the effective date
will be the same as the consolidated assets and liabilities of Black Hills
Holding Corporation and its subsidiaries immediately after the effective date.
We currently expect that Black Hills Holding Corporation will not itself be an
operating company at the parent company level.
Black Hills Holding Corporation will not be subject to regulation by
the Federal Energy Regulatory Commission, the South Dakota Public Utility
Commission or the Wyoming Public Service Commission, except to the extent that
the rules and orders of those agencies impose restrictions on the holding
company's relationship with Black Hills Corporation or Black Hills Corporation's
relationship with other subsidiaries of the holding company. Black Hills Holding
Corporation will be a "public utility holding company" under the Public Utility
Holding Company Act of 1935. However, we expect Black Hills Holding Corporation
to obtain an exemption from most of the provisions of that law. See "Exemption
From Public Utility Holding Company Act of 1935" on page 19.
This chart shows the holding company's proposed corporation structure
immediately after the share exchange:
[INSERT GRAPH]
Neither we nor Black Hills Holding Corporation, the holding company,
are currently parties to any material contracts with each other; however, we
expect that, after the share exchange, the holding company will use various
services of Black Hills Corporation, including:
* Facilities and equipment;
* Executive management;
* Administration;
* Accounting;
* Finance;
* Communications;
* Purchasing;
* Billing;
* Information systems;
* Corporate secretarial;
* Insurance; and
* Others.
We have not yet determined the final corporate structure of Black Hills
Corporation after the share exchange. After the share exchange and subject to
regulatory approval, the holding company intends to realign Black Hills
Corporation's subsidiaries. The manner and timing of this realignment will
depend on a number of factors, including the regulatory approvals and the
business judgment of our Board of Directors. Our shareholders will not get to
vote on the timing or manner of this realignment of Black Hills Corporation's
businesses.
Termination or Amendment of Plan of Exchange
After shareholder approval of the share exchange at our annual meeting:
o Either we or Black Hills Holding Corporation may decide not to go
through with the share exchange and may terminate the plan of exchange.
o Either we or Black Hills Holding Corporation may change the terms of
the share exchange, except that neither party can:
o change the amount or kind of shares to be received; or
o adversely affect the rights of the shareholders.
Conditions to Share Exchange
The share exchange will not happen until all of the following
conditions are satisfied:
o The share exchange is approved by a majority of the shares of our
common stock present in person or by proxy and entitled to vote at the
annual meeting.
o We obtain the approval or waiver of the following regulatory
authorities, as well as any other authorities whose approval we believe
should be obtained in order to form a holding company:
o Federal Energy Regulatory Commission
o Securities and Exchange Commission
o South Dakota Public Utility Commission
o Wyoming Public Service Commission.
We expect to receive these approvals or waivers after approval by our
shareholders of the share exchange.
o The shares of common stock of the holding company are approved for
listing on the New York Stock Exchange.
Dissenters Rights
o Generally, Section 47-6-23 of the South Dakota Business Corporation Act
allows shareholders who do not agree with fundamental actions taken by
a corporation to receive payment of the "fair value" of their shares.
This is referred to as "dissenters rights." For the purposes of the
"dissenter's rights" statutes, the "fair value" of shares means their
value immediately before the effectuation of the proposed corporate
action to which the dissenter objects (here, the share exchange),
excluding any appreciation or depreciation in anticipation of such
corporate action unless such exclusion would be inequitable.
All shareholders have a right to dissent from the share exchange and
obtain payment for their shares by complying with Sections 47-6-23 to
47-6-23.3, inclusive, and Sections 47-6-40 to 47-6-50, inclusive, of
the South Dakota Business Corporation Act, a copy of which accompanies
this proxy statement as Exhibit B.
Any shareholder who wishes to dissent from the share exchange and
obtain payment for his shares must: (1) file with Black Hills
Corporation, prior to the vote on the share exchange, a written notice
of intention to demand that he be paid fair compensation for his shares
if the share exchange takes place; and (2) refrain from voting his
shares in approval of the share exchange. A shareholder who fails to
give the written notice or who votes in approval of the share exchange
forfeits his right to obtain payment for his shares under the
"dissenter's rights" statutes.
No Exchange of Stock Certificates
o Our shareholders do not have to exchange their stock certificates after
the share exchange.
o After the share exchange, each stock certificate representing shares of
Black Hills Corporation common stock will automatically represent the
same number of shares of common stock, respectively, of the holding
company.
o After the share exchange, when stock certificates representing Black
Hills Corporation common stock are presented for transfer as part of
the regular trading of stock, new certificates representing common
stock of the holding company will be issued.
Dividend Reinvestment and Stock Purchase Plan
Purpose of the plans. Our Board of Directors adopted the Dividend
Reinvestment and Stock Purchase Plan to:
o Give the holders of our common stock an easy way of buying
additional shares of our common stock through reinvesting of
dividends; and
o Encourage the purchase of our common stock without payment of
any brokerage commission.
Who administers the plans? Norwest Bank Minnesota, N.A., our Transfer
Agent, Registrar and Dividend Disbursing Agent, administers the plan.
Basic terms of the plans. The dividend reinvestment plan lets you buy
our common stock in two ways:
o Dividends on all participating shares can be automatically
reinvested in shares of our common stock.
o You can also buy additional shares of our common stock from
us by a direct cash investment of not less than $200 per
transaction, up to a maximum of $50,000 per calendar quarter.
o We can decide whether the shares purchased under the plans
come from newly issued shares or open-market purchases by an
independent agent. If newly issued shares are issued, the
purchase price is 100 percent of the average closing prices
for our common stock on the New York Stock Exchange for a
period of five trading days ending on the pricing date as
defined in the plan. If the shares are purchased on the open
market, the price of the shares is the weighted average price
of the shares acquired plus a brokerage commission.
Who is eligible? All holders of record of our common stock can
participate in the dividend plan.
Effect of the share exchange. The dividend reinstatement plan will be
amended so that, after the share exchange, dividends will be reinvested in
shares of common stock of the holding company, instead of Black Hills
Corporation common stock. In addition, all direct cash investments will be used
to purchase shares of common stock of the holding company. All reinvestments and
purchases will be made in the same way and subject to the same terms as existed
before the share exchange.
Employee Stock Purchase Plan
Purpose of the plan. Our Board of Directors adopted the Employee Stock
Purchase Plan to encourage employee ownership of our common stock.
Who administers the plan? The Board of Directors administers and
interprets the plan.
Basic terms of the plan. Our employees are allowed to purchase
shares of our common stock at a price equal to 90 percent of the fair market
value of such shares on the offering date.
Who is eligible? Our full-time employees are eligible to participate in
the plan.
Effect of the share exchange. After the share exchange, shares
purchased under the plan will be exercisable for common stock of the holding
company instead of Black Hills Corporation common stock, in the same amount and
subject to the same terms as before the share exchange. In addition, the holding
company will assume the rights and obligations under the plan, and its board, or
one of its committees, will administer and interpret the plan.
Benefit Plans
The following is a general description of our benefit plans. After the
effective date, the benefit plans that issue Black Hills Corporation common
stock will issue common stock of the holding company instead. We are providing
this information to you for informational purposes only. You are not being asked
to approve the substitution of common stock of the holding company for Black
Hills Corporation common stock in the benefit plans, any changes to the benefit
plans necessary to substitute common stock of the holding company or any other
aspect of the benefit plans.
1. 1996 and 1999 Stock Option Plans.
Purpose of the plans. The 1996 and 1999 plans were adopted by our Board
of Directors to allow us to issue options to certain officers and other key
employees to purchase our common stock. Our Board believes that issuing options
to our employees encourages their contribution to our growth and that of our
subsidiaries by aligning their economic interests with those of our
shareholders; provides participants with an incentive for excellence in
individual performance; promotes teamwork among participants; and provides us
with flexibility in its ability to motivate, attract and retain the services of
participants who make significant contributions to our success and to allow
participants to share in our success.
Who administers the plans? The Compensation Committee of our Board of
Directors administers and interprets the plans.
Basic terms of the plans. We may grant options for up to 1,000,000
shares of our common stock under the stock option plans. The Board of Directors
has granted options on 449,450 shares, of which 7,500 have been forfeited and
3,000 have been exercised.
Who is eligible? The Compensation Committee decides which employees are
eligible to receive options under the plans and the number of options to be
granted.
Effect of the share exchange. After the share exchange, each option
granted under the plans will be exercisable for common stock of the holding
company instead of Black Hills Corporation common stock, in the same amount and
subject to the same terms as before the share exchange. In addition, the holding
company will assume all rights and obligations under the plans, and its board,
or one of its committees, will administer and interpret the plans.
2. Short-Term Annual Incentive Compensation Plan.
Purpose of the plan. The Short-Term Annual Incentive Compensation Plan
was adopted by our Board of Directors to recognize and reward the contribution
that group performance makes to our corporate success.
Basic terms of the plan. The plan has a corporate goal that is based on
the percentage of consolidated earnings per share that exceeds targeted amounts.
Target award levels are a percentage of base salary. Participants are required
to purchase our common stock with 50 percent of the Short-Term Annual Incentive
Bonus.
Who is eligible? Only our executive officers are eligible to
participate in the plan at this time.
Effect of the share exchange. The holding company will assume all
rights and obligations under the plan and its board, or one of its committees,
will administer and interpret the plan. After the share exchange, participants
will be required to purchase Black Hills Holding Corporation common stock with
50 percent of the Short-Term Annual Incentive Bonus.
3. Retirement Savings 401(k) Plan and Non-Qualified Deferred
Compensation Plan.
Purpose of the plans. The plans allow the participants to defer a
portion of their eligible earnings on a pre-tax basis into an investment fund
subject to limitations imposed by the Internal Revenue Code.
Basic terms of the plans. Participants may elect to defer up to 20
percent of their eligible earnings on a pre-tax basis under the 401(k)
Retirement Savings Plan and up to 50 percent of their eligible earnings under
the Non-Qualified Deferred Compensation Plan. Effective January 1, 2000, we
provide a matching contribution of 100 percent of the employee's tax deferred
contribution, subject to a maximum of three percent of the employee's
compensation to the 401(k) Retirement Savings Plan.
Who is eligible? All of our full-time employees are eligible to
participate in the 401(k) Retirement Savings Plan. Only our executive officers
are allowed to participate in the Non-Qualified Deferred Compensation Plan.
Effect of the share exchange. The holding company will assume all
rights and obligations under the plans. Participants' investments in the plans
that consist of Black Hills Corporation common stock will be exchanged for Black
Hills Holding Corporation's common stock.
4. Pension Plan and Pension Equalization Plan.
Purpose of the plans. The Pension Plan and the Pension Equalization
Plan provide benefits to our employees at retirement.
Basic terms of the plans. See "Retirement Plans" on page 28.
Who is eligible? See "Retirement Plans" on page 28.
Effect of the share exchange. The holding company will assume all
rights and obligations under the plans.
5. Severance Agreements.
Purpose of the agreements. The Change in Control Severance Agreements
provide for certain payments and other benefits to our executive officers and
certain key employees to be payable upon a change in control and a subsequent
termination of employment, either involuntary or for a good reason.
Basic terms of the agreements. See "Severance Agreements" on page 30.
Who is eligible? Our executive officers and certain key employees have
change in control agreements.
Effect of the share exchange. The holding company will assume all
rights and obligations under the agreements and the agreements will be amended
so that a change of control of Black Hills Corporation will be amended to
include a change in control of Black Hills Holding Corporation.
6. Outside Directors Stock Based Compensation Plan.
Purpose of the plan. The purpose of the plan is to provide our outside
directors certain benefits in order to attract and retain competent and
hardworking outside directors whose abilities, experience and judgment can
contribute to our well-being and that of our shareholders and to further align
the long-term interests of our outside directors with those of our shareholders.
Who administers the plan? The Compensation Committee of our Board of
Directors administers the plan.
Basic terms of the plan. Each participant is entitled to a monthly
contribution to their account equal to the number of common stock equivalents
determined by dividing the sum of $583.33 by the market price of our common
stock on the last day of the month for each month of each plan year that the
participant is eligible for benefits.
Who is eligible? Members of our Board of Directors who are not our
employees are eligible to participate in the plan.
Effect of the share exchange. After the share exchange, each common
stock equivalent of Black Hills Corporation will be exchanged for common stock
equivalents of Black Hills Holding Corporation. In addition, the holding company
will assume all right and obligations under the plan and its Compensation
Committee will administer the plan.
Listing of Common Stock of the Holding Company
o An application will be filed to list the common stock of the
holding company on the New York Stock Exchange under the symbol
"BKH". If the common stock of the holding company is approved for
listing, we expect trading to start immediately after the share
exchange.
o At the same time, we intend to delist the Black Hills Corporation
common stock from the New York Stock Exchange.
Transfer Agent and Registrar
The transfer agent and registrar for the common stock of the holding
company will be Norwest Bank, N.A. The address for the transfer agent and
registrar will be:
Norwest Shareowner Services
PO Box 64854
St. Paul, MN 55164-0854
Market Value of Our Common Stock
Our common stock is currently listed on the New York Stock Exchange.
The high and low sale prices of our common stock on May 1, 2000, the record
date, were $23.125 and $22, respectively.
Dividend Policy
o We expect that quarterly dividends on the common stock of the
holding company will be declared and paid on the same schedule
currently followed for dividends on our common stock.
o The most recent quarterly dividend declared by the Board of
Directors on our common stock was $0.27 per share payable on June
1, 2000 to holders of record on May 12, 2000.
There is no guarantee of the amount of the quarterly dividend or of the
payment of future dividends. The rate and timing of dividends on the common
stock of the holding company will depend on the future earnings and financial
condition of the holding company and its subsidiaries, including Black Hills
Corporation, and on other factors affecting dividend policy, all of which cannot
now be determined. As a practical matter, the ability of the holding company to
pay dividends on its preferred and common stock will be governed by the ability
of the operating subsidiaries to pay dividends to the holding company. For a
period of time after the share exchange, the funds needed by the holding company
to pay dividends on its preferred and common stock are expected to come
primarily from the dividends paid by Black Hills Corporation. In the future,
dividends from the holding company's subsidiaries other than Black Hills
Corporation may also be a source of funds for dividend payments by the holding
company.
After the share exchange, Black Hills Corporation intends to pay
dividends to the holding company, if available, in amounts which, to the extent
not otherwise provided by dividends and other funds from any other subsidiaries,
will be sufficient to pay cash dividends on the preferred and common stock of
the holding company. The amount of dividends to be paid by Black Hills
Corporation will also be used to pay the operating expenses of the holding
company and for other corporate purposes that the board of directors of the
holding company determines.
Black Hills Corporation's ability to make regular cash dividends to
the holding company after the share exchange will be subject to the availability
of earnings and the needs of its business. Because Black Hills Corporation will
remain subject to regulation by the public utility commissions in South Dakota
and Wyoming and the Federal Energy Regulatory Commission, the amount of its
earnings and dividends will be affected by the manner in which these commissions
regulate Black Hills Corporation.
Dividends on the holding company's preferred stock, when and as
declared, will be paid at the times, at the rates and under the terms of the
preferred stock depending on the earnings, financial condition and other factors
affecting the holding company. The ability of the holding company to declare and
pay dividends on its preferred stock will be subject to the same considerations
that apply to the payment of dividends on the common stock, but no dividends
will be paid on the common stock unless all accrued but unpaid dividends are
paid on the preferred stock.
Directors and Executive Officers
o On the effective date, the Board of Directors will become the
board of the holding company, in the same class as each director
currently serves.
o After the share exchange, we expect that the following executive
officers will hold the following offices with the holding company:
Daniel P. Landguth, Chairman of the Board, President
and Chief Executive Officer
Mark T. Thies, Senior Vice President
and Chief Financial Officer
James M. Mattern, Senior Vice President-Corporate
Administration and Assistant to the Chief Executive Officer
Roxann R. Basham, Vice President, Controller
and Corporate Secretary
Black Hills Holding Corporation, the holding company, and Black Hills
Corporation each may have directors or executive officers who are not directors
or executive officers of the other.
Immediately after the share exchange, we expect that the holding
company will use various services of Black Hills Corporation, including
facilities and equipment, executive management, administration, accounting,
finance, communications, purchasing, billing, information systems, corporate
secretarial, insurance and others. The use of these services may change in the
future.
Our Common Stock
Authorization. Before the share exchange, our authorized
capitalization consists of:
o 50,000,000 shares of common stock, $1 par value, of which
21,390,949 shares were issued and outstanding as of
May 1, 2000, the record date;
o 270,000 shares of cumulative preferred stock, $100 par value,
of which no shares were issued and outstanding as of
May 1, 2000, the record date; and
o 400,000 shares of no par cumulative preferred stock, of which no
shares were issued and outstanding as of May 1, 2000, the record
date.
We currently expect that, after the share exchange, the Black Hills
Corporation articles of incorporation will be amended to remove the
authorization to issue preferred stock.
Preferences. Dividends and distributions of assets, if we were
liquidated, would first be paid to holders of our preferred stock, then to the
holders of the common stock. To the extent the holding company depends on Black
Hills Corporation for its dividend payments, the common stock of the holding
company would also receive dividends only after dividends were paid to holders
of preferred stock.
Rights of Shareholders. Our Articles and Bylaws contain the following
provisions that relate to our common stock:
o Each shareholder on the applicable record date is entitled to one
vote per share, and holders of our common stock will vote together
as a single class, at each annual or special meeting of
shareholders;
o In general, all corporate action to be taken by our shareholders
may be authorized by a majority of the votes cast by holders
entitled to vote at a duly authorized meeting;
o No shareholder has a right to subscribe for or purchase any future
issue of our shares;
o If we were liquidated, dissolved or our affairs were wound up,
holders of our common stock would be entitled to our assets and
funds after payment is made to the holders of our preferred stock;
and
o Our shareholders may vote for directors cumulatively, meaning that
shareholders may multiply the number of shares held by them by the
total number of directors being elected in calculating the total
number of votes that they may cast. Cumulative voting makes it
easier for minority shareholders to exert influence over the
selection of directors.
Common Stock of the Holding Company
Authorization. The holding company is authorized to issue:
o 100,000,000 shares of common stock, $1 par value; and
o 25,000,000 shares of series preferred stock, without par value.
The board of the holding company can determine the voting rights, if
any, and other terms of any series of preferred stock of the holding company.
As of May 1, 2000, the record date, 100 shares of common stock of the
holding company were outstanding and held by us, and no other shares of stock
were issued or outstanding. After the share exchange, the board of the holding
company can issue all or any portion of its unissued common stock. Holders of
common stock of the holding company will have no right to subscribe for or to
purchase any future issue of common stock of the holding company.
Rights of Shareholders. The board of the holding company believes that
the rights of holders of common stock of the holding company will not be
materially different from the rights of holders of our common stock discussed
above. After the share exchange, the holders of common stock of the holding
company will have all voting rights with respect to each share of common stock
of the holding company entitled to one vote on all matters and will have
cumulative voting for the election of directors.
Dividends. Dividends on common stock of the holding company will be
paid as determined by the board of the holding company from time to time out of
funds available for that purpose. See "Dividend Policy" on page 15 for a
discussion of our dividend policy and the holding company's expected dependence
on Black Hills Corporation's declaration of dividends.
Comparison of Holding Company Articles to Our Articles
The Articles of Incorporation of Black Hills Holding Corporation, the
holding company, differ from our Articles as follows:
o Both the Articles of the holding company and the Black Hills
Corporation Articles currently authorize the issuance of series
preferred stock which may be issued by each board at the time and
with the voting, designation, preference, limitation and special
rights as that board determines. We currently expect that, after
the share exchange, the Black Hills Corporation Articles will be
amended to remove the authorization to issue Black Hills
Corporation series preferred stock.
o The clause in the Articles of the holding company that describes
the activities in which the holding company can engage is more
general than the clause in the Black Hills Corporation Articles
because it does not contain references to specific activities,
including those related to the utility business.
Treatment of Our Preferred Stock
o To the extent preferred stock is issued between the record date
and exchange date, holders of our preferred stock will exchange
their preferred shares for preferred shares of the holding company
having like rights and preferences as part of the proposed share
exchange.
Treatment of Our Indebtedness
o All of our indebtedness outstanding immediately before the share
exchange will continue to be outstanding indebtedness of Black
Hills Corporation immediately after the share exchange.
o Our first mortgage bonds will continue to be secured by first
mortgage liens on all of our properties that are currently subject
to these liens. We expect that no indebtedness of Black Hills
Corporation will be assumed or guaranteed by the holding company.
Certain Income Tax Consequences
General
The following general discussion summarizes income tax considerations
relating to the share exchange. These summaries are included for general
informational purposes only. They do not address all aspects of income taxation
that may be relevant to every shareholder. The personal tax circumstances of
shareholders differ and shareholders may be subject to special treatment under
the income tax laws, including:
1. holders who are not United States persons;
2. financial institutions, tax-exempt organizations;
3. insurance companies;
4. dealers or brokers in securities;
5. holders who held their stock as part of a hedge, appreciated
financial position, straddle or conversion transaction; or
6. holders who acquired shares through the exercise of employee stock
options or otherwise as compensation.
Except as otherwise indicated, statements of legal conclusion about tax
treatments, effects or consequences are the opinion of Morgan, Lewis & Bockius
LLP, special tax counsel for Black Hills Corporation and Black Hills Holding
Corporation. No rulings have been requested from the Internal Revenue Service.
Each shareholder should consult his or her own tax advisor about the specific
tax consequences of the share exchange, including the application and effect of
state or local income and other tax laws.
The following discussion is based on current provisions of the Internal
Revenue Code of 1986, as amended, currently applicable Treasury regulations and
existing judicial and administrative interpretations and decisions. Future
legislation, regulations, administrative interpretations or court decisions
could significantly change these legal conclusions either prospectively or
retroactively.
The share exchange will be treated as a transfer of all of our
outstanding common stock by our shareholders to the holding company solely in
exchange for all of the outstanding common stock of the holding company. This
exchange will qualify for nonrecognition treatment under Section 351 of the Tax
Code.
Tax Implications to the Shareholders
For federal income tax purposes, no gain or loss will be recognized by
the holders of our common stock as a result of the share exchange. The aggregate
tax basis of the common stock of the holding company received by a shareholder
will be the same as the shareholder's aggregate tax basis in our common stock
surrendered in the share exchange. The holding period of the common stock of the
holding company held by a shareholder will include the period during which the
shareholder held our common stock, provided that the common stock was held as a
capital asset on the date of the share exchange. The share exchange will also
not result in the recognition of gain or loss for federal income tax purposes by
any holders of our preferred stock.
Tax Implications to Us and the Holding Company
No gain or loss will be recognized by us or the holding company for
federal income tax purposes as a result of the share exchange. For federal
income tax purposes, the basis of our common stock received by the holding
company will be the same as our net asset basis immediately before the share
exchange, subject to adjustments under Treasury Regulations relating to
consolidated groups; and the holding company's holding period in the Black Hills
Corporation common stock received in the share exchange will include the period
during which that stock was held by the shareholders
Other Tax Aspects
Apart from federal income tax aspects, no attempt has been made to
determine any tax that may be imposed on a shareholder by the country, state or
jurisdiction in which the holder resides or is a citizen. Our shareholders may
be subject to other taxes, such as state or local income taxes that may be
imposed by various jurisdictions. Our shareholders may also be subject to
intangible property, estate and inheritance taxes in their state of domicile.
Our shareholders should consult their own tax advisors with regard to state and
local income, inheritance and estate taxes.
The federal income tax discussion set forth above is intended to
provide only a general summary, and does not address tax consequences which may
vary with, or are contingent on, individual circumstances. Moreover, this
discussion does not address any foreign, federal, state, or local tax
consequences of the disposition of stock in Black Hills Corporation or the
holding company either before or after the share exchange. Accordingly, each
shareholder is strongly urged to consult with his or her tax advisor to
determine the particular tax consequences to him or her of the share exchange or
a disposition of stock.
Exemption from Public Utility Holding Company Act of 1935
After the share exchange, Black Hills Holding Corporation will be a
"public utility holding company" under the Public Utility Holding Company Act of
1935. However, the holding company expects to obtain an exemption under this law
on the basis that it and Black Hills Corporation will each organize and carry on
their businesses substantially in South Dakota and will be predominantly
intrastate in character. To obtain this exemption, the holding company will
either file an application with the Securities and Exchange Commission
requesting an order under Section 3(a)(1) of the Public Utility Holding Company
Act of 1935, or claim an exemption under Section 3(a)(1) of the Public Utility
Holding Company Act of 1935 by filing an exemption statement on Form U-3A-2. In
either case, the holding company will file for exemption on or before the day
the share exchange is effective. If obtained, Black Hills Holding Corporation
will be exempt from all provisions of the law except the provision requiring
Securities and Exchange Commission approval for direct or indirect acquisitions
of five percent or more of the voting securities of any other electric or gas
utility company.
If Black Hills Holding Corporation obtains its exemption by filing a
Form U-3A-2, it will need to file an exemption statement on such form each year
on or before March 1 with the Securities and Exchange Commission to maintain the
exemption. The exemption may be revoked by the Securities and Exchange
Commission if a substantial question of law or fact exists as to whether the
holding company continues to meet the exemption's requirements or if it appears
that the exemption may be detrimental to the public interest or the interest of
investors or consumers.
If the holding company is not exempt from this law, it will be subject
to the law's provisions which would require Securities and Exchange Commission
approval for a wide range of transactions, including financings, acquisitions,
and intrastate transactions. The holding company would also be subject to
various accounting and reporting requirements.
Legal Opinions
The validity of the common stock of the holding company will be passed
upon by Morrill, Thomas, Nooney & Braun, LLP, general counsel to Black Hills
Corporation and Black Hills Holding Corporation.
Experts
The consolidated financial statements of Black Hills Corporation
incorporated by reference in this proxy statement and prospectus have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their reports, with respect thereto, and are included herein, in reliance upon
the authority of said firm as experts in giving said reports.
The Board of Directors of Black Hills Corporation recommends a vote
"FOR" the formation of a holding company and the Plan of Exchange.
ITEM II: ELECTION OF DIRECTORS
In accordance with the Bylaws and Article Fifth of the Restated
Articles of Incorporation, members of our Board of Directors are elected to
three classes of staggered terms consisting of three years each. At this annual
meeting of our shareholders, three Directors will be elected to Class II of the
Board of Directors to hold office for a term of three years until our annual
meeting of shareholders in 2003 and until their respective successors shall be
duly elected and qualified.
Each of the nominees for director is presently a member of our Board of
Directors. The proxy attorneys will vote your stock for the election of the
three nominees for director listed below, unless otherwise instructed. If, at
the time of the meeting, any of such nominees shall be unable to serve in the
capacity for which they are nominated or for good cause will not serve, an event
which the Board of Directors does not anticipate, it is the intention of the
persons designated as proxy attorneys to vote, at their discretion, for nominees
to replace those who are unable to serve. The affirmative vote of a majority of
the common shares present and entitled to vote with respect to the election of
directors is required for the election of the nominees to the Board of
Directors.
The following information, including principal occupation or employment
for the past five or more years, is furnished with respect to each of the
following persons who are nominated as Class II Directors, each to serve for a
term of three years to expire in 2003.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE
FOLLOWING NOMINEES:
Nominees for Election Until
2003 Annual Meeting - Class II
Name, Age, Principal Occupation for Director
Last Five Years and Other Directorships Since
Daniel P. Landguth, 53 1989
Chairman and Chief Executive
Officer of Black Hills Corporation. Director,
Rapid City Regional Hospital.
Rapid City, South Dakota
John R. Howard, 59 1977
President, Industrial Products, Inc., an
industrial parts distributor. Branch
Manager for Linweld, Inc.
Rapid City, South Dakota
David C. Ebertz, 54 1998
Consultant, Dave Ebertz Risk Management
Consulting, since January 2000. Owner and
President, Barlow Agency, Inc., an insurance agency,
until December 31, 1999.
Gillette, Wyoming
Directors Whose Terms Expire at
2001 Annual Meeting - Class III
Name, Age, Principal Occupation for Director
Last Five Years and Other Directorships Since
Adil M. Ameer, 47 1997
President and Chief Executive Officer,
Rapid City Regional Hospital.
Rapid City, South Dakota
Everett E. Hoyt, 60 1991
President and Chief Operating Officer of
Black Hills Power and Light Company.
Rapid City, South Dakota
Thomas J. Zeller, 52 1997
President, RE/SPEC Inc., a technical consulting
and services firm. Chairman of the Board,
Teachmaster Technologies, Inc., an educational
software and consulting firm.
Rapid City, South Dakota
Directors Whose Terms Expire at
2002 Annual Meeting - Class I
Name, Age, Principal Occupation for Director
Last Five Years and Other Directorships Since
David S. Maney, 36 1999
Founder, President and CEO of Worldbridge
Broadband Services, Inc. and Open Access
Broadband Networks, Inc.
Golden, Colorado
Bruce B. Brundage, 64 1986
President and Director, Brundage &
Company, a firm specializing in corporate
financing.
Englewood, Colorado
Kay S. Jorgensen, 49 1992
Co-Owner and Vice President, Jorgensen-Thompson
Creative Broadcast Services.
Spearfish, South Dakota
Security Ownership of Management
As of February 29, 2000, the following table sets forth the beneficial
ownership of our common stock for each director, each executive officer named in
the summary compensation table, and all of our directors and executive officers
as a group. Beneficial ownership includes shares a director or executive officer
has the power to vote or transfer, and stock options that are exercisable
currently or within 60 days of February 29, 2000.
The common stock interest of each named person and all directors and
executive officers as a group represents 1.3 percent of the aggregate amount of
common stock issued and outstanding. Except as indicated by footnote below, the
beneficial owner possesses sole voting and investment powers with respect to the
shares shown.
Shares Options Directors
Name of Beneficially Exercisable Common Stock
Beneficial Owner Owned Within 60 Days Equivalents (1) Total
Adil M. Ameer 1,097(2) 657 1,754
Bruce B. Brundage 5,422(3) 5,903 11,325
David C. Ebertz 1,739(4) 397 2,136
Gary R. Fish 7,796(5) 23,000 30,796
John R. Howard 16,864 4,708 21,572
Everett E. Hoyt 10,683 19,000 29,683
Kay S. Jorgensen 2,516 1,717 4,233
Daniel P. Landguth 15,866 45,600 61,466
David S. Maney 1,168(6) 180 1,348
James M. Mattern 5,595 19,000 24,595
Thomas M. Ohlmacher 3,515 19,000 22,515
Thomas J. Zeller 1,172(7) 657 1,829
All directors and
executive officers
as a group 90,046 173,800 14,221 278,068
(1)Includes common stock allocated to the directors' accounts in the
Directors' Stock Based Compensation Plan of which the trustee has sole voting
and investment authority.
(2)Includes 150 shares owned jointly with Mr. Ameer's spouse as to
which he shares voting and investment authority.
(3)Includes 5,400 shares owned by Brundage & Co. Pension Plan and Trust
of which Mr. Brundage is the trustee with sole voting and investment authority.
(4)Includes 506 shares owned jointly with Mr. Ebertz's spouse as to
which he shares voting and investment authority.
(5)Includes 6,236 shares owned jointly with Mr. Fish's spouse as to
which he shares voting and investment authority.
(6)Includes 1,000 shares owned jointly with Mr. Maney's spouse as to
which he shares voting and investment authority.
(7)Includes 225 shares owned jointly with Mr. Zeller's spouse as to
which he shares voting and investment authority.
Based solely upon a review of Black Hills Corporation's records and
copies of reports on Form 3, 4 and 5 furnished to us, we believe that during
1999 all persons subject to the reporting requirements of Section 16(a) of the
Securities Exchange Act of 1934, as amended, filed the required reports on a
timely basis.
The Board and Committees
Our Executive Committee is comprised of Adil M. Ameer, John R. Howard,
Daniel P. Landguth, and Thomas J. Zeller, with Mr. Landguth serving as
Chairperson. The Committee exercises the authority of the Board of Directors
in the interval between meetings of the Board, recommends to the Board of
Directors persons to be elected as officers, and recommends persons to be
appointed to Board Committees. The Executive Committee held three meetings
during 1999.
Our Compensation Committee is comprised of Adil M. Ameer, Bruce B.
Brundage, David C. Ebertz, John R. Howard, Kay S. Jorgensen, David S. Maney and
Thomas J. Zeller, with Mr. Zeller serving as Chairperson. The Committee
performs functions required by the Board of Directors in the administration of
all federal and state statutes relating to employment and compensation,
recommends to the Board of Directors compensation for officers, and considers
and approves the Company'sccompensation program including benefits, stock option
plans and stock ownership plans. The Compensation Committee held six
meetings in 1999.
Our Audit Committee is comprised of Adil M. Ameer, David C. Ebertz,
John R. Howard, and Kay S. Jorgensen, with Mr. Ameer serving as Chairperson. The
Committee annually recommends to the Board of Directors an independent
accounting firm to be appointed by the Board for ratification by our
shareholders, reviews the scope and results of the annual audit including
reports and recommendations of the firm, reviews our internal audit function,
and periodically confers with the internal audit group, our management, and our
independent accountants. The Audit Committee held two meetings in 1999.
Our Nominating Committee is comprised of Bruce B. Brundage, Kay S.
Jorgensen, Daniel P. Landguth, David S. Maney and Thomas J. Zeller, with Mr.
Brundage serving as Chairperson. The Committee recommends to the Board of
Directors persons to be nominated as directors or to be elected to fill
vacancies on the Board. The Bylaws require that an outside director serve as
Chairperson of the Committee. The Nominating Committee held two meetings in
1999.
Pursuant to our Bylaws, nominations from our shareholders for
membership on the Board of Directors will be considered by the Nominating
Committee. Our shareholders who wish to submit names for future consideration
for Board membership should do so in writing prior to January 8, 2001, addressed
to Nominating Committee, c/o Corporate Secretary, Black Hills Corporation, P.O.
Box 1400, Rapid City, South Dakota 57709.
Members of the Committees referred to herein are designated by our
Directors upon recommendation of the Executive Committee each year at a meeting
held following our annual meeting of shareholders.
Our Board of Directors held eleven meetings during 1999. Each Director
attended no less than 80 percent of the aggregate of the total number of Board
meetings and Committee meetings on which the Director served.
Compensation Committee Interlocks and Insider Participation
Our Compensation Committee is solely comprised of the following outside
directors: Adil M. Ameer, Bruce B. Brundage, David C. Ebertz, John R. Howard,
Kay S. Jorgensen, David S. Maney and Thomas J. Zeller.
Mr. Ameer is a Director of Black Hills Corporation and serves as a
member of its Compensation Committee. Mr. Landguth, our Chairman, President
and Chief Executive Officer, is also a director of Rapid City Regional Hospital,
a non-profit organization of which Mr. Ameer is President and Chief Executive
Officer. Mr. Landguth is serving a six-year term on the Rapid City Regional
Hospital Board which will end in July 2000. Mr. Ameer and Mr. Landguth do not
participate in any compensation decisions involving each other.
Western Health, a subsidiary of Rapid City Regional Hospital, is a
third party administrator for our healthcare plans. We have paid approximately
$76,000 to Western Health in 1999 for its services.
Worldwide Broadband Services, of which Mr. Maney was President and
Chief Executive Officer in 1999, sold products and services totaling $395,000
during 1999 to Black Hills FiberCom, a subsidiary of ours.
Directors' Fees
Directors who are not officers receive an annual fee of $15,500 plus a
fee of $600 for each board meeting and committee meeting attended, provided such
committee meetings are substantive in nature and content.
In addition, each outside director receives common stock equivalents
equal to $7,000 per year divided by the market price of our common stock. The
common stock equivalents are payable in stock or cash at retirement or can be
deferred at the election of the director.
Members of our Board of Directors are required to beneficially own 100
shares of common stock when they are initially elected a director and to apply
at least 50 percent of his or her retainer toward the purchase of additional
shares until the director has accumulated at least 2,000 shares of common stock.
Executive Compensation
Compensation Committee Report on Executive Compensation
The Compensation Committee of our Board of Directors is composed
entirely of directors who are not employees of Black Hills Corporation. The
Compensation Committee is responsible for developing and making recommendations
to the Board of Directors on the executive compensation program. The components
of our executive compensation program consist of a base salary, annual incentive
plan and a long-term incentive stock option plan The committee oversees and
administers the incentive compensation programs including the determination of
the annual and long-term incentive awards.
The executive compensation strategy is based on principles designed to:
* Promote the relationship between pay and performance;
* Attract, retain and encourage the development of highly qualified
and motivated executives;
* Recognize and reward outstanding performance;
* Provide compensation that is competitive and equitable; and
* Promote overall corporate performance linked to the mutual interest
of our shareholders.
The Committee retains the services of an independent international
consulting firm, Hewitt Associates, to review and evaluate our compensation
program as compared to compensation practices of other companies with similar
characteristics, including size, type of business and compensation philosophy.
In response to the increased competition in the energy industry and changes in
the size and mix of our business, the comparative groups are comprised of both
traditional utility and general industry companies. (The companies included in
the comparative group are not identical to those included in the EEI Index in
the Stock Performance Graph included in this proxy statement). The Committee
seeks to establish a market based level for each salary range that is at or near
the median, 50th percentile, of the comparative groups surveyed. Recommendations
made by the Committee are based upon the market analysis, company performance
and achievement of individual performance objectives. The 1999 compensation
analysis indicated that the market values increased significantly due to our
growth in revenue size and in industry wide executive compensation levels.
In April 1999, the Compensation Committee reviewed the base salary of
our Chief Executive Officer. In determining the base salary, the Committee
considered the recommendations from the Hewitt Associates study as well as the
goals and objectives of the strategic plan which included a target return on
equity, earnings growth and common stock performance. Consolidated earnings per
share, excluding a special non-cash charge to earnings related to abnormally low
oil prices, increased 7 percent in 1998 to $1.60 compared to $1.49 in 1997. Our
1998 consolidated return on equity was 16.1 percent, dividends increased 5.3
percent and total shareholder return was 17 percent. The Compensation Committee
recommended and the Board of Directors approved a 17 percent base salary
increase in the amount of $40,800 for the Chief Executive Officer. In addition
to the recognition for performance achievements, the increase to base salary
more closely aligned the Chief Executive Officer's base salary to the market.
We currently maintain a variety of employee benefit plans and programs
in which our executive officers may participate, including the short-term annual
incentive compensation program, the retirement savings plan, the pension plan,
and the Pension Equalization Plan. With the exception of the Short-Term Annual
Incentive Plan and the Pension Equalization Plan, these benefit plans and
programs are generally available to all of our employees.
The Short-Term Annual Incentive Compensation Program was designed to
recognize and reward the contribution that group performance makes to corporate
success. Only our executive officers are eligible to participate in the plan at
this time. The program has a corporate goal that is based upon the percentage of
consolidated earnings per share that exceeds targeted amounts. Target award
levels are a percentage of each executive officer's base salary. The percentage
for our Chief Executive Officer was 45 percent and for the other executive
officers ranged from 30 percent to 35 percent. Individual awards may be greater
or less than target amounts based on an assessment of individual performance.
Awards can range from 0 percent to 150 percent of the target amount. As a result
of strong 1999 actual earnings and the furtherance of our corporate goals, cash
awards were made to nine executive officers in the aggregate amount of $442,100.
The awards ranged from 30 percent of base salary to 45 percent of base salary.
The Chief Executive Officer received $127,350 or 45 percent of his base salary
for the year 1999. The executive officers are required to purchase our common
stock with 50 percent of the Short-Term Annual Incentive Bonus.
COMPENSATION COMMITTEE
Thomas J. Zeller, Chairperson Adil M. Ameer Bruce B. Brundage
David C. Ebertz John R. Howard Kay S. Jorgensen
David S. Maney
The following table is furnished for the fiscal year ended December 31,
1999, with respect to our Chief Executive Officer and the four other most highly
compensated executive officers for 1999.
- -------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
- -------------------------------------------------------------------------------
- -------------------------------------- ------ -------------------- ------------
Annual Compensation Long-Term
Compensation
- -------------------------------------- ------ ------------------- ------------
- -------------------------------------- ------ --------- --------- ------------
Name and Principal Position Year Salary Bonus(1) Securities
Underlying
Options
Granted(2)
- -------------------------------------- ------ --------- --------- -------------
- -------------------------------------- ------ --------- --------- -------------
Daniel P. Landguth 1999 $262,600 $127,350 23,500
Chairman and Chief Executive Officer 1998 237,550 47,683 18,000
1997 222,675 26,399 18,000
- -------------------------------------- ------ --------- --------- -------------
- -------------------------------------- ------ --------- --------- -------------
Everett E. Hoyt 1999 $169,100 $53,100 8,000
President and Chief Operating 1998 158,100 18,135 7,500
Officer of Black Hills Power and 1997 147,600 15,930 7,500
Light Company
- -------------------------------------- ------ --------- -------- --------------
- -------------------------------------- ------ --------- -------- --------------
Gary R. Fish 1999 $142,300 $61,250 10,500
President and Chief Operating 1998 123,350 18,154 10,500
Officer of Independent Energy 1997 105,012 12,349 10,500
- -------------------------------------- ------ --------- -------- --------------
- -------------------------------------- ------ --------- -------- --------------
Thomas M. Ohlmacher 1999 $126,500 $35,700 8,000
Vice President - Power Supply 1998 112,350 12,825 7,500
1997 101,452 11,997 7,500
- -------------------------------------- ------ --------- -------- --------------
- -------------------------------------- ------ --------- -------- --------------
James M. Mattern 1999 $116,200 $37,800 8,000
Senior Vice President - Corporate 1998 104,350 11,970 7,500
Administration and Assistant to the 1997 93,001 10,987 7,500
Chief Executive Officer
- -------------------------------------- ------ --------- -------- --------------
(1)Bonus amounts include amounts earned under the Short-Term Annual
Incentive Plan in 1999 and 1998, and the Results Compensation Program and the
Executive Gainshare Program in 1997, cash bonus programs for our employees based
on the attainment of predetermined profitability measures.
(2)Reflects the 3-for-2 stock split on March 10, 1998.
- --------------------------------------------------------------------------------
BLACK HILLS CORPORATION STOCK OPTION GRANTS IN 1999(1)
- --------------------------------------------------------------------------------
- -------------------- ------------ --------------- ---------- ---------- --------
Name Number of Percent of Exercise Expiration Grant
Securities Total Options Price Date Date
Underlying Granted to Present
Options Employees Value(2)
Granted
- -------------------- ------------ --------------- ---------- ---------- --------
- -------------------- ------------ --------------- ---------- ---------- --------
Daniel P. Landguth 23,500 16.8% $24.0625 07/20/09 $103,635
- -------------------- ------------ --------------- ---------- ---------- --------
- -------------------- ------------ --------------- ---------- ---------- --------
Everett E. Hoyt 8,000 5.7% $24.0625 07/20/09 $ 35,280
- -------------------- ------------ --------------- ---------- ---------- --------
- -------------------- ------------ --------------- ---------- ---------- --------
Gary R. Fish 10,500 7.5% $24.0625 07/20/09 $ 46,305
- -------------------- ------------ --------------- ---------- ---------- --------
- -------------------- ------------ --------------- ---------- ---------- --------
Thomas M. Ohlmacher 8,000 5.7% $24.0625 07/20/09 $ 35,280
- -------------------- ------------ --------------- ---------- ---------- --------
- -------------------- ------------ --------------- ---------- ---------- --------
James M. Mattern 8,000 5.7% $24.0625 07/20/09 $ 35,280
- -------------------- ------------ --------------- ---------- ---------- --------
(1)Options vest annually in installments of 33 percent per year
beginning on the first anniversary of the date of grant. All options become
fully vested if a change in control occurs.
(2)The Black-Scholes option-pricing model was used in determining the
present value of the options granted. The assumptions utilized in the
Black-Scholes model are as follows: 19.87 percent for expected volatility; 6.68
percent for risk free rate of return; 4.2 percent for dividend yield; and 10
years for the time of exercise.
================================================================================
STOCK OPTION EXERCISES IN 1999 AND YEAR-END OPTION VALUES(1)
==================== --------------------------------- =========================
Value of Unexercised
Number of Securities Underlying In-the-Money Options at
Unexercised Option at 12/31/99 12/31/99 Exercisable/
Name Exercisable/Unexercisable(2) Unexercisablea(3)
==================== --------------------------------- =========================
Daniel P. Landguth 45,600/35,500 $155,240/$18,000
==================== --------------------------------- =========================
Everett E. Hoyt 19,000/13,000 $64,687/$7,500
==================== --------------------------------- =========================
Gary R. Fish 23,000/17,500 $70,687/$10,500
==================== --------------------------------- =========================
Thomas M. Ohlmacher 19,000/13,000 $64,687/$7,500
==================== ================================= =========================
James M. Mattern 19,000/13,000 $64,687/$7,500
==================== ================================= =========================
(1)No options were exercised by the above named individuals in 1999.
(2)The number of options have been adjusted to reflect the 3-for-2 stock split
on March 10, 1998.
(3)Value of unexercisable options is the market value of the shares at year-end
minus the exercise price.
Retirement Plans
We have a defined benefit retirement plan, a pension plan, for our
employees. The plan provides benefits at retirement based on length of
employment service and average monthly pay in the five consecutive calendar
years of highest earnings out of the last ten years. Our employees do not
contribute to the plan. The amount of annual contribution by us to the plan is
based on an actuarial determination. Accrued benefits become 100 percent vested
after an employee completes five years of service.
We amended the plan, effective January 1, 2000, whereby future benefits
under the plan were decreased and in return we offer a 401(k) match. Our
employees who were age 50 on December 31, 1999 could make a one-time election to
remain under the old plan without the 401(k) match or participate under the
revised plan with a 401(k) match.
We also have a Pension Equalization Plan, a nonqualified supplemental
plan, in which benefits are not tax deductible until paid, designed to provide
the higher paid executive employee a retirement benefit which, when added to
social security benefits and the pension to be received under the defined
benefit retirement plan, will approximate retirement benefits being paid by
other employers to its employees with like executive positions. The employee's
pension from the qualified pension plan is limited under current law to $135,000
annually and the compensation taken into account in determining contributions
and benefits cannot exceed $170,000. The amount of deferred compensation paid
under nonqualified plans such as the Pension Equalization Plan is not subject to
the limits. A participant under the Pension Equalization Plan does not qualify
for benefits until the benefits become vested under a vesting schedule -- 20
percent after three years of employment under the plan increasing up to 100
percent vesting after eight years of employment under the plan. No credit for
past service is granted under the Pension Equalization Plan. The annual benefit
is 25 percent of the employee's average earnings, if salary was less than two
times the Social Security Wage Base, or 30 percent, if salary was more than two
times the Social Security Wage Base, times the vesting percentage. Average
earnings are normally an employee's average earnings for the five highest
consecutive full years of employment during the ten full years of employment
immediately preceding the year of calculation. The annual Pension Equalization
Plan benefit is paid on a monthly basis for 15 years to each participating
employee and, if deceased, to the employee's designated beneficiary or estate,
commencing at the earliest of death or when the employee is both retired and 62
years of age or more.
In the event that at the time of a participant's retirement the
participant's salary level exceeds the qualified pension plan annual
compensation limitation of $170,000, then the participant shall receive an
additional benefit which is measured by the difference between the monthly
benefit which would have been provided to the participant under the defined
benefit retirement plan as if there were no annual compensation limitation and
the monthly benefit to be provided to the participant under the defined benefit
retirement plan.
Participants in the Pension Equalization Plan are designated by our
Board of Directors upon recommendation of the Chief Executive Officer. Selection
is based on key employees as determined by management and consideration of
performance rather than being based solely on salary. The minimum salary
component applied in the selection process is the maximum annual Social Security
taxable wage base that is presently at $76,200.
Retirement Benefits
The following table illustrates estimated annual benefits payable under
the defined benefit retirement plan and the Pension Equalization Plan to our
employees who retire at the normal retirement date.
Years of Service
=========== ========= ========= ========= ========= ========
Annual Pay 15 20 25 30 35
Years Years Years Years Years
=========== ========= ========= ========= ========= ========
$110,000 $ 51,916 $ 60,055 $ 68,194 $ 76,333 $ 84,472
125,000 59,266 68,605 77,944 87,283 96,622
150,000 79,016 90,355 101,694 113,033 124,372
175,000 92,516 105,855 119,194 132,533 145,872
200,000 106,016 121,355 136,694 152,033 167,372
225,000 119,516 136,855 154,194 171,533 188,872
250,000 133,016 152,355 171,694 191,033 210,372
The years of credited service under the defined benefit retirement plan
for the executive officers shown in the preceding summary compensation table are
as follows: Daniel P. Landguth, 30 years; Everett E. Hoyt, 25 years; Gary R.
Fish, 13 years; James M. Mattern, 12 years; Thomas M. Ohlmacher, 24 years. Mr.
Hoyt's benefits will be reduced for service from prior employment.
The benefits in the foregoing table were calculated as a straight life
annuity. Amounts shown are exclusive of Social Security benefits and include
benefits from both the defined benefit retirement plan and from the Pension
Equalization Plan assuming a 100 percent vested interest in the Pension
Equalization Plan.
Employees' Stock Purchase Plan
Our employees and those of our subsidiaries are eligible to participate
in the Employees' Stock Purchase Plan, as approved by the shareholders at the
1987 Annual Meeting under which offerings of our common stock, at the discretion
of the Board of Directors, are made to employees at a price equal to 90 percent
of the closing sale price on the New York Stock Exchange on the date of the
offering. Employees may purchase up to 400 shares per offering. An offering was
extended to employees in 1999 at a price of $21.66 per share. Shares are held in
nominee name until subscriptions are paid for in full.
Retirement Savings Plan
We have a Retirement Savings Plan under Section 401(k) of the Internal
Revenue Code of 1986, as amended, which permits our employees and those of our
subsidiaries, including officers, to elect to invest up to 20 percent of their
eligible earnings on a pre-tax basis into an investment fund subject to
limitations imposed by the Internal Revenue Code.
Effective January 1, 2000, we provide a matching contribution of 100
percent of the employee's tax deferred contribution, subject to a maximum of
three percent of the employee's compensation.
Distribution from the fund will be made to employees at termination of
employment, retirement, death, or in case of hardship. No amounts were paid or
distributed pursuant to the Retirement Savings Plan to the individuals named
herein nor to the officers as a group.
Severance Agreements
We have entered into change of control severance agreements with each
of our executive officers and certain key employees. The change of control
severance agreements provide for certain payments and other benefits to be
payable upon a change in control and a subsequent termination of employment,
either involuntary or for a good reason.
A change in control is defined in the agreements as:
* an acquisition of 30 percent or more of our common stock,
except for certain defined acquisitions, such as acquisition
by employee benefit plans, us, or any of our subsidiaries; or
* members of our incumbent Board of Directors at the time the
agreements were executed cease to constitute at least
two-thirds of the members of the Board of Directors, with the
incumbent Board of Directors being defined as those
individuals consisting of the Board of Directors on the date
the agreement was executed and any other directors elected
subsequently whose election was approved by the incumbent
Board of Directors; or
* approval by our shareholders of:
* a merger, consolidation, or reorganization;
* liquidation or dissolution;
* or agreement for sale or other disposition of all or
substantially all of our assets, with exceptions for
transactions which do not involve an effective
change in control of voting securities or Board of
Directors membership, and transfers to subsidiaries
or sale of subsidiaries; and
* all regulatory approvals required to effect a change in
control have been obtained.
In the change of control severance agreements, a good reason for
termination which would trigger payment of benefits is defined to include:
* a change in the executive's status, title, position or
responsibilities;
* a reduction in the executive's annual compensation or any
failure to pay the executive any compensation or
benefits to which he or she is entitled within seven days
of the date due;
* any material breach by us of any provisions of the change of
control severance agreement;
* requiring the executive to be based outside a 50-mile radius
from Rapid City, South Dakota; or * our failure to
obtain an agreement from any successor company to assume and
agree to perform the change of control severance agreement.
The agreement with the Chief Executive Officer also contains an optional window
period, a 30-day period of time beginning on the one-year anniversary after the
change in control, during which time the Chief Executive Officer may terminate
for any reason and receive the payments and benefits.
Upon a change in control, the executive will have an employment
contract for a three-year period, but not beyond age 65. During this employment
term, the executive shall receive annual compensation at least equal to the
highest rate in effect at any time during the one-year period preceding the
change in control and shall also receive employment welfare benefits, pension
benefits, and supplemental retirement benefits on a basis no less favorable than
those received prior to the change in control.
If the executive's employment is terminated during the three-year
employment term involuntarily, for a good reason, or by the Chief Executive
Officer for any reason during a window period, then the executive is entitled to
the following benefits:
o severance pay equal to 2.99 times executive's five-year average
taxable compensation, provided that the foregoing payment is
subject to proportionate reduction based upon when termination
takes place during the three-year employment term and based upon a
ratio of the executive's employment term to 36 months; and
o continuation of employee welfare benefits for the remainder of the
employment term, with an offset for similar benefits received,
along with additional credited service under the Pension
Equalization Plan and defined benefit retirement plan equal to the
remainder of the employment term.
The change of control severance agreements contain a "cap" provision
which reduces any amounts payable to an amount which would prevent any payments
from being nondeductible under the Internal Revenue Code. The change of control
severance agreements provide for reimbursement of legal fees and expenses of the
executive incurred after the change in control by the executive in seeking to
obtain or enforce any benefits provided by the change of control severance
agreement. The executive is not required to mitigate the amount of any payment
or benefit by seeking other employment or otherwise, and the payments or
benefits are not reduced whether or not the executive obtains other employment
and/or benefits, except for employee welfare benefits.
Stock Performance Graph
The graph below compares the cumulative shareholder return on our
common stock for the last five fiscal years with the cumulative total return of
the S&P 500 Index and the Edison Electric Institute Electric Index over the same
period, assuming the investment of $100 on December 31, 1994, and the
reinvestment of all dividends.
(INSERT GRAPH)
1995 1996 1997 1998 1999
Black Hills Corporation $123 $147 $194 $227 $200
S&P 500 $138 $169 $226 $290 $351
EEI Electric $131 $133 $169 $192 $157
ITEM III: APPOINTMENT OF INDEPENDENT AUDITORS
The firm of Arthur Andersen LLP, independent public accountants, conducted
the audit of the Company and its subsidiaries for 1999. Representatives of
Arthur Andersen LLP will be present at our annual meeting and will have the
opportunity to make a statement, if they desire to do so, and to respond to
appropriate questions.
Audit services performed by Arthur Andersen LLP during 1999 included audits
of our financial statements and those of our subsidiaries and analysis of
interim financial information.
Our Board of Directors, on recommendation of the Audit Committee and
subject to ratification by our shareholders, has appointed Arthur Andersen LLP
to perform an audit of our consolidated financial statements and those of our
subsidiaries for the year 2000 and to render their opinion thereon.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION
OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP TO SERVE AS
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE YEAR 2000
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Shareholder proposals intended to be presented at our 2001 annual meeting
of shareholders must be received by our Secretary in writing at our home offices
at 625 Ninth Street, P.O. Box 1400, Rapid City, South Dakota 57709, prior to
January 8, 2001. Any proposal submitted must be in compliance with Rule 14a-8 of
Regulation 14A of the Securities and Exchange Commission.
ITEM IV: TRANSACTION OF OTHER BUSINESS
Our Board of Directors does not intend to present any business for action
by our shareholders at the meeting except the matters referred to in this proxy
statement. If any other matters should be properly presented at the meeting, it
is the intention of the persons named in the accompanying form of proxy to vote
thereon in accordance with the recommendations of our Board of Directors.
Please complete and sign the accompanying form of proxy whether or not you
expect to be present at the meeting and promptly return it in the enclosed
postage paid envelope.
By Order of the Board of Directors,
ROXANN R. BASHAM
Vice President - Finance
and Corporate Secretary/ Treasurer
Dated: May 8, 2000
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The information required by Item 13, Financial and Other Information, of
Regulation 14-A is provided in our annual report to our shareholders and Form
10-K for the year ended December 31, 1999, which is incorporated by reference
into this proxy statement.
Our 1999 Annual Report to Shareholders was previously mailed to our
shareholders.
================================================================================
PLEASE COMPLETE, SIGN AND RETURN PROMPTLY
THE ENCLOSED PROXY SO THAT YOUR STOCK MAY
BE REPRESENTED AND VOTED AT THE ANNUAL MEETING.
================================================================================
EXHIBIT A
PLAN OF EXCHANGE
BETWEEN
BLACK HILLS CORPORATION
(a South Dakota corporation)
AND
BLACK HILLS HOLDING CORPORATION
(a South Dakota corporation)
RECITALS
A. Black Hills Corporation ("Black Hills") is a corporation duly
organized, validly existing and in good standing under the laws of the State of
South Dakota; Black Hills is authorized to issue 50,000,000 shares of common
stock, $1 par value ("Black Hills Common Stock"), of which 21,390,949 shares are
currently issued and outstanding; 270,000 shares of cumulative preferred stock,
$100 par value, of which no shares were issued and outstanding; and 400,000
shares of series cumulative preferred stock, no par value, of which no shares
are currently issued and outstanding.
B. Black Hills Holding Corporation (the "Holding Company"), a wholly
owned subsidiary of Black Hills, is a corporation duly organized, validly
existing and in good standing under the laws of the State of South Dakota;
Holding Company is authorized to issue 100,000,000 shares of common stock, $1
par value ("Holding Company Common Stock"), of which 100 shares are issued and
outstanding, and 25,000,000 shares of series preferred stock, no par value, of
which no shares are issued and outstanding.
C. The Board of Directors of Black Hills has adopted resolutions
approving this Plan of Exchange (the "Plan") in accordance with the South Dakota
Business Corporation Act (the "BCA") and directing that it be submitted to the
shareholders of Black Hills for adoption.
ARTICLE I
General
1.01. Parties to Exchange. Black Hills and the Holding Company shall
effect the exchange of all outstanding shares of Black Hills Common Stock for
shares of Holding Company Common Stock in accordance with and subject to the
terms of this Plan (the "Exchange"). The Exchange shall be subject to the
receipt of the following conditions precedent and such other conditions as the
Board of Directors of Black Hills shall determine: (1) the receipt of all
necessary governmental approvals and such governmental approvals shall not
contain, in the sole judgment of the Board of Directors of Black Hills, any
unacceptable conditions; (2) receipt of shareholder approval as required by the
BCA; (3) the listing, on official notice of issuance, of the Holding Company
Common Stock on the New York Stock Exchange; (4) the receipt of an opinion of
counsel covering certain United States federal income tax matters; and (5) the
effectiveness of a registration statement under the Securities Act of 1933
covering the Holding Company Common Stock to be issued or reserved for issuance
in connection with the Exchange.
1.02. Effectiveness. Articles of Exchange, and such other documents and
instruments as are required by, and complying in all respects with, the BCA
shall be delivered to the appropriate state officials for filing. The Exchange
shall become effective upon the date specified in the Articles of Exchange as
filed with the Secretary of State of South Dakota (the "Effective Time").
1.03. Termination. Notwithstanding shareholder approval of this Plan,
this Plan may be terminated at any time prior to the Effective Time by either
Black Hills or Holding Company by written notice duly authorized by its board of
directors delivered to the other corporation.
1.04. Amendment. This Plan may be amended by the written agreement of
Black Hills and the Holding Company at any time prior to submission of the Plan
to the shareholders of Black Hills for approval and, at any time thereafter
prior to the Effective Time except to (i) change the amount or kind of shares to
be received by the shareholders of Black Hills or (ii) adversely affect the
rights of the shareholders of Black Hills.
ARTICLE II
Capital Stock
2.01. Exchange. At the Effective Time, each share of Black Hills Common
Stock issued and outstanding immediately prior to the Effective Time shall, by
virtue of the Exchange and without any action on the part of any holder thereof,
be converted and exchanged into one share of Holding Company Common Stock and
the Holding Company shall thereupon have acquired and be the holder of each
share of Black Hills Common Stock converted and exchanged in the Exchange. All
shares of the Holding Company Common Stock so issued shall be validly issued,
fully paid and nonassessable.
At the Effective Time, each share of Black Hills Preferred Stock issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Exchange and without any action on the part of any holder thereof, be converted
and exchanged into one share of Holding Company Preferred Stock and the Holding
Company shall thereupon have acquired and be the holder of each share of Black
Hills Preferred Stock converted and exchanged in the Exchange. All shares of the
Holding Company Preferred Stock so issued shall be validly issued, fully paid
and nonassessable.
2.02. Treasury Stock. At the Effective Time, each share of Black Hills
Common Stock held in the treasury of Black Hills shall be canceled and shall be
restored to the status of authorized but unissued shares. Black Hills common
stock held by Wyodak Resources Development Corp., a subsidiary of Black Hills
Corporation, will be exchanged for shares of Black Hills Holding Corporation.
2.03. Certificates. Following the Effective Time, each holder of an
outstanding certificate or certificates theretofore representing shares of Black
Hills Common Stock may, but shall not be required to, surrender the same to the
Holding Company for reissuance of a new certificate or certificates in holder's
name or for transfer, and each such holder or transferee will be entitled to
receive a certificate or certificates representing the same number of shares of
the Holding Company. Without any further action on the part of Black Hills or
the Holding Company, each outstanding certificate which, immediately before the
Effective Time, represented Black Hills Common Stock shall be deemed and treated
for all corporate purposes to represent the ownership of the same number of
shares of Holding Company Common Stock as though a surrender or transfer and
exchange had taken place. The holders of Black Hills Common Stock at the
Effective Time shall have no right at or after the Effective Time to have their
shares of Black Hills Common Stock transferred on the stock transfer books of
Black Hills (such stock transfer books being deemed closed for this purpose at
the Effective Time) and at and after the Effective Time such stock transfer
books shall be deemed to be the stock transfer books of the Holding Company.
2.04. Cancellation of Holding Company Common Stock Held by Black Hills.
Immediately prior to the Effective Time, each share of Holding Company Common
Stock issued and outstanding immediately before the Effective Time shall be
canceled and thereupon shall constitute an authorized but unissued share, and
all rights in respect thereof shall cease. Black Hills, as the sole holder of
Holding Company Common Stock, consents to such cancellation.
2.05. Assumption of Black Hills' Benefit Plans. The Holding Company
hereby agrees to assume, and Black Hills acknowledges such assumption at and as
of the Effective Time, the following stock benefit plans of Black Hills:
Dividend Reinvestment and Stock Purchase Plan, Employee Stock Purchase Plan,
1996 and 1999 Stock Option Plans, Short-Term Annual Incentive Compensation Plan,
Retirement Savings 401(k) Plan, Outside Directors Stock Based Compensation Plan
and Non-Qualified Deferred Compensation Plan (collectively, the "Benefit
Plans"). In connection with the foregoing, the parties agree that the Benefit
Plans shall be amended to provide that the Holding Company Common Stock will be
issued in lieu of Black Hills Common Stock under the terms of the Benefit Plans.
The Holding Company shall reserve, for purposes of the Benefit Plans, that
number of shares of Holding Company Common Stock equivalent to the number of
shares of Black Hills Common Stock reserved for such purposes immediately prior
to the Effective Time.
2.06. Election of Directors. Prior to or as of the Effective Time, the
Holding Company shall cause each director of Black Hills who is not then also a
director of the Holding Company to be elected a director of the Holding Company
so that as of the Effective Time, the Holding Company shall have the same
directors as Black Hills.
2.07. Name Change. At and as of the Effective Time, the name of Black
Hills shall be changed to "Black Hills Power and Light Company," and the name of
Holding Company shall be changed to "Black Hills Corporation."
2.08. Governing Law. This Plan of Exchange shall be governed by
and construed in accordance with the laws of the State of South Dakota.
IN WITNESS WHEREOF, the parties hereto have executed this Plan of
Exchange as of April 28, 2000.
BLACK HILLS CORPORATION
By: /s/ Daniel P. Landguth
Name: Daniel P. Landguth
Title: Chairman of the Board and Chief
Executive Officer
BLACK HILLS HOLDING CORPORATION
By: /s/ Daniel P. Landguth
Name: Daniel P. Landguth
Title: Chairman of the Board, President and
Chief Executive Officer
EXHIBIT B
DISSENTER'S RIGHTS
OF THE SOUTH DAKOTA BUSINESS CORPORATION ACT
SECTIONS 47-6-23 TO 47-6-23.3
and
SECTIONS 47-6-40 TO 47-6-50
47-6-23. Dissent by shareholder - Right to receive payment for shares. Any
shareholder of a domestic corporation shall have the right to dissent from, and
to obtain payment for his shares in the event of, any of the following corporate
actions:
(1) Any plan of merger or consolidation to which the corporation
is a party;
(2) Any sale or exchange of all or substantially all of the
property and assets of the corporation not made in the usual
and regular course of its business, including a sale in
dissolution, but not including a sale pursuant to an order of
a court having jurisdiction in the premises or a sale for cash
on terms requiring that all or substantially all of the net
proceeds of sale be distributed to the shareholders in
accordance with their respective interests within one year
after the date of sale;
(3) Any plan of exchange to which the corporation is a party as
the corporation the shares of which are to be acquired;
(4) Any amendment of the articles of incorporation which
materially and adversely affects the rights appurtenant to the
shares of the dissenting shareholder in that it:
(a) Alters or abolishes a preferential right to such
shares;
(b) Creates, alters or abolishes a right in respect of
the redemption of such shares, including a provision
respecting a sinking fund for the redemption or
repurchase of such shares;
(c) Alters or abolishes a preemptive right of the holder
of such shares to acquire shares or other securities;
(d) Excludes or limits the right of the holder of such
shares to vote on any matter, or to cumulate his
votes, except as such right may be limited by
dilution through the issuance of shares or other
securities with similar voting rights; or
(5) Any other corporate action taken pursuant to a shareholder
vote with respect to which the articles of incorporation, the
bylaws, or a resolution of the board of directors directs that
dissenting shareholders shall have a right to obtain payment
for their shares.
47-6-23.1 Dissent as to less than all shares held - Beneficial owner. A
record holder of shares may assert dissenters' rights as to less than all of the
shares registered in his name only if he dissents with respect to all the shares
beneficially owned by any one person, and discloses the name and address of the
person or persons on whose behalf he dissents. In that event, his rights shall
be determined as if the shares as to which he has dissented and his other shares
were registered in the names of different shareholders.
A beneficial owner of shares who is not the record holder may assert
dissenters' rights with respect to shares held on his behalf, and shall be
treated as a dissenting shareholder under the terms of this section if he
submits to the corporation at the time of or before the assertion of these
rights a written consent of the record holder.
47-6-23.2. Rights of shareholders not entitled to vote on merger. The right
to obtain payment under Section 47-6-23 does not apply to the shareholders of
the surviving corporation in a merger if a vote of the shareholders of such
corporation is not necessary to authorize such merger.
47-6-23.3. Shareholder entitled to payment may not attack validity of action.
A shareholder of a corporation who has a right under Section 47-6-23 to obtain
payment for his shares may not, at law or in equity, attack the validity of the
corporate action that gives rise to his right to obtain payment, have the action
set aside or rescinded, unless the corporate action is unlawful or fraudulent
with regard to the complaining shareholder or to the corporation.
47-6-40. Definitions. Terms used in this chapter mean:
(1) "Corporation," the issuer of the shares held by the dissenter
before the corporate action, or the successor by merger or
consolidation of that issuer;
(2) "Dissenter," a shareholder or beneficial owner who is entitled
to and does assert dissenters' rights under this chapter, and
who has performed every act required up to the time involved
for the assertion of such rights;
(3) "Fair value" of shares, their value immediately before the
effectuation of the corporate action to which the dissenter
objects, excluding any appreciation or depreciation in
anticipation of such corporate action unless such exclusion
would be inequitable;
(4) "Interest," interest from the effective date of the corporate
action until the date of payment, at the average rate
currently paid by the corporation on its principal bank loans,
or, if none, at such rate as is fair and equitable under all
the circumstances.
47-6-41. Notice to shareholders of right to dissent and obtain payment. If a
proposed corporate action which would give rise to dissenters' rights under this
chapter is submitted to a vote at a meeting of shareholders, the notice of
meeting shall notify all shareholders that they have or may have a right to
dissent and obtain payment for their shares by complying with the terms of this
chapter, and shall be accompanied by a copy of Sections 47-6-23 to 47-6-23.3,
inclusive, and Sections 47-6-40 to 47-6-50, inclusive.
47-6-42. Notice of intent to dissent - Refraining from voting - Effect of
Failure. If the proposed corporate action is submitted to a vote at a meeting of
shareholders, any shareholder who wishes to dissent and obtain payment for his
shares shall file with the corporation, prior to the vote, a written notice of
intention to demand that he be paid fair compensation for his shares if the
proposed action is effectuated, and shall refrain from voting his shares in
approval of such action. A shareholder who fails in either respect acquires no
right to payment of his shares under this section or Sections 47-6-23 to
47-6-23.3, inclusive.
47-6-43. Notice of procedure for demanding payment and depositing
certificates. If the proposed corporate action is approved by the required vote
at a meeting of shareholders, the corporation shall mail a further notice to all
shareholders who gave due notice of intention to demand payment and who
refrained from voting in favor of the proposed action. If the proposed corporate
action is to be taken without a vote of shareholders, the corporation shall send
to all shareholders who are entitled to dissent and demand payment for their
shares a notice of the adoption of the plan of corporate action. The notice
shall (1) state where and when a demand for payment shall be sent and
certificates of certificated shares shall be deposited in order to obtain
payment, (2) inform holders of uncertificated shares to what extent transfer of
shares will be restricted from the time that demand for payment is received, (3)
supply a form for demanding payment which includes a request for certification
of the date on which the shareholder, or the person on whose behalf the
shareholder dissents, acquired beneficial ownership of the shares, and (4) be
accompanied by a copy of Sections 47-6-23 to 47-6-23.3, inclusive, and Sections
47-6-40 to 47-6-50, inclusive. The time set for the demand and deposit shall be
not less than thirty days from the mailing of the notice.
47-6-44. Failure to demand payment or deposit certificates - Waiver
Restrictions on transfers. A shareholder who fails to demand payment, or fails,
in the case of certificated shares, to deposit certificates, as required by a
notice pursuant to Section 47-6-43 has no right under this chapter to receive
payment for his shares. If the shares are not represented by certificates, the
corporation may restrict their transfer from the time of receipt of demand for
payment until effectuation of the proposed corporate action, or the release of
restrictions under the terms of Sections 47-6-45 and 47-6-46. The dissenter
shall retain all other rights of a shareholder until these rights are modified
by effectuation of the proposed corporate action.
47-6-45. Return of certificates or release of restrictions on failure to
effectuate action - New notice. Within sixty days after the date set for
demanding payment and depositing certificates, if the corporation has not
effectuated the proposed corporate action and remitted payment for shares
pursuant to this chapter, it shall return any certificates that have been
deposited, and release uncertificated shares from any transfer restriction
imposed by reason of the demand for payment.
If uncertificated shares have been released from transfer restrictions, and
deposited certificates have been returned, the corporation may at any later time
send a new notice conforming to the requirements of Section 47-6-43 with like
effect.
47-6-46. Remittance of payment to dissenting shareholders - Information to
accompany remittance. Immediately upon effectuation of the proposed corporate
action, or upon receipt of demand for payment if the corporate action has
already been effectuated, the corporation shall remit to dissenters who have
made demand and, if their shares are certificated, have deposited their
certificates the amount which the corporation estimates to be the fair value of
the shares, with interest if any has accrued. The remittance shall be
accompanied by:
(1) The corporation's closing balance sheet and statement of
income for a fiscal year ending not more than sixteen months
before the date of remittance, together with the latest
available interim financial statements;
(2) A statement of the corporation's estimate of fair value
of the shares; and
(3) A notice of the dissenter's right to demand supplemental
payment, accompanied by a copy of Sections 47-6-23 to
47-6-23.3, inclusive, and Sections 47-6-40 to 47-6-50,
inclusive.
47-6-47. Demand for deficiency - Failure to demand as waiver. If the
corporation fails to remit as required by Section 47-6-46 or if the dissenter
believes that the amount remitted is less than the fair value of his shares, or
that the interest is not correctly determined, he may send the corporation his
own estimate of the value of the shares or of the interest and demand payment of
the deficiency.
If the dissenter does not file such an estimate within thirty days after the
corporation's mailing of its remittance, he shall be entitled to no more than
the amount remitted.
47-6-48. Petition for judicial determination of value of shares - Parties
Procedure - Effect of failure to file. Within sixty days after receiving a
demand for payment pursuant to Section 47-6-47, if any such demands for payment
remain unsettled, the corporation shall file in an appropriate court a petition
requesting that the fair value of the shares and interest thereon be determined
by the court.
An appropriate court shall be a court of competent jurisdiction in the county
of this state where the registered office of the corporation is located. If, in
the case of a merger or consolidation or exchange of shares, the corporation is
a foreign corporation without a registered office in this state the petition
shall be filed in the county where the registered office of the domestic
corporation was last located.
All dissenters, wherever residing, whose demands have not been settled shall
be made parties to the proceeding as in an action against their shares. A copy
of the petition shall be served on each such dissenter; if a dissenter is a
nonresident, the copy may be served on him by registered or certified mail or by
publication as provided by law.
The jurisdiction of the court shall be plenary and exclusive. The court may
appoint one or more persons as appraisers to receive evidence and recommend a
decision on the question of fair value. The appraisers shall have such power and
authority as shall be specified in the order of their appointment or in any
amendment thereof. The dissenters shall be entitled to discovery in the same
manner as parties in other civil suits.
All dissenters who are made parties shall be entitled, after a hearing
without a jury, to judgment for the amount by which the fair value of their
shares is found to exceed the amount previously remitted with interest.
If the corporation fails to file a petition as provided in this section, each
dissenter who made a demand and who has not already settled his claim against
the corporation shall be paid by the corporation the amount demanded by him with
interest, and may sue therefor in an appropriate court.
47-6-49. Assessment of costs and expenses of action. The costs and expenses
of any proceeding under Section 47-6-48, including the reasonable compensation
and expenses of appraisers appointed by the court, shall be determined by the
court and assessed against the corporation, except that any part of the costs
and expenses may be apportioned and assessed as the court considers equitable
against all or some of the dissenters who are parties and whose action in
demanding supplemental payment the court finds to be arbitrary, vexatious, or
not in good faith.
Fees and expenses of counsel and of experts for the respective parties may be
assessed as the court considers equitable against the corporation and in favor
of any or all dissenters if the corporation failed to comply substantially with
the requirements of this section, and may be assessed against either the
corporation or a dissenter in favor of any other party, if the court finds that
the party against whom the fees and expenses are assessed acted arbitrarily,
vexatiously, or not in good faith in respect to the rights provided by Sections
47-6-23 to 47-6-23.3, inclusive, and Sections 47-6-40 to 47-6-50, inclusive.
If the court finds that the services of counsel for any dissenter were of
substantial benefit to other dissenters similarly situated and should not be
assessed against the corporation it may award to these counsel reasonable fees
to be paid out of the amounts awarded to the dissenters who were benefited.
47-6-50. Value of shares not beneficially owned by dissenter on date of first
announcement. Notwithstanding Sections 47-6-40 to 47-6-49, inclusive, the
corporation may elect to withhold the remittance required by Section 47-6-46
from any dissenter with respect to shares of which the dissenter or the person
on whose behalf the dissenter acts was not the beneficial owner on the date of
the first announcement to news media or to shareholders of the terms of the
proposed corporate action. With respect to such shares, the corporation shall,
upon effectuating the corporate action, state to each dissenter its estimate of
the fair value of the shares, state the rate of interest to be used, explaining
the basis thereof, and offer to pay the resulting amounts on receiving the
dissenter's agreement to accept them in full satisfaction.
If the dissenter believes that the amount offered is less than the fair value
of the shares and interest determined according to this section, he may within
thirty days after the date of mailing of the corporation's offer, mail the
corporation his own estimate of fair value and interest, and demand their
payment. If the dissenter fails to do so, he shall be entitled to no more than
the corporation's offer.
If the dissenter makes a demand as provided herein the provisions of Sections
47-6-48 and 47-6-49 shall apply to further proceedings on the dissenter's
demand.
BLACK HILLS CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
Tuesday, June 20, 2000
9:30 a.m., Local Time
Journey Museum
222 New York Street
Rapid City, SD 57701
Black Hills Corporation
PO Box 1400, Rapid City, SD 57709 PROXY
- --------------------------------------------------------------------------------
This proxy is solicited by the Board of Directors for use at the Annual Meeting
on June 20, 2000.
The Shares of stock you hold in your account or in a dividend reinvestment
account will be voted as you specify below.
If no choice is specified, the proxy will be voted "FOR" Items 1,2 and 3.
By signing the proxy, you revoke all prior proxies and appoint Daniel P.
Landguth, Roxann Basham, and John K. Nooney, and each of them, with full power
of substitution, to vote your shares on the matters shown on the reverse side
and any other matters which may come before the Annual Meeting and all
adjournments.
HOW TO VOTE YOUR PROXY
Mark, sign and date your proxy card and return it in the postage-paid envelope
we've provided or return it to Black Hills Corporation, c/o Shareowner Services,
P.O. Box 64873, St. Paul, MN 55164-9397.
- --------------------------------------------------------------------------------
The Board of Directors Recommends a Vote FOR Items 1, 2 and 3.
1. Approve the formation of a holding For Against Abstain
company and Plan of Exchange
2. Election of Class II Directors: Vote FOR Vote WITHHELD
01 Daniel P. Landguth all nominees from all nominees
02 John R. Howard
03 David C. Ebertz
(Instructions: To withhold authority to vote for any indicated
nominee, write the number(s) of the nominee(s) in the box
provided to the right. To cumulate votes so indicate.)
3. Ratify the appointment of Arthur For Against Abstain
Andersen LLP to serve as Black Hills
Corporation's independentauditors
in 2000.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
Address change? Mark Box
Indicate changes below: _______________________________
Date
Signature(s) Box
Please sign exactly as your
name(s) appear on Proxy. If
held in joint tenancy, all
persons must sign.
Trustees, administrators,
etc., should include title and
authority. Corporations
should provide full name or
corporation and title of
authorized officer
signing the proxy.
- --------------------------- -------------------- ------------------------------
Proxy # Account # Issue or Issuer #
- --------------------------- -------------------- ------------------------------
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. Indemnification of Directors and Officers
Sections 47-2-58.1 to 47-2-58.7 of the South Dakota Codified Laws permits
indemnification of officers and directors of domestic or foreign corporations
under certain circumstances and subject to certain limitations. Article V of the
Bylaws of the Company and separate indemnification contracts entered into
between the Company and each of its directors and officers authorize
indemnification of the Company's directors and officers consistent with the
provisions of South Dakota laws.
The Company has obtained insurance policies indemnifying the Company and the
Company's directors and officers against certain civil liabilities and related
expenses.
ITEM 21. Exhibits and Financial Statement Schedules
(a) Exhibits
--------------------- --------------------------------------------------------
Exhibit Number Description of Document
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
2 Plan of Exchange between Black Hills Corporation and
Black Hills Holding Corporation (included as Exhibit A
to the Proxy Statement and Prospectus in Part I of
this Registration Statement)
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
3.1 Restated Articles of Incorporation
of Black Hills Corporation filed
May 24, 1984 (incorporated by
reference to Exhibit 3(I) to Black
Hills Corporation's Form 8-K filed
June 7, 1994, File No. 1-7978)
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
3.2 Bylaws of Black Hills Corporation
dated April 20, 1999 (incorporated
by reference to Exhibit 4(b) to
Black Hills Corporation's Form S-8
filed July 13, 1999, File
No. 1-7978)
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
3.3 Articles of Incorporation of Black Hills Holding
Corporation
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
3.4 Bylaws of Black Hills Holding Corporation
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
4.1 Reference to Article Fourth (7) of the Restated
Articles of Incorporation of Black Hills Corporation
(Exhibit 3.1 hereto).
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
4.2 Restated and Amended Indenture of Mortgage and Deed of
Trust of Black Hills Corporation dated as of September
1, 1999
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
4.3 Indenture of Trust dated June 1,
1992, City of Gillette, Campbell
County, Wyoming; Lawrence County,
South Dakota; Pennington County,
South Dakota; Weston County,
Wyoming; and Campbell County,
Wyoming; to Norwest Bank
Minnesota, National Association,
as Trustee (Exhibits 10(n), 10(q),
10(s), 10(u), and 10(w) to Form
10-K for 1992).
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
4.4 Statement of Designations, Preferences and Relative
Rights and Limitations of No Par Preferred Stock,
Series 2000-A of Black Hills Corporation
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
5 Opinion of Morrill Thomas Nooney & Braun LLP regarding
legality
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
8 Opinion of Morgan, Lewis & Bockius LLP regarding
federal income tax matters
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
13 Black Hills Corporation's Annual
Report on Form 10-K for the fiscal
year ended December 31, 1999
(incorporated by reference, filed March 13, 2000, File
No. 1-7978)
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
21 List of Subsidiaries of Black Hills Corporation
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
23.1 Consent of Arthur Andersen LLP
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
23.2 Consent of Morrill Thomas Nooney &
Braun LLP (included in its opinion
filed as Exhibit 5)
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
23.3 Consent of Morgan, Lewis & Bockius
LLP (included in its opinion filed
as Exhibit 8)
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
24.1 Powers of Attorney (included as part of the signature
page hereto)
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
27 Financial Data Schedule
--------------------- --------------------------------------------------------
(b) The financial statement schedules are incorporated by reference from Black
Hills Corporation's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999.
ITEM 22. Undertakings
(a) 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 the 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. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(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.
(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) If the registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include any financial
statements required by Rule 3-19 of this chapter at the start of any delayed
offering or throughout a continuous offering. Financial statements and
information otherwise required by Section 10(a)(3) of the Act need not be
furnished, provided, that the registrant includes in the prospectus, by means of
a post-effective amendment, financial statements required pursuant to this
paragraph (a)(4) and other information necessary to ensure that all other
information in the prospectus is at least as current as the date of those
financial statements. Notwithstanding the foregoing, with respect to
registration statements on Form F-3, a post-effective amendment need not be
filed to include financial statements and information required by Section
10(a)(3) of the Act or Rule 3-19 of this chapter if such financial statements
and information are contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the Form
F-3.
(5) 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 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to 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.
(6) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus
will contain the information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters, in addition to
the information called for by the other items of the applicable form.
(7) That every prospectus: (i) that is filed pursuant to paragraph (6)
immediately preceding, or (ii) that purports to meet the requirements of Section
10(a)(3) of the Act and is used in connection with an offering of securities
subject to Rule 415, will be filed as part of an amendment to the registration
statement and will not be used until such amendment is effective, and that, for
purposes of determining any liability under the Securities Act 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.
(8) 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 foregoing provisions, 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 or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(b) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through the date
of responding to the request.
(c) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has
duly caused this amendment to registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the city of Rapid
City, state of South Dakota on May 22, 2000.
BLACK HILLS CORPORATION
By: /s/ Daniel P. Landguth
Name: Daniel P. Landguth
Title: Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
amendment to registration statement has been signed by the following
persons in the capacities and on the dates indicated.
EACH PERSON IN SO SIGNING ALSO MAKES, CONSTITUTES AND APPOINTS DANIEL
P. LANDGUTH AND ROXANN R. BASHAM, AND EACH OF THEM ACTING ALONE, AS HIS OR HER
TRUE AND LAWFUL ATTORNEY-IN-FACT, WITH FULL POWER OF SUBSTITUTION, TO EXECUTE
AND CAUSE TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
THE SECURITIES ACT OF 1933, AS AMENDED, ANY AND ALL AMENDMENTS AND
POST-EFFECTIVE AMENDMENTS TO THIS REGISTRATION STATEMENT, AND INCLUDING ANY
REGISTRATION STATEMENT FOR THE SAME OFFERING THAT IS TO BE EFFECTIVE PURSUANT TO
RULE 462(B) UNDER THE SECURITIES AND EXCHANGE ACT OF 1933, AS AMENDED, WITH
EXHIBITS THERETO AND OTHER DOCUMENTS IN CONNECTION THEREWITH, AND HEREBY
RATIFIES AND CONFIRMS ALL THAT SAID ATTORNEY-IN-FACT OR HIS OR HER SUBSTITUTE OR
SUBSTITUTES MAY DO OR CAUSE TO BE DONE BY VIRTUE HEREOF.
- ---------------------------------- ------------------------------ --------------
Signature Title Date
- ---------------------------------- ------------------------------ --------------
- ---------------------------------- ------------------------------ --------------
- ---------------------------------- ------------------------------ --------------
/s/ Daniel P. Landguth Director and Principal May 22, 2000
Daniel P. Landguth Executive Officer
Chairman and
Chief Executive Officer
- ---------------------------------- ------------------------------ --------------
- ---------------------------------- ------------------------------ --------------
/s/ Mark T. Thies Principal Financial Officer May 22, 2000
Mark T. Thies
Senior Vice President
and Chief Financial Officer
- ---------------------------------- ------------------------------ --------------
- ---------------------------------- ------------------------------ --------------
/s/ Roxann R. Basham Principal Accounting Officer May 22, 2000
Roxann R. Basham
Vice President - Finance,
Corporate Secretary and Treasurer
- ---------------------------------- ------------------------------ --------------
- ---------------------------------- ------------------------------ --------------
/s/ Adil M. Ameer Director May 22, 2000
Adil M. Ameer
- ---------------------------------- ------------------------------ --------------
- ---------------------------------- ------------------------------ --------------
/s/ Bruce B. Brundage Director May 22, 2000
Bruce B. Brundage
- ---------------------------------- ------------------------------ --------------
- ---------------------------------- ------------------------------ --------------
/s/ David C. Ebertz Director May 22, 2000
David C. Ebertz
- ---------------------------------- ------------------------------ --------------
- ---------------------------------- ------------------------------ --------------
/s/ John R. Howard Director May 22, 2000
John R. Howard
- ---------------------------------- ------------------------------ --------------
- ---------------------------------- ------------------------------ --------------
/s/ Everett E. Hoyt Director and Officer May 22, 2000
Everett E. Hoyt
President and Chief Operating
Officer, Black Hills Power
- ---------------------------------- ------------------------------ --------------
- ---------------------------------- ------------------------------ --------------
/s/ Kay S. Jorgensen Director May 22, 2000
Kay S. Jorgensen
- ---------------------------------- ------------------------------ --------------
- ---------------------------------- ------------------------------ --------------
/s/ David S. Maney Director May 22, 2000
David S. Maney
- ---------------------------------- ------------------------------ --------------
- ---------------------------------- ------------------------------ --------------
/s/ Thomas J. Zeller Director May 22, 2000
Thomas J. Zeller
- ---------------------------------- ------------------------------ --------------
- ---------------------------------- ------------------------------ --------------
EXHIBIT INDEX
--------------------- --------------------------------------------------------
Exhibit Number Description of Document
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
2 Plan of Exchange between Black Hills Corporation and
Black Hills Holding Corporation (included as Exhibit A
to the Proxy Statement and Prospectus in Part I of
this Registration Statement)
- ---------------------- --------------------------------------------------------
- ---------------------- --------------------------------------------------------
3.1 Restated Articles of Incorporation
of Black Hills Corporation filed
May 24, 1984 (incorporated by
reference to Exhibit 3(I) to Black
Hills Corporation's Form 8-K filed
June 7, 1994, File No. 1-7978)
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
3.2 Bylaws of Black Hills Corporation
dated April 20, 1999 (incorporated
by reference to Exhibit 4(b) to
Black Hills Corporation's Form S-8
filed July 13, 1999, File
No. 1-7978)
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
3.3 Articles of Incorporation of Black Hills Holding
Corporation
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
3.4 Bylaws of Black Hills Holding Corporation
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
4.1 Reference to Article Fourth (7) of the Restated
Articles of Incorporation of Black Hills Corporation
(Exhibit 3.1 hereto).
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
4.2 Restated and Amended Indenture of Mortgage and Deed of
Trust of Black Hills Corporation dated as of September
1, 1999
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
4.3 Indenture of Trust dated June 1,
1992, City of Gillette, Campbell
County, Wyoming; Lawrence County,
South Dakota; Pennington County,
South Dakota; Weston County,
Wyoming; and Campbell County,
Wyoming; to Norwest Bank
Minnesota, National Association,
as Trustee (Exhibits 10(n), 10(q),
10(s), 10(u), and 10(w) to Form
10-K for 1992.
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
4.4 Statement of Designations, Preferences and Relative
Rights and Limitations of No Par Preferred Stock,
Series 2000-A of Black Hills Corporation
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
5 Opinion of Morrill Thomas Nooney & Braun LLP regarding
legality
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
8 Opinion of Morgan, Lewis & Bockius LLP regarding
federal income tax matters
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
13 Black Hills Corporation's Annual
Report on Form 10-K for the fiscal
year ended December 31, 1999
(incorporated by reference, filed March 13, 2000, File
No. 1-7978)
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
21 List of Subsidiaries of Black Hills Corporation
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
23.1 Consent of Arthur Andersen LLP
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
23.2 Consent of Morrill Thomas Nooney &
Braun LLP (included in its opinion
filed as Exhibit 5)
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
23.3 Consent of Morgan, Lewis & Bockius
LLP (included in its opinion filed
as Exhibit 8)
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
24.1 Powers of Attorney (included as part of the signature
page hereto)
--------------------- --------------------------------------------------------
--------------------- --------------------------------------------------------
27 Financial Data Schedule
--------------------- --------------------------------------------------------
Exhibit 3.3
ARTICLES OF INCORPORATION
OF
BLACK HILLS HOLDING CORPORATION
Executed by the undersigned for the purpose of forming a South Dakota
business corporation under Chapter 47 of SDCL.
ARTICLE I.
The name of the Corporation is Black Hills Holding Corporation.
ARTICLE II.
The period of existence is perpetual.
ARTICLE III.
The purposes for which this Corporation is organized include, without
limitation, to acquire, hold, purchase, sell, assign, transfer, exchange,
mortgage, pledge, or otherwise dispose of shares of the capital stock of, or any
bonds, securities or evidences of indebtedness created by, any other corporation
of the state of South Dakota, or any other state, and, while the owner of such
stock, to exercise all the rights, powers and privileges of ownership, including
the right to vote thereon; to enter into plans of merger, consolidation, or
exchange with any other corporation of the state of South Dakota or any other
state; to aid in any manner any corporation or association, any shares of stock
of which, or any bonds, debentures, notes, securities, evidences of
indebtedness, contracts, or obligations of which, are held by or for the
Corporation, or in which, or in the welfare of which, the Corporation shall have
any interest; to do any acts designed to protect, preserve, improve or enhance
the value of any property at any time held or controlled by the Corporation, or
in which it may be at any time interested; to organize, promote, or facilitate
the organization of subsidiary companies; to purchase, hold, sell and transfer
shares of its own capital stock in the manner and to the extent provided by any
law, rule or regulation; and to generally engage in any lawful act or activity
and to enjoy and exercise all the rights, powers and privileges which are now or
may hereafter be conferred upon corporations organized under the laws of the
state of South Dakota. The foregoing clauses shall be construed both as objects
and powers, and it is hereby expressly provided that the above enumeration of
specific purposes and powers shall not be held to limit or restrict in any
manner the purposes and powers of the Corporation, but is in furtherance of and
in addition to the general powers conferred by the laws of the state of South
Dakota.
ARTICLE IV.
The amount of total authorized capital stock of the Corporation is
125,000,000 shares consisting of:
A. 100,000,000 shares of Common Stock, having a par value of $1
per share; and
B. 25,000,000 shares of Preferred Stock, without par value.
ARTICLE V
A. Each holder of Common Stock shall at every meeting of the shareholders
be entitled to one vote for each share of Common Stock held by him.
B. The Board of Directors of the Corporation is authorized, subject to
limitations prescribed by law, to provide for the issuance of shares of
Preferred Stock in series, and by filing a statement pursuant to the applicable
law of the state of South Dakota, to establish from time to time the number of
shares to be included in such series, and to fix the designations, powers,
preferences and rights of the shares of each such series and the qualifications,
limitations, and restrictions thereof.
The authority of the Board of Directors with respect to each series
shall include, but not be limited to, determination of the following:
1) The number of shares constituting that series and the distinctive
designation of that series;
2) The dividend rate on the shares of that series, whether dividends
shall be cumulative, and, if so, from which date or dates, and the
relative rights of priority, if any, of payment of dividends on the
shares of that series;
3) Whether that series shall have voting rights, in addition to any
voting rights provided by law, and if so, the terms of such voting
rights, including, but not limited to, rights to elect a specified
number of Directors in the event that dividends, if any, on Preferred
Stock, remain unpaid for a specified period of time;
4) Whether that series shall have conversion privileges, and, if so, the
terms and conditions of such conversion, including provisions for
adjustment of the conversion rate in such events as the Board of
Directors shall determine;
5) Whether or not the shares of that series will be redeemable, and, if
so, the terms and conditions of such redemption, including the date or
date upon or after which they shall be redeemable, and the amount per
share payable in case of redemption, which amount may vary under
different conditions and at different redemption dates;
6) Whether that series shall have a sinking fund for the redemption or
purchase of shares of that series, and, if so, the terms and amount of
such sinking fund;
7) The rights of the shares of that series in the event of voluntary or
involuntary liquidation, dissolution, or winding up of the
corporation, and the relative rights of priority, if any, of payment
of shares of that series;
8) Any other relative rights, preferences, and limitations of that
series.
Dividends on outstanding shares of Preferred Stock shall be paid or
declared and set apart for payment before any dividends shall be paid or
declared and set apart for payment on the Common Stock with respect to the same
dividend period.
If upon any voluntary or involuntary liquidation, dissolution, or
winding up of the Corporation, the assets available for distribution to holders
of shares of Preferred Stock of all series shall be insufficient to pay such
holders the full preferential amount to which they are entitled, then such
assets shall be distributed ratably among the shares of all series of Preferred
Stock in accordance with the respective preferential amounts (including unpaid
cumulative dividends, if any) payable with respect thereto.
C. Neither the holders of the Common Stock nor the holders of any Preferred
Stock shall have any preemptive rights to subscribe to any issue of stock or
other securities of any class of the Corporation.
ARTICLE VI.
The business and affairs of the Corporation shall be managed by or
under the direction of a Board of Directors, the number of which shall not be
less than nine; provided, (i) the Board of Directors may change the number of
Directors by amendments to its bylaws, and (ii) whenever the holders of any one
or more series of Preferred Stock shall have the right, voting separately as a
class, to elect one or more Directors of the Corporation, the number of
Directors shall be increased to the extent necessary to give effect to such
voting rights.
The Board of Directors shall be and is divided into three classes:
Class I, Class II, and Class III, which shall be as nearly equal in number as
possible, with the term of office of one class expiring each year. At the annual
meeting of shareholders in 2000, Directors of the first class shall be elected
to hold office for a term expiring at the next succeeding annual meeting;
Directors of the second class shall be elected to hold office for a term
expiring at the second succeeding annual meeting; and Directors of the third
class shall be elected to hold office for a term expiring at the third
succeeding annual meeting.
Any vacancies in the Board of Directors, for any reason, including any
newly created directorships resulting from any increase in the number of
Directors may be filled by the Board of Directors, acting by a majority of the
directors then in office, although less than a quorum, and any Director so
chosen shall hold office until the next election of the class for which such
Director shall have been chosen.
The Board of Directors is expressly authorized to determine the rights,
powers, duties, rules and procedures that affect the power of the Board of
Directors to manage and direct the business and affairs of the corporation,
including the power to designate and empower the committees of the Board of
Directors, to elect, appoint and empower the officers and other agents of the
corporation, and to determine the time and place of, and the notice requirements
for, Board meetings as well as quorum and voting requirements for, and the
manner of taking, Board action.
Each Director shall serve for a term continuing until the annual
meeting of shareholders at which the term of the class to which he was elected
expires and until his successor is elected and qualified or until his or her
earlier death, resignation or removal; except a Director may be removed from
office prior to the expiration of his or her term only for cause and by a vote
of the majority of the total number of members of the Board of Directors without
including the Director who is the subject of the removal determination and
without such Director being entitled to vote thereon.
Notwithstanding anything contained in this Articles to the contrary,
the affirmative vote or concurrence of the holders of at least 80 percent of the
Common Stock entitled to vote thereon and 66 percent of the Preferred Stock
entitled to vote thereon shall be required to alter, amend, or repeal this
Article VI.
ARTICLE VII.
A. In addition to any other approvals and voting requirements mandated by
law and other provisions of these Articles of Incorporation, the affirmative
vote of the holders of not less than eighty percent (80%) of the outstanding
shares of "Voting Stock" (as hereinafter defined) of this Corporation (the
"Company") shall be required for the approval or authorization of any "Business
Transaction" (as hereinafter defined) with any "Related Person" (as hereinafter
defined) or any Business Transaction in which a Related Person has an interest
(except proportionately as a shareholder of the Company); provided, the eighty
percent (80%) voting requirement shall not be applicable if either:
1) the "Continuing Directors" (as hereinafter defined) of the
Company by at least a majority vote thereof (a) have expressly
approved in advance the acquisition of the outstanding shares of
Voting Stock that caused such Related Person to become a Related
Person, or (b) have expressly approved such Business Transaction; or
2) all of the following conditions (a), (b) and (c) shall have
been met:
(a) the cash or fair market value (as determined by at least a
majority of the Continuing Directors) of the property,
securities or other consideration to be received per share by
holders of Voting Stock of the Company (other than the Related
Person) in the Business Transaction is not less than the
"Highest Purchase Price" or the "Highest Equivalent Price" (as
those terms are hereinafter defined) paid by the Related
Person involved in the Business Transaction in acquiring any
of its holdings of the Company's Voting Stock;
(b) the ratio of:
(w) the aggregate amount of the cash and the fair
market value or other consideration to be received
per share by holders of Common Stock in such Business
Transaction, to
(x) the market price of the Common Stock immediately
prior to the announcement of such Business
Transaction,
is at least as great as the ratio of:
(y) the highest per share price (including brokerage
commissions, transfer taxes and soliciting dealers'
fees) which the Related Person involved in such
Business Transaction has theretofore paid for any
shares of Common Stock acquired by it, to
(z) the market price of the Common Stock immediately
prior to the initial acquisition by such Related
Person of any Common Stock; and
(c) the consideration to be received by holders of each class
of capital stock in such Business Transaction shall be the
same form and of the same kind as the consideration paid by
the Related Person in acquiring the shares of that class of
capital stock already owned by it.
B. For purposes of this Article VII:
1) The term "Business Transaction" shall include, without
limitation, (a) any merger, consolidation or plan of exchange of the
Company, or any entity controlled by or under common control with the
Company, with or into any Related Person, or any entity controlled by
or under common control with such Related Person, (b) any merger,
consolidation or plan of exchange of a Related Person, or any entity
controlled by or under common control with such Related Person, with
or into the Company or any entity controlled by or under common
control with the Company, (c) any sale, lease, exchange, transfer or
other disposition (in one transaction or a series of transactions),
including without limitation a mortgage or any other security device,
of all or any "Substantial Part" (as hereinafter defined) of the
property and assets of the Company, or any entity controlled by or
under common control with the Company, to a Related Person, or any
entity controlled by or under common control with such Related Person,
(d) any purchase, lease, exchange, transfer or other acquisition (in
one transaction or a series of transactions), including, without
limitation, a mortgage or any other security device, of all or any
Substantial Part of the property and assets of a Related Person or any
entity controlled by or under common control with such Related Person,
by the Company or any entity controlled by or under common control
with the Company, (e) any recapitalization of the Company that would
have the effect of increasing the voting power of a Related Person,
(f) the issuance, sale, exchange or other disposition of any
securities of the Company, or of any entity controlled by or under
common control with the Company, by the Company or by any entity
controlled by or under common control with the Company, (g) any
liquidation, spin-off, split-off, split-up or dissolution of the
Company, and (h) any agreement, contract or other arrangement
providing for any of the transactions described in this definition of
Business Transaction.
2) The term "Related Person" shall mean and include (a) any
individual, corporation, association, trust, partnership or other
person or entity (a "Person") which, together with its "Affiliates"
(as hereinafter defined) and "Associates" (as hereinafter defined),
"Beneficially Owns" (as defined in Rule 13d-3 of the General Rules and
Regulations under the Securities Exchange Act of 1934 as in effect at
March 27, 1986) in the aggregate ten percent (10%) or more of the
outstanding Voting Stock of the Company, and (b) any Affiliate or
Associate (other than the Company or a subsidiary of the Company of
which the Company owns, directly or indirectly, more than eighty
percent (80%) of the voting stock) of any such Person. Two or more
Persons acting in concert for the purpose of acquiring, holding or
disposing of Voting Stock of the Company shall be deemed a "Person."
3) Without limitation, any share of Voting Stock of the Company
that any Related Person has the right to acquire at any time
(notwithstanding that Rule 13d-3 deems such shares to be beneficially
owned only if such right may be exercised within 60 days) pursuant to
any agreement, contract, arrangement or understanding, or upon
exercise of conversion rights, warrants or options, or otherwise,
shall be deemed to be Beneficially Owned by such Related Person and to
be outstanding for purposes of clause B(2) above.
4) For the purposes of subparagraph (2) of paragraph A. of this
Article VII, the term "other consideration to be received" shall
include, without limitation, Common Stock or other capital stock of
the Company retained by its existing stockholders, other than any
Related Person or other Person who is a party to such Business
Transaction, in the event of a Business Transaction in which the
Company is the survivor.
5) The term "Voting Stock" shall mean all of the outstanding
shares of capital stock of the Company entitled to vote generally in
the election of Directors, considered as one class, and each reference
to a proportion of shares of Voting Stock shall refer to such
proportion of the votes entitled to be cast by such shares.
6) The term "Continuing Director" shall mean any member of the
Board of Directors of the Company (the "Board") who is unaffiliated
with, and not a nominee of, the Related Person involved in a Business
Transaction and was a member of the Board prior to the time that the
Related Person became a Related Person and any successor of a
Continuing Director who is unaffiliated with, not a nominee of, the
Related Person and is designated to succeed a Continuing Director by a
majority of Continuing Directors then on the Board.
7) A Related Person shall be deemed to have acquired a share of
the Voting Stock of the Company at the time when such Related Person
became the Beneficial Owner thereof. With respect to the shares owned
by Affiliates, Associates or other Persons whose ownership is
attributed to a Related Person under the foregoing definition of
Related Person, if the price paid by such Related Person for such
shares is not determinable by a majority of the Continuing Directors,
the price so paid shall be deemed to be the higher of (a) the price
paid upon the acquisition thereof by the Affiliate, Associate or other
Person or (b) the market price of the shares in question at the time
when such Related Person became the Beneficial Owner thereof.
8) The terms "Highest Purchase Price" and "Highest Equivalent
Price" as used in this Article VII shall mean the following: If there
is only one class of capital stock of the Company issued and
outstanding, the Highest Purchase Price shall mean the highest price
that can be determined to have been paid at any time by the Related
Person involved in the Business Transaction for any share or shares of
that class of capital stock. If there is more than one class of
capital stock of the Company issued and outstanding, the Highest
Equivalent Price shall mean, with respect to each class and series of
capital stock of the Company, the amount determined by a majority of
the Continuing Directors, on whatever basis they believe is
appropriate, to be the highest per share price equivalent to the
highest price that can be determined to have been paid at any time by
the Related Person for any share or shares of any class or series of
capital stock of the Company. The Highest Purchase Price and the
Highest Equivalent Price shall include any brokerage commissions,
transfer taxes and soliciting dealers' fees paid by a Related Person
with respect to the shares of capital stock of the Company acquired by
such Related Person. In the case of any Business Transaction with a
Related Person, the Continuing Directors shall determine the Highest
Purchase Price or the Highest Equivalent Price for each class and
series of the capital stock of the Company. The Highest Purchase Price
and Highest Equivalent Price shall be appropriately adjusted to
reflect the occurrence of any reclassification, recapitalization,
stock split, reverse stock split or other readjustment in the number
of outstanding shares of capital stock of the Company, or the
declaration of a stock dividend thereon, between the last date upon
which the Related Party paid the Highest Purchase Price or Highest
Equivalent Price and the effective date of the merger or consolidation
or the date of distribution to stockholders of the Company of the
proceeds from the sale of all or substantially all of the assets of
the Company.
9) The term "Substantial Part" shall mean ten percent (10%) or
more of the fair market value of the total assets of the Person in
question, as reflected on the most recent balance sheet of such Person
existing at the time the stockholders of the Company would be required
to approve or authorize the Business Transaction involving the assets
constituting any such Substantial Part.
10) The term "Affiliate," used to indicate a relationship with a
specified Person, shall mean a Person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or
is under common control with, the Person specified.
11) The term "Associate," used to indicate a relationship with a
specified Person, shall mean (a) any entity of which such specified
Person is an officer or partner or is, directly or indirectly, the
beneficial owner of ten percent (10%) or more of any class of equity
securities, (b) any trust or other estate in which such specified
Person has a substantial beneficial interest or as to which such
specified Person serves as trustee or in a similar fiduciary capacity,
(c) any relative or spouse of such specified Person, or any relative
of such spouse, who has the same home as such specified Person or who
is a Director or officer of the Company or any of its subsidiaries,
and (d) any Person who is a Director or officer of such specified
Person or any of its parents or subsidiaries (other than the Company
or an entity controlled by or under common control with the Company).
12) The term "subsidiary," when used to indicate a relationship
with a specified Person, shall mean an Affiliate controlled by such
Person directly, or indirectly through one or more intermediaries.
C. For the purposes of this Article VII, a majority of the Continuing
Directors shall have the power to make a good faith determination, on the basis
of information known to them, of: 1) the number of shares of Voting Stock that
any Person Beneficially Owns, 2) whether a Person is an Affiliate or Associate
of another, 3) whether a Person has an agreement, contract, arrangement or
understanding with another or some other right as to the matters referred to in
subparagraph B(1)(h) or B(3) hereof, 4) whether the assets subject to any
Business Transaction constitute a Substantial Part, 5) whether any Business
Transaction is one in which a Related Person has an interest (except
proportionately as a shareholder of the Company), 6) the date of the initial
acquisition of Common Stock by a Related Person, 7) whether the consideration to
be received is in the same form as to the matter referred to in subparagraph
A(2)(c), and 8) such other matters with respect to which a determination is
required under this Article VII.
D. The provisions set forth in this Article VII may not be amended, altered,
changed or repealed in any respect unless such action is approved by the
affirmative vote of the holders of not less than eighty percent (80%) of the
outstanding shares of Voting Stock of the Company.
ARTICLE VIII.
The Corporation will not commence business until consideration of the
value of at least $1,000 has been received for issuance of shares.
ARTICLE IX.
The complete address, including the street address of the Corporation's
registered office is 625 Ninth Street, Rapid City, South Dakota 57701, and the
name of its registered agent at such address is Roxann R. Basham.
ARTICLE X.
The number of Directors constituting the initial Board of Directors is
one and the name and address of the persons who is to serve as initial Director:
NAME ADDRESS
Roxann R. Basham 625 Ninth Street, 4th floor
P. O. Box 1400
Rapid City, SD 57709-1400
ARTICLE XI.
The name and address of the incorporator is:
NAME ADDRESS
Roxann R. Basham 625 Ninth Street, 4th floor
P. O. Box 1400
Rapid City, SD 57709-1400
ARTICLE XII.
Except as otherwise expressly provided by the laws of the State of
South Dakota, the following additional provisions are inserted for the
regulation of the business and for the conduct of the affairs of this
Corporation and its Directors and shareholders:
A. No contract or other transaction between this Corporation and any other
corporation shall be void or voidable because of the fact that Directors of this
Corporation are Directors of such other corporation, if such contract or
transaction shall be approved or ratified by the affirmative vote of a majority
of the Directors present at a meeting of the Board of Directors, who are not so
interested. Any Director individually, or any firm of which any Director is a
partner, may be a party to or may be interested in any contract or transaction
of this Corporation provided that such contract or transaction shall be approved
or ratified by the affirmative vote of at least a majority of the Directors
present at a meeting of the Board of Directors, who are not so interested, nor
shall any Director be liable to account to this Corporation for any profit
realized by him from or through any such transaction or contract of this
Corporation, ratified or approved as aforesaid, by reason of his interest in
such transaction or contract. Directors so interested may be counted when
present at meetings of the Board of Directors for the purpose of determining the
existence of a quorum.
B. The Board of Directors, in addition to the powers and authority
expressly conferred upon it hereinbefore and by statute and by the Bylaws, is
hereby empowered to exercise all such powers as may be exercised by the
Corporation; subject, nevertheless, to the provisions of the laws of the State
of South Dakota and of these Articles of Incorporation.
C. To the fullest extent permitted by South Dakota law governing this
Corporation as the same exists or may hereafter be amended, a Director of this
Corporation shall not be personally liable to the Corporation or its
shareholders for monetary damages for breach of fiduciary duty as a Director,
except for liability (i) for any breach of the Director's duty of loyalty to the
Corporation or its shareholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
any violation of ss.ss. 47-5-15 to 47-5-19, inclusive, of the South Dakota
Codified Laws, or (iv) for any transaction from which the Director derived an
improper personal benefit.
D. The provisions of South Dakota Codified Laws ss.ss. 47-33-8 through
47-33-16, inclusive, do not apply to control share acquisitions (as defined by
South Dakota Codified Laws ss. 47-33-3(l)) of shares of this Corporation.
Dated this ____ day of _____________, 2000.
---------------------------------------
ROXANN R. BASHAM
STATE OF SOUTH DAKOTA
COUNTY OF PENNINGTON
On this ____ day of ____________, 2000, before me, the undersigned
officer, appeared Roxann R. Basham, known to me or satisfactorily proven to be
the person whose name is subscribed to the foregoing instrument and she
acknowledged to me that she executed the same for the purposes contained
therein.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
----------------------------------
Notary Public
(SEAL)
CONSENT OF REGISTERED AGENT
I, Roxann R. Basham, hereby give my consent to serve as the registered
agent for Black Hills Holding Corporation.
Dated ________________, 2000.
-----------------------------------
Roxann R. Basham
Exhibit 3.4
BLACK HILLS HOLDING CORPORATION
BYLAWS
ARTICLE I
MEETINGS OF SHAREHOLDERS
Section 1. Place. Meetings of the shareholders shall be held at such
place within or without the State of South Dakota as the Board of Directors may
from time to time determine and as stated in the notice of the meeting.
Section 2. Annual Meeting. The annual meeting of the shareholders shall
be held at such time within six months after the end of each fiscal year of the
Company as the Board of Directors designates for the purpose of electing
directors and for the transacting of any other business as may be brought before
the meeting.
Section 3. Special Meetings. All annual and special meetings of the
shareholders shall be called by a majority of the Board of Directors.
Section 4. Notice. Unless all shareholders entitled to vote at the
meeting waive notice in writing, written notice stating the place, day and hour
of each meeting of shareholders, and in the case of a special meeting, further
stating the purpose for which such meeting is called, shall be mailed at least
ten days before the meeting when called by the Board of Directors to each
stockholder of record who shall be entitled to vote thereat to the last known
post office address of each such stockholder as it appears upon the stock
transfer books of the Company. However, notice of a meeting, at which proposal
to increase the capital stock or indebtedness is to be considered, shall be
given at least sixty days prior to such meeting.
Section 5. Quorum. The holders of a majority of the issued and
outstanding shares of the capital stock of the Company entitled to vote thereat,
present in person or represented by proxy, shall constitute a quorum for the
transaction of business at all meetings of the shareholders except as may
otherwise be provided by law or by the Articles of Incorporation. If a quorum or
greater number as may be required by law or the Articles shall not be present or
represented at any meeting of the shareholders, a majority of the shareholders
who are present in person or by proxy and who are entitled to vote thereat shall
have the power to adjourn the meeting from time to time without notice other
than announcement at the meeting until such quorum or such greater number shall
have been obtained.
14
Section 6. Adjourned Meeting. The majority of the shareholders who are
entitled to vote and who are present in person or by proxy at any regular or
special meeting of the shareholders shall have the right to adjourn the meeting
from time to time without notice other than announcement at the meeting to be
adjourned; provided, however, the meeting may not be adjourned for a period
longer than sixty days from the date of the meeting as set forth in the notice
thereof.
Section 7. Voting. At each meeting of the shareholders, every
stockholder having the right to vote shall be entitled to vote one vote per
share in person or by proxy appointed by an instrument in writing subscribed by
such stockholder. No proxy shall be valid after eleven months from the date of
its execution, unless otherwise provided in the proxy. All voting for directors
shall be by written ballot. All elections shall be had and all questions decided
by a plurality except as otherwise provided by law or by the Articles of
Incorporation.
Section 8. Inspectors. The Board of Directors or, if the Board shall
not have made the appointment, the person presiding at any meeting of
shareholders shall have power to appoint one or more persons, other than the
nominees for directors, to act as inspectors to receive, canvass and report the
votes cast by the shareholders at such meeting. Any inspector so appointed who
for any reason does not serve in such capacity may be replaced by the person
presiding at the meeting.
ARTICLE II
BOARD OF DIRECTORS
Section 1. Definitions. For the purposes of these Bylaws an "Inside
Director" is a director who is an employee of the Company, an officer of the
Company, a person who has in the past served as an officer of the Company or any
person whose relationship to the Company other than as a director gives him
access on a regular basis to material information about the Company that is not
generally available. Any director who is not an Inside Director would for the
purpose of these Bylaws constitute an "Outside Director." For the purpose of
this Section "Company" shall also include any subsidiary of the Company.
Section 2. Management of the Company. The property, business and
affairs of the Company shall be managed by or under the direction of its Board
of Directors.
Section 3. Qualifications of Directors. At the time a person is elected
as director by the shareholders, that person must beneficially own at least 100
shares of the common stock of the Company; and if such person is elected by the
shareholders, the person must be duly qualified to vote such stock at the said
election. Each director is required to apply at least 50 percent of his or her
retainer toward the purchase of additional shares until the director has
accumulated at least 2,000 shares of common stock. No person shall be elected or
stand for reelection as a director who will be sixty-five years of age or older
on the thirty-first day of December of the year of the election, except in the
event the Board of Directors has not yet identified a director to be elected to
replace any director who will be sixty-five years of age during the year in
which he or she stands for reelection, a director may stand for reelection
solely for the purpose of filling the slate of directors. However, upon the
Board of Directors' choosing a replacement director, the incumbent director
shall tender his or her resignation to the Chairman.
Section 4. Number and Election; Vacancies and Removal. The number of
members of the Board of Directors shall not be less than nine (9); provided, the
Board of Directors may change the number of directors through amendments to its
Bylaws. The Board of Directors shall be and is divided into three classes, Class
I, Class II and Class III, which shall be as nearly equal in number as possible.
Each director shall serve for a term ending on the date of the third annual
meeting following the annual meeting at which such director was elected;
provided, each initial director in Class I shall hold office until the annual
meeting of shareholders in 2002, each initial director in Class II shall hold
office until the annual meeting of shareholders in 2003, and each initial
director in Class III shall hold office until the annual meeting of shareholders
in 2001.
The Board of Directors is expressly authorized to determine the rights,
powers, duties, rules and procedures that affect the power of the Board of
Directors to manage and direct the business and affairs of the Corporation,
including the power to designate and empower committees of the Board of
Directors, to elect, appoint and empower the officers and other agents of the
Corporation, and to determine the time and place of, and the notice requirements
for, Board meetings, as well as quorum and voting requirements for, and the
manner of taking, Board action.
In the event of any change in the authorized number of directors, the
Board of Directors shall apportion any newly created directorships to, or reduce
the number of directorships in, such class or classes as shall, so far as
possible, equalize the number of directors in each class. The Board of Directors
shall allocate consistently with the rule that the three classes shall be as
nearly equal in number of directors as possible, any newly-created directorship
to the class the term of office of which is due to expire at the latest date
following such allocation.
Any vacancies in the Board of Directors for any reason, including any
newly created directorships resulting from any increase in the number of
directors, may be filled by the Board of Directors, acting by a majority of the
directors then in office, although less than a quorum; and any directors so
chosen shall hold office until the next election of the class for which such
directors shall have been chosen.
Notwithstanding any of the foregoing, each director shall serve for a
term continuing until the annual meeting of shareholders at which the term of
the class to which he was elected expires and until his successor is elected and
qualified or until his or her earlier death, resignation or removal; except, a
director may be removed from office prior to the expiration of his or her term
only for cause and by a vote of the majority of the total number of members of
the Board of Directors without including the director who is the subject of the
removal determination and without such director being entitled to vote thereon.
Section 5. Compensation. Outside Directors shall be entitled to such
compensation and expenses as may be determined by resolution of the Board.
Outside Directors may serve the Company in other capacities and receive
compensation therefor.
Section 6. Meetings. The Board of Directors may hold meetings within or
without the State of South Dakota. Members of the Board of Directors or any
committee thereof may participate in a meeting of such Board or committee by
means of a conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other at the same
time, and participation by such means shall constitute presence in person at a
meeting.
Section 7. Regular Meetings. The annual meeting of the Board of
Directors for the election of officers and to conduct such other business to be
brought before the meeting shall, if practicable, be held on the same day as and
immediately after the annual election of the directors by the shareholders or
any adjournment thereof, and no notice thereof need be given. Further regular
meetings of the Board may be held with or without notice at such time and place
as shall from time to time be determined by the Board by resolution.
Section 8. Special Meetings. Special meetings of the Board of Directors
may be called either by the Chairman of the Board and Chief Executive Officer,
the President or by the Secretary upon the written request of any two directors
by giving oral or written notice to each director stating the time and place of
such meeting.
Section 9. Notice of Meetings. Notice shall be considered to have been
given if a notice is either orally communicated to a director at least twelve
hours prior to such meeting or placed in writing and mailed to the director at
his last known post office address as shown by the records of the Company at
least four days prior to the meeting. Any notice to be given a director for a
meeting of the directors may be waived by the director in writing either before
or after the meeting. Presence of any director at a meeting of the Board shall
be considered to be a waiver of notice by such director unless such director
attends a meeting for the express purpose of objecting to the transaction of any
business because the meeting is not lawfully called or convened. Neither the
business to be transacted nor the purpose of any regular or special meeting of
the Board of Directors need be specified in the notice or waiver of notice of
such meeting.
Section 10. Quorum. At all meetings of the Board of Directors a
majority of the number of directors at the time in office shall constitute a
quorum for the transaction of business; provided, less than a quorum of
directors may fill vacancies as set forth in Section 4 of this Article II. The
act of a majority of the number of directors at the time in office shall be the
act of the Board of Directors. If at any meeting of the board there shall be
less than a quorum present, a majority of those present may adjourn the meeting
from time to time until a quorum is obtained and no further notice thereof need
be given other than by announcement at said meeting which shall be so adjourned.
Section 11. Manifestation of Dissent. A director of the Company who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless
his dissent shall be entered in the minutes of the meeting or unless he shall
file his written dissent to such action with the person acting as the secretary
of the meeting before the adjournment thereof or shall forward such dissent by
registered mail to the Secretary of the Company immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a director
who voted in favor of such action.
Section 12. Action Taken Without Meeting. Any action which may be taken
at a meeting of the directors or of a committee may be taken without a meeting
if a consent in writing setting forth the actions so to be taken shall be signed
before such action by all of the directors, or all of the members of the
committee, as the case may be. Such consent shall have the same effect as a
unanimous vote.
ARTICLE III
COMMITTEES
Section 1. Executive Committee. The Board of Directors shall appoint
from among its members an executive committee of at least five directors. The
Chairman of the Board and Chief Executive Officer and President shall be a
member of the executive committee. At least three members of the executive
committee shall be Outside Directors. The executive committee (i) shall
recommend to the Board persons to be elected as officers, (ii) recommend persons
to be appointed to Board committees, (iii) may consider and make recommendations
to the Board on other Board actions and (iv) may perform such other duties as
may be permitted by law.
Section 2. Audit Committee. The Board of Directors shall appoint at
least three of its Outside Directors to serve as an audit committee, all of whom
shall have no relationship to the Company that may interfere with the exercise
of their independence from management. The audit committee shall meet prior to
and after each yearly audit with representatives of the independent accounting
firm approved by the shareholders for the purpose of reviewing the audit of such
firm of the Company's financial condition and shall each year recommend to the
Board an independent accounting firm to be appointed by the Board for the
ratification by the shareholders and shall perform such other duties as assigned
by the Board.
Section 3. Compensation Committee. The Board of Directors shall appoint
at least three of its Outside Directors to serve as a compensation committee.
The compensation committee (i) shall perform any function required by directors
in the administration of all federal and state statutes relating to employment
and compensation, (ii) shall recommend to the Board the compensation for
officers, and (iii) shall consider and approve the compensation program,
including the benefit program and stock ownership plans, of the Company.
Section 4. Director Nominating Committee. The Board of Directors shall
appoint a director nominating committee to be composed of the Chief Executive
Officer and a number of Outside Directors as determined by the Board of
Directors. An outside director shall be appointed by the Board of Directors to
serve as chairman of the director nominating committee. The director nominating
committee shall recommend to the Board of Directors persons to be nominated as
directors or to be elected to fill vacancies on the Board of Directors.
Section 5. Other Committees. The Board of Directors may also appoint
from among its own members such other committees as the Board may determine and
assign such powers and duties as shall from time to time be prescribed by the
Board.
Section 6. Removal from Committees and Rules of Procedure. Subject to
these Bylaws directors may be removed from the committees and vacancies therein
may be filled by a majority of the Board of Directors. A meeting of any
committee may be called by any member of the committee. The provisions of these
Bylaws concerning notice of meetings, compensation, manifestation of dissent and
taking action without a meeting as they pertain to directors shall also pertain
to committee meetings.
ARTICLE IV
OFFICERS
Section 1. Officers. The Board of Directors shall elect as officers of
the Company a Chairman of the Board, who shall be the Chief Executive Officer, a
President, a Vice President, a Secretary, a Treasurer and may elect a Controller
and such other Vice Presidents and other officers as the Board may determine is
necessary for the conduct of the business of the Company. Officers need not be
directors except for the Chairman of the Board. Any two or more offices may be
held by the same person. No person shall hold an officer position after the last
day of the month during which said person became sixty-five years of age.
Section 2. Term and Removal. All officers of the Company shall serve at
the pleasure of the Board of Directors, and the Board at any regular or special
meeting by the vote of a majority of the whole Board may remove an officer from
an office.
Section 3. Duties of Chairman of the Board and Chief Executive Officer.
The Chairman of the Board and Chief Executive Officer shall be the chief
administrative officer of the Company. The Chairman of the Board and Chief
Executive Officer (i) shall exercise such duties as customarily pertain to the
office of Chief Executive Officer, (ii) shall have general and active management
authority and supervision over the property, business and affairs of the company
and over its officers and employees, (iii) may appoint employees, consultants
and agents as deemed necessary for the proper conduct of the Company's business,
(iv) may sign, execute and deliver in the name of the Company powers of
attorney, contracts, bonds and other obligations subject to direction of the
Board as set forth in Article VII of these Bylaws, (v) shall recommend to the
Board of Directors persons for appointment to offices and committees and for
nomination of directors, (vi) shall preside at stockholder meetings and at
meetings of the Board of Directors, and (vii) shall perform such other duties as
may be prescribed from time to time by the Board of Directors.
Section 4. Duties of the President. The President shall perform such
duties as may be prescribed from time to time by the Board of Directors or by
the Chairman of the Board and Chief Executive Officer. The President, in the
absence or disability of the Chairman of the Board and Chief Executive Officer,
shall perform the duties and exercise the powers of the Chairman of the Board
and Chief Executive Officer.
Section 5. Duties of Vice Presidents. The Vice Presidents shall have
such powers and perform such duties as may be assigned to them by the Board of
Directors, or the Chairman of the Board and Chief Executive Officer. In the
absence or disability of the Chairman of the Board and Chief Executive Officer,
and the President, the Vice Presidents in the order as designated by the Board,
or if the Board so directs, by the Chairman of the Board and Chief Executive
Officer, shall perform the duties and exercise the powers of the Chairman of the
Board and Chief Executive Officer.
Section 6. Duties of Secretary. The Secretary shall attend all meetings
of the Board and shareholders, record all votes and the minutes of all
proceedings in books to be kept for such purposes and shall perform like duties
for the committees when required. The Secretary shall have the custody of the
seal. The Secretary shall have the custody of the stock books and shall perform
such other duties as may be prescribed by the Board of Directors or the Chairman
of the Board and Chief Executive Officer.
Section 7. Duties of Treasurer. The Treasurer shall have the custody of
the corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books of the Company and shall deposit all monies
and other valuable effects in the name and to the credit of the Company in such
depositories as may be designated by the Board of Directors. The Treasurer shall
disburse the funds of the Company as may be ordered by the Board, taking proper
vouchers for such disbursements and shall render to the Chairman of the Board
and Chief Executive Officer and to the Board of Directors at its regular
meetings or whenever they may require it, an account of all his transactions as
Treasurer and of the financial condition of the Company.
Section 8. Duties of Other Officers. All other officers of the Company
shall have such duties as shall be prescribed by the Board of Directors or the
Chairman of the Board and Chief Executive Officer.
Section 9. Delegation of Duties of Officers. In the case of the absence
of any officer of the Company or for any other reason that the Board may deem
sufficient, the Board may delegate the powers or duties of any officer to any
other officer or to any director for such time as determined by the Board.
Section 10. Compensation of Officers. The compensation of the Chairman
of the Board and Chief Executive Officer shall be determined by the Board of
Directors. The compensation of each of the other officers shall be recommended
by the Chairman of the Board and Chief Executive Officer and approved by the
Board of Directors. No officer shall be prevented from receiving such salary by
reason of the fact that he is also a director of the Company.
ARTICLE V
INDEMNIFICATION
Section 1. Actions, Suits or Proceedings Other than by or in the Right
of the Company. The Company shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
including all appeals, (other than an action by or in the right of the Company)
by reason of the fact that he is or was or has agreed to become a director or
officer of the Company, or is or was serving or had agreed to serve at the
request of the Company as a director or officer of another corporation
(including a subsidiary of the corporation, or subsidiaries of subsidiaries),
partnership, joint venture, trust or other enterprise, or by reason of any
action alleged to have been taken or omitted in such capacity, against costs,
charges, expenses (including attorneys' fees), judgments, fines, penalties and
amounts paid in settlement actually and reasonably incurred by him or on his
behalf in connection with such action, suit or proceeding and any appeal
therefrom, if he acted in good faith and in a manner he reasonably believed to
be within the scope of his authority and in, or not opposed to, the best
interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be within the scope of his authority and
in, or not opposed to, the best interests of the Company and, with respect to
any criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
Section 2. Actions or Suits by or in the Right of the Company. The
Company shall indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
including all appeals, by or in the right of the Company to procure a judgment
in its favor by reason of the fact that he is or was or has agreed to become a
director or officer of the Company or is or was serving or has agreed to serve
at the request of the Company as a director or officer of another corporation
(including a subsidiary of the corporation or subsidiaries of subsidiaries),
partnership, joint venture, trust or other enterprise, or by reason of any
action alleged to have been taken or omitted in such capacity, against costs,
charges and expenses (including attorneys' fees) actually and reasonably
incurred by him or on his behalf in connection with the defense or settlement of
such action or suit and any appeal therefrom, if he acted in good faith and in a
manner he reasonably believed to be within the scope of his authority and in, or
not opposed to, the best interests of the Company, except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Company unless
and only to the extent that the Courts of South Dakota or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of such liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such costs,
charges and expenses which the Courts of South Dakota or such other court shall
deem proper.
Section 3. Indemnification for Costs, Charges and Expenses of
Successful Party. Notwithstanding the other provisions of this Article V, to the
extent that a director or officer has been successful, on the merits or
otherwise, including, without limitation, the dismissal of an action without
prejudice, in defense of any action, suit or proceeding referred to in Sections
1 and 2 of this Article V, or in defense of any claim, issue or matter therein,
he shall be indemnified against all costs, charges and expenses (including
attorneys' fees) actually and reasonably incurred by him or on his behalf in
connection therewith.
Section 4. Determination of Right to Indemnification. Any
indemnification under Sections 1 and 2 of this Article V (unless ordered by a
court) shall be paid by the Company unless a determination is made (i) by the
board of directors by a majority vote of the directors who were not parties to
such action, suit or proceeding, or if such majority of disinterested directors
so directs, (ii) by independent legal counsel in a written opinion, or (iii) by
the shareholders, that indemnification of the director or officer is not proper
in the circumstances because he has not met the applicable standard of conduct
set forth in Sections 1 and 2 of this Article V.
Section 5. Advance of Costs, Charges and Expenses. Costs, charges and
expenses (including attorneys' fees) incurred by a person referred to in
Sections 1 or 2 of this Article V in defending a civil or criminal action, suit
or proceeding shall be paid by the Company in advance of the final disposition
of such action, suit or proceeding; provided, however, that the payment of such
costs, charges and expenses incurred by a director or officer in his capacity as
a director or officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer) in advance of the final
disposition of such action, suit or proceeding shall be made only upon receipt
of an undertaking by or on behalf of the director or officer to repay all
amounts so advanced in the event that it shall ultimately be determined that
such director or officer is not entitled to be indemnified by the Company as
authorized in this Article V. Such costs, charges and expenses incurred by other
employees and agents may be so paid upon such terms and conditions, if any, as
the majority of the directors deems appropriate. The majority of the directors
may, in the manner set forth above, and upon approval of such director or
officer of the Company, authorize the Company's counsel to represent such
person, in any action, suit or proceeding, whether or not the Company is a party
to such action, suit or proceeding.
Section 6. Procedure of Indemnification. Any indemnification under
Sections 1, 2 and 3, or advance of costs, charges and expenses under Section 5
of this Article V shall be made promptly, and in any event within 60 days, upon
the written request of the director or officer. The right to indemnification or
advances as granted by this Article V shall be enforceable by the director or
officer in any court of competent jurisdiction, if the Company denies such
request, in whole or in part, or if no disposition thereof is made within 60
days. Such person's costs and expenses incurred in connection with successfully
establishing his right to indemnification, in whole or in part, in any such
action shall also be indemnified by the Company. It shall be a defense to any
such action (other than an action brought to enforce a claim for the advance of
costs, charges and expenses under Section 5 of this Article V where the required
undertaking, if any, has been received by the Company) that the claimant has not
met the standard of conduct set forth in Sections 1 or 2 of this Article V, but
the burden of proving such defense shall be on the Company. Neither the failure
of the Company (including its board of directors, its independent legal counsel
and its shareholders) to have made a determination prior to the commencement of
such action that indemnification of the claimant is proper in the circumstances
because he has met the applicable standard of conduct set forth in Sections 1 or
2 of this Article V, nor the fact that there has been an actual determination by
the Company (including its board of directors, its independent legal counsel and
its shareholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standards of conduct.
Section 7. Settlement. The Company shall not be obligated to reimburse
the costs of any settlement to which it has not agreed. If in any action, suit
or proceeding, including any appeal, within the scope of Sections 1 or 2 of this
Article V, the person to be indemnified shall have unreasonably failed to enter
into a settlement thereof offered or assented to by the opposing party or
parties in such action, suit or proceeding, then, notwithstanding any other
provision hereof, the indemnification obligation of the Company to such person
in connection with such action, suit or proceeding shall not exceed the total of
the amount at which settlement could have been made and the expenses incurred by
such person prior to the time such settlement could reasonably have been
effected.
Section 8. Subsequent Amendment. No amendment, termination or repeal of
this Article V or of relevant provisions of the South Dakota corporation law or
any other applicable laws shall affect or diminish in any way the rights of any
director or officer of the Company to indemnification under the provisions
hereof with respect to any action, suit or proceeding arising out of, or
relating to, any actions, transactions or facts occurring prior to the final
adoption of such amendment, termination or repeal.
Section 9. Other Rights, Continuation of Right to Indemnification. The
indemnification provided by this Article V shall not be deemed exclusive of any
other rights to which a director, officer, employee or agent seeking
indemnification may be entitled under any law (common or statutory), agreement,
vote of shareholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in any other capacity while holding
office or while employed by or acting as agent for the Company, and shall
continue as to a person who has ceased to be a director, officer, employee or
agent, and shall inure to the benefit of the estate, heirs, executors and
administrators of such person. Nothing contained in this Article V shall be
deemed to prohibit, and the Company is specifically authorized to enter into,
agreements with officers and directors providing indemnification rights and
procedures different from those set forth herein. All rights to indemnification
under this Article V shall be deemed to be a contract between the Company and
each director or officer of the Company who serves or served in such capacity at
any time while this Article V is in effect. This Article V shall be binding upon
any successor corporation to this Company, whether by way of acquisition,
merger, consolidation or otherwise.
Section 10. Savings Clause. If this Article V or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Company shall nevertheless indemnify each director or officer of the Company
as to any costs, charges, expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement with respect to any action, suit or proceeding,
whether civil, criminal, administrative or investigative, including an action by
or in the right of the Company, to the full extent permitted by any applicable
portion of this Article V that shall not have been invalidated and to the full
extent permitted by applicable law.
Section 11. Subsequent Legislation. If the South Dakota law is amended
after the adoption of this Article V to further expand the indemnification
permitted to directors and officers of the Company, then the Company shall
indemnify such persons to the fullest extent permitted by the South Dakota law,
as so amended.
ARTICLE VI
CAPITAL STOCK
Section 1. Stock Certificates. Certificates for stock of the Company
shall be in such form as the Board of Directors may from time to time prescribe
and shall be signed by the President or a Vice President and by a Treasurer or
an Assistant Treasurer or the Secretary or an Assistant Secretary. If
certificates are signed by a transfer agent, acting in behalf of the Company, or
registered by a registrar, the signatures of the officers of the Company may be
facsimile. The Company, through its officers, may cause certificates to be
issued and delivered bearing facsimile signatures of persons even though at the
time of the issuance and delivery of such certificates, any of such persons may
no longer be an officer of the Company.
Section 2. Transfer Agent. The Board of Directors shall have power to
appoint one or more transfer agents and registrars for the transfer and
registration of certificates of stock of any class and may require that stock
certificates shall be countersigned and registered by one or more of such
transfer agents and registrars. The transfer agent and registrar may be the same
person.
Section 3. Transfer of Stock. Shares of the capital stock of the
Company shall be transferable on the books of the Company only by the holder of
record thereof in person or by a duly authorized attorney upon surrender and
cancellation of certificates for a like number of shares properly endorsed.
Section 4. Lost Certificate. In case any certificates of the capital
stock of the Company shall be lost, stolen or destroyed, the Company may cause
replacement certificates to be issued upon such proof of the fact and such
indemnity to be given to it and to its transfer agent and registrar, if any, as
shall be deemed necessary or advisable by it.
Section 5. Holder of Record. The Company shall be entitled to treat the
holder of record of any share or shares of stock as the holder thereof in fact
and shall not be bound to recognize any equitable or other claim to or interest
in such shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise expressly provided by law.
The expression "stockholder" or "shareholders" whenever used in these Bylaws
shall be deemed to mean only the holder or holders of record of stock.
Section 6. Closing of Transfer Books. The Board of Directors shall have
power to close the stock transfer books of the Company for a stated period but
not to exceed, in any case, fifty days, and in case of a meeting of shareholders
not less than ten days, preceding the date of any meeting of shareholders, or
the date for payment of any dividend, or the date for the allotment of rights,
or the date when any change or conversion or exchange of capital stock shall go
into effect, or in order to make a determination of shareholders for any other
proper purpose; provided, however, that in lieu of closing the stock transfer
books, the Board of Directors may fix in advance a date as the record date for
any such determination of shareholders, not less than ten days prior to the date
on which the particular action, requiring such determination of shareholders, is
to be taken; and in such case only such shareholders as shall be shareholders of
record on the date so fixed shall be entitled to such notice of, and to vote at,
such meeting, or to receive payment of such dividend, or to receive such
allotment of rights, or to exercise such rights, as the case may be,
notwithstanding any transfer of any stock on the books of the Company after any
such record date fixed as aforesaid. When a determination of shareholders
entitled to vote at any meeting of shareholders has been made as provided in
this section, such determination shall apply to any adjournment thereof.
Section 7. Closing of Transfer Books to Authorize Increase in
Indebtedness and Capital Stock. Notwithstanding Section 6 of this Article and in
order to comply with Section 8 of Article XVII of the South Dakota Constitution,
the notice to be given shareholders for a meeting at which a proposal to
increase the Company's authorized indebtedness or capital stock is to be
considered shall be given at least sixty days prior to the meeting and the
record date for the determination of shareholders eligible to vote at such
meeting may be set by the Board sixty or more days prior to the said meeting.
ARTICLE VII
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. Contracts. The Board of Directors may authorize any officer
or officers, agent or agents, to enter into any contract or execute and deliver
any instrument in the name of and on behalf of the Company, and such authority
may be general or confined to specific instances.
Section 2. Loans. No loans shall be contracted on behalf of the Company
and no evidences of indebtedness shall be issued in its name unless authorized
by a resolution of the Board of Directors. Such authority may be general or
confined to specific instances.
Section 3. Checks, Drafts, etc. All checks, drafts, or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the Company shall be signed by such officer or officers, agent or agents
of the Company and in such manner as shall from time to time be determined by
resolution of the Board of Directors.
Section 4. Deposits and Investments. All funds of the Company not
otherwise employed shall be deposited from time to time to the credit of the
Company in such banks, trust companies or other depositories as the Board of
Directors or officers of the Company designated by the Board of Directors may
select; or be invested as authorized by the Board of Directors. Such authority
may be general or confined to specific instances.
ARTICLE VIII
MISCELLANEOUS
Section 1. Offices. The principal office of the Company shall be in the
City of Rapid City, County of Pennington, State of South Dakota. The Company may
also have offices at such other places within or without the State of South
Dakota as the Board of Directors may from time to time designate or as the
business of the Company may require.
Section 2. Seal. The corporate seal shall have inscribed thereon the
name of the Company and the words "Corporate Seal--2000--South Dakota."
Section 3. Audit. The books of account of the Company shall be audited
annually by an independent firm of public accountants who shall be appointed by
the Board of Directors and ratified by the shareholders at each annual meeting.
Such auditors shall submit to the Board of Directors each year certified
financial statements of the Company for the preceding fiscal year.
ARTICLE IX
AMENDMENTS
These Bylaws may be altered, amended or repealed at any meeting of the
Board of Directors by the affirmative vote of a majority of the whole Board;
provided, no alteration or amendment may be in conflict with any provision of
the Articles of Incorporation.
Dated this 28th day of April, 2000.
By__________________________________
Roxann R. Basham, Incorporator and
Initial Director
Exhibit 4.2
BLACK HILLS CORPORATION
TO
THE CHASE MANHATTAN BANK,
As Trustee
--------------------------
RESTATED AND AMENDED INDENTURE
OF MORTGAGE AND
DEED OF TRUST
Dated as of September 1, 1999
------------------------------
TABLE OF CONTENTS
Page
RECITALS..........................................................................................................1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION..................................................8
Section 1.01.Definitions.................................................................................8
Section 1.02. Opinion and Certificate Requirements.....................................................18
Section 1.03. Documentary Requirements.................................................................18
Section 1.04. Documentary Requirements--More Than One Certificate
Permissible...........................................................................19
Section 1.05. Redemption Requirements--Cash Deposit....................................................19
ARTICLE TWO
THE BONDS...............................................................................................20
Section 2.01. Bond Form................................................................................20
Section 2.02. Issuance of Bonds--Limitations...........................................................23
Section 2.03. Registered Bonds.........................................................................23
Section 2.04. Naming Series of Bonds...................................................................23
Section 2.05. New Bonds--Optional Provisions...........................................................23
Section 2.06. Denominations and Interest Rates.........................................................24
Section 2.07. Exchange of Bonds........................................................................25
Section 2.08. Execution of Bonds.......................................................................25
Section 2.09. Authentication of Bonds..................................................................25
Section 2.10. Temporary Bonds and Exchange.............................................................26
Section 2.11. Registrar and Registration...............................................................26
Section 2.12. Governmental Charges.....................................................................27
Section 2.13. Bonds Without Certificates Allowed.......................................................27
Section 2.14. Replacement of Bonds.....................................................................27
ARTICLE THREE
EXISTING BONDS..........................................................................................28
Section 3.01. Series Y Bonds...........................................................................28
Section 3.02. Series Z Bonds...........................................................................30
Section 3.03.Series AA Bonds............................................................................33
Section 3.04. Series AB Bonds..........................................................................34
Section 3.05.Series AC Bonds............................................................................35
Section 3.06.Series AD Bonds............................................................................36
Section 3.07.Indemnity of Trustee.......................................................................37
Section 3.08. Registrar of Existing Bonds..............................................................37
Section 3.09.Exchange of Bonds..........................................................................37
Section 3.10. Compliance with Covenants................................................................37
ARTICLE FOUR
AUTHENTICATION AND DELIVERY OF BONDSUPON THE BASIS OF PROPERTY ADDITIONS................................38
Section 4.01. Property Additions and Certifiable Net Earnings Defined..................................38
Section 4.02. Additional Bonds Under Property Additions................................................40
Section 4.03. Bonds Limited by 70 Percent of Net Bondable Additions....................................48
Section 4.04. Additional Bonding Authority Based on Property Additions
Certified Prior.......................................................................48
ARTICLE FIVE
AUTHENTICATION AND DELIVERY OF BONDSUPON DEPOSIT OF CASH WITH TRUSTEE...................................48
Section 5.01. Additional Bonds Authorized by Deposit of Cash...........................................48
Section 5.02. Amount of Bonds..........................................................................50
Section 5.03. Terms of Withdrawal of Cash..............................................................50
ARTICLE SIX
AUTHENTICATION AND DELIVERY OF BONDSUPON RETIREMENT OF BONDS PREVIOUSLY ISSUED HEREUNDER................50
Section 6.01. Additional Bonds Authorized by Retired Bonds.............................................50
Section 6.02. Amount of Bonds Equal to Retired Bonds...................................................53
Section 6.03. Canceled Bonds...........................................................................53
ARTICLE SEVEN
RELEASE OF MORTGAGED PROPERTY...........................................................................53
Section 7.01. Company's Permitted Activities...........................................................53
Section 7.02. Conditions of Release of Property........................................................55
Section 7.03. Release of Property Upon Eminent Domain..................................................61
Section 7.04. Release under Authority of Trustee or Bondholder.........................................62
Section 7.05. In Event of Receiver or Trustee Possessing Trust Estate..................................62
Section 7.06. Purchasers in Good Faith.................................................................62
Section 7.07. Application of Cash......................................................................63
ARTICLE EIGHT
APPLICATION AND WITHDRAWAL OF TRUST MONEYS..............................................................63
Section 8.01. General Provisions--Withdrawing Trust Moneys.............................................63
Section 8.02. Trust Moneys Withdrawn Against Gross Bondable Additions..................................64
Section 8.03. Trust Moneys Withdrawn Against Net Bondable Additions....................................65
Section 8.04. Trust Moneys Withdrawn Against Bonds.....................................................67
Section 8.05. Trust Moneys Withdrawn to Redeem Bonds...................................................68
Section 8.06. Trust Moneys Withdrawn for Repairs.......................................................69
Section 8.07. Trust Moneys Withdrawn for Taxes.........................................................70
Section 8.08. Trust Moneys Held More Than Two Years Applied to Redeem
Bonds and Application of Trust Moneys in Event of Eminent
Domain or Purchase by a Public Authority of the Entire
Trust Estate..........................................................................72
------------
Section 8.09. Possession After Default.................................................................73
------------------------
Section 8.10. Cancellation of Bonds Delivered..........................................................73
-------------------------------
Section 8.11. Moneys Received by Trustee and Payment of Interest.......................................74
--------------------------------------------------
Section 8.12. Investment of Trust Funds................................................................74
--------------------------
ARTICLE NINE
PARTICULAR COVENANTS OF THE COMPANY.....................................................................74
Section 9.01. Payment of Principal and Interest........................................................74
Section 9.02. Company Prohibited from Extending Time for Payment.......................................75
Section 9.03. Warrants and Defends Title...............................................................75
Section 9.04. Payment of Taxes and Prohibition on Liens................................................75
Section 9.05. Repair and Maintain......................................................................76
Section 9.06. Prior Lien Obligations...................................................................77
Section 9.07. Use of Property Released from Prior Lien.................................................77
Section 9.08. Recording and Filing and Annual Opinion and Certificate..................................78
Section 9.09. Insurance Requirements and Annual Certificate............................................80
Section 9.10. Record Keeping...........................................................................80
Section 9.11. Accounting and Audits....................................................................80
Section 9.12. Maintain Existence.......................................................................81
Section 9.13. Advances by Trustee......................................................................81
Section 9.14. Dividend Restrictions....................................................................81
Section 9.15. Governmental Reporting Requirements......................................................81
Section 9.16. List of Bondholders......................................................................82
Section 9.17. Preservation of List of Bondholders......................................................82
Section 9.18. Annual Compliance Certificate............................................................84
ARTICLE TEN
REDEMPTION OF BONDS.....................................................................................84
Section 10.01. Redeemable Bonds........................................................................84
Section 10.02. Redemption Rights of Existing Bonds.....................................................84
Section 10.03. Notice and Selection of Bonds...........................................................84
Section 10.04. Method of Effecting Redemption..........................................................86
Section 10.05. Cancellation of Redeemed Bonds..........................................................87
ARTICLE ELEVEN
REMEDIES OF TRUSTEES AND BONDHOLDERS....................................................................87
Section 11.01. Events of Default.......................................................................87
Section 11.02. Possession of Trust Estate by Trustee...................................................89
Section 11.03. Additional Power of Trustee in Event of Default.........................................91
Section 11.04. Bondholders'Right to Direct Action......................................................91
Section 11.05. Notice of Sale by Trustee...............................................................92
Section 11.06. Adjournment of Sale.....................................................................92
Section 11.07. Conveyance to Purchasers................................................................92
Section 11.08. Sale as an Entirety Unless Holders Otherwise Direct.....................................93
Section 11.09. Accrual of Interest Upon Sale...........................................................93
Section 11.10. Application of Proceeds of Sale.........................................................93
Section 11.11. Use of Bonds to Pay for Property........................................................94
Section 11.12. Other Rights of Trustee in Event of Default.............................................94
Section 11.13. Recovery of Judgment....................................................................94
Section 11.14. Restrictions on Rights of Bondholders and Unconditional
Obligation of Company.................................................................95
---------------------
Section 11.15. Remedies Cumulative.....................................................................96
-------------------
Section 11.16. No Waiver for Delay.....................................................................97
-------------------
Section 11.17. Trustee's Power to Institute Legal Proceedings..........................................97
----------------------------------------------
Section 11.18. Failure of Remedy Restores Rights.......................................................97
---------------------------------
Section 11.19. Holders of Majority May Direct Proceedings..............................................98
------------------------------------------
Section 11.20. Company's Waiver of Certain Rights......................................................98
----------------------------------
Section 11.21. No Recourse Against Stockholders, Directors and Officers................................98
--------------------------------------------------------
Section 11.22. Obligor Not Entitled to Distribution....................................................99
------------------------------------
ARTICLE TWELVE
EVIDENCE OF RIGHTS OF BONDHOLDERS.......................................................................99
Section 12.01. Bondholder Concurrent Writings..........................................................99
Section 12.02. Proof of Execution by Bondholder........................................................99
Section 12.03. Register Proves Ownership of Bond.......................................................99
ARTICLE THIRTEEN
MERGER, CONSOLIDATION, TRANSFER OR LEASE...............................................................100
Section 13.01. Conditions of Merger...................................................................100
Section 13.02. Conditions of Successor to Succeed to Rights of Company................................101
ARTICLE FOURTEEN
CONCERNING THE TRUSTEE.................................................................................102
Section 14.01. Qualification of Trustee...............................................................102
Section 14.02. Trustee's Duties and Obligations.......................................................102
Section 14.03. Removal, Resignation and Discharge of Trustee..........................................106
Section 14.04. Special Account in Case of Default.....................................................111
Section 14.05. Trustee's Annual Report to Bondholders.................................................115
Section 14.06. Removal and Resignation of Trustee.....................................................117
Section 14.07. Disqualification and Appointment of Successor Trustee..................................117
Section 14.08. Merger of Trustee......................................................................118
Section 14.09. Appointment of Co-Trustee..............................................................119
Section 14.10. Notice.................................................................................119
ARTICLE FIFTEEN
DEFEASANCE.............................................................................................120
Section 15.01. Conditions to Discharge Restated Indenture.............................................120
Section 15.02. Discharge of Restated Indenture........................................................121
ARTICLE SIXTEEN
SUPPLEMENTAL INDENTURES................................................................................121
Section 16.01. Modification of Restated Indenture Through Supplemental
Indentures...........................................................................121
Section 16.02. Authority of Trustee...................................................................123
Section 16.03. Trustee's Discretion...................................................................123
ARTICLE SEVENTEEN
MEETING OF BONDHOLDERS.................................................................................123
Section 17.01. Modification of Restated Indenture by Bondholders......................................123
Sections 17.02. Calling Meetings of Bondholders and Notice............................................123
Section 17.03. Qualifications of Bondholders to Vote..................................................124
Section 17.04. Proxy Voting Allowed...................................................................125
Section 17.05. Conduct of Meeting.....................................................................126
Section 17.06. Quorum for Meeting.....................................................................126
Section 17.07. Vote Required..........................................................................127
Section 17.08. Records of Meetings and Notices........................................................127
Section 17.09. Actions Noted on Bonds.................................................................128
Section 17.10. Nullification of Article Seventeen.....................................................129
Section 17.11. Written Consent in Lieu of Meeting.....................................................129
Section 17.12. Trustee's Expenses.....................................................................129
ARTICLE EIGHTEEN
MISCELLANEOUS PROVISIONS...............................................................................129
Section 18.01. Binding on Successors and Assigns......................................................129
Section 18.02. Rights Limited to Company, Bondholders and Trustee.....................................130
Section 18.03. Trust Indenture Act Controls...........................................................130
Section 18.04. Headings. .............................................................................130
Section 18.05. Complete Agreement.....................................................................130
Section 18.06. Receipt of Copy........................................................................130
Section 18.07. Executed in Counterparts...............................................................130
TABLE OF EXHIBITS
Page
A Legal Description of Real Property....................................................................A-1
B Series Y Bond Form....................................................................................B-1
C Series Z Bond Form....................................................................................C-1
D Series AA Bond Form...................................................................................D-1
E Series AB Bond Form...................................................................................E-1
F Series AC Bond Form...................................................................................F-1
G Series AD Bond Form...................................................................................G-1
RESTATED AND AMENDED INDENTURE OF MORTGAGE
AND DEED OF TRUST
RESTATED AND AMENDED INDENTURE OF MORTGAGE AND DEED OF TRUST, dated as
of September 1, 1999 (hereinafter referred to as the "Restated Indenture"),
between BLACK HILLS CORPORATION, a corporation duly organized and existing under
the laws of the State of South Dakota (formerly known as Black Hills Power and
Light Company) (hereinafter called the "Company"), and THE CHASE MANHATTAN BANK,
a New York corporation organized and existing under the laws of the State of New
York (hereinafter called the Trustee).
RECITALS
In order to secure an authorized issue of First Mortgage Bonds of the
Company, the Company has executed and delivered an Indenture of Mortgage and
Deed of Trust to Central Hanover Bank and Trust Company (subsequently known as
The Hanover Bank) as Trustee, dated September 1, 1941, hereinafter referred to
as the "Original Indenture."
The Chase Manhattan Bank is the successor Trustee as the result of
mergers of The Hanover Bank followed by a series of subsequent mergers leading
to the Trustee as the current successor.
Subsequent to the execution of the Original Indenture, the Company has
executed various supplemental indentures providing for the issuance of
additional series of Bonds and supplementing and modifying the Original
Indenture which, as supplemented and amended by said thirty-one supplemental
indentures, is referred to herein as the "Indenture."
Pursuant to the provisions of the Indenture, First Mortgage Bonds have
been duly issued and are presently outstanding and secured by the Indenture, and
continue to be secured by this Restated Indenture as follows:
Principal Amount
Series Outstanding
Series Y, 9.49%, due June 15, 2018 $ 5,420,000
Series Z, 9.35%, due May 29, 2021 $35,000,000
Series AA, 9.00%, due September 1, 2003 $ 4,254,946
Series AB, 8.30%, due September 1, 2024 $45,000,000
Series AC, 8.06%, due February 1, 2010 $30,000,000
Series AD, 6.50%, due July 15, 2002 $15,000,000
Because of the extensive amendments contained in the thirty-one
supplemental indentures and the complexities in reading and interpreting the
Indenture resulting therefrom, the Company desires to cause the Indenture to be
restated and amended to constitute one instrument which completely states the
agreement of the parties hereto as of the date hereof.
Subject to the conditions therein contained, subparagraph (k) of
Section 17.01 as set forth in Section 1.23 of the Twenty Eighth Supplemental
Indenture, dated as of March 15, 1995 as a supplement to the Original Indenture,
authorizes the Trustee to enter into a restatement and amendment of the
Indenture without consent of the Bondholders.
The Company, in the exercise of the powers and authority conferred upon
and reserved to it under and by virtue of the provisions of the Indenture, and
pursuant to resolutions of its Board of Directors, has duly resolved and
determined to make, execute, and deliver to the Trustee this Restated Indenture
in the form hereof for the purpose of restating the Indenture without any
interruption of the Lien of the Indenture which now continues under the Restated
Indenture.
NOW, THEREFORE, to secure the payment of the principal of, premium, if
any, and interest, if any, on all Bonds at any time issued and Outstanding under
this Restated Indenture when payable in accordance with the provisions thereof
and hereof, and to secure the performance and observance by the Company of, and
its compliance with, the covenants and conditions of this Restated Indenture,
and in consideration of the premises and of One Dollar paid to the Company by
the Trustee, the Company hereby grants, bargains, sells, releases, conveys,
assigns, transfers, mortgages, pledges, sets forth and confirms to The Chase
Manhattan Bank, as Trustee, and grants and assigns to the Trustee a security
interest in the following described property, referred to herein as the "Trust
Estate":
GRANTING CLAUSE FIRST
(Real Property)
All right, title and interest of the Company in and to real
property wherever situated, including without limitation (a) all land
and interests in land referenced in the Original Indenture and in the
thirty-one Supplemental Indentures thereto, which land and interests in
land are described in Exhibit A to this Restated Indenture, except land
and interests in land which have been specifically released from the
Lien of the Indenture from time to time; (b) all other lands,
easements, servitudes and other rights and interests in or relating to
real property or the occupancy or use of the same; and (c) all
buildings, offices, warehouses and other structures and improvements of
whatever kind and nature situated upon the real property.
GRANTING CLAUSE SECOND
(Generating Plants)
All electric generating plants and stations in which the Company
has an ownership interest at the date of the execution of this
Restated Indenture, including all powerhouses, structures and works,
and the land on which the same are situated, and all other lands and
easements, water rights, rights-of-way, permits, privileges, towers,
poles, wires, machinery, equipment, appliances, appurtenances and
sites forming a part of such plants and stations, or any of them, or
occupied, enjoyed or used in connection therewith.
GRANTING CLAUSE THIRD
(Transmission System)
All electric transmission lines of the Company owned by it at the
date of the execution hereof, including towers, poles, pole lines,
wires, switch racks, switch boards, insulators and other appliances
and equipment, and all other property of the Company forming a part
thereof or pertaining thereto, and all service lines extending
therefrom, together with all of the Company's real property,
rights-of-way, and easements over or relating to the construction,
maintenance or operation thereof, through, over, under, or upon any
private property.
GRANTING CLAUSE FOURTH
(Substations)
All the substations and switching stations of the Company owned
by it at the date of the execution hereof for transforming,
distributing or otherwise regulating electric current, together with
all of the Company's buildings, transformers, wires, insulators,
appliances, equipment, and all other property, real or personal, of
the Company, forming a part of or pertaining to or used, occupied or
enjoyed in connection with any of such substations and switching
stations.
GRANTING CLAUSE FIFTH
(Distribution System)
All electric distribution systems of the Company owned by it at
the date of the execution hereof, including substations, transformers,
switchboards, towers, poles, wires, insulators, subways, manholes,
cables, appliances, equipment and all other property of the Company,
real or personal, forming a part of or appertaining to or used,
occupied or enjoyed in connection with such distribution systems, or
any of them, together with the Company's rights-of-way and easements
relating to the construction, maintenance or operation thereof.
GRANTING CLAUSE SIXTH
(After-Acquired Property)
All property (other than Excepted Property and property released
from the Lien of this Restated Indenture under Article Seven) of the
kind and nature described in Granting Clauses First, Second, Third,
Fourth and Fifth which may be hereafter acquired by the Company, it
being the intention of the Company that all such property acquired by
the Company after the date of the execution and delivery of this
Restated Indenture shall be as fully embraced within and subjected to
the Lien hereof as if such property were owned by the Company as of
the date of the execution and delivery of this Restated Indenture.
GRANTING CLAUSE SEVENTH
(Property Company May Cause to be Mortgaged)
Also any and all property, real, personal or mixed, including
Excepted Property, that may, from time to time hereafter, by delivery
or by writing of any kind for the purposes hereof be in any wise
subjected to the lien hereof or be expressly conveyed, mortgaged,
assigned, transferred, deposited or pledged by the Company or by
anyone in its behalf or with its consent, to and with the Trustee,
which is hereby authorized to receive the same at any and all times as
and for additional security and also, when and as hereinafter
provided, as substituted security hereunder, to the extent permitted
by law. Such conveyance, mortgage, assignment, transfer, deposit or
pledge or other creation of lien by the Company or by anyone in its
behalf or with its consent of or upon any property as and for
additional security may be made subject to any reservations,
limitations, conditions and provisions which shall be set forth in an
instrument or agreement in writing executed by the Company or the
person or corporation conveying, assigning, mortgaging, transferring,
depositing or pledging the same or by the Trustee, respecting the use,
management and disposition of the property so conveyed, assigned,
mortgaged, transferred, deposited or pledged, or the proceeds thereof.
GRANTING CLAUSE EIGHTH
(Excepted Property)
There is, however, expressly excepted and excluded from the Lien
of this Restated Indenture the following described property of the
Company, herein sometimes referred to as "Excepted Property":
A. all cash on hand, in banks or in other financial
institutions with which the Company maintains deposits, shares of
stock, bonds, notes, evidences of indebtedness and other
securities not hereafter paid or delivered to, deposited with, or
held by, the Trustee hereunder or required so to be;
B. all contracts, leases and other agreements of whatsoever
kind and nature (including pole attachment agreements and joint
pole agreements), contract rights, bills, notes and other
instruments, accounts receivable, claims, credits, demands,
judgments, choses in action, patents, patent licenses and other
patent rights, patent applications, trade names, trademarks and
other general intangibles;
C. all permits, licenses, franchises (including municipal
franchises and other rights to use public ways) and rights
(however characterized) granted by any governmental entity with
respect to air, water or other types of pollution or pollution
credits;
D. all motor vehicles, automobiles, buses, trucks, truck
cranes, tractors, trailers and similar vehicles, movable
equipment, all rolling stock, railcars, containers and other
railroad equipment, all vessels, boats, barges and other marine
equipment, all airplanes, airplane engines and flight equipment,
and all components, spare parts, accessories, supplies and fuel
used or to be used in connection with any of the foregoing;
E. all goods, wares, merchandise, equipment, spare parts and
tools held for sale or lease in the ordinary course of business
or for use or consumption in, or in the operation of, any
properties of, or for the benefit of, the Company, or held in
advance of use thereof for maintenance, replacement or fixed
capital purposes; all fuel, materials and supplies and other
personal property which are consumable (otherwise than by
ordinary wear and tear) in their use in the Electric Utility
Business;
F. all office furniture and office equipment; all satellites
and other equipment and materials used or to be used in outer
space; all business machines; all communications equipment
(including telephone equipment); all computer equipment; all
record production, storage and retrieval equipment; and all
components, spare parts, accessories, programs (other than
computer software) and supplies used or to be used in connection
with any of the foregoing;
G. all crops, timber, sand, gravel, rocks, earth, natural
gas, coal, ore, uranium, gas, oil and other minerals harvested,
mined or extracted or otherwise separated from the land, or lying
or being upon, within or under any properties of the Company,
including the Trust Estate, all mineral rights, leases and
royalties and income therefrom, and all rights to explore for
minerals, and gas or oil wells or any lease or real estate
acquired for the purpose of obtaining gas or oil rights;
H. all electric energy, steam, water, ice and other products
generated, manufactured, produced, provided or purchased by the
Company for sale, transmission or distribution or used or to be
used by the Company;
I. all leasehold interests and leasehold improvements;
J. all property, real, personal and mixed, which is:
(i) not specifically subjected or required to be
subjected to the Lien of this Restated Indenture by any
express provision hereof; and
(ii) not used or to be used in the Electric Utility
Business, or in connection with the operation of any
property specifically subjected or required to be subjected
to the Lien of this Restated Indenture by the express
provisions hereof;
K. the Company's franchise to be a corporation; and
L. all books and records;
it being understood that the Company may, however, pursuant
to the Seventh Granting Clause of the Restated Indenture,
subject to the Lien of this Restated Indenture any Excepted
Property, whereupon the same shall cease to be Excepted
Property.
GRANTING CLAUSE NINTH
TOGETHER WITH ALL AND SINGULAR the tenements, hereditaments and
appurtenances belonging or in anywise appertaining to the Trust Estate, or any
part thereof, with the reversion or reversions, remainder and remainders, rents,
issues, income and profits thereof, and all the right, title, interest and claim
whatsoever, at law or in equity, which the Company now has or which it may
hereafter acquire in and to the Trust Estate and every part and parcel thereof.
TO HAVE AND TO HOLD the Trust Estate and all and singular the lands,
properties, estates, rights, privileges and appurtenances hereby mortgaged,
conveyed, pledged, or assigned, or intended so to be, together with all the
appurtenances thereunto appertaining, unto the Trustee and its successors and
assigns forever;
Subject, however, to Permitted Encumbrances;
BUT IN TRUST, NEVERTHELESS, for the equal and proportionate use,
benefit, security and protection of those who from time to time shall hold the
Bonds authenticated and delivered hereunder and duly issued by the Company,
without any discrimination, preference or priority of any one Bond over any
other by reason of priority in the time of issue, sale or negotiation thereof or
otherwise, except as provided in Section 9.02, so that, subject to said
provisions, each and all of said Bonds shall have the same right, lien and
privilege under this Restated Indenture and shall be equally secured hereby
(except as any sinking, amortization, improvement, renewal or other analogous
fund, established in accordance with the provisions of this Restated Indenture,
may afford additional security for the Bonds of any particular series, and
except any covenant of the Company with respect to the refund or reimbursement
of taxes, assessments or other governmental charges on account of the ownership
of the Bonds or the income derived therefrom, for which the holders of the Bonds
shall look only to the Company and not to the property hereby mortgaged or
pledged), and shall have the same proportionate interest and share in the Trust
Estate, with the same effect as if all of the Bonds had been issued, sold and
negotiated simultaneously on the date of the delivery hereof; and in trust for
enforcing payment of the principal of the Bonds and of the interest thereon,
according to the tenor, purport and effect of the Bonds and of this Restated
Indenture, and for enforcing the terms, provisions, covenants and stipulations
herein and in the Bonds set forth;
UPON CONDITION that, if the Company, its successors and assigns, shall
pay or cause to be paid the principal of and interest and premium, if any, on
said Bonds or shall provide as permitted hereby for the payment thereof by
depositing with the Trustee the entire amount due or to become due thereon for
principal, interest and premium, if any, and if the Company shall also pay or
cause to be paid all other sums payable hereunder by it, and shall strictly
observe and perform all of the terms, provisions and conditions of this Restated
Indenture, then this Restated Indenture and the estate and rights hereby granted
shall cease, determine and be void, otherwise to be and remain in full force and
effect.
IT IS HEREBY FURTHER COVENANTED, DECLARED AND AGREED by and between the
parties hereto that all such Bonds are to be authenticated, delivered and
issued, and that all property subject or to become subject hereto is to be held
upon the uses, trusts and purposes hereinafter set forth and subject to the
covenants, agreements, and conditions hereinafter set forth, and the Company,
for itself, its successors and assigns, does hereby covenant and agree to and
with the Trustee and its successors in such trusts, for the benefit of those who
shall hold said Bonds or any of them, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.
For all purposes of this Restated Indenture, except as otherwise
specifically provided or unless the context otherwise requires:
(a) The terms defined in this Article have the meanings
assigned to them in this Article and include the plural
as well as the singular;
(b) All terms used herein (and which are not specifically
defined herein) which are defined in the Trust
Indenture Act, either directly or by reference herein,
have the meanings assigned to them therein;
(c) All terms used herein (and which are not specifically
defined herein) which are defined in the Uniform
Commercial Code (as in effect in the relevant
jurisdiction) have the meanings assigned to them
therein;
(d) The word "or" is not exclusive;
(e) All accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with
Generally Accepted Accounting Principles; and
(f) All references herein to "Articles," "Sections" and
other subdivisions are to the corresponding Articles,
Sections or other subdivisions of this Restated
Indenture. The words "herein," "hereof" and "hereunder"
and other words of similar import refer to this
Restated Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Accountant" is any individual who is a certified or public accountant
or any firm or copartnership of certified or public accountants.
"Additions Credit." If and whenever any Net Bondable Additions or Gross
Bondable Additions are certified or made a part of an application to
the Trustee for any purpose under this Restated Indenture, any amount
is in excess of that required for such purpose, the excess amount shall
constitute an Additions Credit and may be carried forward and used as
Property Additions for additional certifications and applications under
this Restated Indenture. The Company shall have the right, at any time
and from time to time, to establish an Additions Credit by delivering
to the Trustee the Certificates, Opinions and Other Instruments which
would be required to be delivered to the Trustee under Section 4.02 B,
Clauses (1) through (11), (13) and (14) and Sections 4.02, Paragraphs
C, D and E of this Restated Indenture.
"Affiliate," when used with reference to the Company or any other
person who is liable on the Bonds, is an individual, firm, corporation
or other legal entity which directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common
control with, the Company or such other person. The term "control" is
the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a firm, corporation or
other legal entity, whether through the ownership of voting securities,
by contract or otherwise.
"Amount" of any Property Additions is the Cost to the Company or the
Fair Value to the Company at the time of determination (whichever is
less) of such Property Additions.
"Appraiser" is any corporation, qualified individual or copartnership
who is engaged in the business of appraising property.
"Authorized Newspaper," when used with reference to a particular
municipality shall mean a newspaper printed in the English language and
regularly published and of general circulation in such municipality at
least once on each day, other than holidays and Sundays, in each
calendar week.
"Board of Directors of the Company" is the Board of Directors of the
Company or an Executive Committee thereof.
"Bonded Cash" is and includes:
(1) Cash deposited with the Trustee under Section
5.01;
(2) Cash (including the proceeds of purchase money
obligations) deposited or required to be deposited with the
Trustee to obtain the release of, or representing the proceeds
of the taking by eminent domain or of the purchase by a public
authority or of any other disposition of, or of insurance on,
any Bonded Property;
(3) Cash repaid to the Trustee pursuant to Section
8.07 in respect of refunds of taxes to the extent that the
amount withdrawn by the Company in respect of reimbursement
for such taxes shall have been Bonded Cash;
(4) Cash held by the Trustee in any sinking,
amortization, improvement, renewal or other analogous fund, if
any, which may hereafter be created as provided in Section
2.05, but only to the extent that the supplemental indenture
or other instrument creating such fund provides that such cash
shall be Bonded Cash; and
(5) Cash held by the Trustee to pay or redeem
any indebtedness secured by a Prior Lien.
"Bonded Property" is and includes:
(1) All property (other than Excepted Property) owned
by the Company on or prior to November 1, 1941, except
materials and supplies; provided, however, that salvaged or
reclaimed property which shall have been a part of any present
or future Bonded Property retired by the Company, shall from
and after the date of its retirement, be deemed to be Unbonded
Property for all purposes hereof;
(2) All Property Additions which have been made the
basis for the authentication and delivery of Bonds or the
release of any Bonded Property from the Lien of the Indenture
and this Restated Indenture or the withdrawal of any Bonded
Cash (or Unbonded Cash, if withdrawn under Section 8.03) from
the Trustee, but not including Additions Credit;
(3) All purchase money obligations and all securities
delivered or required to be delivered to the Trustee either
(i) to obtain the release of any Bonded Property from the Lien
of the Indenture and the Restated Indenture or (ii) as the
proceeds of Bonded Property taken by eminent domain or
purchased by any governmental body or agency upon exercise of
any right which it may have to purchase the same;
(4) All property acquired by the Company to replace,
or in lieu of, Bonded Property sold or disposed of pursuant to
Paragraph (b) of Section 7.01, or to repair, replace or
restore insured Bonded Property which shall have been damaged
or destroyed, but the proceeds of that insurance which shall
not have been required to be paid to the Trustee pursuant to
the provisions of Section 9.09 shall not be Bonded Property;
(5) All Property Additions certified to the Trustee
to meet maintenance requirements under the Indenture prior to
the adoption of the Restated Indenture; and
(6) All Property Additions previously certified to
the Trustee to meet the requirements of any sinking,
amortization, improvement, renewal or other analogous fund, if
any, which may hereafter be created as provided in Paragraph D
of Section 2.05, but only if, and to the extent that, the
supplemental indenture or other instrument creating such fund
shall preclude the certification of such Property Additions as
a basis for the authentication and delivery of Bonds under
this Article.
"Bondholder" and "holder" shall include the plural as well as the
singular number, and vice versa, unless otherwise expressly indicated,
and shall include both the bearer of a Bond not registered as to
principal and the registered owner of a Bond registered as to
principal.
"Bonds" are any bonds authenticated and delivered under this Restated
Indenture, including the Existing Bonds.
"Certifiable Net Earnings" are defined at Section 4.01, Paragraph B.
"Certificate of the Company" is a written certificate signed by its
Chairman of the Board, President or a Vice-President and by the
Treasurer or an Assistant Treasurer of the Company, wherein the person
signing shall certify to the correctness of the statements therein
contained.
"Company" is Black Hills Corporation, a South Dakota corporation, and
any successor corporation which shall become such pursuant to the
applicable provisions of this Restated Indenture, and thereafter
"Company" shall mean such successor.
"Corporation" or "corporation" also includes voluntary associations,
joint stock companies and other similar organizations.
"Cost" to the Company of Property Additions shall be taken to mean the
sum of (1) the amount of cash expenditures made or agreed to be made by
the Company therefor, (2) the Fair Value, at the time of installation,
of all materials and supplies of the Company (not included in the
preceding Clause (1)) which have been installed as part of such
Property Additions, including all salvaged or reclaimed property so
installed which shall have been included in any Property Retirements
then or theretofore certified to the Trustee in a Retirements
Certificate under any provision hereof, whether or not such salvaged or
reclaimed property shall upon such retirement have been transferred to
materials and supplies account, (3) the Fair Value in cash (as of the
date of delivery) of any securities delivered as consideration for such
Property Additions and (4) the aggregate of the amounts expended or
agreed to be expended (excluding any amounts expended or to be expended
in respect of interest or premium) by the Company to procure the
satisfaction or discharge of any indebtedness secured by a Prior Lien
upon such Property Additions outstanding or created at the time of the
acquisition thereof or to cause the mortgage or other lien securing
such indebtedness to become a Prepaid Lien, as defined in this Section
1.01, unless such amounts shall have theretofore been included in the
Cost of other Property Additions subject to the same Prior Lien. The
Cost to the Company of any new plant or system acquired as an entirety
from others may be deemed to include the Cost to the Company of any
franchises, rights and intangible property simultaneously acquired with
the same, for which no separate or distinct consideration shall have
been paid or apportioned. The Cost to the Company of any property, part
of which constitutes Property Additions, and part does not, and all of
which is acquired for a single consideration, shall in all cases be
properly allocated in the Property Additions Certificate filed with the
Trustee pursuant to Paragraph B of Section 4.02. In the case of
Property Additions subject to a Prior Lien or Liens, the Fair Value of
such additions shall be determined as if such additions were free of
such lien or liens. In the case of Property Additions consisting of
property owned by a successor corporation immediately prior to the time
it shall have become such by consolidation, merger or conveyance as
provided in Article Thirteen, the Cost to the Company shall be the cost
thereof to such successor corporation, less applicable reserves for
depreciation, retirements and/or depletion immediately prior to such
consolidation, merger or conveyance.
"Deposit of Bonds." Whenever, in connection with any application to the
Trustee under this Restated Indenture, the Company shall deposit Bonds
with the Trustee or shall, in lieu of such deposit as herein provided,
deliver to the Trustee a certificate that certain Bonds have been paid,
redeemed or otherwise retired or that cash has been deposited or is
held in trust sufficient to pay or redeem, and for the purpose of
paying or redeeming, certain Bonds, such Bonds are sometimes herein
referred to as having been "used" or having been "made the basis" for
the purpose accomplished by such application.
"Electric Utility Business" is the business of the generation,
transmission, distribution and/or sale of electricity, or any part
thereof.
"Engineer" is an individual or a copartnership or a corporation engaged
in the engineering profession who, unless specifically required to be
an Independent Engineer, may be regularly employed in the service of
the Company or of an Affiliate.
"Event of Default" is one of the events described in Section 11.01.
"Excepted Property" is that property of the Company described in
Granting Clause Eighth of this Restated Indenture.
"Existing Bonds" are those Bonds Outstanding as of the execution of the
Restated Indenture and are described in Article Three.
"Fair Value" is the value of property as determined by an Engineer or
Independent Engineer in compliance with Article Four. In determining
the Fair Value of any plant or system acquired as an entirety from
others, consideration shall be given only to the value, in place, of
the physical property acquired. In the case of Property Additions
subject to a Prior Lien or Liens, the Fair Value of such additions
shall be determined as if such additions were free of such lien or
liens. For the purposes of Section 7.02, "Fair Value" is further
defined at Paragraph A of Section 7.02.
"Gross Bondable Additions" is the Amount of certified Property
Additions which have not previously become Bonded Property and which
are not subject to any lien, charge or encumbrance prior to the Lien of
this Restated Indenture, except Prepaid Liens and Permitted
Encumbrances.
"Indenture" is the Original Indenture as supplemented and amended by
thirty-one supplemental indentures thereto. The Indenture is restated
by this Restated Indenture. Reference to the Indenture in the bond
forms of Existing Bonds attached as Exhibits B, C, D, E, F and G are
deemed to refer to this Restated Indenture.
"Independent," when applied to any accountant, engineer, appraiser, or
other expert, shall mean such a person who (a) is in fact independent;
(b) does not have any substantial interest, direct or indirect, in the
Company or in any other obligor upon the Bonds issued hereunder or in
any person directly or indirectly controlling, or controlled by, or
under direct or indirect common control with, the Company or any such
other obligor; and (c) is not connected with the Company or any other
obligor upon the Bonds issued hereunder or any person directly or
indirectly controlling, or controlled by, or under direct or indirect
common control with, the Company or any other obligor, as an officer,
employee, promoter, underwriter, trustee, partner, director, or person
performing similar functions.
"Lien" is any mortgage, pledge, security interest, encumbrance,
easement, lease, reservation, restriction, servitude, charge or similar
right or lien of any kind, including, without limitation, any
conditional sale or other title retention agreement, any lease in the
nature thereof, any filing of, or agreement to give, any financing
statement under the Uniform Commercial Code of any jurisdiction, and
any defect or irregularity in record title.
"Net Bondable Additions" is the amount of Gross Bondable Additions,
plus the amount of any then unused Additions Credit which the Company
is entitled to use and elects to use, less the amount of Net
Retirements.
"Net Retirements" as of any particular date shall mean the Amount of
all Retirements up to that date not previously certified to the Trustee
in a Retirement Certificate filed under any provision of this Restated
Indenture, less the aggregate amount of all Retirement Credits
applicable thereto. If in any case the aggregate amount of applicable
Retirement Credits exceeds the amount of Retirements shown in any such
Retirements Certificate, the amount of Net Retirements for the purpose
of such certificate shall be deemed to be zero, but such excess may be
carried forward and used as a Retirement Credit in a future Retirement
Certificate.
"Opinion of Counsel" is a written opinion of counsel selected by the
Company, who may be counsel for the Company, and who shall be
acceptable to the Trustee.
"Original Indenture" is the Indenture of Mortgage and Deed of Trust,
dated September 1, 1941, entered into between the Central Hanover Bank
and Trust Company and the Company. The Original Indenture was
supplemented and amended by thirty-one supplemental indentures, which
is referred to as the Indenture and which is restated by this Restated
Indenture.
"Outstanding" or "outstanding," when used as of any particular time
with reference to Bonds, are all of the Bonds which theretofore shall
have been authenticated and delivered under the Indenture and this
Restated Indenture, except:
(a) Bonds theretofore canceled or surrendered to the
Trustee for cancellation;
(b) Bonds for the payment or redemption of which money in
the necessary amounts shall have been deposited with
the Trustee, whether upon or prior to the maturity or
the redemption date of such Bonds, provided that if
such Bonds are to be redeemed prior to the maturity
thereof, notice of such redemption shall have been
given, as provided herein, or provisions satisfactory
to the Trustee shall have been made therefor;
(c) Any reference to the holders of a majority or a
particular percentage of the Bonds, or to the holders
of a majority or a particular percentage of the Bonds
of a particular series, shall mean the holders at the
time in question of a majority or the specified
percentage in aggregate principal amount of all of the
Bonds then outstanding under this Restated Indenture,
or of all of the Bonds of such particular series then
outstanding under this Restated Indenture, as the case
may be, excluding Bonds owned by or for the account or
benefit of the Company or any other person who is
liable on the Bonds, or an Affiliate of the Company or
of any such persons; provided that for the purpose of
determining whether the Trustee shall be protected in
relying on any notice, request, direction, consent,
waiver or other action by the holders of Bonds, only
Bonds which the Trustee knows are so owned shall be
excluded; and
(d) Bonds in lieu of and in substitution for which other
Bonds shall have authenticated and delivered pursuant
to the terms of Section 2.12.
"Permitted Encumbrances" are as of any particular time any of the
following:
(1) Liens for taxes, assessments, or governmental charges
for the then current year and taxes, assessments or
governmental charges not then due and delinquent;
(2) Liens for taxes, assessments or governmental charges
already due, but the validity of which is being
contested at the time by the Company in good faith as
provided in Section 9.04;
(3) Liens and charges incidental to construction
effected during the six months next preceding such
time of which the Company has no notice;
(4) Liens, securing obligations neither assumed by the
Company nor on account of which it customarily pays
interest, existing, either at the date of execution
hereof, or, as to property thereafter acquired, at
the time of acquisition by the Company, upon real
estate or rights in or relating to real estate
acquired by the Company for substation, transmission
line, distribution line, or right-of-way purposes;
(5) Zoning laws and ordinances, easements, restrictions
and similar encumbrances and minor defects or
irregularities of title which do not impair the use
of the property of the Company in the operation of
its business.
In determining, for the purpose of any opinion to be
delivered hereunder, whether any such defect, irregularity,
law or ordinance, or easement, restriction or similar
encumbrance impairs the use of the property subject thereto in
the operation of the business of the Company, counsel giving
such opinion may, subject to the requirements of any statement
therein made pursuant to Section 1.02, rely on an Engineer's
Certificate.
"Person" is an individual, corporation, partnership, trust or
unincorporated organization, or a government or a political subdivision
thereof.
"Prepaid Lien" is any Prior Lien in respect of which cash sufficient to
pay or redeem all indebtedness secured thereby shall be held in trust
for such purpose by the Trustee hereunder or by the trustee or other
holder of such Prior Lien.
"Principal office of the Trustee" is the main office of the Trustee in
the Borough of Manhattan, City of New York.
"Prior Lien" is and includes any mortgage or other lien (except
Permitted Encumbrances) prior to the lien of this Restated Indenture
upon property hereafter acquired by the Company, existing on said
property and/or placed thereon to secure unpaid portions of the
purchase price, at the time of such acquisition, and any lease,
conditional sales agreement or other title retention contract existing
in respect of said property or created to secure unpaid portions of the
purchase price thereof.
"Prior Lien Obligations" are any bonds or indebtedness and/or evidences
of indebtedness secured by a Prior Lien. The term "outstanding," as of
any particular time when used with reference to Prior Lien Obligations,
shall mean all obligations secured by a Prior Lien, except Obligations
for whose payment or redemption sufficient cash shall have been
irrevocably deposited in trust with the Trustee hereunder or with the
trustee or other holder of such Prior Lien.
"Property Additions" are defined at Section 4.01, Paragraph A.
"Resolution of the Board" is a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company under its corporate
seal to have been duly adopted by the Board of Directors of the
Company, at a meeting thereof duly called and held and at which a
quorum was present, and to be still in full force and effect.
"Responsible officer or officers" of the Trustee includes the
President, any Vice-President, any Assistant Vice-President, the
Secretary, the Treasurer, and every officer and assistant officer of
the Trustee customarily performing functions similar to those performed
by the foregoing individuals or to whom any corporate trust matter is
referred because of his knowledge of and familiarity with a particular
subject.
"Restated Indenture" is this Restated and Amended Indenture of Mortgage
and Deed of Trust which is a restatement of the Indenture. The Restated
Indenture is not a new indenture; and when such term is used herein, it
refers to the Indenture as restated by this Restated Indenture.
"Retirements" are (a) all Bonded Property which, since November 1, 1941
(or prior thereto, as regards any of the Trust Estate owned by the
Company on November 1, 1941), shall have been worn out, abandoned or
destroyed, or released from the Lien of this Restated Indenture or
taken by eminent domain, or purchased by any public authority pursuant
to the right reserved to or vested in it by any license or franchise,
or otherwise disposed of by the Company, or permanently retired from
service for any reason, whether or not renewed or replaced, and (b) all
Bonded Property which at the time has permanently ceased to be used or
useful in the Electric Utility Business of the Company, and whether or
not the cost of any such property referred to in the foregoing Clauses
(a) or (b) shall have been written off or eliminated from the books of
the Company, except that, when a minor item of property has been
replaced by other property of equal value and efficiency and the cost
of such replacement has been charged to maintenance, repairs or other
similar account, the property replaced shall not be considered as a
Retirement.
The "amount" of all Retirements shall be as follows:
(1) As to property owned by the Company on or prior to
November 1, 1941, the book value of such property on
November 1, 1941, or on the date when such property
became a Retirement in the case of Retirements prior
to November 1, 1941 (such book value to be estimated
if necessary as to particular property), without
deducting therefrom any applicable reserves for
depreciation and/or retirements;
(2) As to Property Additions or other Bonded Property
acquired after November 1, 1941, the Cost to the
Company or the Fair Value thereof (whichever is
less), as certified to the Trustee at the time said
Property Additions (or other such Bonded Property)
became Bonded Property (estimated, if necessary, as
to particular property) or, if no such certification
shall have been made hereunder, then the Cost
thereof. The Company will not, on or prior to
November 1, 1941, change the book value of property
owned by it.
"Retirement Credits" are the following credits which may be applied
against the Retirements at any time certified to the Trustee in a
Retirements Certificate under any provision hereof:
(1) (a) The cash and the principal amount of any purchase
money obligations, if any, deposited with the Trustee to obtain the
release of, or representing the proceeds of the taking by eminent
domain or of the purchase by a public authority or of any other
disposition of, or of insurance on, any property included in the
Retirements then so certified, minus
(b) The maximum amount, if any, then estimated by the Company
to be withdrawable in partial reimbursement for taxes pursuant to the
provisions of Section 8.07 in respect of such property, plus or minus
(c) Such sum, if any, as may be necessary to reflect any
difference not previously adjusted between (i) amounts theretofore
estimated pursuant to the foregoing subdivision (b) of this Clause (1)
to be withdrawable in respect of property previously released and (ii)
the actual net amounts withdrawn in respect of such property pursuant
to Section 8.07;
(If in any case the result of the calculation required by the
foregoing subdivisions (a), (b) and (c) is less than zero, such amount
shall be deducted from the aggregate amount of other Retirement Credits
in computing Net Retirements.)
(2) The Amount of all Property Additions, if any, used to
obtain the release of any property included in the Retirements then so
certified; and
(3) The excess credit, if any, carried forward from a previous
Retirements Certificate, as provided in the definition of Net
Retirements in this Section 1.01.
"Subsidiary" is any corporation, more than 50% of the issued and
outstanding shares of which having ordinary voting power for the
election of directors (whether or not at the time stock of any other
class or classes shall or might have voting power by reason of the
happening of any contingency) shall at the time be owned legally or
equitably by the Company and/or by one or more Subsidiaries as said
term is herein defined.
"Trustee" is The Chase Manhattan Bank, a corporation organized and
existing under the laws of the State of New York or, subject to the
provisions of Article Fourteen, its successors in the trusts hereby
created.
"Trust Indenture Act" is the Trust Indenture Act of 1939, as amended
and as in effect on the date hereof.
"Unbonded Cash" is cash, other than Bonded Cash, held by the Trustee
or by the trustee or other holder of a Prior Lien.
"Unbonded Property" is and includes all property of the Company, other
than Bonded Property and Excepted Property.
"Written Order of the Company," "Written Request of the Company," and
"Written Consent of the Company" are, respectively, a written order,
request or consent signed in the name of the Company under its
corporate seal by the Chairman of the Board or the President or a
Vice-President and by the Treasurer or an Assistant Treasurer of the
Company.
Section 1.02. Opinion and Certificate Requirements. Whenever in this
Restated Indenture it is provided that a certificate, opinion or other document
shall comply with the provisions of this Section 1.02, such document shall
include:
(1) a statement that the person making such certificate,
opinion or other document has read the covenant or condition in respect
of which such document is furnished; and
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such document are based; and
(3) a statement that, in the opinion of such person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such covenant or condition has been complied with.
Section 1.03. Documentary Requirements. Wherever in this Restated
Indenture, in connection with any application for the authentication and
delivery of Bonds hereunder or for the withdrawal of any moneys held by the
Trustee under any provision hereof or for the execution of any release, or any
other application or certificate or report to the Trustee hereunder, it is
provided that the Company shall deliver resolutions, certificates, statements,
opinions, evidence, reports, orders and/or other papers as a condition of the
granting of such application, or as evidence of the Company's compliance with
any condition or covenant herein contained, it is intended that the truth and
accuracy, at the time of the granting of such application or at the effective
date of such certificate or report (as the case maybe), of the facts and
opinions stated in such resolutions, certificates, statements, opinions,
evidence, reports, orders and/or other papers shall in each and every such case
be conditions precedent to the right of the Company to have such application
granted or to the effectiveness of such certificate or report. Nevertheless,
upon any such application, certificate or report, the resolutions, certificates,
statements, opinions, evidence, reports, orders and/or other papers required by
any of the provisions of this Restated Indenture to be delivered to the Trustee
as a condition of the granting of such application, or as evidence of such
compliance, may, subject to the provisions of Section 14.02, be received by the
Trustee as conclusive evidence of any statement therein contained, and, subject
to such provisions, shall be full warrant, authority and protection to the
Trustee acting on the faith thereof, not only in respect of the statements of
fact therein made, but also in respect of the opinions therein set forth. Before
granting any such application, or accepting such evidence of compliance, the
Trustee shall not (subject to the provisions of Section 14.02) be under any duty
to make any further investigation into the truth of the matters evidenced by any
such resolution, certificate, statement, opinion, evidence, report, order and/or
other paper, but it may in its discretion make any such independent inquiry or
investigation as to it may seem proper. If the Trustee shall determine to make
such further inquiry, it shall be entitled to examine the books, records and
premises of the Company, either itself or by agent or attorney, and unless
satisfied, with or without such examination, of the truth and accuracy of the
matters stated in such resolutions, certificates, statements, opinions,
evidence, reports, orders and/or other papers, it shall be under no obligation
to grant the application or to accept such evidence of compliance. The
reasonable expenses of every such examination or other inquiry shall be paid by
the Company or, if paid by the Trustee, shall be repaid by the Company, upon
demand, with interest at the rate of 6% per annum and, until such repayment,
shall be secured under this Restated Indenture in priority to the Bonds and
coupons.
Section 1.04. Documentary Requirements--More Than One Certificate
Permissible. Whenever in this Restated Indenture provision is made for the
delivery of any certificate, opinion or other document signed by an officer or
officers of the Company or by any other person, such provision may be complied
with by the delivery of more than one certificate or opinion or other document,
each covering a particular part of the matter or matters required to be included
in the certificate or opinion or other document so provided for; and in such
event such separate certificates, opinions or other documents need not all be
signed by the same officers or persons, provided that such separate
certificates, opinions or other documents shall, taken together, contain all of
the statements herein provided for and be signed by an officer or officers or
person or persons, as the case may be, by whom the certificate, opinion or other
document so provided for is authorized or required to be signed.
Section 1.05. Redemption Requirements--Cash Deposit. Wherever in this
Restated Indenture it is provided or permitted that there be deposited with or
held in trust by the Trustee or other person cash sufficient to pay or redeem
any bonds, obligations or other indebtedness, the amount of cash so to be
deposited or held shall be the principal amount of such bonds, obligations or
other indebtedness and all unpaid interest thereon to maturity, unless said
bonds, obligations or other indebtedness are redeemable and are to be redeemed
prior to maturity and there shall be furnished to the Trustee proof satisfactory
to it that notice of such redemption on a specified redemption date has been
duly given or provision satisfactory to the Trustee shall be made for such
notice, in which case the amount of cash so to be deposited or held shall be the
principal amount of such bonds, obligations or indebtedness and interest thereon
to the redemption date, together with the redemption premium, if any.
ARTICLE TWO
THE BONDS
Section 2.01. Bond Form. The text of the Bonds and the certificate of
authentication of the Trustee to be executed thereon are to be substantially in
the following form, with such appropriate omissions, insertions and variations
as are in this Restated Indenture provided or permitted.
(General Form of Bond)
No._________ $____________
BLACK HILLS CORPORATION
FIRST MORTGAGE BOND, SERIES _________
Due _____________________
Black Hills Corporation (hereinafter called the "Company"), a
corporation organized and existing under the laws of the State of South
Dakota, for value received, hereby promises to pay to
, or registered assigns, on the
day of , at
,
Dollars, in any coin or currency of the
United States of America which at the time of payment shall be legal
tender for the payment of public and private debts, and to pay interest
thereon from the date hereof, at the rate of
per cent per annum, payable at
in like coin or currency annually on and in each
year until the principal hereof shall have become due and payable,
and thereafter if default be made in the payment of such principal, at
the rate of six per cent, per annum until the principal hereof shall
be paid.
This Bond is one of an authorized issue of Bonds of the Company
known as its "First Mortgage Bonds," issued and to be issued in one or
more series under, and all equally and ratably secured (except as any
sinking, amortization, improvement, renewal or other analogous fund,
established in accordance with the provisions of the Restated
Indenture hereinafter mentioned, may afford additional security for
the Bonds of any particular series) by, a Restated Indenture of
Mortgage and Deed of Trust dated as of ________________, 1998
(hereinafter called the "Restated Indenture") executed by the Company
to The Chase Manhattan Bank (herein called the "Trustee"), as Trustee,
to which Restated Indenture and all indentures supplemental thereto
reference is hereby made for a description of the properties mortgaged
and pledged, the nature and extent of the security, the rights of the
holders of said Bonds and of the Trustee and of the Company in respect
of such security, and the terms and conditions upon which said Bonds
are and are to be issued and secured.
To the extent permitted by the Restated Indenture and as provided
therein, with the consent of the Company and upon the written consent
or affirmative vote of at least sixty-six and two-thirds per cent in
principal amount of the Bonds then outstanding and entitled to
consent, and of not less than sixty-six and two-third percent in
principal amount of the Bonds then outstanding and entitled to consent
of each series affected thereby in case one or more but less than all
of the series of Bonds issued under the Restated Indenture are so
affected, the rights and obligations of the Company and of the holders
of Bonds and the terms and provisions of the Restated Indenture and of
any instrument supplemental thereto may be modified from time to time,
provided that no such modification or alteration shall be made which
would postpone the date fixed herein or in the Restated Indenture for
the payment of the principal of, or any installment of interest on,
the Bonds, or reduce the principal of, or the rate of interest payable
on, the Bonds, or reduce the percentage of the principal amount of
Bonds the consent of which is required for the authorization of any
such modification of alternation, or which would modify, without the
written consent of the Trustee, the rights, duties or immunities of
the Trustee.
As provided in said Restated Indenture, said Bonds are issuable
in series which may vary as in said Restated Indenture provided or
permitted. This Bond is one of a series of bonds entitled "First
Mortgage Bonds, Series ."
(Here insert reference to redemption if Bonds of a particular
series are redeemable and to sinking or other fund if such Bonds are
entitled thereto.)
If an event of default, as defined in said Restated Indenture,
shall occur, the principal of this Bond may become or be declared due
and payable, in the manner and with the effect provided in said
Restated Indenture.
This Bond is transferable by the registered owner hereof in
person or by attorney authorized in writing, at ,
upon surrender for cancellation of this Bond and on payment of
charges, and upon any such transfer a new registered Bond, of the
same series, for the same aggregate principal amount, will be
issued to the transferee in exchange herefor.
(Here insert provisions for exchangeability, if any.)
The Company and the Trustee may deem and treat the person in
whose name this Bond is registered as the absolute owner hereof, for
the purpose of receiving payment of or on account of the principal
hereof and interest due hereon, and neither the Company nor the
Trustee shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or
the interest on this Bond, or for any claim based hereon or otherwise
in respect hereof or of said Indenture or of any indenture
supplemental thereto, against any incorporator, stockholder, director
or officer, as such, past, present or future, of the Company or of any
predecessor or successor corporation, either directly or through the
Company or any predecessor or successor corporation, whether by virtue
of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or by any legal or equitable proceeding or
otherwise howsoever; all such liability being, by the acceptance
hereof and as a part of the consideration for the issuance hereof,
expressly waived and released by every holder hereof, as more fully
provided in said Restated Indenture; provided, however, that nothing
herein or in said Restated Indenture contained shall be taken to
prevent recourse to and the enforcement of the liability, if any, of
any shareholder or any stockholder or subscriber to capital stock upon
or in respect of shares of capital stock not fully paid up.
This Bond shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed
by the Trustee, or its successor as Trustee under said Restated
Indenture.
IN WITNESS WHEREOF, the Company has caused this Bond to be signed
in its name by its President or one of its Vice Presidents, and its
corporate seal to be impressed or imprinted hereon and attested by its
Secretary or one of its Assistant Secretaries.
Dated,
BLACK HILLS CORPORATION,
By
President.
Attest:
Secretary.
(FORM OF TRUSTEE'S CERTIFICATE OF
AUTHENTICATION FOR ALL BONDS)
This is one of the Bonds described in the within-mentioned
Restated Indenture.
THE CHASE MANHATTAN BANK,
As Trustee,
By
Authorized Officer
Section 2.02. Issuance of Bonds--Limitations. The aggregate principal
amount of Bonds which may be authenticated and delivered and outstanding under
this Restated Indenture is not limited, except as hereinafter in Articles Three,
Four, Five and Six provided. The power of the Company to issue Bonds hereunder
may be exercised from time to time whenever Bonds may be authenticated and
delivered in accordance with Articles Three, Four, Five or Six; and this
Restated Indenture shall be and constitute a continuing Lien to secure the full
final payment of the principal of and interest on all Bonds which may, from time
to time, be executed, authenticated and delivered hereunder, and issued by the
Company.
Section 2.03. Registered Bonds. The Bonds issuable under this Restated
Indenture shall be issued as registered Bonds in series as from time to time
shall be authorized by the Board of Directors of the Company.
Section 2.04. Naming Series of Bonds. The Bonds of all series shall be
known and entitled generally as the "First Mortgage Bonds" of the Company. With
respect to the Bonds of any particular series, the Company may incorporate in
the general title of such Bonds the rate of interest borne by the Bonds of such
series, the maturity date or any other words or figures descriptive thereof or
of the security thereof or distinctive or definitive of such series, as the
Board of Directors of the Company may determine.
Section 2.05. New Bonds--Optional Provisions. The Bonds of each series
shall bear such date or dates, shall be payable at such place or places, shall
be transferable or registerable at such place or places, shall mature on such
date, or in the case of serial maturities on such dates, shall bear interest at
such rate, or in the case of serial maturities at such rates, payable in such
installments and on such dates, and may be redeemable before maturity at such
price or prices and upon such terms and conditions, as shall be fixed and
determined by the Board of Directors of the Company, and as shall be
appropriately expressed in the Bonds of such series. The Company may, at the
time of the creation of any particular series of Bonds or at any time
thereafter, make, and the Bonds of such series may contain any or all of the
following:
A. Provision for the payment of the principal of and/or the
interest on the Bonds of such series without deduction for specified
taxes, assessments or other governmental charges;
B. Provision for refunding or reimbursing to the holders of the
Bonds of such series, specified taxes, assessments or other
governmental charges, but the obligation of the Company to refund or
reimburse any such taxes, assessments or other governmental charges
shall not be deemed to be a part of the indebtedness secured by this
Restated Indenture;
C. Provision for the exchange or conversion of the Bonds of such
series for or into new Bonds issuable hereunder of a different series
and/or shares of stock of the Company and/or other securities;
D. Provision for a sinking, amortization, improvement, renewal or
other analogous fund; and
E. Provision limiting the aggregate principal amount of the Bonds
of such series;
all to such extent, at such times and upon such terms and conditions as the
Board of Directors of the Company may determine and fix. All Bonds of the same
series shall be identical as to date of maturity, rate of interest, and terms of
redemption if redeemable, except that in the case of serial maturities, they may
be of different maturity dates, rates of interest and terms of redemption.
Each new series of Bonds shall be created by an indenture supplemental
to the Restated Indenture hereto authorized by a Resolution of the Board
delivered to the Trustee.
The Bonds of each series shall be substantially in the form as provided
at Section 2.01 hereofwith such omissions, variations and insertions as are
permitted by this Restated Indenture, and may have such letters, numbers or
other marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon, as may be required to comply with the
rules of any securities exchange or to conform to any usage in respect thereof,
or as may, consistently herewith, be prescribed by the Board of Directors of the
Company. The form of the Bonds of each new series shall be established by the
indenture supplemental hereto creating such series as hereinabove provided.
Section 2.06. Denominations and Interest Rates. The Bonds of each new
series shall be issued in such denominations as the Board of Directors of the
Company may determine. The Bonds shall bear interest from, and shall be dated as
of, the interest date next preceding the date on which the same shall be
authenticated by the Trustee, or, if such date of authentication shall be an
interest date, such Bonds shall bear interest from, and shall be dated as of,
such interest date, or, if such date of authentication shall be a date prior to
the first interest payment date for Bonds of the series being authenticated,
such Bonds shall bear interest from, and shall be dated as of, the commencement
of the first interest period for such series; provided, however, that, if at the
time of authentication of any Bond of any series, interest is in default on
outstanding Bonds of such series, such Bond shall bear interest from, and shall
be dated as of, the interest date for such series to which interest has
previously been paid or made available for payment on outstanding Bonds of such
series.
Section 2.07. Exchange of Bonds. If and to the extent that the Company,
by Resolution of the Board delivered to the Trustee, or by an indenture
supplemental hereto authorized by like resolution, shall so determine, either at
the time of the creation of any series of Bonds or at any time thereafter, Bonds
of such series may, at the option of the holders thereof, and upon the surrender
thereof to the Trustee, be exchanged for Bonds of the same series of the same
aggregate principal amount, but of a different authorized denomination or
denominations. All Bonds surrendered for exchange shall be accompanied by a
written instrument of transfer, in form approved by the Company, executed by the
registered owner in person or by attorney authorized in writing. All Bonds so
surrendered shall be forthwith canceled by the Trustee. All Bonds executed,
authenticated and delivered in exchange for Bonds so surrendered shall be the
valid obligations of the Company, evidencing the same debt as the Bonds
surrendered, and shall be secured by the Lien of this Restated Indenture and
entitled to all of the benefits and protection hereof to the same extent as the
Bonds in exchange for which they shall be executed, authenticated and delivered.
Any such exchange of Bonds shall be subject to payment of the charges set forth
in Section 2.12.
Section 2.08. Execution of Bonds. From time to time the Bonds issuable
hereunder shall be executed on behalf of the Company by its Chairman of the
Board, President or a Vice-President, under its corporate seal attested by its
Secretary or an Assistant Secretary, or by such other form of execution as may
be prescribed in accordance with applicable law by a Resolution of the Board
delivered to the Trustee. The corporate seal of the Company may be affixed to
any Bond by printing, engraving, lithographing, stamping or otherwise making,
placing or affixing, or causing to be printed, engraved, lithographed, stamped
or otherwise made, placed or affixed, upon such Bond, by any process whatsoever,
any impression, facsimile or other representation of said corporate seal. In
case any officer of the Company who shall have signed or sealed any Bond shall
cease to be such officer of the Company before the Bond so signed or sealed
shall have been actually authenticated and delivered by the Trustee, such Bond,
nevertheless, may be authenticated and delivered and issued as though the person
who had signed or sealed such Bond had not ceased to be an officer of the
Company; and also any Bond may be signed and sealed on behalf of the Company by
such person as at the actual date of the execution of such Bond shall be the
proper officer of the Company, although at the date of such Bond such person
shall not have been an officer of the Company.
Section 2.09. Authentication of Bonds. The Bonds when executed shall be
delivered to the Trustee for authentication by it; and the Trustee shall
authenticate and deliver said Bonds as in this Restated Indenture provided and
not otherwise. Only such Bonds as shall bear thereon a certificate of
authentication substantially in the form at Section 2.01 and executed by the
Trustee, shall be secured by this Restated Indenture or be entitled to any Lien,
right or benefit hereunder. No Bond shall be valid or become obligatory for any
purpose until such certificate of authentication shall have been duly executed
on such Bond; and such authentication by the Trustee upon any Bond shall be
conclusive evidence and the only evidence that the Board so authenticated has
been duly issued hereunder.
Section 2.10. Temporary Bonds and Exchange. Pending the preparation of
definitive Bonds of any series the Company may execute, and the Trustee shall
authenticate and deliver, in lieu of such definitive Bonds and subject to the
same provisions, limitations and conditions, one or more temporary printed,
lithographed or typewritten Bonds, of any denomination specified in the Written
Order of the Company for the authentication and delivery thereof, substantially
of the tenor of the Bonds to be issued as hereinbefore recited, with such
omissions, insertions and variations as the officers executing such Bonds may
determine. The Company shall without unreasonable delay, at its own expense,
prepare, execute and deliver to the Trustee, and thereupon, upon the surrender
of temporary Bonds, the Trustee shall deliver in exchange therefor, definitive
authenticated Bonds of the same series and for the same principal amount in the
aggregate as the temporary Bonds surrendered. Definitive Bonds may be in the
form of fully engraved Bonds or printed or lithographed Bonds on steel engraved
borders. All temporary Bonds so surrendered, whether in exchange for definitive
Bonds or for other temporary Bonds, shall be forthwith canceled by the Trustee.
Until exchanged for definitive Bonds, each of the temporary Bonds shall in all
respects be entitled to the Lien and security of this Restated Indenture, and
interest thereon, when and as payable, shall be paid to the registered owner of
such Bond.
Section 2.11. Registrar and Registration. The Trustee shall be deemed
to be and is hereby appointed by the Company a Registrar of Bonds issued
hereunder, for the purpose of registering and transferring all Bonds issued
hereunder and entitled to be so registered or transferred, and the Company shall
keep or cause to be kept at the principal office of the Trustee, books for the
registration and transfer of Bonds issued hereunder; and, upon presentation for
such purpose, the Company shall, under such reasonable regulations as it may
prescribe, register or transfer or cause to be registered or transferred
therein, any of the Bonds issued hereunder and entitled to be so registered or
transferred.
Whenever the registered owner of any registered Bond shall surrender
the same to the Company for transfer at said principal office of the Trustee,
together with a written instrument of transfer in form approved by the Company,
executed by such registered owner in person, or by attorney authorized in
writing, the Company shall execute, and the Trustee shall authenticate, and the
Company shall deliver in exchange therefor a new registered Bond or Bonds of the
same series, for the same aggregate principal amount. All Bonds so surrendered
shall be forthwith canceled by the Trustee.
The Company shall not be required to make transfers of Bonds as
provided in this Section for a period of two days next preceding any interest
payment date but shall not be prohibited hereby from so doing.
Similar books may also be kept at such other place or places as the
Board of Directors of the Company may determine for the registration and
transfer of the Bonds of any particular series, open at all times to inspection
by the Trustee, in which the Bonds of such series may be registered and
transferred as in this Section provided; and such other place or places may (but
need not) be appropriately recited in the Bonds of such series.
The Company and the Trustee may deem and treat the person in whose name
any Bond shall be registered upon the books of the Company as hereinbefore
provided, as the absolute owner of such Bond for the purpose of receiving
payment of or on account of the principal of and interest on such Bond and,
subject to the provisions of Subdivision (b) of Section 9.17, for all other
purposes; and all such payments so made to any such registered owner or upon his
order shall be valid and effectual to satisfy and discharge the liability upon
such Bond to the extent of the sum or sums so paid, and neither the Company nor
the Trustee shall be affected by any notice to the contrary.
Neither the Company nor the Trustee shall be bound to recognize any
person as the holder of a Bond outstanding hereunder unless and until his Bond
is submitted for inspection, if required, and his title thereto satisfactorily
established, if disputed.
Section 2.12. Governmental Charges. For any exchange of Bonds for Bonds
of another denomination, or for any transfer of any Bond, the Company at its
option may require the payment of a sum sufficient to reimburse it for any stamp
tax or other governmental charge incident thereto, and in addition thereto, a
further sum not exceeding $2 for each new Bond, if any, issued upon such
exchange or transfer.
Section 2.13. Bonds Without Certificates Allowed. The Company may issue
Bonds without certificates and under a noncertificated system of registration
for any series of Bonds as authorized by the Trustee.
Section 2.14. Replacement of Bonds. In case any Bond shall be
mutilated, lost, stolen or destroyed, then, upon the production of such
mutilated Bond, or upon receipt of evidence satisfactory to the Company and the
Trustee of the loss, theft or destruction of such Bond and of the ownership and
authenticity thereof, and upon receipt also of indemnity satisfactory to each of
them, the Company in its discretion may execute, and thereupon the Trustee shall
authenticate and deliver a new bond of like tenor in exchange for, and upon
cancellation of, the mutilated Bond or in lieu of the Bond so lost, stolen or
destroyed; or, if any such mutilated, lost, stolen or destroyed Bond shall have
matured or be about to mature, instead of issuing a new Bond, the Company, with
the consent of the Trustee, may pay the same without surrender thereof, in the
case of any such lost, stolen or destroyed Bond. Any new Bond issued under this
Section in lieu of any Bond alleged to have been lost, stolen or destroyed shall
constitute an original contractual obligation of the Company, whether or not the
Bond alleged to have been lost, stolen or destroyed be at any time enforceable
by anyone; and such new Bond shall be entitled to the benefits of this Restated
Indenture equally and ratably with all other Bonds issued hereunder (subject to
the provisions of Section 9.02). The Company and the Trustee, in their
discretion, may place upon any such new Bond a distinguishing mark or a legend
to comply with the rules of any securities exchange or to conform to any usage
with respect thereto, but such mark or legend shall in no wise affect the
validity of such new Bond. The Company may at its option require the payment of
a sum sufficient to reimburse it for any stamp tax or other governmental charge,
and any expenses incurred by the Company or the Trustee in connection with the
issuance of any such new Bond, and also a further sum not exceeding $2 for each
such new Bond.
ARTICLE THREE
EXISTING BONDS
Section 3.01. Series Y Bonds. First Mortgage Bonds, Series Y, 9.49%,
due June 15, 2018 (the "Series Y Bonds"), have been duly issued and are
presently outstanding and secured by the Restated Indenture in the principal
amount outstanding of $5,420,000.
A. Attached to this Restated Indenture as Exhibit B is a copy
of the Bond form setting forth the interest rate and other terms and
conditions of the Series Y Bonds.
B. The Series Y Bonds shall be redeemable (except as otherwise
provided in the following Paragraphs C or F of this Section 3.01) at
the option of the Company, at any time and from time to time, in whole
or in part, on or after June 15, 1991, in the manner and upon the
notice provided in Article Ten of the Restated Indenture, at the
redemption prices, and subject to the conditions set forth in Exhibit
B, together, in each case, with accrued interest to the redemption
date. In the case of any redemption of Series Y Bonds for which the
Make-Whole Premium set forth in Exhibit B may be payable, the Company
will give written notice to the registered owners of the Series Y Bonds
to be redeemed, and to the Trustee, by telecopy or other same-day
written communication, three business days prior to the date fixed for
redemption, which notice shall set forth the Make-Whole Premium, if
any, applicable to the Series Y Bonds to be redeemed, and the
calculations used to determine the amount of such premium.
C. Any monies applied to the redemption of Series Y Bonds
pursuant to the provisions of Section 8.08(a) of the Restated Indenture
on or after June 15, 1991 and on or before June 14, 2008, and any
monies applied to the redemption of Series Y Bonds pursuant to the
provisions of Section 8.08(b) of the Restated Indenture on or before
June 14, 2008, shall be so applied at a redemption price equal to 100%
of the principal amount of the Series Y Bonds to be redeemed, plus
accrued interest to the redemption date, plus an amount equal to the
Make-Whole Premium set forth in the form of the Series Y Bonds provided
in Exhibit B. Monies applied to the redemption of Series Y Bonds
pursuant to the provisions of Section 8.08(a) or Section 8.08(b) of the
Restated Indenture on or after June 15, 2008, shall be applied at a
redemption price equal to the applicable percentage of the principal
amount of the Series Y Bonds to be redeemed set forth in Exhibit B plus
accrued interest to the redemption date.
D. As a sinking fund for the retirement of Series Y Bonds, so
long as any of the Series Y Bonds shall be outstanding, the Company
will deposit with the Trustee on June 14, 1998, and annually thereafter
on each June 14 to and including June 14, 2017 (each such date being
herein sometimes referred to as a "Series Y Sinking Fund Payment
Date"), cash in an amount sufficient for the redemption of $290,000
aggregate principal amount of Series Y Bonds on the next ensuing June
15 at a redemption price of 100% of the principal amount thereof,
together, in each case, with accrued interest to the redemption date,
and thereupon the Trustee shall apply such cash to the redemption of
said aggregate principal amount of the Bonds of said series on said
next ensuing June 15. Any redemption of less than all of the Series Y
Bonds shall not relieve the Company of its obligation to redeem Series
Y Bonds in accordance with the requirements of this Paragraph D.
E. In addition to the mandatory sinking fund payments required
by Paragraph D, on June 15, 2008 and on any Series Y Sinking Fund
Payment Date thereafter, the Company shall have the option to double
the mandatory sinking fund payment as long as the aggregate principal
amount of the Series Y Bonds retired pursuant to this Paragraph E does
not exceed twenty-five percent (25%) of the original principal amount
of the Series Y Bonds. Any redemption pursuant to this Paragraph E
shall be at a redemption price of 100% of the principal amount of the
Series Y Bonds to be redeemed, together in each case, with accrued
interest to the redemption date. Moneys deposited with the Trustee
pursuant to this Paragraph E shall be applied by the Trustee to the
redemption of Series Y Bonds on the next ensuing June 15. In the event
the Company shall elect to redeem Series Y Bonds pursuant to the
provisions of this Paragraph E, the Company shall give written notice
of such election to the Trustee on or before the 55th day prior to the
applicable Series Y Sinking Fund Payment Date.
F. Whenever the Trustee shall be required to redeem Bonds
pursuant to the provisions of Paragraphs D and E of this Section 3.01,
the Trustee shall, on or before the 45th day prior to the Series Y
Sinking Fund Payment Date, proceed to select for redemption, from the
Bonds of said series, in the manner provided in Paragraph G of Section
3.01, the aggregate principal amount of Bonds of said series required
by the provisions of Paragraphs D and E to be redeemed by application
of the cash to be paid to the Trustee on said Series Y Sinking Fund
Payment Date, and for and on behalf of the Company and in the name of
the Company, the Trustee shall give notice, as required by the
provisions of Article Ten of the Restated Indenture, of the redemption
for the Series Y Sinking Fund of the Bonds so selected. Subject to the
provisions of this Article, the redemption of such Bonds shall be
effected in the manner and upon the terms provided in Section 10.03 of
the Restated Indenture at the sinking fund redemption price of 100% of
the principal amount thereof, together, in each case, with accrued
interest to the redemption date.
G. Notwithstanding the provisions of Section 10.03 of the
Restated Indenture, in case of the redemption at any time of less than
all the outstanding Series Y Bonds, the particular Bonds or parts
thereof to be redeemed shall be selected by the Trustee from the
outstanding Series Y Bonds not previously called for redemption as
nearly as practicable pro rata among the registered holders of the
Series Y Bonds according to the respective principal amounts of such
Bonds, provided that the portions of the principal of Series Y Bonds at
any time so selected for redemption in part shall be equal to $1,000 or
an integral multiple thereof.
H. The Company further covenants that so long as any Series Y
Bonds shall remain outstanding, the Company will not, without the
consent of the holder of each of the Series Y Bonds, revise the
original schedule of sinking fund payments as provided in Paragraph D
of Section 3.01 or modify any of the redemption prices for the Series Y
Bonds as provided in Exhibit B. The provisions of this covenant can
only be modified, amended or otherwise waived with approval from all of
the holders of Series Y Bonds outstanding, excluding any Series Y Bonds
held by the Company.
Section 3.02. Series Z Bonds. First Mortgage Bonds, Series Z, 9.35%,
due May 29, 2021 (the "Series Z Bonds"), have been duly issued and are presently
outstanding and secured by the Restated Indenture in the principal amount
outstanding of $35,000,000.
The terms and conditions of the Series Z Bonds are as follows:
A. Attached to this Restated Indenture as Exhibit C is a copy
of the Bond form setting forth the interest rate and other terms and
conditions of the Series Z Bonds.
B. The Series Z Bonds shall be redeemable (except as otherwise
provided in the last sentence of this Paragraph B or in Paragraph F of
this Section 3.02) at the option of the Company, at any time and from
time to time, in whole or in part, on or after May 29, 2010, in the
manner and upon the notice provided in Article Ten of this Restated
Indenture, at the redemption prices, and subject to the conditions, set
forth in the form at Exhibit C, together, in each case, with accrued
interest to the redemption date.
C. Any monies applied to the redemption of Bonds of Series Z
pursuant to the provisions of Section 8.08 of this Restated Indenture
before May 29, 2010, shall be so applied at a redemption price equal to
100% of the principal amount of the Bonds of Series Z to be redeemed,
plus accrued interest to the redemption date, plus an amount equal to
the Make-Whole Premium as provided in this Paragraph C. Monies applied
to the redemption of Series Z Bonds pursuant to the provisions of
Section 8.08 of the Restated Indenture on or after May 29, 2010, shall
be applied at a redemption price equal to the applicable percentage of
the principal amount of the Series Z Bonds to be redeemed set forth in
the form at Exhibit C plus accrued interest to the redemption date.
The "Make-Whole Premium" shall mean the product of the excess,
if any, of (a) the present value as of the date of redemption
of all remaining scheduled principal and interest payments,
including the principal payment at final maturity and the
remaining scheduled interest payments on the Series Z Bonds
(determined by discounting such amounts at the Reinvestment
Yield from the respective dates on which such principal and
interest payments are payable), minus 100% of the principal
amount of the outstanding Series Z Bonds, times (b) a
fraction, the numerator of which is the principal amount of
the Series Z Bonds being redeemed on such date pursuant to
this Section and the denominator of which is 100% of the
principal amount of the then outstanding Series Z Bonds.
"Reinvestment Yield" shall mean the rate published in the
weekly statistical release designated H.15(519) of the Federal
Reserve System under the caption "U.S. Government
Securities-Treasury Constant Maturities" ("the Statistical
Release") (or if the Statistical Release is not published,
such reasonably comparable index as may be designated by the
holders of 66-2/3% in aggregate principal amount of the Series
Z Bonds outstanding) for the maturity corresponding to the
remaining Average Term to Maturity of the Series Z Bonds as of
the date of redemption, rounded to the nearest month. If no
maturity exactly corresponds to such Average Term to Maturity
of the Series Z Bonds, yields for the terms just before and
just after the Average Term to Maturity of the Series Z Bonds
shall be calculated pursuant to the immediately preceding
sentence and the Reinvestment Yield will be interpolated from
such yields on a straight-line basis, rounding each of the
relevant periods to the nearest month. For the purposes of
calculating the Reinvestment Yield, the most recent
Statistical Release published prior to the date of
determination hereunder shall be used.
"Average Term to Maturity" shall mean, as of the time of
determination thereof, the number of years obtained by
dividing the Remaining Dollar-Years of the Series Z Bonds by
the then outstanding principal amount of the Series Z Bonds.
The term "Remaining Dollar-Years of the Series Z Bonds" shall
mean the amount obtained by (1) multiplying the amount of each
of the then remaining scheduled principal and interest
payments, including the principal payments at final maturity,
by the number of years (calculated to the nearest one-twelfth)
which will elapse between the date of determination of the
Average Term to Maturity of the Series Z Bonds and the date of
each particular scheduled principal and interest payment and
(2) totaling all products obtained in (1).
The Trustee may require the Company to certify to the Trustee in
writing the calculation of the amount of any Make-Whole Premium to be
paid under Section 8.08 of the Restated Indenture and this Paragraph C;
and without limiting the other indemnities provided to the Trustee, the
Company shall indemnify and save the Trustee harmless from any costs
and liabilities incurred by the Trustee in relying on the Company's
certification in making payment.
D. Notwithstanding the provisions of Section 10.03 of the
Restated Indenture, in case of the redemption at any time of less than
all the outstanding Series Z Bonds, the particular Bonds or parts
thereof to be redeemed shall be selected by the Trustee from the
outstanding Series Z Bonds not previously called for redemption as
nearly as practicable pro rata among the registered holders of the
Series Z Bonds according to the respective principal amounts of such
Bonds, provided that the portions of the principal of Series Z Bonds at
any time so selected for redemption in part shall be equal to $1,000 or
an integral multiple thereof.
E. As a sinking fund for the retirement of Series Z Bonds, so
long as any of the Series Z Bonds shall be outstanding, the Company
will deposit with the Trustee on May 28, 2001, and annually thereafter
on each May 28 to and including May 28, 2020 (each such date being
herein sometimes referred to as a "Series Z Sinking Fund Payment
Date"), cash in an amount sufficient for the redemption of $1,700,000
aggregate principal amount of Series Z Bonds on May 29, 2001, and of
$1,665,000 aggregate principal amount of Series Z Bonds on May 29, 2002
and on each next ensuing May 29 up to and including May 29, 2020 at a
redemption price of 100% of the principal amount thereof, together, in
each case, with accrued interest to the redemption date, and thereupon
the Trustee shall apply such cash to the redemption of said aggregate
principal amount of the Bonds of said series on said next ensuing May
29. Any redemption of less than all of the Series Z Bonds shall not
relieve the Company of its obligation to redeem Series Z Bonds in
accordance with the requirements of this Paragraph E.
F. Whenever the Trustee shall be required to redeem Bonds
pursuant to the provisions of Paragraph E of this Section 3.02, the
Trustee shall, on or before the 45th day prior to the Series Z Sinking
Fund Payment Date, proceed to select for redemption, from the Bonds of
said series, in the manner provided in Paragraph D of this Section
3.02, the aggregate principal amount of Bonds of said series required
by the provisions of said Paragraph E to be redeemed by application of
the cash to be paid to the Trustee on said Series Z Sinking Fund
Payment Date, and for and on behalf of the Company and in the name of
the Company, the Trustee shall give notice, as required by the
provisions of Article Ten of the Restated Indenture, of the redemption
for the Series Z Sinking Fund of the Bonds so selected. Subject to the
provisions of this Section 3.02, the redemption of such Bonds shall be
effected in the manner and upon the terms provided in Section 10.03 of
the Restated Indenture at the sinking fund redemption price of 100% of
the principal amount thereof, together, in each case, with accrued
interest to the redemption date.
G. The Company further covenants that so long as any Series Z
Bonds shall remain outstanding, the Company will not, without the
consent of the holder of each of the Series Z Bonds, revise the
original schedule of sinking fund payments as provided in Paragraph E
of this Section 3.02 or modify any of the redemption prices for the
Series Z Bonds as provided in the form at Exhibit C. The provisions of
this covenant can only be modified, amended or otherwise waived with
approval from all of the holders of Series Z Bonds outstanding,
excluding any Series Z Bonds held by the Company.
Section 3.03. Series AA Bonds. First Mortgage Bonds, Series AA, 9%, due
September 1, 2003 (the "Series AA Bonds"), have been duly issued and are
presently outstanding and secured by the Restated Indenture in the principal
amount outstanding of $4,254,946. The terms and conditions of the Series AA
Bonds are as follows:
A. Attached to this Restated Indenture as Exhibit D is a copy
of the Bond form setting forth the interest rate and other terms and
conditions of the Series AA Bonds.
B. Reference in Exhibit D to Section 8.08 of the Indenture and
the Make-Whole Premium as provided in Section 1.01 of the Supplemental
Indenture dated as of June 1, 1991, now refers to Section 8.08 of this
Restated Indenture and the following Paragraph C, respectively.
C. The Series AA Bonds shall not be subject to redemption
prior to maturity; provided, the Series AA Bonds are subject to
redemption in whole or in part pursuant to Section 8.08 of the Restated
Indenture by application of monies deposited with the Trustee in
certain cases for the release of properties from the Lien of the
Restated Indenture, all subject to the conditions and as more fully set
forth in the Restated Indenture, at any time upon notice as required by
the above Bond form at a redemption price equal to 100% of the
principal amount of the Series AA Bonds to be redeemed, plus accrued
interest to the redemption date, plus an amount equal to the Make-Whole
Premium as provided in this Paragraph C.
The "Make-Whole Premium" shall mean the product of the excess,
if any, of (a) the present value as of the date of redemption
of all remaining scheduled principal and interest payments,
including the principal payment at final maturity and the
remaining scheduled interest payments on the Series AA Bonds
(determined by discounting on a semi-annual basis such amounts
at the Reinvestment Yield from the respective dates on which
such principal and interest payments are payable), minus 100%
of the principal amount of the outstanding Series AA Bonds,
times (b) a fraction, the numerator of which is the principal
amount of the Series AA Bonds being redeemed on such date
pursuant to this Section 3.03 and the denominator of which is
100% of the principal amount of the then outstanding Series AA
Bonds.
"Reinvestment Yield" shall mean the rate published in the
weekly statistical release designated H.15(519) of the Federal
Reserve System under the caption "U.S. Government
Securities-Treasury Constant Maturities" ("the Statistical
Release") (or if the Statistical Release is not published,
such reasonably comparable index as may be designated by the
holders of 66-2/3% in aggregate principal amount of the Series
AA Bonds outstanding) for the maturity corresponding to the
remaining Average Term to Maturity of the Series AA Bonds as
of the date of redemption, rounded to the nearest month. If no
maturity exactly corresponds to such Average Term to Maturity
of the Series AA Bonds, yields for the terms just before and
just after the Average Term to Maturity of the Series AA Bonds
shall be calculated pursuant to the immediately preceding
sentence and the Reinvestment Yield will be interpolated from
such yields on a straight-line basis, rounding each of the
relevant periods to the nearest month. For the purposes of
calculating the Reinvestment Yield, the most recent
Statistical Release published prior to the date of
determination hereunder shall be used.
"Average Term to Maturity" shall mean, as of the time of
determination thereof, the number of years obtained by
dividing the Remaining Dollar-Years of the Series AA Bonds by
the then outstanding principal amount of the Series AA Bonds.
The term "Remaining Dollar-Years of the Series AA Bonds" shall
mean the amount obtained by (1) multiplying the amount of each
of the then remaining scheduled principal and interest
payments, including the principal payments at final maturity,
by the number of years (calculated to the nearest one-twelfth)
which will elapse between the date of determination of the
Average Term to Maturity of the Series AA Bonds and the date
of each particular scheduled principal and interest payment
and (2) totaling all products obtained in (1).
The Trustee may require the Company to certify to the Trustee in
writing the calculation of the amount of any Make-Whole Premium to be
paid under Section 8.08 of the Restated Indenture and this Paragraph C;
and without limiting the other indemnities provided to the Trustee, the
Company shall indemnify and save the Trustee harmless from any costs
and liabilities incurred by the Trustee in relying on the Company's
certification in making payment.
D. Notwithstanding the provisions of Section 10.03 of the
Restated Indenture, in case of the redemption at any time of less than
all the outstanding Series AA Bonds, the particular Bonds or parts
thereof to be redeemed shall be selected by the Trustee from the
outstanding Series AA Bonds not previously called for redemption as
nearly as practicable pro rata among the registered holders of the
Series AA Bonds according to the respective principal amounts of such
Bonds, provided that the portions of the principal of Series AA Bonds
at any time so selected for redemption in part shall be equal to $1,000
or a multiple thereof.
Section 3.04. Series AB Bonds. First Mortgage Bonds, Series AB, 8.30%,
due September 1, 2024 (the "Series AB Bonds"), have been duly issued and are
presently outstanding and secured by the Restated Indenture in the principal
amount outstanding of $45,000,000. The terms and conditions of the Series AB
Bonds are as follows:
A. Attached to this Restated Indenture as Exhibit E is a copy
of the Bond form setting forth the interest rate and other terms and
conditions of the Series AB Bonds.
B. Reference in Exhibit E to Sections 8.05 and 8.08 of the
Indenture now refers to Sections 8.05 and 8.08 of this Restated
Indenture.
C. The Series AB Bonds shall be redeemable at the option of
the Company at any time and from time to time, in whole or in part, on
and after September 1, 2004, in the manner and upon the notice provided
in Article Ten of the Restated Indenture, at the redemption price as
set forth in the form of Series AB Bonds, Exhibit E, together in each
case, with accrued interest to the redemption date.
D. Notwithstanding the provisions of Section 10.03 of the
Restated Indenture, in case of the redemption at any time of less than
all of the outstanding Series AB Bonds, the particular Bonds or parts
thereof to be redeemed shall be selected by the Trustee from the
outstanding Series AB Bonds not previously called for redemption as
nearly as practicable pro rata among the registered holders of the
Series AB Bonds, according to the respective principal amounts of such
Bonds, provided that the portions of the principal of Series AB Bonds
at any time so selected for redemption in part shall be equal to $1,000
or a multiple thereof.
E. Notwithstanding that Section 8.05 of the Restated Indenture
authorizes the Company to request the Trustee to apply Trust Monies
toward the redemption of Bonds to be selected by the Company, the
Company does hereby covenant that the Company will not request the
Trustee to apply any Trust Monies to the redemption of the Series AB
Bonds prior to September 1, 2004.
Section 3.05. Series AC Bonds. First Mortgage Bonds, Series AC, 8.06%,
due February 1, 2010 (the "Series AC Bonds"), have been duly issued and are
presently outstanding and secured by the Restated Indenture in the principal
amount outstanding of $30,000,000. The terms and conditions of the Series AC
Bonds are as follows:
A. Attached to this Restated Indenture as Exhibit F is a copy
of the Bond form setting forth the interest rate and other terms and
conditions of the Series AC Bonds.
B. Reference to Section 8.08 of the Indenture now refers to
Section 8.08 of this Restated Indenture.
C. The Series AC Bonds shall not be redeemable at the option of
the Company as a whole or in part at any time.
D. The holders of the Series AC Bonds shall have the option to
require the Company to redeem all or any portion (in integral multiples
of $1,000) on February 1, 2002 (the "Redemption Day") at a Redemption
Price equal to 100% of the principal thereof to be redeemed, plus
interest accrued, if any, to the Redemption Day. To exercise such
option, the Holder shall deliver or cause to be delivered to the
Trustee, and the Trustee shall receive at its office in the Borough of
Manhattan, City of New York, during the period beginning December 1,
2001 and ending at 5:00 P.M. (New York City time) on December 31, 2001
(or, if December 31, 2001 is not a business day, on the next succeeding
business day), those Series AC Bonds which the Holder desires to redeem
with the form entitled "Option to Require Redemption on February 1,
2002" on the reverse side thereof duly completed. Any such exercise of
such option shall be irrevocable. All questions as to the validity,
form, eligibility (including timely receipt) and acceptance of Series
AC Bonds for redemption will be determined by the Company, whose
determination shall be final and binding.
E. Notwithstanding the provisions of Section 10.03 of the
Restated Indenture, in case of the redemption at any time of less than
all of the outstanding Series AC Bonds, the particular Bonds or parts
thereof to be redeemed shall be selected by the Trustee from the
outstanding Series AC Bonds not previously called for redemption as
nearly as practicable, pro rata among the registered holders of the
Series AC Bonds, according to the respective principal amounts of such
Bonds, and provided that the portions of the principal of Series AC
Bonds at any time so selected for redemption in part shall be equal to
$1,000 or a multiple thereof.
F. Notwithstanding that Section 8.05 of the Restated Indenture
authorizes the Company to request the Trustee to apply Trust Monies
toward the redemption of Bonds to be selected by the Company, the
Company does hereby covenant that the Company will not request the
Trustee to apply any Trust Monies to the redemption of the Series AC
Bonds prior to February 1, 2010.
Section 3.06. Series AD Bonds. First Mortgage Bonds, Series AD, 6.50%,
due July 15, 2002 (the "Series AD Bonds"), have been duly issued and are
presently outstanding and secured by the Restated Indenture in the principal
amount outstanding of $15,000,000. The terms and conditions of the Series AD
Bonds are as follows:
A. Attached to this Restated Indenture as Exhibit G is a copy
of the Bond form setting forth the interest rate and other terms and
conditions of the Series AD Bonds.
B. Reference to Sections 8.05 and 8.08 of the Indenture
now refers to Sections 8.05 and 8.08 of this Restated Indenture.
C. The Series AD Bonds are not redeemable at the option of
the Company as a whole or in part at any time.
D. Notwithstanding the provisions of Section 10.03 of the
Restated Indenture, in case of the redemption at any time of less than
all of the outstanding Series AD Bonds, the particular Bonds or parts
thereof to be redeemed shall be selected by the Trustee from the
outstanding Series AD Bonds not previously called for redemption as
nearly as practicable, pro rata among the registered holders of the
Series AD Bonds, according to the respective principal amounts of such
Bonds, and provided that the portions of the principal of Series AD
Bonds at any time so selected for redemption in part shall be equal to
$1,000 or a multiple thereof.
E. Notwithstanding that Section 8.05 of the Restated Indenture
authorizes the Company to request the Trustee to apply Trust Monies
toward the redemption of Bonds to be selected by the Company, the
Company does hereby covenant that the Company will not request the
Trustee to apply any Trust Monies to the redemption of the Series AD
Bonds prior to July 15, 2002.
Section 3.07. Indemnity of Trustee. Without limiting the other
indemnities provided to the Trustee, the Company shall indemnify and save the
Trustee harmless from any liabilities and costs incurred by the Trustee arising
out of the making of the final payment when due of the principal owing on any of
the Series Z Bonds, Series AA Bonds, Series AB Bonds, Series AC Bonds and Series
AD Bonds without the surrender of such Bond to the Trustee.
Section 3.08. Registrar of Existing Bonds. The Trustee is hereby
appointed Registrar in respect of the Series Y Bonds, Series Z Bonds, Series AA
Bonds, Series AB Bonds, Series AC Bonds and Series AD Bonds, and the principal
corporate trust office of the Trustee in the Borough of Manhattan, the City of
New York, hereby designated as the office or agency of the Company in said
Borough where notices or demands in respect of said series of Bonds may be
served.
Section 3.09. Exchange of Bonds. Subject to Section 2.12 of the
Restated Indenture, all definitive Series Y Bonds, Series Z Bonds, Series AA
Bonds, Series AB Bonds, Series AC Bonds and Series AD Bonds shall, upon
surrender thereof to the Trustee at its principal office, be exchangeable for
other Bonds of the same series, respectively, in registered form and in such
authorized denomination or denominations in the same aggregate principal amount,
as may be requested by the Holder surrendering the same. The Company will
execute and the Trustee shall authenticate and deliver registered Series Y
Bonds, Series Z Bonds, Series AA Bonds, Series AB Bonds, Series AC Bonds and
Series AD Bonds whenever the same shall be required for any such exchange.
Section 3.10. Compliance with Covenants. The Company covenants that so
long as any Series Y Bonds, Series Z Bonds, Series AA Bonds, Series AB Bonds,
Series AC Bonds and Series AD Bonds remain outstanding, it will comply with the
covenants contained in Sections 9.14 and 9.18 of the Restated Indenture.
ARTICLE FOUR
AUTHENTICATION AND DELIVERY OF BONDS
UPON THE BASIS OF PROPERTY ADDITIONS
Section 4.01. Property Additions and Certifiable Net Earnings Defined.
The terms in this Section mentioned shall, for all purposes of this Restated
Indenture, unless the context shall otherwise require, be taken to have the
meanings hereafter set forth.
A. The term "Property Additions" shall mean real estate owned
in fee, easements and rights of way in respect of real estate,
buildings, electric lines, reservoirs, structures, machinery, meters,
equipment and other tangible properties, real, personal or mixed useful
to the Company in the Electric Utility Business, including whole or
undivided interests in any of such properties purchased, constructed or
otherwise acquired by the Company subsequent to October 31, 1941; and
the term "Property Additions" shall include
(1) property of the character above described
acquired by the Company by merger or consolidation as well as
property purchased or constructed by the Company;
(2) new plants and systems of the character
above described;
(3) all construction work in progress in the amount
as recorded on the books of account of the Company under
generally accepted accounting principles;
(4) property of the character above described
constructed or acquired to replace an item of property whose
retirement has been credited to plant account; and
(5) any Excepted Property and other property of the
Company that the Company elects to be included under the Lien
of the Restated Indenture.
If the Company shall, as provided in Article Thirteen, consolidate with
or merge into or convey all or substantially all of the Trust Estate as
an entirety to any other corporation, and such successor corporation
shall execute a supplemental indenture of the character described in
Paragraph A of Section 13.02, all property of the character herein
described as Property Additions and owned by such successor corporation
at the time of such consolidation, merger or conveyance, or acquired by
it by such consolidation, merger or conveyance (excluding Bonded
Property acquired from the Company), shall be deemed to be Property
Additions acquired by such successor corporation at the date upon which
it became such successor corporation.
Among other properties not constituting Property Additions
under the foregoing provisions, the term "Property Additions" shall not
be deemed to include
(6) any item of property constructed or acquired to
replace a similar item of property whose retirement has not
been credited to plant account; or any property whose cost has
been charged, or is properly chargeable, to repairs or
maintenance or other operating expense account, or whose cost
has not been charged, or is not properly chargeable, to plant
account;
(7) any Excepted Property unless the Company elects
to cause the Excepted Property to be subject to the Lien of
the Restated Indenture; or
(8) going concern value or good will, or franchises
or governmental permits granted to or acquired by the Company,
separate and distinct from the property operated thereunder.
B. The "Certifiable Net Earnings" of the Company for any
particular period shall be computed and ascertained by deducting from
the total of the Gross Operating Revenues of the Company for such
period the following:
All operating expenses and other proper charges
(other than those charged to capital accounts or surplus)
including (a) all Federal, state and local taxes (other than
taxes in respect of income or profits and other taxes imposed
on or measured by income or profits); and (b) rentals,
insurance, current repairs and maintenance; but excluding (i)
provisions for reserves for renewals, replacements,
depreciation, depletion or retirement of property (or any
expenditures therefor), or provisions for amortization of
property, (ii) expenses or provisions for interest on any
indebtedness of the Company, for the amortization of debt
discount, premium, expense or loss on reacquired debt, for any
maintenance and replacement, improvement or sinking fund or
other device for the retirement of any indebtedness, or for
other amortization, (iii) expenses or provisions for any
nonrecurring charge to income or to retained earnings of
whatever kind or nature (including without limitation the
recognition of expense or impairment due to the
nonrecoverability of assets or expense), whether or not
recorded as a nonrecurring charge in the Company's books of
account, and (iv) provisions for any refund of revenues
previously collected or accrued by the Company subject to
possible refund.
The Gross Operating Revenues of the Company shall consist of
Gross Utility Operating Revenues of the Company, plus the Net
Non-Operating Income of the Company. The term "Gross Utility Operating
Revenues" of the Company shall mean the aggregate gross operating
revenues derived from the operation of the utility properties owned or
leased by the Company. The term "Net Non-Operating Income" of the
Company shall mean net income derived from but not necessarily limited
to the following: (a) merchandising, jobbing and contract work; (b)
rental of non-utility properties; (c) interest and dividend income
including dividends from Subsidiaries; (d) allowance for funds used
during construction; and (e) other miscellaneous non-operating income;
provided, however, that profits or losses resulting from the sale,
abandonment or other disposition of capital assets or securities of the
Company and the Company's equity in the undistributed earnings of
Subsidiaries, shall not be taken into account in the calculation of Net
Non-Operating Income.
Subject to the foregoing provisions of this Section, all
determinations of earnings pursuant to this Restated Indenture shall be
made, and all balance sheets and other financial statements to be
delivered hereunder shall be prepared, in accordance with the practice
prescribed by any regulatory authority having jurisdiction over the
Company or other lawfully prescribed practice or, in the absence of any
practice prescribed by law, in accordance with sound accounting
practice and, where consistent with such practice and with the
foregoing provisions of this Section, on the same basis as that used in
preparing the financial statements included in the annual report of the
Company for the preceding fiscal year.
Section 4.02. Additional Bonds Under Property Additions. Additional
Bonds of any series other than Existing Bonds may at any time and from time to
time be executed by the Company and delivered to the Trustee, and thereupon the
same shall, subject to the provisions of Sections 4.03 and 4.04, be
authenticated and delivered under this Article by the Trustee upon the Written
Order of the Company, upon receipt by and deposit with the Trustee of the
following:
A. A RESOLUTION OF THE BOARD, requesting the authentication
and delivery pursuant to the provisions of this Article of a specified
principal amount of Bonds of a designated series.
B. A PROPERTY ADDITIONS CERTIFICATE of the Company, complying
with the provisions of Section 1.02, dated not more than 30 days prior
to the application for the authentication and delivery of such Bonds,
and signed also (except as to Clauses (2), (4), (5), (7), (11), (12)
and (14) of this Paragraph) by an Engineer, setting forth in substance
as follows:
(1) That the Company has acquired, by purchase,
construction or otherwise, Property Additions, and giving a
brief description of such Property Additions and the principal
subdivisions of plant account to which the cost of such
Property Additions has been charged.
(2) That no part of said Property Additions consists
of Bonded Property or is included in any other application or
certificate then pending with the Trustee by virtue whereof
said Property Additions or any part thereof would become
Bonded Property.
(3) Whether the Property Additions described in said
Certificate include any additional tract or parcel of real
estate, and if so, a separate description of such tract or
parcel shall be included in the Certificate.
(4) Whether the Property Additions described in said
Certificate, or any part thereof, were, at the time of their
acquisition by the Company, subject to a Prior Lien or Liens
existing or placed thereon at such time, and, if so, such
Certificate shall also state:
(a) the nature and extent of each such Prior
Lien and the principal amount of all indebtedness
secured thereby at said time;
(b) that all such Prior Liens have, at or
prior to the date of the Certificate, become Prepaid
Liens or that all indebtedness secured thereby has
been satisfied or discharged; and
(c) the aggregate of the amounts expended
(excluding any amounts expended in respect of
interest or premium) by the Company to cause such
Prior Liens to become Prepaid Liens or to procure the
satisfaction and discharge of the indebtedness
secured thereby.
(5) That there is no outstanding indebtedness of the
Company for the purchase price or construction of, or for
labor, wages or materials in connection with the construction
of, such Property Additions which could become the basis of a
lien upon said Property Additions prior to the lien of this
Restated Indenture (other than a Prior Lien described as
provided in the preceding Clause (4)), which, in the opinion
of the signers of said Certificate, might materially impair
the security afforded thereby.
(6) Whether any part of the Property Additions
described in said Certificate consists of property which,
within six months prior to the date of acquisition thereof by
the Company, has been used or operated by others than the
Company in a business similar to that in which it has been or
is to be used or operated by the Company; and, if so, such
part of said Property Additions shall be separately described,
and if such part of said Property Additions shall be shown
pursuant to Clause (9) of this Paragraph to have a Fair Value
to the Company at least equal to the greater of $25,000 or 1%
of the aggregate principal amount of all Bonds at the time
outstanding hereunder, than an Independent Engineer's
Certificate shall be required under Clause (1) of Paragraph C
of this Section and it shall be requisite for the Company to
comply with the provisions of Clause (13) of this Paragraph.
(7) Whether any part of the Property Additions
described in said Certificate was acquired from an Affiliate
of the Company; and, if so, such Property Additions shall be
separately described.
(8) Whether any part of the Property Additions
described in said Certificate was acquired by the Company, in
whole or in part, for a consideration consisting of
securities; and, if so, such Property Additions shall be
separately described, and said securities shall also be
described.
(9) The Cost to the Company of said Property
Additions, and also the Fair Value thereof to the Company at
the date of such Certificate as determined by said Engineer;
and stating that said Cost and said Fair Value have been
computed and ascertained with due regard to the provisions of
the respective definitions of those terms in Section 1.01 of
the Restated Indenture. If, by virtue of the provisions of the
foregoing Clauses (6), (7) and/or (8) of this Paragraph, any
of said Property Additions shall be separately described in
said Certificate, the Cost and Fair Value to the Company of
such Property Additions shall be separately stated; and, in
the case of Property Additions of the character described in
Clauses (6) and/or (7) of this Paragraph, said Fair Value
shall not exceed the value of such Property Additions as
stated in the certificate filed with the Trustee pursuant to
Paragraph C of this Section if such a certificate is required
by the provisions of said Paragraph C; and in the case of
Property Additions of the character described in Clause (8) of
this Paragraph, the portion of the Cost thereof represented by
securities shall not exceed the Fair Value of such securities
as shown by the Appraiser's Certificate filed with the Trustee
pursuant to Paragraph D of this Section.
(10) That no part of the Property Additions described
in said Certificate is property the construction or
acquisition of which under the provisions of Section 4.01 is
not permitted to be made the basis of the authentication and
delivery of Bonds under this Article.
(11) That none of said Property additions is subject
to any lien, charge or encumbrance prior to the Lien of this
Restated Indenture, except the Prepaid Liens described
pursuant to Clause (4) of this Paragraph and Permitted
Encumbrances.
(12) Whether there is any unused Additions Credit
which the Company desires to use, in whole or in part, as a
basis for the authentication and delivery of the Bonds then
applied for, and if so, a statement of the entire amount which
the Company so desires to use, of each such unused Additions
Credit.
(13) If, but only if, it shall, pursuant to Clause
(6) of this Paragraph, become requisite for the Company to
comply with the provisions of this Clause (13), then such
Property Additions Certificate shall state whether any
Property Additions previously certified in a Property
Additions Certificate filed with the Trustee during the then
current calendar year, as a basis for the authentication and
delivery of Bonds or the withdrawal of cash from the Trustee
or the release of property from the Lien hereof, consist of
property which, within six months prior to the respective
dates of acquisition thereof by the Company, had been used or
operated by others than the Company in a business similar to
that in which they are to be used or operated by the Company,
but as to which a Certificate of an Independent Engineer has
not previously been furnished to the Trustee; and, if so, such
previously certified Property Additions shall be specified and
a reference shall be made to the previous Property Additions
Certificate or Certificates whereby such Property Additions
were originally certified to the Trustee and there shall be
stated the aggregate Fair Value of such Property Additions as
shown by such previous Property Additions Certificates, and
also the excess, if any, of such aggregate Fair Value over the
aggregate Fair Value of such Property Additions as shown by
the Independent Engineer's Certificate furnished pursuant to
Clause (2) of Paragraph C of this Section (such excess being
herein sometimes referred to as the "Fair Value Deficiency").
(14) That the Company is not in default in the
performance of any of the covenants on its part to be
performed under this Restated Indenture.
C. AN INDEPENDENT ENGINEER'S CERTIFICATE, dated not more than
60 days prior to the application for the authentication and delivery of
such Bonds, signed by an Independent Engineer selected by the Company
and approved by the Trustee in the exercise of reasonable care,
complying with the provisions of Section 1.02,
(1) stating the Fair Value to the Company, in the
opinion of the signer, at the date of said Independent
Engineer's Certificate, of such part, if any, of such Property
Additions as shall have been separately described pursuant to
Clause (6) of the foregoing Paragraph B, if, but only if, an
Independent Engineer's Certificate shall be required under
this Clause (1) by virtue of the provisions of said Clause
(6); and
(2) stating the Fair Value to the Company, in the
opinion of the signer, of all previously certified Property
Additions, if any, which shall have been specified in said
Property Additions Certificate pursuant to Clause (13) of the
preceding Paragraph B, such Fair Value to be stated as of the
date of said Independent Engineer's Certificate; and
(3) stating the Fair Value to the Company, in the
opinion of the signer, at the date of said Independent
Engineer's Certificate, of such part, if any, of such Property
Additions as shall be shown by said Property Additions
Certificate to have been acquired from an Affiliate of the
Company, if such Property Additions shall be shown by said
Property Additions Certificate to have had a Cost to the
Company in excess of $100,000, and if the Fair Value thereof
shall not have been required to be stated under Clause (1) of
this Paragraph C.
No Independent Engineer's Certificate shall be required to be
furnished pursuant to this Paragraph C unless necessary to
comply with the requirements of one or more of Clauses (1),
(2) and (3) of this Paragraph C.
D. In case any part of such Property Additions is shown by
said Property Additions Certificate to have been acquired by the
Company, in whole or in part, for a consideration consisting of
securities, a CERTIFICATE, complying with the provisions of Section
1.02, signed by an Independent Appraiser selected by the Company and
approved by the Trustee in the exercise of reasonable care, stating, in
the opinion of the signer, the Fair Value of such securities at the
time of the delivery thereof as consideration for the acquisition of
such part of such Property Additions.
E. A RETIREMENTS CERTIFICATE of the Company, complying with
the provisions of Section 1.02, dated not more than 30 days prior to
the application for the authentication and delivery of such Bonds and
signed also by an Engineer, setting forth:
(1) The aggregate amount of all Retirements up to the
date of said certificate which have not been included in a
previous Retirements Certificate filed with the Trustee
pursuant to this Section or Sections 5.03 or 8.03, and stating
that the amount of such Retirements has been computed as
required in the definition of "Retirements" in Section 1.01;
(2) A brief description of such Retirements and the
principal subdivisions of plant account to which such
Retirements have been or will be credited; and
(3) The amounts (stated separately according to the
categories specified in the definition of Retirement Credits
in Section 1.01) of all Retirement Credits which, as provided
in said definition, may be applied against such Retirements,
and stating that such Retirement Credits have been computed as
required by said definition.
F. A Net Earnings Certificate of the Company, complying with
the provisions of Section 1.02, dated not more than 45 days prior to
the application for the authentication and delivery of such Bonds,
certified by an Accountant, and setting forth:
(1) The amount of the Certifiable Net Earnings of the
Company, for a period of 12 consecutive calendar months within
the 18 calendar months immediately preceding the date on which
the application for the authentication and delivery of the
Bonds is made, and stating separately the Gross Utility
Operating Revenues and the Net Non-Operating Income and the
operating expenses of the Company and other deductions from
such Gross Utility Operating Revenues and Net Non-Operating
Income pursuant to Paragraph B of Section 4.01, with the
principal subdivisions thereof.
(2) The aggregate amount of the annual "Interest
Charges on Bonds and Prior Lien Debt" of the Company, which
term shall mean the annual interest charges on
(a) all Bonds outstanding hereunder at the
date of said Certificate, provided, however, that in
the case of any Bonds which shall at such time be
pledged as security for any indebtedness of the
Company, the amount of the annual interest charges on
such pledged Bonds shall be deemed to be either the
amount of the annual interest charges on such
indebtedness or the amount of the annual interest
charges on such pledged Bonds, whichever shall be
greater; and
(b) all Bonds the authentication and
delivery of which is applied for in such application
and in any other pending application; and
(c) all indebtedness secured by a lien upon
the Trust Estate, or any part thereof, prior to the
Lien of this Restated Indenture, other than a Prepaid
Lien;
provided, however, that there shall be excluded from such
computation the annual interest charges on any Bonds or
indebtedness which is to be paid, redeemed or otherwise
retired, or provision for the retirement of which is to be
made, so that the same will cease to be outstanding prior to
or concurrently with the authentication and delivery of the
Bonds then applied for.
(3) That the amount of the Certifiable Net Earnings
of the Company set forth as provided by Clause (1) of this
Paragraph have been at least equal to two (2) times the
aggregate amount of the annual Interest Charges on Bonds and
Prior Lien Debt of the Company as provided by Clause (2) of
this Paragraph.
(4) That such Certifiable Net Earnings have been
computed and ascertained as provided in Paragraph B of Section
4.01.
If the annual Interest Charges on Bonds and Prior Lien Debt
shall be increased after the date of the Earnings Certificate
hereinabove in this Paragraph described, and before the authentication
and delivery of the Bonds then applied for, the Company will file with
the Trustee a new Earnings Certificate showing the amount of said
annual Interest Charges on Bonds and Prior Liens as so increased--it
being the intention hereof that no Bonds shall be authenticated and
delivered under the provisions of this Article, unless the ratio
provided for by Clause (3) of this Paragraph shall have been
established with respect to the aggregate amount of the annual Interest
Charges on Bonds and Prior Liens of the Company as constituted at the
time of the authentication and delivery of the Bonds then applied for;
but the Trustee shall, subject to the provisions of Section 14.02, be
entitled to assume, in the absence of such new Earnings Certificate,
that the aggregate amount of the annual Interest Charges on Bonds and
Prior Lien Debt of the Company, as constituted at the time of the
authentication and delivery of the Bonds then applied for, are as
stated in the Earnings Certificate filed with the Trustee as aforesaid.
The Earnings Certificate provided for in this Paragraph shall
be certified by an Independent Public Accountant selected by the
Company and approved by the Trustee, in the exercise of reasonable
care, if, but only if, the aggregate principal amount of the Bonds to
be authenticated and delivered on the basis thereof and of other Bonds
authenticated and delivered since the commencement of the then current
calendar year (other than those with respect to which an Earnings
Certificate is not required or with respect to which an Earnings
Certificate verified by an Independent Public Accountant has previously
been furnished) is 10% or more of the aggregate principal amount of the
Bonds at the time outstanding.
G. A summary certificate and computation of the Company
complying with the provisions of Section 1.02, determining the Net
Bondable Additions in conformity with the provisions of this Restated
Indenture.
H. THE MORTGAGES, DEEDS, CONVEYANCES, ASSIGNMENTS, TRANSFERS
and INSTRUMENTS OF FURTHER ASSURANCE and the CERTIFICATE or
CERTIFICATES and OTHER EVIDENCE, if any, specified in the Opinion of
Counsel as provided by Clauses (2), (6) and (7) of the following
Paragraph I.
I. An OPINION or OPINIONS OF COUNSEL, complying with the
provisions of Section 1.02:
(1) stating that the instruments which have been or
are therewith delivered to the Trustee conform to the
requirements of this Restated Indenture and constitute
sufficient authority under this Restated Indenture for the
Trustee to authenticate and deliver the Bonds applied for, and
that, upon the basis of the acquisition of the Net Bondable
Additions described in and shown by said instruments delivered
to the Trustee pursuant to this Section, the Bonds applied for
may be lawfully authenticated and delivered under this
Article;
(2) specifying the mortgages, deeds, conveyances,
assignments, transfers and instruments of further assurance,
if any, which will be sufficient to subject to the direct lien
of this Restated Indenture the Property Additions described in
said Certificate, and stating that upon the recordation or
filing in the manner stated in such opinion of the instruments
so specified, no further recording or re-recording or filing
or refiling of this Restated Indenture or any other instrument
is required to maintain the lien of this Restated Indenture
upon such Property Additions as against all creditors and
subsequent purchasers, or stating what further recordation or
filing of this Restated Indenture or any supplemental
indenture is or will be necessary for that purpose; or stating
that said Property Additions are then subject to the direct
Lien of this Restated Indenture and that no such mortgage,
deed, conveyance, transfer or instrument of further assurance
is necessary for such purpose;
(3) stating that the Company has a good and valid
title to said Property Additions, and that the same and every
part thereof is free and clear of all liens, charges and
encumbrances prior to the Lien of this Restated Indenture,
except Permitted Encumbrances, and except also the Prepaid
Liens, if any, mentioned in said Property Additions
Certificate and in such case that the nature, extent and
amount of such Prepaid Liens are correctly stated in said
certificate;
(4) stating that the Company has lawful power to
acquire, own and use said Property Additions in its business;
and, to the extent that any franchise, permit, license,
right-of-way or easement is necessary for the maintenance and
use of such Property Additions, that the Company, either alone
or jointly with some other person, lawfully holds such
franchises, permits, licenses, rights-of-way and easements,
and that each such franchise, permit, license, right-of-way or
easement is in the opinion of such counsel adequate for the
operations of the Company, and does not contain any provisions
materially prejudicial to the interests of the Bondholders;
(5) stating that, since the date of the last previous
Opinion of Counsel filed with the Trustee pursuant to this
Clause or Clause (4) of Paragraph E of Section 5.01 or 6.01
(or, in the case of the first such opinion, since the date of
the execution and delivery hereof), no Bonded Property owned
by the Company has become subject to any then subsisting lien
or encumbrance (except Permitted Encumbrances) prior to the
Lien created by this Restated Indenture for the security of
the Bonds whose authentication and delivery is then applied
for;
(6) specifying the certificate or other evidence
which will be sufficient to show compliance with the
requirements, if any, of any mortgage recording tax law or
other tax law applicable to the issuance of the Bonds then
applied for, or stating that there are no such legal
requirements; and
(7) specifying the certificate or other evidence
which will be sufficient to show the authorization, approval
or consent of or to the issuance by the Company of the Bonds
then applied for, by any Federal, State or other governmental
regulatory body or commission at the time having jurisdiction
in the premises, or stating that no such authorization,
approval or consent is required.
Section 4.03. Bonds Limited by 70 Percent of Net Bondable Additions.
Upon compliance with the provisions of Section 4.02, the Trustee shall
authenticate and deliver Bonds in an aggregate principal amount up to, but not
exceeding seventy percent (70%) of the amount of Net Bondable Additions shown by
the summary certificate and computation filed pursuant to Paragraph G of Section
4.02.
Section 4.04. Additional Bonding Authority Based on Property Additions
Certified Prior. Notwithstanding anything in this Restated Indenture to the
contrary, upon the Written Order of the Company, the Trustee shall authenticate
and deliver Bonds in an aggregate principal amount up to, but not exceeding
seventy percent (70%) of fourteen and two-tenths percent (14.2%) of the total
amount of all Property Additions certified to the Trustee and used as Bondable
Additions for the issuance of Bonds during the period beginning May 1, 1994 and
ending March 15, 1995.
The Company shall furnish the Trustee a Certificate of the Company
referencing and documenting the amount of Property Additions previously
certified and used as provided in the previous sentence, a summary certificate
and computation determining the amount of Bonds that may be issued under this
Section 4.04 and an Opinion of Counsel as required by Paragraph I of this
Section 4.02; provided that subparagraph (1) thereunder shall refer to the basis
of this Section 4.04 rather than Net Bondable Additions and subparagraphs (2),
(3), (4) and (5) are not to be included in such opinion.
ARTICLE FIVE
AUTHENTICATION AND DELIVERY OF BONDS
UPON DEPOSIT OF CASH WITH TRUSTEE
Section 5.01. Additional Bonds Authorized by Deposit of Cash.
Additional Bonds of any series except Existing Bonds may at any time and from
time to time be executed by the Company and delivered to the Trustee for
authentication, and thereupon the same shall, subject to the provisions of
Section 5.02, be authenticated and delivered under this Article by the Trustee
upon the Written Order of the Company, upon receipt by and deposit with the
Trustee of the following:
A. A RESOLUTION OF THE BOARD, requesting the authentication
and delivery pursuant to the provisions of this Article of a specified
principal amount of Bonds of a designated series.
B. CASH equal to the aggregate principal amount of the Bonds
the authentication and delivery of which is then applied for.
C. A CERTIFICATE OF THE COMPANY, complying with the provisions
of Section 1.02, stating that the Company is not in default in the
performance of any of the covenants on its part to be performed under
this Restated Indenture.
D. THE CERTIFICATES and OTHER EVIDENCE, if any, specified in
the Opinion of Counsel as provided by Clauses (2) and (3) of the
following Paragraph E.
E. An OPINION or OPINIONS OF COUNSEL, complying with the
provisions of Section 1.02,
(1) stating that the instruments which have been or
are therewith delivered to the Trustee conform to the
requirements of this Restated Indenture and constitute
sufficient authority under this Restated Indenture for the
Trustee to authenticate and deliver the Bonds applied for, and
that, upon the deposit of an amount of cash equal to the
aggregate principal amount of the Bonds then applied for, such
Bonds may be lawfully authenticated and delivered under this
Article;
(2) specifying the certificate or other evidence
which will be sufficient to show compliance with the
requirements, if any, of any mortgage recording tax law or
other tax law applicable to the issuance of the Bonds then
applied for, or stating that there are no such legal
requirements;
(3) specifying the certificate or other evidence
which will be sufficient to show the authorization, approval
or consent of or to the issuance by the Company of the bonds
then applied for, by any Federal, State or other governmental
regulatory body or commission at the time having jurisdiction
in the premises, or stating that no such authorization,
approval or consent is required; and
(4) stating that, since the date of the last previous
Opinion of Counsel filed with the Trustee pursuant to this
Clause or Clause (5) of Paragraph I of Section 4.02 or Clause
(4) of Paragraph E of Section 6.01 (or, in the case of the
first such opinion, since the date of the execution and
delivery hereof), no Bonded Property owned by the Company has
become subject to any then subsisting lien or encumbrance
(except Permitted Encumbrances) prior to the lien created by
this Restated Indenture for the security of the Bonds whose
authentication and delivery is then applied for.
F. The NET EARNINGS CERTIFICATE required by Paragraph F of
Section 4.02.
Section 5.02. Amount of Bonds. Upon compliance with the provisions of
Section 5.01 the Trustee shall authenticate and deliver Bonds of an aggregate
principal amount up to, but not exceeding, the amount of the cash deposited with
the Trustee pursuant to Paragraph B of Section 5.01.
Section 5.03. Terms of Withdrawal of Cash. Cash deposited with the
Trustee under the provisions of Section 5.01 is in this Restated Indenture
sometimes referred to as "Deposited Cash"; and until the same shall have been
paid over by the Trustee upon the Written Order of the Company as hereinafter in
this Section provided, the Trustee shall hold all Deposited Cash as a part of
the Trust Estate hereunder, subject, however, to the provisions of Section 8.11;
and, upon default in the payment of the principal of any of the Bonds, when and
as the same shall become due and payable, whether by the terms thereof or by
declaration or otherwise as herein provided, any Deposited Cash then in the
hands of the Trustee shall become applicable to the purposes specified in, and
in accordance with the provisions of, Section 11.10.
At any time and from time to time, whenever the Company shall become
entitled to the authentication and delivery of Bonds under the provisions of
Article Four, the Trustee, upon receipt of a Resolution of the Board requesting
the payment of a specified amount of Deposited Cash, and upon receipt also of
the instruments required to be delivered to the Trustee by said provisions (with
such appropriate omissions and variations as are applicable to deposited Cash),
shall pay upon the Written Order of the Company, and the Company shall be
entitled to withdraw, Deposited Cash of an amount equal to the principal amount
of the Bonds to whose authentication and delivery the Company would be so
entitled; provided, however, that, upon the application to withdraw Deposited
Cash under the provisions of this Section, it shall not be necessary for the
Company to deliver to the Trustee (a) the Resolution required by Paragraph A of
Section 4.02, or (b) any of the certificates or parts of the Opinion of Counsel
referred to in Clauses (6) and (7) of Paragraph I of Section 4.02 or (c) the Net
Earnings Certificate required by Paragraph F of Section 4.02.
ARTICLE SIX
AUTHENTICATION AND DELIVERY OF BONDS
UPON RETIREMENT OF BONDS PREVIOUSLY ISSUED HEREUNDER
Section 6.01. Additional Bonds Authorized by Retired Bonds. Additional
Bonds of any series except Existing Bonds may at any time and from time to time
be executed by the Company and delivered to the Trustee for authentication, and
thereupon the same shall be authenticated and delivered under this Article by
the Trustee upon the Written Order of the Company, upon receipt by and deposit
with the Trustee of the following:
A. A RESOLUTION OF THE BOARD, requesting the authentication
and delivery pursuant to the provisions of this Article of a specified
principal amount of Bonds of a designated series.
B. BONDS theretofore authenticated and delivered under this
Restated Indenture, matured or unmatured, in negotiable form, canceled
or uncanceled, thereto belonging; provided, however, that, for the
purposes of this Article, in lieu of depositing Bonds with the Trustee
as aforesaid, the Company may deposit or deliver to the Trustee:
(1) CASH sufficient under the provisions of Section
1.05, among other provisions hereof, to pay or redeem certain
Bonds theretofore authenticated and delivered hereunder, which
cash shall be irrevocably deposited in trust for such purpose;
and/or
(2) A CERTIFICATE OF THE COMPANY, stating
(a) that cash sufficient under such
provisions to pay or redeem certain Bonds theretofore
authenticated and delivered hereunder is then held by
the Trustee in trust irrevocably for such purpose;
and/or
(b) that certain Bonds theretofore
authenticated and delivered hereunder have been paid,
redeemed or otherwise retired and theretofore
delivered to the Trustee.
C. A CERTIFICATE OF THE COMPANY, complying with the
provisions of Section 1.02, stating
(1) That the Company is not in default in the
performance of any of the covenants on its part to be
performed under this Restated Indenture; and
(2) That the Bonds, the retirement of which (or
provision therefor) is made the basis for the authentication
and delivery of Bonds hereunder as in the preceding Paragraph
B provided, do not include
(a) any Bond, the retirement of which, in
any other previous or pending application or
certificate, has been made the basis for the
authentication and delivery of a Bond or the
withdrawal of Bonded Cash from the Trustee or which
has been purchased, paid, redeemed or otherwise
retired out of Bonded Cash pursuant to the provisions
of Section 8.05 or Section 8.08; or
(b) any Bond purchased, paid, redeemed or
otherwise retired through the operation of any
sinking, amortization, improvement, renewal or other
analogous fund, if any, which may hereafter be
created as provided in Section 2.05, but only if, and
to the extent that, the supplemental indenture or
other instrument creating such fund shall preclude
the authentication and delivery of Bonds under this
Article upon the basis of the redemption, purchase or
other retirement of such Bond.
D. The CERTIFICATES and OTHER EVIDENCE, if any,
specified in the Opinion of Counsel as provided by Clauses (2) and (3)
of the following Paragraph E.
E. An OPINION or OPINIONS OF COUNSEL, complying with
the provisions of Section 1.02,
(1) stating that the instruments which have been or
are therewith delivered to the Trustee conform to the
requirements of this Restated Indenture and constitute
sufficient authority under this Restated Indenture for the
Trustee to authenticate and deliver the Bonds applied for, and
that (a) upon the basis of the deposit with the Trustee of the
Bonds and/or cash deposited and/or cash certified to be held
in trust, pursuant to Paragraph B of this Section, and/or (b)
upon the basis of the payment, redemption or other retirement
of Bonds as certified pursuant to Paragraph B of this Section,
the Bonds applied for may be lawfully authenticated and
delivered under this Article;
(2) specifying the certificate or other evidence
which will be sufficient to show compliance with the
requirements, if any, of any mortgage recording tax law or
other tax law applicable to the issuance of the Bonds then
applied for, or stating that there are no such legal
requirements;
(3) specifying the certificate or other evidence
which will be sufficient to show the authorization, approval
or consent of or to the issuance of the Bonds then applied
for, by an Federal, State or other governmental regulatory
body or commission at the time having jurisdiction in the
premises, or stating that no such authorization, approval or
consent is required; and
(4) stating that, since the date of the last previous
Opinion of Counsel filed with the Trustee pursuant to this
Clause or Clause (5) of Paragraph I of Section 4.02 or Clause
(4) of Paragraph E of Section 5.01 (or, in the case of the
first such opinion, since the date of the execution and
delivery hereof), no bonded Property owned by the Company has
become subject to any then subsisting lien or encumbrance
(except Permitted Encumbrances), prior to the lien created by
this Restated Indenture for the security of the Bonds whose
authentication and delivery is then applied for.
F. THE NET EARNINGS CERTIFICATE required by Paragraph F
of Section 4.02 unless either
(i) the Bonds, the retirement of which (or provision
therefor) is made the basis for the authentication and
delivery of the Bonds then applied for, bear interest at a
higher rate than the Bonds the authentication of which is
sought, provided however, that nothing in this item (i) shall
be deemed to excuse the Company from delivering said Net
Earnings Certificate if said first mentioned Bonds shall not
have been issued by the Company or shall have ceased to be
outstanding hereunder during any period or periods prior to
the authentication and delivery of the Bonds then applied for,
and during said period or periods a Net Earnings Certificate
shall have been delivered to the Trustee pursuant to any
provision of this Restated Indenture in which the annual
interest requirements on any such Bond which shall have so
ceased to be outstanding shall not have been included in
Interest Charges on the Secured Bonded Debt of the Company, or
(ii) the payment date or the redemption date of said
first mentioned Bonds (if they have been paid or have been or
are to be redeemed) or the date of their surrender to the
Trustee (if they have been acquired by the Company and
surrendered to the Trustee) is less than three years prior to
the maturity date stated in such Bonds.
Section 6.02. Amount of Bonds Equal to Retired Bonds. Upon compliance
with the provisions of Section 6.01, the Trustee shall authenticate and deliver
Bonds of an aggregate principal amount up to, but not exceeding, the principal
amount of the Bonds deposited with the Trustee, and/or paid, redeemed or
otherwise retired, and/or for whose payment or redemption cash has been
deposited with or is held in trust by the Trustee, as in Paragraph B of Section
6.01 provided.
Section 6.03. Canceled Bonds. Every Bond delivered uncanceled to the
Trustee, and on the basis of which an additional Bond is authenticated and
delivered under this Article, shall be immediately canceled.
ARTICLE SEVEN
RELEASE OF MORTGAGED PROPERTY
Section 7.01. Company's Permitted Activities. The Company, unless an
Event of Default shall have happened and shall not have been remedied,
(a) shall be entitled to possess, manage, operate, use and
enjoy and to remain in the actual and undisturbed possession of all its
properties (other than bonds, certificates of stock and other
securities and cash deposited or required to be deposited with the
Trustee) and to receive, take and use the rents, income and profits
thereof, to use and consume any fuel, oil and similar materials and
supplies consumable in the operation of any properties of the Company
and to use, consume, sell or dispose of any electricity, materials,
supplies or merchandise held by the Company for the purpose of sale in
the ordinary course of business, all as if this Restated Indenture had
not been made;
(b) may, without obtaining any release and without obtaining
the consent of the Trustee, sell or otherwise dispose of, free from the
Lien of this Restated Indenture, any machinery, equipment, tools and
appliances which may have become obsolete, inadequate or worn-out or
otherwise unsuitable for use in the business of the Company, and apply
the proceeds thereof toward the replacement of the same with other
machinery, equipment, tools and appliances of at least equal value and
efficiency;
(c) may, without the consent of the Trustee, alter, add to and
repair its buildings, structures, machinery, equipment and appliances
appertaining to or used in connection with the works, plants or
transmission or distribution systems of the Company;
(d) shall be entitled to receive and collect for its own use
all dividends paid on shares of stock of any corporation held by the
Trustee hereunder which are paid in cash out of the earned surplus or
net profits of the issuing corporation and all interest upon
obligations or indebtedness of any person held by the Trustee
hereunder; and, in case such shares of stock shall be transferred into
the name of the Trustee or of its nominee or nominees, the Trustee from
time to time shall execute and deliver upon the Written Order of the
Company suitable assignments and orders in favor of the Company or its
nominee named in such order for the payment of such cash dividends and
interest, and as the date of their maturity approaches shall deliver
upon a like order any and all coupons representing such interest,
provided, however, and it is hereby declared and agreed that the
Company shall not be entitled to receive and the Trustee shall not pay
over to it,
(i) the principal of any obligation or
indebtedness at the time held by the Trustee hereunder, or
(ii) any dividend upon any share of stock at the time
held by the Trustee hereunder other than a dividend paid in
cash out of the earned surplus or net profits of the issuing
corporation, or
(iii) any sum paid upon liquidation or dissolution or
reduction of capital or redemption, upon any obligation or
indebtedness or share of stock at the time held by the Trustee
hereunder, and
the Company shall also have the right, except as herein expressly
limited, to vote and/or give consents with respect to all shares of
stock held by the Trustee hereunder, and from time to time, in case
such shares of stock shall have been transferred into the name of the
Trustee or of its nominee or nominees, the Trustee, upon the Written
Request of the Company, shall execute and deliver or cause to be
executed and delivered to the Company or its nominee named in such
Written Request appropriate powers of attorney or proxies to vote such
stock or to execute a waiver or consent or certificate with respect to
such stock, for such purpose or purposes as may be specified in such
request, except that each such power of attorney or proxy may be
limited so as to provide in effect that the powers thereby conferred to
not include any power to vote for or to authorize or consent to any act
or thing inconsistent with this Restated Indenture.
Section 7.02. Conditions of Release of Property.
A. Definition of "Fair Value." For the purposes of this
Section 7.02, "Fair Value" when applied to property is its value as
determined without deduction for any Prior Liens upon such property and
without deduction to reflect that such property may be of value only to
the Company or another operator of the Trust Estate as a whole, which
value may be determined without physical inspection by use of
accounting and engineering records and other data maintained by, or
available to, the Company.
B. Release Based on Bond Ratio. Unless an Event of Default
shall have occurred and be continuing, upon receipt of a Written Order
of the Company requesting the release of any of the Trust Estate
pursuant to this Paragraph B, the Trustee shall execute and deliver to
the Company the documents and instruments described in Paragraph B,
releasing from the Lien of this Restated Indenture any of the Trust
Estate if the Fair Value of all of the Trust Estate (excluding the
Trust Estate to be released but including any Trust Estate to be
acquired by the Company with the proceeds of, or otherwise in
connection with, such release) stated on the Engineer's certificates
delivered pursuant to Clause (2) of Paragraph B and Clause (3) of
Paragraph B, equals or exceeds an amount equal to twenty-fourteenths
(20/14) of the aggregate principal amount of Bonds outstanding at the
date of such Written Order of the Company as stated on the Certificate
of the Company delivered pursuant to Clause (4) of Paragraph B, upon
receipt by the Trustee of:
(1) appropriate documents and instruments releasing
without recourse the interest of the Trustee in the Trust
Estate to be released, and describing in reasonable detail the
Trust Estate to be released;
(2) an Engineer's certificate, dated the date of such
Written Order of the Company, stating (i) that the signers of
such Engineer's certificate have examined the Certificate of
the Company delivered pursuant to Clause (4) of Paragraph B in
connection with such release, (ii) the Fair Value, in the
opinion of the signer of such Engineer's certificate, of (A)
all of the Trust Estate, and (B) the Trust Estate to be
released, in each case as of a date not more than 90 days
prior to the date of such Written Order of the Company, and
(iii) that in the judgment of such signers, such release (A)
will not materially adversely affect the Company's Electric
Utility Business, and (B) will not impair the security under
this Restated Indenture in contravention of the provisions
hereof;
(3) in case any Property Additions are being acquired
by the Company with the proceeds of, or otherwise in
connection with, such release, an Engineer's certificate,
dated the date of such Written Order of the Company, as to the
Fair Value, as of a date not more than 90 days prior to the
date of such Written Order of the Company, of the Property
Additions being so acquired (and if within six months prior to
the date of acquisition by the Company of the Property
Additions being so acquired, any property included within such
Property Additions had been used or operated by others than
the Company in a business similar to that in which it has been
or is to be used or operated by the Company, and the Fair
Value thereof to the Company, as set forth in such Engineer's
certificate, is not less than one percent (1%) of the
aggregate principal amount of Bonds then outstanding, such
certificate shall be an Independent Engineer's Certificate);
(4) a Certificate of the Company, dated the date of
such Written Order of the Company, stating (i) that the
aggregate principal amount of Bonds outstanding at the date of
such Written Order of the Company, and stating that the Fair
Value of all of the Trust Estate (excluding the Trust Estate
to be released but including any Property Additions to be
acquired by the Company with the proceeds of, or otherwise in
connection with, such release) stated on the Engineer's
certificate filed pursuant to Clause (2) of Paragraph B equals
or exceeds an amount equal to twenty-fourteenths (20/14) of
such aggregate principal amount, and (ii) that, to the
knowledge of the signer, no Event of Default has occurred and
is continuing; and
(5) an Opinion of Counsel complying with the
provisions of Section 1.02 stating that the instruments which
have been or are delivered to the Trustee conform to the
requirements of this Restated Indenture and constitute
sufficient authority under this Restated Indenture for the
Trustee to execute and deliver the release requested.
C. Release up to a Limited Amount. If the Company is unable,
or elects not, to obtain, in accordance with the preceding Paragraph B,
the release from the Lien of this Restated Indenture of any of the
Trust Estate, unless an Event of Default shall have occurred and be
continuing, upon receipt of a Written Order of the Company requesting
the release of any of the Trust Estate pursuant to this Paragraph C,
the Trustee shall execute and deliver to the Company the documents and
instruments described in Clause (1) of Paragraph C releasing from the
Lien of this Restated Indenture any of the Trust Estate if the Fair
Value thereof, as stated on the Engineer's certificate delivered
pursuant to Clause (2) of Paragraph C is less than one percent (1%) of
the aggregate principal amount of Bonds outstanding at the date of such
Written Order of the Company, provided that the aggregate Fair Value of
all Trust Estate released pursuant to this Paragraph C, as stated on
all Engineer's certificates filed pursuant to this Paragraph C in any
period of 12 consecutive calendar months which includes the date of
such Engineer's certificate, shall not exceed three percent (3%) of the
aggregate principal amount of Bonds outstanding at the date of such
Written Order of the Company as stated in the Certificate of the
Company delivered pursuant to Clause (3) of Paragraph C, upon receipt
by the Trustee of:
(1) appropriate documents and instruments releasing
without recourse the interest of the Trustee in the Trust
Estate to be released, and describing in reasonable detail the
Trust Estate to be released;
(2) an Engineer's certificate, dated the date of such
Written Order of the Company, stating (i) that the signer of
such Engineer's certificate has examined the Certificate of
the Company delivered pursuant to Clause (2) of Paragraph C in
connection with such release, (ii) the Fair Value, in the
opinion of the signers of such Engineer's certificate, of such
Trust Estate to be released as of a date not more than 90 days
prior to the date of such Written Order of the Company, and
(iii) that in the judgment of such signers, such release (A)
will not materially adversely affect the Company's Electric
Utility Business and (B) will not impair the security under
this Restated Indenture in contravention of the provisions
hereof;
(3) a Certificate of the Company, dated the date of
such Written Order of the Company, stating (i) the aggregate
principal amount of Bonds outstanding at the date of such
Written Order of the Company, (ii) that one percent (1%) of
such aggregate principal amount exceeds the Fair Value of the
Trust Estate for which such release is applied for, (iii) that
three percent (3%) of such aggregate principal amount exceeds
the aggregate Fair Value of all Trust Estate released from the
Lien of this Restated Indenture pursuant to this Paragraph C,
as shown by all Engineer's certificates filed pursuant to
Clause (2) of Paragraph C in such period of 12 consecutive
calendar months, and (iv) that, to the knowledge of the
signer, no Event of Default has occurred and is continuing;
and
(4) an Opinion of Counsel complying with the
provisions of Section 1.02 stating that the instruments which
have been or are delivered to the Trustee conform to the
requirements of this Restated Indenture and constitute
sufficient authority under this Restated Indenture for the
Trustee to execute and deliver the release requested.
D. Release by Deposit of Cash, Purchase Money Obligations or
Property Additions. If the Company is unable, or elects not, to obtain,
in accordance with Paragraphs B or C, the release from the Lien of this
Restated Indenture of any of the Trust Estate, unless an Event of
Default shall have occurred and be continuing, upon receipt and deposit
of a Written Order of the Company requesting the release of any of the
Trust Estate pursuant to this Paragraph D and those items at Clause (2)
in this Paragraph D, the Trustee shall execute and deliver to the
Company the documents and instruments described in Clause (1) of
Paragraph D releasing from the Lien of this Restated Indenture the
Trust Estate described in the Written Order of the Company.
(1) appropriate documents and instruments releasing
without recourse the interests of the Trustee in the Trust
Estate to be released, and describing in reasonable detail the
Trust Estate to be released;
(2) Cash in an amount equal to the greater of the
following items (i) and (ii):
(i) the Fair Value of the property to
be released, or
(ii) the consideration received or to be
received by the Company therefor (valuing purchase
money obligations at their principal amount and
property received in exchange at its Fair Value as
stated in said certificate),
provided, however, that in lieu of all or any part of such cash, the
Company shall have the right to deposit with or deliver to the Trustee
any of the following:
(a) Purchase Money Obligations secured by a mortgage
on the property to be released, or a portion thereof, not
exceeding in principal amount seventy percent (70%) of the
Fair Value (as certified as above set forth) of the property
covered by such purchase money mortgage, which purchase money
obligations and the mortgages securing the same, shall be duly
assigned to the Trustee and shall be received by the Trustee
at the principal amount thereof in lieu of cash; provided,
however, that the Trustee shall not accept any such purchase
money obligations in lieu of cash as provided in this Clause
if thereby the aggregate principal amount of all purchase
money obligations received by the Trustee pursuant to this
Clause and at the time held by the Trustee would equal or
exceed 10 percent of the principal amount of all Bonds then
outstanding hereunder.
(b) A Certificate of the trustee or other holder of a
Prior Lien on all or any part of the property to be released,
stating that a specific amount of cash and/or a specified
principal amount of purchase money obligations of the
character described in subparagraph (a) of this Clause and
representing proceeds of the sale of such property, have been
deposited with such trustee or other holder pursuant to the
requirements of such Prior Lien, provided, however, that the
aggregate of the cash and principal amount of purchase money
obligations so certified at any one time shall in no event
exceed the principal amount of the Prior Lien Obligations
outstanding thereunder, less any amounts then held by the
trustee or other holder of such Prior Lien other than for the
payment or redemption of Prior Lien Obligations not deemed
outstanding under the provisions of Section 4.01; and such
certificate shall be received by the Trustee in lieu of cash
equal to the cash and the principal amount of the purchase
money obligations so certified to have been deposited with
such trustee or other holder of such Prior Lien.
(c) The Certificates, Opinions and Other Instruments
which the Company would be required to furnish to the Trustee,
upon an application for the authentication and delivery of
Bonds on the basis of Property Additions under Article Four,
but with the following variations and omissions of the
instruments specified in Section 4:02:
(i) There shall be an additional statement
in Clause (2) of the Property Additions Certificate,
to the effect that no part of the Property Additions
therein described has in any other previous or then
pending application been made the basis for the
release of any Unbonded Property from the lien of
this Restated Indenture or for the withdrawal of any
Unbonded Cash from the Trustee or from the trustee or
other holder of a Prior Lien, or to repair, replace,
or restore insured Unbonded Property which shall have
been damaged or destroyed but the proceeds of the
insurance on which shall not have been required to be
paid to the Trustee pursuant to the provisions of
Section 9.09;
(ii) It shall not be necessary for the
Company to deliver to the Trustee the Resolution
required by Paragraph A, the Retirements Certificate
required by Paragraph E, the Net Earnings Certificate
required by Paragraph F, or any of the certificates
or parts of the Opinion of Counsel referred to in
Clauses (6) and (7) of Paragraph I of Section 4.02;
(iii) The Summary Certificate required by
Paragraph G of Section 4.02 shall show only Gross
Bondable Additions and may include any Additions
Credit; and
(iv) If no part of the property to be
released is Bonded Property and such property or any
part thereof is subject to a Prior Lien, the Property
Additions then so certified may be subject to the
same Prior Lien, and the Property Additions
Certificate required by Paragraph B of Section 4.02
and the Opinion of Counsel required by Paragraph I of
Section 4.02 may be modified accordingly.
Such Certificates, Opinions and Other Instruments
shall be received by the Trustee in lieu of cash up to the
amount of the Gross Bondable Additions so certified to the
Trustee.
(3) An Opinion or Opinions of Counsel, complying with
the provisions of Section 1.02,
(a) stating that the instruments which have
been or are therewith delivered to the Trustee
conform to the requirements of this Restated
Indenture and constitute sufficient authority under
this Restated Indenture for the Trustee to execute
and deliver the release requested, and that, upon the
basis of the cash, purchase money obligations,
certificates, opinions and other instruments
delivered to the Trustee pursuant to Paragraph D of
this Section, the property so sold or disposed of or
contracted to be sold or disposed of may lawfully be
released from the lien of this Restated Indenture
pursuant to the provisions of this Section;
(b) stating that the purchase money
obligations, if any, delivered to the Trustee or to
the trustee or other holder of a Prior Lien pursuant
to subparagraph (a) of Clause (2) of Paragraph D of
this Section are valid obligations and are duly
secured by a valid purchase money mortgage
constituting a direct lien upon all the property to
be released, or upon the portion thereof described,
free and clear of all prior liens, charges or
encumbrances, except any Prior Liens or other charges
or encumbrances prior to the lien of this Restated
Indenture which may have existed on the property to
be released immediately prior to such release and
that the assignment of any mortgage securing such
purchase money obligations is valid and in recordable
form; and
(c) in case, pursuant to subparagraph (a) of
Clause (2) of Paragraph D of this Section, any cash
or purchase money obligations shall be certified to
have been deposited with the trustee or other holder
of a Prior Lien, stating that the property to be
released, or a specified portion thereof, is or
immediately before such sale or disposition was
subject to such Prior Lien and that such deposit is
required by such Prior Lien.
Section 7.03. Release of Property Upon Eminent Domain. Should any part
of the Trust Estate be taken by the exercise of the power of eminent domain or
should any State, municipality or other governmental authority at any time
exercise any right which it may then have to purchase any part of the Trust
Estate, the Company, forthwith upon receipt,, shall deposit the award for any
property so taken by eminent domain and/or the proceeds of any such purchase
with the Trustee, or, to the extent required, in the Opinion of Counsel, by the
terms of a Prior Lien on all or any part of any property so taken or purchased,
with the trustee or other holder of such Prior Lien. In the event of any such
taking or purchase, the Trustee shall release the property so taken or
purchased, but only upon receipt by and deposit with the Trustee of:
A. A RESOLUTION OF THE BOARD, requesting such release and
describing the property so to be released.
B. A CERTIFICATE OF THE COMPANY, complying with the provisions
of Section 1.02, stating that such property has been taken by eminent
domain and the amount of the award therefor, or that said property has
been purchased by a State, municipality or other governmental authority
pursuant to a right vested in it to purchase such property and the
amount of the proceeds of such purchase, and also stating whether any
of such property was Bonded Property.
C. The AWARD for said property or the PROCEEDS of such
purchase; provided, however, that, in lieu of all or any part of such
award or proceeds, the Company shall have the right to deliver to the
Trustee a CERTIFICATE of the trustee or other holder of a Prior Lien on
all or any part of the property to be released, stating that said award
or proceeds, or such specified part thereon, has been deposited with
such trustee or other holder pursuant to the requirements of such Prior
Lien.
D. AN OPINION OF COUNSEL, complying with the provisions
of Section 1.02, stating
(1) that such property has been duly taken by the
exercise of the power of eminent domain, or has been duly
purchased by a State, municipality or other governmental
authority in the exercise of a right which it had to purchase
such property, and that the instruments which have been or are
therewith delivered to the Trustee conform to the requirements
of this Restated Indenture and constitute sufficient authority
under this Restated Indenture for the Trustees to execute and
deliver the release requested;
(2) that the amount of the award for the property so
taken by eminent domain or the amount of the proceeds of the
property so purchased, is not less than the amount to which
the Company is entitled under the applicable laws governing
such taking, or under the terms of such right to purchase, as
the case may be; and
(3) in case, pursuant to the preceding Paragraph C,
the award for said property or the proceeds of such purchase,
or any portion thereof, shall be certified to have been
deposited with the trustee or other holder of a Prior Lien,
that the property to be released, or a specified portion
thereof, is or immediately before such taking or purchase was
subject to such Prior Lien, and that such deposit is required
by such Prior Lien.
In any proceedings for the taking or purchase of any part of the Trust
Estate by the exercise of eminent domain or by virtue of any right of purchase
vested in any State, municipality or other governmental authority, the Trustee
may be represented by counsel, who may be counsel for the Company.
Section 7.04. Release under Authority of Trustee or Bondholder. The
Company, while in possession, of the Trust Estate (other than securities and
cash held by the Trustee, or the trustee, or other holder of a prior lien), may
do any of the things enumerated in Section 7.01 notwithstanding that an Event of
Default shall have happened and shall not have been remedied; and the Company
may do any of the things enumerated in Section 7.02 notwithstanding that it is
in default in the performance of a covenant on its part to be performed under
this Restated Indenture, if the Trustee, in its discretion, or the holders of at
least a majority in amount of the Bonds at the time outstanding, shall in
writing expressly authorize or consent to such action.
Section 7.05. In Event of Receiver or Trustee Possessing Trust Estate.
In case the Trust Estate (other than securities and cash held by the Trustee or
the trustee or other holder of a Prior Lien) shall be in the possession of a
receiver or trustee lawfully appointed, the powers in this Article conferred
upon the Company with respect to the sale or other disposition and release of
the Trust Estate may, to the extent permitted by applicable law, be exercised by
such receiver or trustee (subject, in the cases specified in Section 7.04, to
authorization or consent of the Trustee or Bondholders as provided therein), in
which case a written request signed by said receiver or trustee shall be deemed
the equivalent of the Written Order of the Company or Resolution of the Board
required by Section 7.02 or 7.03 and a certificate signed by such receiver or
trustee shall be deemed the equivalent of any Certificate of the Company
required by any provision of this Restated Indenture, and no such certificate
need contain a statement to the effect that the Company is not in default
hereunder. If the Trustee shall be in possession of the Trust Estate (other than
securities and cash held by the trustee or other holder of a Prior Lien) under
any provision of this Restated Indenture, then such powers may be exercised by
the Trustee in its discretion.
Section 7.06. Purchasers in Good Faith. No purchaser in good faith of
property purporting to be released herefrom shall be bound to ascertain the
authority of the Trustee to execute the release or to inquire as to the
existence of any conditions required by the provisions hereof for the exercise
of such authority; nor shall any purchaser or grantee of any property or rights
permitted by this Article to be sold, granted or otherwise disposed of by the
Company, be under any obligation to ascertain or inquire into the authority of
the Company to make any such sale, grant or other disposition.
Section 7.07. Application of Cash. Except as herein otherwise
specifically provided, cash received by the Trustee pursuant to this Article
shall be held and paid over or applied by the Trustee as provided in Article
Eight, and all purchase money obligations received by the Trustee pursuant to
this Article or pursuant to Section 9.07, shall be held by the Trustee as a part
of the Trust Estate. The principal of and (subject to the provisions of Section
7.01) interest on all such obligations shall be received by the trustee as and
when the same shall become payable, and the Trustee may take any action which in
its judgment may be desirable or necessary for the collection thereof or for the
enforcement of the security therefor. Unless an Event of Default shall have
occurred and shall not have been remedied, or unless to the knowledge of the
Trustee the Company shall be in default in the performance of any of the
covenants on its part to be performed under this Restated Indenture, all
interest received by the Trustee on any such obligation shall be paid from time
to time to the Company upon its Written Order of the Company in accordance with
Clause (d) of Section 7.01.
Upon payment by or on behalf of the Company to the Trustee of the
principal amount of any such obligation, or the portion thereof remaining
unpaid, the Trustee shall release and surrender such obligation to the Company
upon its Written Order of the Company.
ARTICLE EIGHT
APPLICATION AND WITHDRAWAL OF TRUST MONEYS
Section 8.01. General Provisions--Withdrawing Trust Moneys. All moneys
received by the Trustee upon the release of property from the Lien of this
Restated Indenture, including the principal of all purchase money obligations
when paid, and all moneys received by the Trustee as compensation for any part
of the Trust Estate taken by the exercise of the power of eminent domain or
purchased by a public authority, and all moneys received by the Trustee as
proceeds of the sale of or insurance upon any part of the Trust Estate, and all
other moneys elsewhere herein provided to be held and applied as in this Article
provided, and all moneys, if any (but in no event including Deposited Cash as
defined in Section 5.03), received by the Trustee the disposition of which is
not elsewhere herein otherwise specifically provided for (herein sometimes
called "Trust Moneys," whether the same be Bonded Cash or Unbonded Cash), shall
be held by the Trustee as a part of the Trust Estate, and, upon default in the
payment of the principal of any of the Bonds when and as the same shall become
due and payable, whether by the terms thereof or by declaration or otherwise, as
herein provided, said moneys shall, unless and until such default shall be
remedied, be applicable only to the purposes specified in, and in accordance
with the provision of, Section 11.10; but, unless such a default shall have
happened and shall not have been remedied, all or any part of said Trust Moneys,
at the request and election of the Company, except as otherwise specifically
provided herein, may be withdrawn from and shall be applied by the Trustee from
time to time as provided in Section 8.02, 8.03, 8.04, 8.05, 8.06 or 8.07.
Section 8.02. Trust Moneys Withdrawn Against Gross Bondable Additions.
Trust Moneys may be withdrawn and shall be paid by the Trustee upon the Written
Order of the Company at any time and from time to time upon receipt by and
deposit with the Trustee of the following:
A. A RESOLUTION OF THE BOARD, requesting the withdrawal and
payment of a specified amount of Trust Moneys, and designating the
Trust Moneys so to be withdrawn.
B. A CERTIFICATE OF THE COMPANY, complying with the provisions
of Section 1.02, stating whether any part of the Trust Moneys so to be
withdrawn is Bonded Cash.
C. The CERTIFICATES, OPINIONS and OTHER INSTRUMENTS which the
Company would be required to furnish to the Trustee, upon an
application for the authentication and delivery of Bonds on the basis
of Property Additions under Article Four, but with the following
variations and omissions of the instruments specified in Section 4.02:
(1) Clause (1) of the Property Additions Certificate
shall contain an additional statement to the effect that no
part of the Property Additions therein described has been
acquired by the Company more than 60 days prior to the date
when the Trustee received the Trust Moneys the withdrawal of
which is then requested (or in the case of Trust Moneys
representing the proceeds of purchase money obligations, the
date when the Trustee received such proceeds);
(2) There shall be an additional statement in Clause
(2) of the Property Additions Certificate, to the effect that
no part of the Property Additions therein described has in any
other previous or then pending application been made the basis
for the release of any Unbonded Property from the Lien of this
Restated Indenture, or for the withdrawal of any Unbonded Cash
from the Trustee or from the trustee or other holder of a
Prior Lien and that no part of said Property Additions
includes any property acquired or constructed by the Company
in the performance of its duty to replace old, inadequate,
obsolete or worn out Unbonded Property disposed of pursuant to
Paragraph (b) of Section 7.01, or to repair, replace, or
restore uninsured Unbonded Property which shall have been
damaged or destroyed but the proceeds of the insurance on
which shall not have been required to be paid to the Trustee
pursuant to the provisions of Section 9.09; said Property
Additional Certificate shall include no Additions Credits; and
said Property Additions Certificate need not contain the
statements required by Clause (12) thereof;
(3) It shall not be necessary for the Company to
deliver to the Trustee the Resolution required by Paragraph A,
the Retirements Certificate required by Paragraph E, the
Earnings Certificate required by Paragraph F, or any of the
certificates or parts of the Opinion of Counsel referred to in
Clauses (6) and (7) of Paragraph I of Section 4.02;
(4) The Summary Certificate required by Paragraph G
of Section 4.02 shall show only Gross Bondable Additions and
shall not include any Additions Credit.
D. An OPINION or OPINIONS OF COUNSEL, complying with the
provisions of Section 1.02, stating that the instruments which have
been or are therewith delivered to the Trustee conform to the
requirements of this Restated Indenture and constitute sufficient
authority under this Restated Indenture for the Trustee to pay over the
Trust Moneys applied for, and that upon the basis of the acquisition of
the Property Additions described in the Property Additions Certificate
delivered to the Trustee pursuant to Paragraph C of this Section, the
Trust Moneys the withdrawal of which is then requested may be lawfully
paid over under this Section.
Subject to the provisions of Section 8.08, upon compliance with the
foregoing provisions of this Section, the Company shall be entitled to withdraw
and the Trustee shall pay upon the Written Order of the Company an amount of
Trust Moneys equal to the amount of the Gross Bondable Additions so certified to
the Trustee pursuant to Paragraph C of this Section.
Section 8.03. Trust Moneys Withdrawn Against Net Bondable Additions.
Trust Moneys may be withdrawn and shall be paid by the Trustee on the Written
Order of the Company at any time and from time to time upon receipt by and
deposit with the Trustee of the following:
A. A RESOLUTION OF THE BOARD requesting the withdrawal and
payment of a specified amount of Trust Moneys, and designating the
Trust Moneys so to be withdrawn.
B. A CERTIFICATE OF THE COMPANY complying with the provisions
of Section 1.02 stating whether any part of the Trust Moneys so to be
withdrawn is Bonded Cash.
C. The CERTIFICATES, OPINIONS and OTHER INSTRUMENTS which the
Company would be required to furnish to the Trustee, upon an
application for the authentication and delivery of Bonds on the basis
of Net Bondable Additions under Article Four, but with the following
variations and omissions of the instruments specified in Section 4.02:
(1) Clause (1) of the Property Additions Certificate
shall contain an additional statement to the effect that no
part of the Property Additions therein specified has been
acquired by the Company more than three years prior to the
date when the Trustee received the Trust Moneys the withdrawal
of which is then requested (or in the case of Trust Moneys
representing the proceeds of purchase money obligations, the
date when the Trustee received such proceeds);
(2) There shall be an additional statement in Clause
(2) of the Property Additions Certificate to the effect that
none of the Property Additions therein described has in any
other previous or then pending application been made the basis
for the release of any Unbonded Property from the lien of this
Restated Indenture or for the withdrawal of any Unbonded Cash
from the Trustee or from the trustee or other holder of a
Prior Lien and that no part of said Property Additions
includes any property acquired or constructed by the Company
in the performance of its duty to replace old, inadequate,
obsolete or worn out Unbonded Property disposed of pursuant to
Paragraph (b) of Section 7.01, or to repair, replace or
restore Unbonded Property which shall have been damaged or
destroyed but the proceeds of the insurance on which shall not
have been required to be paid to the Trustee pursuant to the
provisions of Section 9.09; and a like additional statement in
Clause (12) with reference to Property Additions reflected in
any unused Additions Credit included in said Property
Additions Certificate;
(3) It shall not be necessary for the Company to
deliver to the Trustee the Resolution required by Paragraph A,
the Retirements Certificate required by Paragraph E, the
Earnings Certificate required by Paragraph F, or any of the
certificates or parts of the Opinion of Counsel referred to in
Clauses (6) and (7) of Paragraph I of Section 4.02;
(4) The Summary Certificate required by Paragraph G
of Section 4.02 shall show only Gross Bondable Additions, and
shall not include any Additions Credit.
D. An OPINION or OPINIONS OF COUNSEL, complying with the
provisions of Section 1.02, stating that the instruments which have
been or are therewith delivered to the Trustee conform to the
requirements of this Restated Indenture and constitute sufficient
authority under this Restated Indenture for the Trustee to pay over the
Trust Moneys applied for, and that upon the basis of the acquisition of
the Property Additions described in the Property Additions Certificate
delivered to the Trustee pursuant to Paragraph C of this Section, the
Trust Moneys the withdrawal of which is then requested may be lawfully
paid over under this Section.
Subject to the provisions of Section 8.08, upon compliance with the
foregoing provisions of this Section, the Company shall be entitled to withdraw
and the Trustee shall pay upon the Written Order of the Company an amount of
Trust Moneys equal to the amount of the Gross Bondable Additions so certified to
the Trustee pursuant to Paragraph C of this Section.
Section 8.04. Trust Moneys Withdrawn Against Bonds. Trust Moneys may be
withdrawn and shall be paid by the Trustee upon the Written Order of the Company
at any time and from time to time, upon receipt by and deposit with the Trustee
of the following:
A. A RESOLUTION OF THE BOARD, requesting the withdrawal and
payment of a specified amount of Trust Moneys, and designating the
Trust Moneys so to be withdrawn.
B. A CERTIFICATE OF THE COMPANY, complying with the provisions
of Section 1.02, stating whether any part of the Trust Moneys so to be
withdrawn is Bonded Cash;
C. The BONDS, CERTIFICATES, OPINIONS and OTHER INSTRUMENTS
which the Company would be required to furnish to the Trustee upon an
application for the authentication and delivery of Bonds under Article
Six, but with the following variations or omissions of the instruments
specified in Section 6.01:
(1) The Certificate of the Company required by
Paragraph C of Section 6.01 shall contain an additional
statement to the effect that all of the Bonds which are then
made the basis of the withdrawal of such Trust Moneys are
Bonds which were originally issued by the Company by way of
bona fide sale, other than to an Affiliate of the Company and
which were outstanding in the hands of holders thereof, other
than the Company or an Affiliate of the Company, within the 60
days immediately preceding the date when the Trustee received
the Trust Moneys whose withdrawal is then requested (or in the
case of Trust Moneys representing the proceeds of purchase
money obligations, the date when the Trustee received such
proceeds);
(2) The Certificate of the Company required by
Paragraph C of Section 6.01 shall contain an additional
statement to the effect that the Bonds which are then made the
basis for the withdrawal of the Trust Moneys then applied for
do not include any Bond which in any other previous or then
pending application has been made the basis for the withdrawal
of any Unbonded Cash from the Trustee or which has been
purchased, paid or redeemed or otherwise retired out of
Unbonded Cash pursuant to the provisions of Sections 8.05 or
8.08;
(3) It shall not be necessary for the Company to
deliver to the Trustee the Resolution required by Paragraph A
of Section 6.01 or any of the certificates or parts of the
Opinion of Counsel referred to in Clauses (2), (3) and (4) of
Paragraph E of Section 6.01 or the Earnings Certificate
required by Paragraph F of Section 6.01.
D. An OPINION or OPINIONS OF COUNSEL, complying with the
provisions of Section 1.02, stating that the instruments which have
been or are therewith delivered to the Trustee conform to the
requirements of this Restated Indenture and constitute sufficient
authority under this Restated Indenture for the Trustee to pay over the
Trust Moneys applied for, and that, upon the basis of the retirement
(or provision therefor) of the Bonds then made the basis of the
withdrawal of such Trust Moneys pursuant to Paragraph C of this
Section, such Trust Moneys may be lawfully paid over under this
Section.
Subject to the provisions of Section 8.08, upon compliance with the
foregoing provisions of this Section, the Company shall be entitled to withdraw
and the Trustee shall pay upon the Written Order of the Company an amount of
Trust Moneys equal to the principal amount of the Bonds then made the basis of
such withdrawal of Trust Moneys pursuant to Paragraph C of this Section.
Section 8.05. Trust Moneys Withdrawn to Redeem Bonds. Trust Moneys may
be applied by the Trustee at any time and from time to time to the payment of
the principal of Bonds upon redemption prior to maturity or upon the purchase of
Bonds upon tender or in the open market or at private sale or upon any
securities exchange or in any one or more of said ways, as the Company shall
determine, upon receipt by and deposit with the Trustee of the following:
A. A RESOLUTION OF THE BOARD, requesting the application
pursuant to the provisions of this Section of a specified amount of
Trust Moneys, designating the Trust Moneys so to be applied, and
specifying the principal amount of Bonds and the series thereof to be
redeemed and the redemption price, or, in case such moneys are to be
applied to the purchase of Bonds, prescribing the method of purchase,
the price or prices to be paid, which price or prices shall not exceed
such then current redemption price, and the maximum principal amount of
Bonds and the series thereof to be purchased.
B. CASH sufficient in the opinion of the Trustee to cover the
amount of the accrued interest and premium, if any, required to be paid
in connection with any such redemption or purchase, which cash shall be
held by the Trustee in trust for such purpose, and, to the extent not
required for such purpose, shall be repaid to the Company.
C. A CERTIFICATE OF THE COMPANY, complying with the provisions
of Section 1.02,
(1) Stating whether any part of the Trust Moneys
so to be applied is Bonded Cash;
(2) Stating that all Bonds so to be redeemed or
purchased were originally issued by the Company by way of bona
fide sale;
(3) Either (i) describing all Bonds of any series of
which Bonds are to be redeemed owned legally or equitably by
the Company or an Affiliate of the Company which were acquired
by the Company or by any Affiliate of the Company sixty or
more days prior to the date when the Trustee received the
Trust Moneys whose application to such redemption or purchase
is then requested (or in the case of Trust Moneys representing
the proceeds of purchase money obligations, the date when the
Trustee received such proceeds) or (ii) stating that no such
Bonds are to be so redeemed or purchased; and
(4) Stating that the Company is not in default in the
performance of any of the covenants on its part to be
performed under this Restated Indenture.
D. An OPINION OF COUNSEL, complying with the provisions of
Section 1.02, stating that it is proper for the Trustee, under the
provisions of this Section, to apply Trust Moneys in accordance with
such Resolution of the Board, and specifying the certificate or other
evidence which will be sufficient to show the authorization, approval
or consent of or to such payment, redemption or purchase by the
Company, by any Federal, State or other governmental regulatory body or
commission at the time having jurisdiction in the premises, or stating
that no such authorization, approval or consent is required.
E. THE CERTIFICATE OR CERTIFICATES AND OTHER EVIDENCE, if any,
specified in the Opinion of Counsel as provided in the foregoing
Paragraph D.
Subject to the provisions of Section 8.08, upon compliance with the
foregoing provisions of this Section, the Trustee shall apply Trust Moneys as
requested by said Resolution of the Board for the purpose of purchasing or
redeeming Bonds (other than Bonds, if any, described in Item (i) of the
foregoing Clause (3) of Paragraph C) using the cash deposited pursuant to
Paragraph B of this Section, to the extent necessary, to pay any accrued
interest and premium or excess over the principal amount of the Bonds purchased,
in connection with any such redemption or purchase.
Section 8.06. Trust Moneys Withdrawn for Repairs. To the extent that
any Trust Moneys are proceeds of insurance upon any part of the Trust Estate,
they may be paid over upon the Written Request of the Company to reimburse the
Company for expenditures made for the purpose of repairing, restoring or
replacing the property destroyed or damaged, upon the receipt by the Trustee of
the following:
A. A CERTIFICATE OF THE COMPANY, complying with the
provisions of Section 1.02 signed also by an Engineer as to Clause (2)
of this Paragraph A, stating:
(1) Whether any part of the Trust Moneys so to be
withdrawn is Bonded Cash;
(2) That expenditures have been made for such
purpose, and the amount thereof, and giving a brief
description of the nature of such repairs, restorations and
replacements and also stating the Fair Value to the Company of
such repairs, restorations or replacements, and also stating
that no part of such repairs, restorations or replacements has
in any previous or then pending application been made the
basis for the authentication and delivery of Bonds or the
withdrawal of any cash or the release of any property from the
lien of this Restated Indenture, or of a Prior Lien;
(3) That there is no outstanding indebtedness of the
Company known, after due inquiry, to the Company for the
purchase price or construction of, or for labor, wages or
materials in connection with the construction of, such
repairs, restorations or replacements, which could become the
basis of a Prior Lien thereon and which, in the opinion of the
signers of said Certificate might materially impair the
security afforded thereby.
B. AN OPINION OF COUNSEL complying with the provisions of
Section 1.02, to the effect that such repairs, restorations or
replacements are subject to the direct lien of this Restated Indenture
free from all other liens, charges or encumbrances prior to the lien of
this Restated Indenture, except Permitted Encumbrances, and except
also, any Prior Liens, charges, or encumbrances to which the property
so destroyed or damaged shall have been subject at the time of such
destruction or damage.
The amount of Trust Moneys so to be paid shall be an amount up to, but
not exceeding, the Fair Value to the Company of the expenditures stated in such
Certificate.
Section 8.07. Trust Moneys Withdrawn for Taxes. Trust Moneys may be
withdrawn and shall be paid upon the Written Order of the Company, subject to
the provisions set forth below, at any time and from time to time upon receipt
by and deposit with the Trustee of the following:
A. A RESOLUTION OF THE BOARD, requesting the withdrawal and
payment of a specified amount of Trust Moneys, and designating the
Trust Moneys so to be withdrawn.
B. A CERTIFICATE OF THE COMPANY, complying with the provisions
of Section 1.02, stating:
(1) Whether any part of the Trust Moneys so to be
withdrawn is Bonded Cash.
(2) That the Company has theretofore, on a date or
dates specified, delivered to and deposited with the Trustee
the CASH and/or PURCHASE MONEY OBLIGATIONS, CERTIFICATES and
OPINIONS required upon the release of certain specified
property or securities, as the case may be, pursuant to
Article Seven.
(3) That the Company has theretofore, paid Federal
income taxes or other Federal taxes based on or measured by or
in respect of net income for a specified period, in the
computation of which taxes, gains or profits from the
disposition of such property or securities have been
reflected, and stating:
(a) the amount of such taxes so paid;
(b) the amount of taxable gain or profit
from the disposition of such property or securities
reflected in the computation of said taxes, provided
that there shall not be included in any such
Certificate, any gain or profit in connection with
any particular disposition of property or securities
if the amount of the gain or profit is less than
$150,000;
(c) the net taxable income of the Company
from whatever source, including gains or profits upon
the disposition of property or securities whether or
not included in the foregoing item (b), for the
period in respect of which such taxes were levied;
(d) such other facts as, in the judgment of
the Trustee, may be necessary to determine the
taxable gains, profits or income derived from the
disposition of such property or securities and the
net taxable income of the Company; and
(e) that the amount of reimbursement to
which the Company is entitled, in accordance with the
provisions of this Section, is a specified sum.
(4) That the aforesaid taxes were levied in respect
of income for a tax year or other tax period ended not more
than twelve months prior to the date of the Certificate.
C. A COPY OF THE TAX RETURN OR RETURNS covering the taxes in
respect of which reimbursement is sought.
D. A CERTIFICATE OF AN INDEPENDENT ACCOUNTANT, selected by the
Company and approved by the Trustee in the exercise of reasonable care,
complying with the provisions of Section 1.02, stating that the
computation of the amount of reimbursement to which the Company is
entitled as set forth in subparagraph (e) of Clause (3) of the
foregoing Paragraph B is, in the opinion of the signer, in all respects
in accordance with the provisions of this Section.
E. An OPINION OF COUNSEL, complying with the provisions of
Section 1.02 and stating that in his opinion all conditions precedent
which relate to the withdrawal of cash, as set forth in this Section,
have been complied with.
The amount of Trust Moneys so to be paid shall be a sum equal to a
portion (not greater than 100%) of any such taxes so certified to have been
paid, bearing the same ratio to the aggregate amount of such taxes as (i) the
amount of taxable gains or income certified in Subparagraph (b) of Clause (3) of
the foregoing Paragraph B bears to (ii) the net taxable income of the Company as
certified in Subparagraph (c) of said Clause (3), provided that the amount of
Trust Moneys so to be paid shall not exceed (x) the amount of cash certified in
Clause (2) of the foregoing Paragraph B or (y) 10% of the aggregate amount of
cash and purchase money obligation thus certified in said Clause (2), whichever
shall be the lesser amount.
The Company covenants that, in the event of the refund of any such
taxes so paid by reason of the overpayment thereof or otherwise, it will
promptly repay to the Trustee such portion of the sum refunded as the amount
withdrawn by the Company in respect of reimbursement for such taxes bears to the
total amount of taxes so paid, and sums so repaid to the Trustee shall be held
by the Trustee subject to disposition under this Article Eight.
Section 8.08. Trust Moneys Held More Than Two Years Applied to Redeem
Bonds and Application of Trust Moneys in Event of Eminent Domain or Purchase by
a Public Authority of the Entire Trust Estate.
(a) In the event that at any time there shall be on deposit
with the Trustee, Trust Moneys in an amount in excess of $25,000,
exclusive of all moneys which represent proceeds of insurance subject
to the provisions of Section 8.06, and if at all times during the
preceding two years the amount of Trust Moneys so on deposit with the
Trustee shall have exceeded such amount, then, and in every such case,
the Trustee shall set aside all Trust Moneys, exclusive of all moneys
which represent proceeds of insurance subject to the provisions of
Section 8.06, then held by it and which have been held by it for more
than two years, and thereafter the Trust Moneys so set aside may be
applied only in accordance with the provisions of Section 8.05 pro rata
as between the several series of Bonds then outstanding in the ratio of
the respective aggregate principal amounts of each such series
outstanding at the aforesaid time. In case such Trust Moneys shall be
applied to redemption of Bonds pursuant to Section 8.05, redemption
shall be effected at such then applicable redemption prices, in such
manner and upon such notice as may be specified in respect of said
Bonds of each series in this Restated Indenture or in any applicable
indenture supplemental hereto.
(b) In case of the sale and release of, or the taking by
eminent domain or of the purchase by a public authority (pursuant to
any right which it may then have to make such purchase) of the entire
Trust Estate, then all Trust Moneys representing the proceeds thereof
received by the Trustee shall be applied by the Trustee in accordance
with the provisions of Section 8.05 to the redemption of Bonds
outstanding hereunder (prorated between or among the several series,
according to the principal amount of Bonds outstanding of each series,
if Bonds of more than one series be outstanding) at such then
applicable redemption prices, in such manner and upon such notice
(which shall be given by the Trustee for and on behalf of the Company,
and in the name of the Company) as may be specified in respect of said
Bonds of each series in this Restated Indenture or in any applicable
indenture supplemental hereto.
(c) Whenever Bonds shall be redeemed pursuant to this Section
8.08, the Company shall in each case other than in the case of the
sale, taking, or purchase, as aforesaid, of all or substantially all of
the Trust Estate, pay to the Trustee cash sufficient to cover the
amount of the accrued interest and premium, if any, required to be paid
in connection with any such redemption, which cash shall be held by the
Trustee in trust for such purpose, and, to the extent not required for
such purpose, shall be repaid to the Company.
Section 8.09. Possession After Default. In case the Company shall be in
default hereunder (other than a default in the payment of the principal of any
Bond), the Company, while in possession of the Trust Estate (other than
securities and cash held by the Trustee or the trustee or other holder of a
Prior Lien), may do any of the things enumerated in Sections 8.02 to 8.07,
inclusive, if the Trustee, in its discretion, or the holders of at least a
majority in amount of the Bonds at the time outstanding, shall in writing
expressly authorize or consent to such action, in which event no certificate
filed pursuant to any of said Sections need contain a statement to the effect
that the Company is not in default hereunder.
In case the Trust Estate (other than securities and cash held by the
Trustee or the trustee or other holder of a Prior Lien) shall be in the
possession of a receiver or trustee lawfully appointed, the powers hereinbefore
in Sections 8.02, 8.03, 8.06 and 8.07 conferred upon the Company with respect to
the withdrawal of Trust Moneys may be exercised by such receiver or trustee
(subject to similar authorization or consent of the Trustee or Bondholders as
aforesaid), in which case a written request signed by said receiver or trustee
shall be deemed the equivalent of any Resolution of the Board or any Written
Request of the Company required by any provision of this Article, and a
certificate signed by such receiver or trustee shall be deemed the equivalent of
any Certificate of the Company required by any provision of this Restated
Indenture and such certificate shall contain a statement to the effect that the
Company is not in default in payment of the principal of any Bond, but need not
contain a statement to the effect that the Company is not otherwise in default
hereunder. If the Trustee shall be in possession of the Trust Estate (other than
securities and cash held by the trustee or other holder of a Prior Lien) under
any provision of this Restated Indenture, then such powers may be exercised by
the Trustee so in possession of the Trust Estate, in its uncontrolled
discretion.
Section 8.10. Cancellation of Bonds Delivered. All Bonds delivered
uncanceled to the Trustee and on the basis of which Trust Moneys are paid over,
or for whose redemption or purchase Trust Moneys are applied, under this
Article, when received by the Trustee, shall be immediately canceled.
Section 8.11. Moneys Received by Trustee and Payment of Interest. All
moneys received by the Trustee, including any moneys received for the payment of
Bonds, pursuant to any provision of this Restated Indenture, shall be held in
trust for the purposes for which they were received, but, except to the extent
required by applicable law, need not be segregated in any manner from any other
moneys, and the Trustee shall not be under any obligation to pay interest
thereon except such, if any, as during the period it may generally allow on
similar funds or as it may agree to pay. Unless an Event of Default has happened
and shall be continuing, any interest so allowed by the Trustee shall be paid
over to the Company.
Section 8.12. Investment of Trust Funds. So long as the Company is not
in default in the payment of interest on any Bonds outstanding hereunder and
none of the events of default specified in Section 11.01 hereof shall have
occurred and be continuing, any Trust Moneys deposited with the Trustee under
any of the provisions hereof (other than Trust Moneys deposited with the Trustee
for the purpose of effecting payment or redemption of any Bonds issued hereunder
or interest thereon or which the Trustee has been directed to hold and apply for
the purpose of such payment or redemption) shall, at the Written Request of the
Company evidenced by a Resolution of the Board, be invested or reinvested by the
Trustee in any bonds or other obligations of the United States of America
designated by the Company, maturing not more than five years from the date of
their purchase by the Trustee, and until an event of default specified in
Section 11.01 hereof shall have occurred and be continuing, any interest on such
bonds and obligations which may be received by the Trustee, shall be forthwith
paid to the Company. Such bonds and obligations shall be held by the Trustee as
a part of the Trust Estate subject to the same provisions hereof as the cash
used to purchase the same, but upon a like Written Request of the Company (which
Written Request the Company agrees to make whenever notified by the Trustee that
Trust Moneys are required to be applied under one or more provisions of this
Restated Indenture and that the Trustee does not hold sufficient cash for such
purpose or purposes) the Trustee shall sell all or any designated part of the
same and the proceeds of such sale shall be held by the Trustee subject to the
same provisions hereof as the cash used by it to purchase the bonds and
obligations so sold. If such sale shall produce a net sum less than the cost of
the bonds or other obligations so sold, the Company covenants that it will pay
promptly to the Trustee such amount of cash as with the net proceeds from such
sale will equal the cost of the bonds or other obligations so sold, and if such
sale shall produce a net sum greater than the cost of the bonds or obligations
so sold, the Trustee shall promptly pay to the Company an amount in cash equal
to such excess.
ARTICLE NINE
PARTICULAR COVENANTS OF THE COMPANY
The Company hereby covenants, agrees and warrants as follows:
Section 9.01. Payment of Principal and Interest. The Company will duly
and punctually pay the principal of and interest and premium, if any, on every
Bond issued under this Restated Indenture, on the dates and at the place and in
the manner specified in the Bonds. The interest on Bonds shall be paid to or
upon the order of the registered owners thereof by check of the Company, or of
the Trustee or other paying agent.
Money deposited with the Trustee or with any paying agent for the
purpose of paying the principal of or interest on Bonds, shall constitute a
trust fund for such purpose and for no other purpose whatsoever. Every paying
agent which may be appointed for the purpose of making payments of the principal
of or the interest on any Bond shall be required to notify the Trustee in
writing promptly of any default by the Company in the payment of any such
principal or interest.
The Company covenants and agrees that, if it should at any time act as
its own paying agent, it will, on or before each due date of the principal of,
and premium, if any or interest on any of the Bonds, set aside and segregate and
hold in trust for the benefit of the holders of such Bonds a sum sufficient to
pay such principal and premium, if any, or interest so becoming due, and will
notify the Trustee of any failure to take such action.
Section 9.02. Company Prohibited from Extending Time for Payment. The
Company will not, directly or indirectly, extend, or assent to the extension of,
the time for payment of any claim for interest upon any Bond, and it will not,
directly or indirectly, take part in any arrangement therefor or for the
purchasing or funding of claims in any manner. No such claim so extended, nor
claim for interest upon any Bond which in any way at or after its maturity shall
have been transferred or pledged separate and apart from the Bond to which it
belongs, shall be entitled, in case of default hereunder, to the benefit or
security of this Restated Indenture, until the prior payment in full of the
principal of all Bonds issued hereunder and outstanding and of all claims not so
extended or transferred or pledged.
Section 9.03. Warrants and Defends Title. The Company is lawfully
seized and possessed of and has good title to all of the Trust Estate which is
described in the Granting Clauses hereof as being presently mortgaged and
pledged hereunder, and it has good right and lawful authority to mortgage and
pledge the same as provided in and by this Restated Indenture; said property is
free and clear of all liens and encumbrances except liens and encumbrances set
forth in the Granting Clauses and except Permitted Encumbrances, and the Company
warrants and will defend the title to such property and every part thereof to
the Trustee, its successors in the trust and assigns, forever, for the benefit
of the holders of the Bonds, against the claims and demands of all persons
whomsoever.
Section 9.04. Payment of Taxes and Prohibition on Liens. The Company
will pay or cause to be paid all taxes and assessments levied or assessed upon
the Company or upon the Trust Estate or upon any income therefrom or upon the
interest of the Trustee or of the Bondholders in respect of the Trust Estate,
when the same shall become due, provided, however, that nothing herein contained
shall constitute an agreement on the part of the Company to pay any taxes of the
mortgagee upon or on account of the mortgage debt, and will duly observe and
conform to all valid requirements of any governmental authority relative to any
of the Trust Estate, and all covenants, terms and conditions upon or under which
any of the Trust Estate is held; it will not create or suffer to be hereafter
created any lien upon the Trust Estate, or any part thereof, or the income
therefrom, prior to, or having equality with, the lien of these presents, except
Permitted Encumbrances; within three months after the accruing of any lawful
claims or demands for labor, material, supplies or other objects, which, if
unpaid, might by law be given precedence over this Restated Indenture, as a lien
or charge upon the Trust Estate or the income thereof, it will pay the same, or
make adequate provision to satisfy or discharge the same; provided, however,
that nothing in this Section contained shall require the Company to observe or
conform to any requirement of any governmental authority or to pay or cause to
be paid or discharged, or make provision for, any such tax, prior lien or charge
so long as the validity thereof shall be contested by it in good faith and by
appropriate legal proceedings and such security for the payment of such prior
lien or charge shall be given as the Trustee may require; and it will not suffer
to be done any matter or thing whereby the lien hereof might or could be
impaired; provided, however, that notwithstanding anything herein contained to
the contrary the Company may acquire any property constructed or acquired as
betterments, extensions, improvements, repairs, renewals, replacements,
substitutions or alterations to, upon, for and of property subject to such Prior
Lien, but only to the extent that the after-acquired property clause or other
provisions of such Prior Lien attaches thereto, but no such mortgage, lien or
other encumbrance shall be permitted to exist upon any such after-acquired
property which is made the basis of the authentication and delivery of Bonds
under Article Four or the withdrawal of Deposited Cash under Section 5.03 or the
release of property under Article Seven or the withdrawal of Trust Moneys under
Article Eight (except to the extent expressly permitted by Articles Seven and
Eight).
Section 9.05. Repair and Maintain. The Company covenants that the
business of the Company will be carried on and conducted in an efficient manner;
all property, plants, appliances and equipment of the Company useful in the
carrying on of its business will be kept in repair and maintained in good
working order and condition, and if worn or damaged beyond repair shall be
replaced by other property suitable to the business of the Company and of at
least equal value.
Whenever the holders of not less than a majority in amount of the Bonds
shall so request the Trustee in writing, or whenever the Trustee shall elect so
to do, the Trustee shall select in the exercise of reasonable care, and the
Company at its own expense shall promptly appoint an Independent Engineer to
make an inspection of the Trust Estate and within a reasonable time after his
appointment to report to the Company and to the Trustee whether or not the Trust
Estate, as an operating system, has been maintained in good repair, working
order and condition; provided that the Company shall not be obligated to make
more than one such appointment within any period of sixty months.
If such Independent Engineer shall report that the Trust Estate as an
operating system has not been so maintained he shall specify in his report the
character and extent of, and the estimated cost of making good, the deficiency
in such maintenance, and, if longer than one year, the time reasonably necessary
to make good such deficiency. Said report shall be placed on file by the Trustee
and shall be open to inspection by any Bondholder at any reasonable time.
The Company shall, with all reasonable speed, do such maintenance work
as may be necessary to make good any such maintenance deficiency as shall have
been specified to exist in such report, and upon completion thereof such
Independent Engineer (or, in the case of his refusal or inability to act, some
other Independent Engineer selected by the Trustee in the exercise of reasonable
care) shall report in writing to the Trustee that the deficiency specified in
said report has been made good.
Unless the Trustee shall be so informed in writing by such Independent
Engineer within one year from the date of the report with respect to the
maintenance deficiency (or such longer period as may be specified in such report
to be reasonably necessary for the purpose), that such deficiency has been made
good, the Company shall be deemed to have defaulted in the due performance of
the covenants of this Section with respect to the maintenance of the Trust
Estate; and in any proceedings consequent upon such default, said report of such
Independent Engineer shall be conclusive evidence against the Company of the
existence of the facts and conditions therein set forth, and, subject to the
provisions of Section 14.02, the Trustee shall be fully protected in relying
thereon.
All expenses incurred pursuant to this Section shall be borne by the
Company.
In the event that any regulatory authority having jurisdiction over the
Company shall determine that the expenditures required by this Section for
repairs and maintenance are excessive or shall, by order or regulation,
prohibit, in whole or in part, any such expenditures for repairs and
maintenance, then, upon filing with the Trustee a certified copy of such order
or a copy of such regulation, as the case may be, the Company shall, so long as
such order or such regulation remains in effect, be relieved from compliance
with the covenants contained in this Section, to the extent that such
expenditures for repairs and maintenance shall have been held excessive or shall
be prohibited.
Section 9.06. Prior Lien Obligations. The Company will not permit any
increase of the aggregate principal amount of outstanding Prior Lien Obligations
secured by any Prior Lien, but the Company shall have the right to issue new
Obligations under a Prior Lien, in place of, and in substitution for, or to
refund, other Obligations secured by the same Prior Lien, if the principal
amount of such new Obligations shall not exceed the principal amount of the
Obligations in place of which, or to refund which, such new Obligations are
being issued.
The Company will not permit any default to occur in the payment of any
principal of or any interest or premium, if any, on any Prior Lien Obligations,
and will not permit any act or omission, which is or may be declared to be a
default under any mortgage securing Prior Lien Obligations, to occur hereafter
or to continue beyond the period of grace, if any, specified in any such
mortgage, and will, at all times, protect its title to the Trust Estate and
every part thereof against loss by reason of any foreclosure or other proceeding
to enforce any Prior Lien thereon.
Section 9.07. Use of Property Released from Prior Lien. Upon the
cancellation and discharge of any Prior Lien, the Company will cause all cash,
obligations or other property then held by the trustee or other holder of such
Prior Lien, which were received by such trustee or other holder by reason of the
release of, or which represent the proceeds of the taking by eminent domain or
the purchase by a public authority or any other disposition of, or insurance on,
any of the Trust Estate (including all proceeds of or substitutes for any
thereof), in case such cash, obligations or other property was received by such
trustee or other holder while the property released was subject to the Lien of
this Restated Indenture, and not otherwise, to be paid and/or deposited and
pledged with the trustee, subject to no lien or charge prior to the Lien of this
Restated Indenture, such cash to be held and paid over or applied by the Trustee
as provided in Article Eight and such obligations or other property to be held
by the Trustee as part of the Trust Estate; provided, however, that in lieu of
paying or delivering to the Trustee all or any part of such cash, obligations or
other property, the Company may deliver to the Trustee a certificate of the
trustee or other holder of another Prior Lien, stating that a specified amount
thereof has been deposited with such trustee or other holder pursuant to the
requirements of such other Prior Lien, in which case there shall also be
delivered to the Trustee an Opinion of Counsel stating that such deposit is
required by such other Prior Lien.
Section 9.08. Recording and Filing and Annual Opinion and Certificate.
At any and all times the Company will do, execute, acknowledge, deliver, file
and/or record, and will cause to be done, executed, acknowledged, delivered,
filed and/or recorded, all and every such further acts, deeds, conveyances,
mortgages, transfers and assurances in law as the Trustee shall reasonably
require for the better assuring, conveying, pledging, transferring, mortgaging,
assigning and confirming unto the Trustee all and singular the hereditaments and
premises, estate and property hereby conveyed, pledged, transferred or assigned,
or intended so to be.
The Company will cause this Restated Indenture and every instrument
amendatory hereof or supplementary hereto which shall be executed pursuant to
the provisions hereof, forthwith upon execution, to be recorded as a real estate
mortgage and filed as a security interest under the Uniform Commercial Code as
required by law under the applicable state jurisdictions and will, to the extent
permitted by law, pay any mortgage recording or filing or other tax legally due
upon such recording and filing or the issuing of Bonds hereunder, and will
punctually and fully comply with the requirements of any and every mortgage
recording tax law or other law, or direction of the Trustee, affecting the due
recording and re-recording and filing and refiling of this Restated Indenture or
of such additional instruments in such manner as may be necessary fully to
preserve, continue and protect the security and validity of the Bonds, the
superior lien of this Restated Indenture on the Trust Estate and the rights and
remedies of the Trustee.
Promptly after the execution and delivery of this Restated Indenture,
the Company will furnish to the Trustee an Opinion of Counsel, complying with
the provisions of Section 1.02, either stating that in the opinion of such
counsel this Restated Indenture has been properly recorded and filed so as to
make effective the lien intended to be created hereby and that all other action
required by the preceding paragraph theretofore to have been taken has been
taken, and reciting the details of such action, or stating that in the opinion
of such counsel no such recording, filing or other action is necessary to make
such lien effective.
The Company agrees upon each and every purchase or acquisition by the
Company hereafter of property which under the terms hereof is upon acquisition
to be subject to this Restated Indenture, to record and/or re-record and/or file
or refile this Restated Indenture, and/or a duplicate hereof and/or a further
separate and supplemental mortgage, and/or assignment, if and to the extent that
such action may be required by law in order effectively to subject such property
to the lien hereof and to preserve the priority of such lien, or as may be
directed by the Trustee, in the proper office or offices of the county or
counties or other recording districts in which such property is situated, or in
any other office, and to do every other act and thing necessary to effectuate
the lien hereof in respect thereof.
Without limiting the generality of the foregoing covenants of this
Section, the Company will furnish to the Trustee on or before May 1st in each
year commencing with the year 1942, the following:
A. A CERTIFICATE OF THE COMPANY, complying with the provisions
of Section 1.02, briefly describing (or referring to descriptions
thereof in other Certificates of the Company) each item of property
which was acquired in the preceding calendar year at a cost of not less
than $100,000, and which under the terms hereof is subjected to the
Lien of this Restated Indenture, or required so to be;
B. AN OPINION OF COUNSEL, complying with the provisions of
Section 1.02, specifying the mortgages, deeds, conveyances,
assignments, transfers and instruments of further assurance which will
be sufficient to subject such property to the Lien of this Restated
Indenture or stating that no such mortgage, deed, conveyance,
assignment, transfer or instrument of further assurance is necessary
for such purpose, and that, upon the recordation or filing, in the
manner stated in such opinion, of the instruments so specified, if any,
and, upon the recordation or filing of this Restated Indenture or any
supplemental indenture in the manner stated in such opinion, or without
any such recordation or filing if such opinion shall so state, this
Restated Indenture will constitute a valid lien upon such property;
C. THE MORTGAGES, DEEDS, CONVEYANCES, ASSIGNMENTS, TRANSFERS
AND INSTRUMENTS OF FURTHER ASSURANCE, if any, specified in such Opinion
of Counsel and not theretofore delivered to the Trustee;
D. AN OPINION OF COUNSEL, complying with the provisions of
Section 1.02, either stating that in the opinion of such counsel such
action has been taken with respect to the recording, filing,
re-recording and refiling of this Restated Indenture as is necessary to
maintain the lien hereof, and reciting the details of such action, or
stating that in the opinion of such counsel no such action is necessary
to maintain such lien, and stating whether, under the then applicable
law, such action will be necessary or advisable within the next ensuing
period of twelve months.
Section 9.09. Insurance Requirements and Annual Certificate. The
Company will at all times keep the Trust Estate insured with good and reputable
insurance companies against loss or damage by fire or other risk, to the extent
that property of similar character is usually insured by companies engaged in a
similar business. The Company will also at all times maintain proper insurance
against loss or damage from such hazards and risks to the person and property of
others as are usually insured against by companies engaged in a similar
business. All policies or other contracts for insurance upon the Trust Estate
shall provide that any loss in excess of Five Million Dollars shall be payable
to the Trustee as its interest may appear, or to the trustee or other holder of
any Prior Lien if required by the terms thereof; and, if so requested in writing
by the Trustee, the Company will, subject to the provisions of any Prior Lien,
cause policies for such insurance to be delivered to the Trustee.
Any such insurance moneys received by the Trustee shall, subject to the
requirements of any Prior Lien, be held by the Trustee and be applied from time
to time as provided in Article Eight.
There shall be deposited with the Trustee, at such reasonable times as
it may request, and at least once in each year on or before May 1 without any
such request, a CERTIFICATE OF THE COMPANY, complying with the provisions of
Section 1.02, with respect to the compliance by the Company with the covenants
contained in this Section 9.09, which certificate (i) shall include the names of
the issuing companies, the numbers and expiration dates of the policies, the
amounts of such policies and the risks covered thereby, and (ii) shall state
that it has been prepared in accordance with the provisions of this Section
9.09. In case the Trustee shall at any time notify the Company in writing that
it disapproves of any insurance company with which the Company has taken out any
insurance, or of the terms of any such policy, other insurance satisfactory to
the Trustee shall forthwith be effected by the Company.
Except as may be otherwise required by Section 14.02, the Trustee may
accept as conclusive the adjustment of any loss or losses between the Company
and any insurance company, without the necessity of any further action on the
part of the Trustee, and the Trustee shall be under no duty or obligation to
check or verify any insurance policies or any list of insurance policies at any
time filed with it hereunder, or to ascertain whether the Trust Estate is
adequately or properly insured and may accept a certificate of the Company as
conclusive evidence of any such adjustment and also as conclusive evidence that
the total amounts payable by insurance companies with respect to any given loss
by the Company are or will be less than $5,000,000.
Section 9.10. Record Keeping. The Company will keep full and complete
records and accounts showing the sale of all Bonds authenticated and delivered
hereunder, and the price or prices received therefor.
Section 9.11. Accounting and Audits. The Company will keep books of
record and account, in which full, true and correct entries will be made of all
dealings or transactions relative to the plants, properties, business and
affairs of the Company, and all books, documents and vouchers relative to the
plants, properties, business and affairs of the Company shall at all reasonable
times be open to the inspection of such accountant or other agent as the Trustee
may from time to time designate, and the Company will bear all expenses of such
inspections at intervals of not more than once every two years. Except as may be
otherwise required by Section 14.02, the Trustee shall be under no duty to cause
any such inspection to be made, unless requested so to do by the holders of not
less than a majority in amount of the Bonds.
Section 9.12. Maintain Existence. Except in the case of a merger,
consolidation, conveyance or transfer as in Article Thirteen provided, the
Company will at all times maintain its corporate existence and right to carry on
business and will duly procure all renewals and extensions thereof and shall do
or cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and rights and franchises of the Company;
provided, the Company shall not be required to preserve any such right or
franchise if, in the good faith judgment of the Company, the preservation
thereof is no longer desirable in the conduct of business of the Company, and
the loss thereof would not adversely affect the interests of the Bondholders in
any material respect. The Company will not enter into any merger or
consolidation, or make any conveyance or lease of all or substantially all the
Trust Estate as an entirety unless, in connection therewith, the Company and/or
the successor corporation and/or the lessee, as the case may be, shall observe
and comply with the terms and conditions of Article Thirteen applicable to such
transaction.
Section 9.13. Advances by Trustee. If the Company shall fail to perform
any of the covenants contained in Section 9.09, the Trustee may make advances to
perform the same in its behalf, but, except as may be otherwise required by
Section 14.02, shall be under no obligation so to do; and all sums so advanced
shall be at once repayable by the Company, and shall bear interest at six
percent (6%) per annum until paid, and shall be secured hereby and have the
benefit of the lien hereby created in priority to the Bonds issued hereunder,
but no such advance shall be deemed to relieve the Company from any default
hereunder.
Section 9.14. Dividend Restrictions. Other than dividends payable
solely in shares of its common stock, the Company may declare and pay dividends
in cash or property on any shares of its common stock only out of the unreserved
and unrestricted retained earnings of the Company and shall not make any such
declaration or payment when the Company is insolvent, or when the payment
thereof would render the Company insolvent.
Section 9.15. Governmental Reporting Requirements. The Company
covenants and agrees
(1) to file with the Trustee within 15 days after the Company
is required to file the same with the Securities and Exchange
Commission, copies of the annual reports and of the information,
documents, and other reports (or copies of such portions of any of the
foregoing as such Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with
such Commission pursuant to Section 13 or Section 15 (d) of the
Securities Exchange Act of 1934; or, if the Company is not required to
file information, documents, or reports pursuant to either of such
sections, then to file with the Trustee and the Securities and Exchange
Commission, in accordance with rules and regulations prescribed from
time to time by said Commission, such of the supplementary and periodic
information, documents, and reports which may be required pursuant to
Section 13 of the Securities Exchange Act of 1934 in respect of a
security listed and registered on a national securities exchange as may
be prescribed from time to time in such rules and regulations;
(2) to file with the Trustee and the Securities and Exchange
Commission, in accordance with the rules and regulations prescribed
from time to time by said Commission, such additional information,
documents and reports with respect to compliance by the Company with
the conditions and covenants provided for in this Restated Indenture as
may be required from time to time by such rules and regulations;
(3) to transmit to the holders of the Bonds in the manner and
to the extent provided in Clause (c) of Section 14.05 with respect to
reports pursuant to Clause (a) of Section 14.05, such summaries of any
information, documents and reports required to be filed by the Company
pursuant to Clauses (1) and (2) of this Section 9.15 as may be required
by the rules and regulations prescribed from time to time by the
Securities and Exchange Commission.
Section 9.16. List of Bondholders. The Company covenants and agrees
that it will furnish or cause to be furnished to the Trustee between April 15
and April 30 and between October 15 and October 30 in each year, beginning with
the month of April in the year 1942, and at such other times as the Trustee may
request in writing, a list in such form as the Trustee may reasonably require
containing all the information in the possession or control of the Company or of
its paying agents, as to the names and addresses of the holders of Bonds
obtained since the date as of which the next previous list, if any, was
furnished. Any such list may be dated as of a date not more than 15 days prior
to the time such information is furnished or caused to be furnished, and need
not include information received after such date.
Section 9.17. Preservation of List of Bondholders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses
of the holders of Bonds (1) contained in the most recent list furnished
to it as provided in Section 9.16, (2) received by it in the capacity
of paying agent hereunder, and (3) filed with it within two preceding
years pursuant to the provisions of Paragraph (2) of Clause (c) of
Section 14.05. The Trustee may (1) destroy any list furnished to it as
provided in Section 9.16 upon receipt of a new list so furnished; (2)
destroy any information received by it as paying agent upon delivering
to itself as Trustee, not earlier than 45 days after an interest
payment date of the Bonds, a list containing the names and addresses of
the holders of Bonds obtained from such information since the delivery
of the next previous list, if any; (3) destroy any list delivered to
itself as Trustee which was compiled from information received by it as
paying agent upon the receipt of a new list so delivered; and (4)
destroy any information received by it pursuant to the provisions of
Paragraph (2) of Clause (c) of Section 14.05, but not until two years
after such information has been filed with it.
(b) In case three or more holders of Bonds (hereinafter
referred to as "applicants") apply in writing to the Trustee, and
furnish to the Trustee reasonable proof that each such applicant has
owned a Bond for a period of at least six months preceding the date of
such application, and such application states that the applicants
desire to communicate with other holders of Bonds with respect to their
rights under this Restated Indenture or under the Bonds, and is
accompanied by a copy of the form of proxy or other communication which
such applicants propose to transmit, then the Trustee shall, within 5
business days after the receipt of such application, at its election,
either
(1) afford to such applicants access to the
information preserved at the time by the Trustee in accordance
with the provisions of Clause (a) of this Section; or
(2) inform such applicants as to the approximate
number of holders of Bonds whose names and addresses appear in
the information preserved at the time by the Trustee, in
accordance with the provisions of Clause (a) of this Section,
and as to the approximate cost of mailing to such Bondholders
the form of proxy or other communication, if any, specified in
such application.
If the Trustee shall elect not to afford to such applicants
access to such information, the Trustee shall, upon the written request
of such applicants, mail to each Bondholder whose name and address
appears in the information preserved at the time by the Trustee in
accordance with the provisions of Clause (a) of this Section, a copy of
the form of proxy or other communication which is specified in such
request, with reasonable promptness after a tender to the Trustee of
the material to be mailed and of payment or provision for the payment
of the reasonable expenses of mailing, unless within 5 days after such
tender the Trustee shall mail to such applicants and file with the
Securities and Exchange Commission together with a copy of the material
to be mailed, a written statement to the effect that, in the opinion of
the Trustee, such mailing would be contrary to the best interests of
the holders of Bonds, or would be in violation of applicable law. Such
written statement shall specify the basis of such opinion. If said
Commission, after opportunity for a hearing upon the objections
specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an
order sustaining one or more of such objections, said Commission shall
find, after notice and opportunity for a hearing, that all the
objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all such
Bondholders with reasonable promptness after the entry of such order
and the renewal of such tender; otherwise the Trustee shall be relieved
of any obligation or duty to such applicants respecting their
application.
(c) The Trustee shall not be held accountable by reason of the
mailing of any material pursuant to any request made under Clause (b)
of this Section.
Section 9.18. Annual Compliance Certificate. On or before May 1 in each
calendar year, or on or before such other date in each calendar year as the
Company and the Trustee may agree upon, the Company will deliver to the Trustee
a Certificate of the Company, complying with the provisions of Section 1.02,
with respect to the compliance by the Company with the covenants contained in
Sections 9.04, 9.05, 9.06, 9.07, 9.10, 9.11, and 9.12, and the Company covenants
and agrees to notify the Trustee immediately upon the occurrence of any event
which constitutes an Event of Default (as defined in Section 11.01 hereof) or
which may constitute an Event of Default as the result of the giving of a notice
and/or expiration of a period of grace.
ARTICLE TEN
REDEMPTION OF BONDS
Section 10.01. Redeemable Bonds. Such of the Bonds issued hereunder as
are by their terms redeemable before maturity may, at the election of the
Company evidenced by a Resolution of the Board delivered to the Trustee, be
redeemed at such times, in such amounts and at such prices as may be specified
therein, and in accordance with the provisions of this Article.
Section 10.02. Redemption Rights of Existing Bonds. The options of the
Company, if any, to redeem any of the Existing Bonds are set forth in Exhibits
B, C, D and E attached hereto.
Section 10.03. Notice and Selection of Bonds. If the Company shall
elect to exercise such right of redemption, it shall give notice thereof in
accordance with this Section. Notice of redemption shall be sufficiently given
if mailed, postage prepaid, at least 30 days and not more than 50 days prior to
the date on which such redemption is to be made, to all registered owners of
Bonds to be redeemed, at their addresses as the same shall appear on the Bond
register of the Company. Failure to mail such notice to any such registered
owner or owners or any imperfection or defect in such notice shall affect the
validity of the proceedings for redemption. Each notice of redemption shall
state such election on the part of the Company and shall specify, in case less
than all of the Bonds of a series are to be redeemed, the distinctive numbers of
the Bonds to be redeemed, and shall also state that the interest on the Bonds in
such notice designated for redemption shall cease on such redemption date and
that on said date there will become due and payable upon each of said Bonds the
redemption price therein specified, at the principal office of the Trustee in
the Borough of Manhattan, The City of New York.
Any election of the Company pursuant to Section 10.01 to redeem Bonds
may be rescinded by the Company at any time prior to the first publication or
the mailing of the notice of redemption.
In case the Company shall have elected to redeem less than all the
outstanding Bonds of any series, it shall, in each such instance, at least 10
days before the date upon which the first publication or the mailing of notice
of redemption is required to be made, notify the Trustee in writing of such
election and of the aggregate principal amount of Bonds of such series to be
redeemed.
The selection of Bonds to be redeemed shall, in case less than all of
the outstanding Bonds of any series are to be redeemed, be made by the Trustee
either (a) in accordance with the provisions of any agreement, duly executed by
the owners of all outstanding Bonds of such series, provided that an executed
counterpart of such agreement shall have been filed with the Trustee on or prior
to the date on which the notice aforesaid is received by the Trustee, or (b) if
the provisions of the preceding Clause (a) shall not be applicable, the Trustee
shall determine by lot, in any manner in its discretion, the serial numbers of
the Bonds to be redeemed and shall certify to the Company the serial numbers of
the Bonds so to be redeemed. The Bond so certified shall be specified in such
notice by their serial numbers. In any determination by lot under this Section,
(a) Bonds held by the Company shall not be considered to be outstanding and
shall be excluded in making the determination of the Bonds to be redeemed and
(b) each Bond shall be represented by a separate number for each $1,000 of its
principal amount. If less than the whole principal amount of any such Bond shall
be called for redemption, said notice shall also specifically state the portion
of the principal amount thereof which is to be redeemed and that, upon
presentation of such Bond for partial redemption, there will be issued, in lieu
of the unredeemed portion of the principal amount thereof, a new Bond or Bonds
of an aggregate principal amount equal to such unredeemed portion, as requested
by the registered owner thereof; and in such case the Company shall execute and
the Trustee shall authenticate and deliver to or upon the written order of the
registered owner of any such Bond, at the expense of the Company, a Bond or
Bonds of the same series (but only in authorized denominations) for the
principal amount of the unredeemed portion of such Bond or, at the option of
such registered owner, the Trustee shall, upon presentation of such Bond for the
purpose, make a notation thereon of the payment of the portion thereof so called
for partial redemption.
Notice having been given as aforesaid, the Bonds so to be redeemed
shall on the date designated in such notice become due and payable at the
redemption price so specified; and from and after the date of redemption so
designated (unless the Company shall make default in the payment of the
redemption price of such Bonds) interest on the Bonds so designated for
redemption (or in the case of partial redemption of a Bond on the portion
thereof to be redeemed) shall cease to accrue, and upon surrender at the
principal office of the Trustee in the Borough of Manhattan, The City of New
York, in accordance with said notice, of any Bond specified therein, such Bond
(or the portion thereof to be redeemed) shall be paid by the Company at the
redemption price aforesaid. If the redemption price shall not be so paid upon
surrender thereof, said Bond shall continue to bear interest at the rate therein
specified.
The Company shall deposit in trust with the Trustee, prior to the date
designated for redemption, an amount of money sufficient to pay the redemption
price of all the Bonds which the Company has elected to redeem on such date.
Notwithstanding the provisions of this Section 10.03, payment of the
redemption price of a portion of any Bond of any series (for the sinking fund or
otherwise) shall be made directly to the registered owner thereof without
surrender or presentation thereof to the Trustee if the Company shall have filed
with the Trustee a copy of an agreement between the Company and such registered
owner providing that such payment will so be made, that such registered owner
will make a notation on such Bond of the portion or portions thereof so redeemed
and that, if such registered owner should sell or otherwise dispose of such
Bond, such registered owner, before making any delivery of such Bond, will
surrender the same to the Trustee for confirmation by the Trustee of the
notation thereon of the principal amount of such Bond theretofore paid.
Section 10.04. Method of Effecting Redemption. If and so soon as
A. The Company shall have duly elected to redeem any Bond
pursuant to Section 10.01 and shall have delivered to the Trustee
(1) proof satisfactory to the Trustee that notice of
redemption thereof has been mailed as required by Section
10.03; or
(2) a Written Order of the Company, expressed to be
irrevocable, authorizing the Trustee to give such notice on
behalf of the Company;
and shall have deposited with the Trustee an amount of money
sufficient to pay the redemption price of such Bond; or
B. The Trustee shall have selected any Bond for redemption
pursuant to Section 8.08 pursuant to any sinking, amortization,
improvement, renewal or other analogous fund, if any, which may
hereafter be created as in Section 2.04 provided (with respect to a
Bond of any other series); there being on deposit with the Trustee an
amount of money sufficient to pay the redemption price of such Bond;
and in either such case
C. The Company shall have deposited with the Trustee,
sufficient funds for the payment of all interest on any such Bond
payable on or before the date designated for redemption thereof which
is not included in the redemption price thereof;
then and in every such case the money held by the Trustee for the redemption of
such Bond shall, without further act, be deemed forthwith to be reserved for the
benefit of, and shall constitute a trust fund for, the holder of such Bond, but
no interest shall accrue thereon in his favor. Thereafter, such Bond (or in the
case of partial redemption of a Bond, the portion thereof to be redeemed) shall
be excluded from participation in the lien of this Restated Indenture or in the
Trust Estate. Money held in trust by the Trustee for the redemption of any Bond
shall not be deemed to be a part of the Trust Estate.
Section 10.05. Cancellation of Redeemed Bonds. All Bonds redeemed
pursuant to Section 10.03 (except Bonds partially redeemed and not surrendered,
as permitted by said Section 10.03) shall be canceled by the Trustee.
ARTICLE ELEVEN
REMEDIES OF TRUSTEES AND BONDHOLDERS
Section 11.01. Events of Default. In case one or more of the
following events (herein called "Events of Default") shall happen, that is to
say:
A. Default shall be made in the payment of any interest on any
Bond issued hereunder when and as the same shall become due and
payable, and any such default shall have continued for a period of 30
days; or
B. Default shall be made in the payment of the principal of
any Bond issued hereunder when and as the same shall become due and
payable, whether by the terms thereof or otherwise as herein provided;
or
C. Default shall be made in the due performance or observance
of any covenant or condition required by Section 9.14 to be performed
or observed by the Company and any such default shall have continued
for a period of 30 days; or
D. Default shall be made in the due performance or observance
of any covenant or condition required by the provisions for any
sinking, amortization, improvement, renewal or other analogous fund
with respect to Bonds of any series, and any such default shall have
continued for a period of 30 days; or
E. Default shall be made in the due performance or observance
of any other covenant or condition herein required to be performed or
observed by the Company (except in respect of the refund or
reimbursement of taxes, assessments or other governmental charges for
which the holders of Bonds may look only to the Company), and any such
default shall have continued for a period of 60 days after written
notice thereof to the Company from the Trustee or from the holders of
at least 10% in amount of the Bonds at the time outstanding; or
F. If the Company shall be adjudicated a bankrupt or
insolvent, or shall admit in writing its inability to pay its debts
generally as they come due, or shall make a general assignment for the
benefit of creditors or shall file a voluntary petition in bankruptcy
or under the corporate reorganization provisions of the Federal
Bankruptcy Act (as now or hereafter amended) or an answer admitting the
material allegations of a petition filed against the Company under such
provisions, or shall, by voluntary petition, answer or consent, seek
relief under the provisions of any other now existing or future
bankruptcy or other law providing for the reorganization, dissolution,
liquidation or winding up of corporations on the ground of insolvency;
or
G. If the Company shall consent to the appointment, upon the
application of a creditor or creditors, of a receiver of itself or of
the whole or any part of the Trust Estate; or if an order, judgment or
decree shall be entered, upon the application of a creditor or
creditors, by any court of competent jurisdiction appointing, without
the consent of the Company, a receiver of the Company or of the whole
or any substantial part of the Trust Estate, and the receiver so
appointed shall not have been removed or discharged within 90 days
thereafter; or
H. If a petition against the Company in proceedings under the
corporate reorganization provisions of the Federal Bankruptcy Act (as
now or hereafter amended) shall be approved by any court of competent
jurisdiction and such approval shall not be withdrawn or the proceeding
dismissed within 90 days thereafter, or if under the provisions of any
other now existing or future bankruptcy or other law providing for the
reorganization, dissolution, liquidation or winding up of corporations
on the ground of insolvency, any court of competent jurisdiction shall
assume jurisdiction, custody or control of the Company or of the whole
or any part of the Trust Estate and such jurisdiction, custody or
control shall not be relinquished or terminated within 90 days
thereafter; or
I. If final judgment for the payment of money shall be
rendered against the Company, and the same shall not be discharged
within 60 days from the entry thereof or an appeal therefrom or from
the order, decree or process upon which or pursuant to which said
judgment was granted, based or entered, or other appropriate proceeding
for the appellate review thereof, shall not be taken within said period
and a stay of execution pending such appeal shall be secured or if such
appeal be taken and on such appeal such order, decree or process shall
be affirmed and the Company shall not discharge said judgment or
provide for its discharge in accordance with its terms within sixty
days after the entry of the order or decree or affirmance; or
J. If any governmental agency or any court at the instance of
any governmental agency shall assume, other than under the exercise of
eminent domain, custody or control of the whole or any substantial part
of the Trust Estate, or shall assume control over the Company's affairs
or operations to the exclusion of management by the Company;
then, and in every such case, if such default or defaults shall not have been
remedied, the Trustee may, and upon the written request of the holders of at
least a majority in amount of the Bonds then outstanding shall, and the holders
of at least 25% in amount of the Bonds may, by notice in writing to the Company,
declare the principal of and interest on all the Bonds to be due and payable
immediately, and upon any such declaration the same shall become immediately due
and payable, anything in this Restated Indenture or in the Bonds contained to
the contrary notwithstanding. This provision is subject, however, to the
condition that if, at any time after such declaration, but before any sale of
the Trust Estate, or any part thereof, shall have been made under this Article,
all overdue installments of interest upon all the bonds, with interest (to the
extent that payment of such interest is enforceable under applicable law) on
overdue installments of interest at the rate of 6% per annum, together with all
sums paid or advanced by the Trustee under any provision hereof and the
reasonable and proper charges, expenses and liabilities of the Trustee, its
agents, attorneys and counsel, and all other sums payable by the Company
hereunder, except the principal of, and interest accrued since the next
preceding interest date on, the Bonds due and payable solely by virtue of such
declaration, shall either be paid by or for the account of the Company or
provision satisfactory to the Trustee shall be made for such payment, and all
Events of Default hereunder shall be remedied, then, and in every such case, the
holders of at least a majority in amount of the Bonds then outstanding, by
written notice to the Company and to the Trustee, may rescind and annul such
declaration in its entirety; but no such action shall extend to or affect any
subsequent default or impair any right consequent thereon.
The Trustee shall give to the Bondholders, in the manner and to the
extent provided in Clause (c) of Section 14.05, notice of the happening of any
of the events set forth in the preceding Paragraphs A to J which are known to
it, within 90 days (exclusive of days of grace) after the happening thereof;
provided, however, that, except in the case of a default in the payment of
principal of or interest on any Bonds outstanding hereunder or in the payment of
any sinking, purchase or analogous fund installment, the Trustee may withhold
the giving of such notice if, and so long as, the withholding of such notice is,
in the judgment of the board of directors, the executive committee or a trust
committee of directors and/or responsible officers of the Trustee, made in good
faith in the interests of the Bondholders.
Section 11.02. Possession of Trust Estate by Trustee. In case one or
more of the Events of Default shall happen and shall not have been remedied,
then, and in every such case, to the extent permitted by law, the Trustee,
personally or by agents or attorneys, may enter into and upon all or any part of
the Trust Estate (including the books, papers and financial records of the
Company, but excluding money, securities and property deposited or pledged, or
required by the terms hereof to be deposited or pledged, with the trustee,
mortgagee or other holder of some Prior Lien), and may exclude the Company, its
agents and servants, and all persons claiming under the Company, wholly or
partly therefrom; and having and holding the same, may use, operate, manage and
control the Trust Estate and conduct the business thereof, by superintendents,
managers, receivers, agents, servants and/or attorneys. Upon every such entry,
the Trustee may, from time to time, at the expense of the Trust Estate, make all
such repairs, renewals, replacements and useful or required alterations,
additions, betterments and improvements to and on the Trust Estate, as to it may
seem necessary, proper or judicious. In each such case, the Trustee shall have
the right to manage the Trust Estate and to carry on the business and to
exercise all rights and powers of the Company, either in the name of the
Company, or otherwise, as the Trustee shall deem best, and the Trustee shall be
entitled to collect and receive all earnings, income, rents, issues and profits
of the same and every part thereof, without prejudice, however, to any right of
the Trustee as provided in Article Seven to collect and receive all income from
money, obligations or other property deposited or pledged, or required by the
terms hereof to be deposited or pledged, with the Trustee. Such earnings,
income, rents, issues and profits shall be applied to pay the expenses of
holding and operating the Trust Estate and of conducting the business thereof,
and of all maintenance, repairs, renewals, replacements, alterations, additions,
betterments and improvements, and to make all payments which the Trustee may be
required or may elect to make, if any, for taxes, assessments, insurance and
other prior or proper charges upon the Trust Estate or any part thereof
(including interest on and principal of Prior Lien Obligations), and to set up
such reasonable reserves as the Trustee may deem advisable for taxes,
assessments, interest and other prior or proper charges, and to make all other
payments which the Trustee may be required or authorized to make under any
provision of this Restated Indenture, as well as just and reasonable
compensation for the services of the Trustee, and of all superintendents,
managers, receivers, agents, attorneys, counsel, servants and other employees
engaged and employed in conducting the business of the Company, and to employ
engineers or accountants to investigate and make reports upon the business and
affairs of the Company. The remainder of such income, rents, issues and profits
shall be applied as follows:
In case the principal of the Bonds then outstanding shall not
have become due and be unpaid, to the payment of the interest in
default, in the order of the maturity of the installments of such
interest, with interest (to the extent that payment of such interest is
enforceable under applicable law) on overdue installments of interest
at the rate of 6% per annum; such payments to be made ratably to the
persons entitled thereto without discrimination or preference, subject,
however, to the provisions of Section 9.02.
In case the principal of any of the Bonds then outstanding
shall have become due, by declaration or otherwise, and shall be
unpaid, first to the payment of the accrued interest in the order of
the maturity of the installments of such interest (treating for this
purpose each semiannual accrual of interest on overdue Bonds as an
installment of interest), with interest (to the extent that payment of
such interest is enforceable under applicable law) on overdue
installments of interest at the rate of 6% per annum, and then to the
payment of the whole amount due and unpaid upon the principal of the
Bonds; in every instance such payments to be made ratably to the
persons entitled to such payments without any discrimination or
preference, subject, however, to the provisions of Section 9.02.
If and whenever, prior to any sale of the Trust Estate, or any part
thereof, all overdue installments of interest upon all the Bonds, with interest
(to the extent that payment of such interest is enforceable under applicable
law) on overdue installments of interest at the rate of 6% per annum, together
with all sums paid or advanced by the Trustee under any provision hereof and the
reasonable and proper charges, expenses and liabilities of the Trustee, its
agents, attorneys and counsel, and all other sums then payable by the Company
hereunder, including the principal of and all accrued unpaid interest on all
Bonds which shall then be payable, by declaration (unless such declaration shall
have been annulled, pursuant to Section 11.01) or otherwise, shall either be
paid by or for the account of the Company or provision satisfactory to the
Trustee shall be made for such payment, and all Events of Default hereunder
shall be remedied, the Trustee shall surrender to the Company, its successors or
assigns, the possession of the Trust Estate (except money, securities or
property deposited or pledged, or required by the terms hereof to be deposited
or pledged, with the Trustee), and shall pay over upon the Written Order of the
Company the amount, if any there be, of any earnings, income, rents, issues and
profits of the Trust Estate then remaining unexpended in the hands of the
Trustee and thereupon the Company and the Trustee shall be restored to their
former positions and rights hereunder in respect of the Trust Estate, but no
such surrender shall extend to or affect any subsequent default or impair any
right consequent thereon.
In case one or more Events of Default shall happen and shall not have
been remedied, the Trustee shall collect and receive all dividends on any stock
and all sums payable for interest on any obligations or indebtedness held by the
Trustee hereunder, and the Trustee shall cancel and revoke all assignments and
orders in respect thereof in favor of the Company or its nominee, and all moneys
so received by the Trustee shall, prior to any sale of the Trust Estate under
this Restated Indenture, be applied to any one or more of the purposes to which
income from the Trust Estate may be applied as provided in this Section 11.02,
and upon any such sale any moneys so received by the trustee and remaining
unexpended in its hands shall be held and applied in the same manner as the
proceeds of such sale; but in every such case, after the Company's rights shall
have been restored as in this Section 11.02 provided, the right of the Company
to receive and collect interest and dividends to the extent set forth in Section
7.01, and the duty of the Trustee to execute and deliver assignments and order
for the same as provided in Section 7.01, shall revive and continue as though no
Event of Default had occurred; and the Trustee shall pay over upon the Written
Order of the Company the amount, if any there be, of any such interest or
dividends collected or received by the Trustee and then remaining unexpended in
its hands.
Section 11.03. Additional Power of Trustee in Event of Default. In case
one or more of the Events of Default shall happen and shall not have been
remedied, the Trustee, by agents or attorneys, with or without entry, if the
Trustee shall deem it advisable
(a) may sell to the highest bidder all and singular the Trust
Estate (if such sale be permitted by the laws of the jurisdiction or
jurisdictions wherein the Trust Estate shall be located), such sale to
be made at public auction at such place or places and at such time or
times and upon such terms as the Trustee may fix in compliance with law
and briefly specify in the notice of sale to be given as herein
provided or as may be required by law; or
(b) may proceed to protect and enforce its rights and the
rights of the Bondholders under this Restated Indenture, by a suit or
suits in equity or at law, whether for the specific performance of any
covenant herein contained, or in aid of the execution of any power
herein granted, or for the foreclosure of this Restated Indenture or
for the enforcement of any other legal or equitable right, as the
Trustee, being advised by counsel, shall deem most effectual to enforce
any of its rights or to perform any of its duties hereunder.
Section 11.04. Bondholders' Right to Direct Action. Upon the written
request of the holders of at least a majority in amount of the Bonds then
outstanding, in case of the happening of any Event of Default, if the same shall
not have been remedied, it shall be the duty of the Trustee, upon being
indemnified as provided in Section 14.02, if under the provisions of said
Section it is entitled to demand indemnity, to take all such steps for the
protection and enforcement of its rights and the rights of the holders of the
Bonds, or to take such appropriate judicial proceedings as the Trustee, being
advised by counsel, shall deem most expedient in the interest of the holders of
the Bonds.
Section 11.05. Notice of Sale by Trustee. Notice of any sale under the
power of sale herein granted shall state the time when and the place where the
same is to be made, and shall contain a brief description of the property to be
sold, and shall be sufficiently given if published once in each of four
successive calendar weeks prior to such sale in an Authorized Newspaper, in the
Borough of Manhattan, The City of New York (upon any day of the week and in any
such newspaper, the first publication to be made not less than 30 days nor more
than 40 days prior to such sale), and in such other manner as may be required by
law.
Section 11.06. Adjournment of Sale. The Trustee may from time to time
adjourn any sale to be made under the power of sale granted by this Restated
Indenture, by announcement at the time and place appointed for such sale or for
any adjournment thereof; and without further notice or publication except such
as may be required by applicable law, may make such sale at the time and place
to which the same shall have been so adjourned.
Section 11.07. Conveyance to Purchasers. Upon the completion of any
sale or sales under this Restated Indenture, the Trustee shall execute and
deliver to the accepted purchaser or purchasers a good and sufficient deed or
deeds of conveyance, and such other instruments as in the judgment of the
Trustee may be desirable or proper, conveying, assigning and transferring the
properties and rights sold; and the Trustee hereunder at such time, is hereby
irrevocably appointed the true and lawful attorney of the Company, in its name
and stead, to make all necessary deeds and conveyances of the property thus
sold; and for that purpose the Trustee may execute all necessary deeds and
instruments of assignment and transfer, the Company hereby ratifying and
confirming all that its said attorneys shall lawfully do by virtue hereof.
Any such sale or sales made under or by virtue of this Restated
Indenture, whether under the power of sale herein granted or by virtue of
judicial proceedings, shall, to the full extent permitted by law, operate to
divest all right, title, interest, claim and demand whatsoever, either at law or
in equity, of the Company of, in and to the property so sold, and shall be a
perpetual bar, both at law and in equity, against the Company, its successors
and assigns, and against any and all persons claiming or who may claim the
property sold, or any part thereof, from, through or under the Company, its
successors or assigns.
The receipt of the Trustee or of the court officer conducting any such
sale shall be a full and sufficient discharge to any purchaser of any property
sold as aforesaid, for the purchase money; and no such purchaser, or his
representatives, grantees or assigns, after paying such purchase money and
receiving such receipt, shall be bound to see to the application of such
purchase money upon or for any trust or purpose of this Restated Indenture, or
in any manner whatsoever be answerable for any loss, misapplication or
nonapplication of any such purchase money or any part thereof, or be bound to
inquire as to the authorization, necessity, expediency or regularity of any such
sale.
Section 11.08. Sale as an Entirety Unless Holders Otherwise Direct. In
the event of any sale under this Article, whether made under the power of sale
herein granted or by virtue of judicial proceedings, the whole of the Trust
Estate shall (if permitted under applicable law) be sold in one parcel and as an
entirety, unless the holders of at least a majority in amount of the Bonds then
outstanding shall in writing request the Trustee to cause said property to be
sold in parcels, in which case (to the extent permitted by applicable law) the
sale shall be made in such parcels as may be specified in such request, or
unless such sale as an entirety is impracticable by reason of some statute or
other cause.
Section 11.09. Accrual of Interest Upon Sale. In case of any sale of
the Trust Estate, or any part thereof, under this Article, whether made under
the power of sale herein granted, or by virtue of judicial proceedings, the
principal of and accrued interest on all the Bonds then outstanding, if not
already due, shall immediately become due and payable, anything in the Bonds or
in this Restated Indenture to the contrary notwithstanding.
Section 11.10. Application of Proceeds of Sale. The purchase money,
proceeds and avails of any such sale shall be applied as follows:
First: To the payment of the costs and expenses of such sale,
including a reasonable compensation to the Trustee, its agents,
attorneys and counsel, and of all charges, expenses and liabilities
incurred (and all advances made) without negligence or bad faith by the
Trustee in managing and maintaining the Trust Estate or in executing
any trust or power hereunder, and, if in conformity with applicable
law, to the payment of all taxes, assessments or liens prior to the
Lien of this Restated Indenture, except any taxes, assessments or other
superior liens subject to which such sale shall have been made;
Second: To the payment of the whole amount then due and unpaid
upon the Bonds then outstanding, for principal and interest, with
accrued interest on the principal, and with interest (to the extent
that payment of such interest is enforceable under applicable law) on
the overdue installments of interest at the rate of 6% per annum; and
in cash such proceeds shall be insufficient to pay in full the whole
amount so due and unpaid upon the Bonds, then to the payment of such
principal and interest, without preference or priority of principal
over interest or of interest over principal or of any installment of
interest over any other installment of interest, or of any series of
the Bonds over any other series of the Bonds, ratably according to the
aggregate so due for such principal and the accrued and unpaid
interest, at the date fixed by the Trustee for the distribution of such
moneys, subject, however, to the provisions of Section 9.02; and
Third: The surplus, if any, shall be paid to the Company, its
successors or assigns, or to whomsoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may direct.
Any other sums which may be held by the Trustee as part of the Trust
Estate at the time of such application of the purchase money, proceeds and
avails of any such sale, as aforesaid, shall be applied together with such
purchase money, proceeds, and avails, in the manner provided in the foregoing
Paragraphs First, Second and Third, but shall not be separately so applied.
Section 11.11. Use of Bonds to Pay for Property. In case of any sale as
aforesaid of the Trust Estate or any part thereof any purchaser shall be
entitled, for the purpose of making settlement or payment for the property
purchased, to use and apply any Bonds then outstanding and claims for interest,
in order that there may be credited thereon the sums payable out of the net
proceeds of such sale to the holder of such Bonds and claims for interest,
subject to the provisions of Section 9.02, as his ratable share of such net
proceeds; and thereupon such purchaser shall be credited, on account of such
purchase price, with the portion of such net proceeds that shall be applicable
to the payment of, and that shall have been credited upon, the Bonds and claims
for interest so used and applied; and at any such sale, any Bondholder or the
Trustee may bid for and purchase the property offered for sale, may make payment
on account thereof as aforesaid, and upon compliance with the terms of sale, may
hold, retain and dispose of such property without further accountability
therefor.
Section 11.12. Other Rights of Trustee in Event of Default. Upon filing
a bill in equity or upon other commencement of judicial proceedings by the
Trustee to enforce any right under this Restated Indenture, the Trustee shall be
entitled to exercise any and all other rights and powers herein conferred and
provided to be exercised by the Trustee upon the occurrence of an Event of
Default.
Section 11.13. Recovery of Judgment. The Company covenants that
(1) in case default shall be made in the payment of any
interest on any Bond when and as the same shall become due and payable,
and any such default shall have continued for a period of 30 days, or
(2) in case default shall be made in the payment of the
principal of any Bond when and as the same shall become due and
payable, whether by the terms thereof or otherwise as herein provided,
then, and upon demand of the Trustee, the Company will pay to the Trustee for
the benefit of the holders of the Bonds in respect of which such default shall
be made, the whole amount due and payable on all such Bonds, for principal and
interest, including the redemption price of any Bonds called for redemption,
with interest upon the overdue principal and, to the extent that the same is
enforceable under applicable law, interest upon overdue installments of
interest, in each case at the rate of 6% per annum; and in case the Company
shall fail to pay the same forthwith upon such demand, the Trustee, in its own
name, and as trustee of an express trust, shall be entitled to recover judgment
for the whole amount so due and unpaid.
To the extent permitted by applicable law, the Trustee shall be
entitled to recover judgment as aforesaid either before, after or during the
pendency of any proceedings for the enforcement of the lien of this Restated
Indenture, and the right of the Trustee to recover such judgment shall not be
affected by any entry or sale hereunder or by the exercise of any other right,
power or remedy for the enforcement of the provisions of this Restated Indenture
or the foreclosure of the lien hereof. In case of a sale of the Trust Estate and
the application of the proceeds of sale to the payment of the Bonds, the
Trustee, in its own name and as trustee of an express trust, shall be entitled
to enforce payment of, and to receive, all amounts then remaining due and unpaid
upon any and all of the Bonds then outstanding, for the benefit of the holders
thereof, and shall be entitled to recover judgment for any portion of the same
remaining unpaid, with interest. No recovery of any such judgment by the Trustee
shall in any manner or to any extent affect the lien of the Trustee upon the
Trust Estate or any part thereof or any rights, powers or remedies of the
Trustee hereunder or any rights, powers or remedies of the holders of the Bonds;
but such lien, rights, powers and remedies shall continue unimpaired as before.
All moneys collected by the Trustee under this Section shall be applied
as follows:
First: To the payment of the costs and expenses of the
proceedings resulting in the collection of such moneys, including
counsel fees, and of the charges, expenses and liabilities incurred and
all advances made by the Trustee, without negligence or bad faith, in
theretofore managing and maintaining the Trust Estate or in executing
any trust or power hereunder; and
Second: To the payment of the amounts then due and unpaid upon
the Bonds in respect of which or for the benefit of which or for the
benefit of which such moneys shall have been collected, ratably and
without any preference or priority of any kind (except as provided in
Section 9.02) according to the amounts due and payable upon such Bonds
at the date fixed by the Trustee for the distribution of such moneys.
Section 11.14. Restrictions on Rights of Bondholders and Unconditional
Obligation of Company. No holder of any Bond issued hereunder shall have any
right to institute any suit, action or proceeding at law or in equity for the
foreclosure of this Restated Indenture or for the execution of any trusts
hereunder or for the appointment of a receiver or for any other remedy
hereunder, unless
(a) such holder shall have previously given to the Trustee
written notice of the occurrence of an Event of Default, as
hereinbefore provided; and
(b) the holders of at least a majority in amount of the Bonds
then outstanding shall have filed a written request with the Trustee to
exercise the powers hereinbefore granted or to institute such action,
suit or proceeding in the name of the Trustee; and
(c) said holders shall have tendered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities to be
incurred by compliance with such request, if the Trustee is entitled
under the provisions of Section 14.02, to such security or indemnity;
and
(d) the Trustee shall have refused or omitted to comply with
such request for a period of 90 days after such written request shall
have been filed with, and said tender of indemnity (if the Trustee is
entitled thereto as aforesaid) shall have been made to, the Trustee.
Such notification, request and tender of indemnity (if the Trustee is
entitled thereto as aforesaid) are hereby declared, in every case, at the option
of the Trustee, but subject to the provisions of Section 14.02, to be conditions
precedent to any action or cause of action for foreclosure or for the execution
of any trusts hereunder or for the appointment of a receiver or for any other
remedy hereunder; it being understood and intended that no one or more holders
of Bonds shall have any right in any manner whatever by his or their action to
affect, disturb or prejudice the lien of this Restated Indenture or to enforce
any right hereunder, except in the manner herein provided; and that all
proceedings at law or in equity to enforce any provision of this Restated
Indenture shall be instituted, had and maintained in the manner herein provided
and for the equal benefit of all holders of the outstanding Bonds (subject to
the provisions of Section 9.02).
It is, however, expressly provided that nothing in this Restated
Indenture or in the Bonds contained shall affect or impair the obligation of the
Company, which is absolute and unconditional, to pay at the respective dates of
maturity and places therein expressed the principal of and interest on the Bonds
to the respective holders of the Bonds or affect or impair the right of action,
which is also absolute and unconditional, of such holders to enforce such
payment. Neither enforcement by any such holder of such right of action in
respect of any Bond nor entry of any judgment thereon shall in any manner or to
any extent affect the lien of the Trustee upon the Trust Estate or any part
thereof, or any rights, powers or remedies hereunder of the Trustee or of the
holders of the Bonds, except to the extent if any that the rights, powers or
remedies of such holder with respect to such Bond may under applicable law be
affected thereby.
Section 11.15. Remedies Cumulative. Except as herein expressly provided
to the contrary, no remedy herein conferred upon or reserved to the Trustee or
to the holders of Bonds is intended to be exclusive of any other remedy, but
each and every such remedy shall, to the extent permitted by applicable law, be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute.
Section 11.16. No Waiver for Delay. No delay or omission of the
Trustee, or of any holder of Bonds to exercise any right or power arising upon
the happening of any Event of Default shall impair any right or power or shall
be construed to be a waiver of any such default or an acquiescence therein; and
every power and remedy given by this Article to the Trustee or to the
Bondholders, may, subject to the provisions of Section 11.14, be exercised from
time to time and as often as may be deemed expedient by the Trustee or by the
Bondholders.
All rights of action under this Restated Indenture may be enforced by
the Trustee without the possession of any of the Bonds or the production thereof
on the trial or other proceedings, and any such suit or proceedings instituted
by the Trustee shall be brought in its name.
The Trustee shall be entitled and empowered either in its own name and
as trustee of an express trust, or as attorney-in-fact for the holders of the
Bonds, or in any one or more such capacities, to file such proof of debt,
amendment of proof of debt, claim, petition or other document as may be
necessary or advisable in order to have the claims of the holders of Bonds
allowed in any equity receivership, insolvency, bankruptcy, liquidation,
readjustment, reorganization or other similar proceedings, or in any judicial
proceedings, relative to the Company or its creditors or its property. The
Trustee is hereby irrevocably appointed (and the successive respective holders
of the Bonds by taking and holding the same, shall be conclusively deemed to
have so appointed the Trustee) the true and lawful attorney-in-fact of the
respective holders of the Bonds, with authority to make or file in the
respective names of the holders of the Bonds as a class (subject to deduction
from any such claim of the amounts of any claim filed by any of the holders of
the Bonds themselves), any proof of debt, amendment of proof of debt, claim,
petition or other document in any such proceedings and to receive payment of any
sums becoming distributable on account thereof, and to execute and other papers
and documents and do and perform any and all acts and things for and on behalf
of such holders of the Bonds, as may be necessary or advisable in the opinion of
the Trustee, in order to have the respective claims of the holders of the Bonds
against the Company and/or its property allowed in any such proceeding, and to
receive payment of or on account of such claims; provided, however, that nothing
herein contained shall be deemed to authorize or empower the Trustee to consent
to or accept or adopt, on behalf of any Bondholder, any plan of reorganization
or readjustment of the Company affecting the Bonds.
Section 11.17. Trustee's Power to Institute Legal Proceedings. The
Trustee shall have power to institute and to maintain such suits and proceedings
as it may be advised by counsel shall be necessary or expedient to prevent any
impairment of the security hereunder by any acts which may be unlawful or in
violation of this Restated Indenture, and such suits and proceedings as it may
be advised by counsel shall be necessary or expedient to preserve or protect its
interests and the interests of the Bondholders in respect of the Trust Estate
and in respect of the income, earnings, issues and profits arising therefrom,
but nothing herein contained shall be deemed to limit the duties and obligations
of the Trustee set forth in Section 14.02.
Section 11.18. Failure of Remedy Restores Rights. In case the Trustee
shall have proceeded to enforce any right under this Restated Indenture by
foreclosure, entry or otherwise, and such proceeding shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to the Trustee, then, and in every such case, the Company and the Trustee shall
without further act be restored to their former positions and rights hereunder
in respect of the Trust Estate, and all rights, remedies and powers of the
Trustee shall continue as though no such proceedings had been taken.
Section 11.19. Holders of Majority May Direct Proceedings. Anything
contained in this Restated Indenture to the contrary notwithstanding, the
holders of at least a majority in amount of the Bonds at the time outstanding
shall have the right, at any time, by instrument or instruments in writing
executed and delivered to the Trustee, to direct the method, time and place of
conducting all proceedings to be taken for any sale of the Trust Estate or for
the foreclosure of this Restated Indenture or for the appointment of a receiver
or any other proceedings hereunder; provided, however, that such direction shall
not be otherwise than in accordance with law and the provisions of this Restated
Indenture, and that the Trustee shall have the right to decline to follow any
such direction which in its opinion would be unjustly prejudicial to Bondholders
not parties to such direction, but, subject to the provisions of Section 14.02,
shall be fully protected with respect to any action taken or omitted by it in
good faith in accordance with such direction.
Section 11.20. Company's Waiver of Certain Rights. The Company agrees,
to the full extent that it may lawfully so agree, that it will not at any time
insist upon or plead or in any manner whatever, claim or take the benefit or
advantage of any appraisement, valuation, stay, extension or redemption law now
or hereafter in force, in order to prevent or hinder the enforcement or
foreclosure of this Restated Indenture or the absolute sale of the Trust Estate
or the possession thereof by any purchaser at any sale made pursuant to any
provision hereof, or pursuant to the decree of any court of competent
jurisdiction; but the Company, for itself and all who may claim through or under
it, so far as it now or hereafter lawfully may, hereby waives the benefit of all
such laws. The Company, to the full extent that it may lawfully do so, for
itself and all who may claim through or under it, waives any and all right to
have the property included in the Trust Estate marshaled upon any foreclosure of
the lien hereof, and agrees that any court having jurisdiction to foreclose such
lien may sell the Trust Estate as an entirety.
If any law in this Section referred to and now in force, of which the
Company or its successor or successors might take advantage despite the
provisions hereof, shall hereafter be repealed or cease to be in force, such law
shall not thereafter be deemed to constitute any part of the contract herein
contained or to preclude the operation or application of the provisions of this
Section.
Section 11.21. No Recourse Against Stockholders, Directors and
Officers. No recourse under or upon any obligation, covenant or agreement
contained in this Restated Indenture or in any Bond issued hereunder or under or
upon any indebtedness hereby secured or arising out of this Restated Indenture,
shall be had against any incorporator, stockholder, officer or director, as
such, past, present or future, of the Company or of any predecessor or successor
corporation, either directly or through the Company or any such predecessor or
successor corporation, whether by virtue of any constitution, statute or rule of
law or by the enforcement of any assessment or penalty or by any legal or
equitable proceeding or otherwise howsoever. It is expressly agreed and
understood that this Restated Indenture and the Bonds are solely corporate
obligations and that no personal liability whatever does or shall attach to or
be incurred by the incorporators, stockholders, officers or directors of the
Company or of any predecessor or successor corporation, or any of them, because
of the indebtedness represented by the Bonds or implied therefrom; and that any
and all personal liability of every name and nature, either at common law or in
equity or by statute or constitution, of every such incorporator, stockholder,
officer or director, is hereby expressly waived and released as a condition of,
and as part of the consideration for, the execution of this Restated Indenture
and the issuance of the Bonds; provided, however, that nothing herein contained
shall be taken to prevent recourse to and the enforcement of the liability, if
any, of any shareholder or any stockholder or any subscriber to capital stock
upon or in respect of shares of capital stock not fully paid up.
Section 11.22. Obligor Not Entitled to Distribution. No Bonds owned or
held by, for the account of or for the benefit of the Company or any other
obligor on the Bonds (other than Bonds pledged to secure an obligation) shall be
deemed entitled to share in any payment or distribution provided for in this
Article Eleven.
ARTICLE TWELVE
EVIDENCE OF RIGHTS OF BONDHOLDERS
Section 12.01. Bondholder Concurrent Writings. Any request, consent or
other instrument required by this Restated Indenture to be signed and executed
by Bondholders may be in any number of concurrent writings of substantially
similar tenor and may be signed or executed by such Bondholders in person or by
agent or agents duly appointed in writing. Proof of the execution of any such
request or other instrument or of a writing appointing any such agent, or of
holding by any person of Bonds transferable by delivery, shall be sufficient for
any purpose of this Restated Indenture and shall be conclusive in favor of the
Company and, subject to the provisions of Sections 9.17 and 14.02, in favor of
the Trustee, if made in the manner provided in this Article.
Section 12.02. Proof of Execution by Bondholder. The fact and date of
the execution by any person of any such request, consent or other instrument or
writing may be proved by the affidavit of a witness of such execution or by the
certificate of any notary public or other officer of any jurisdiction,
authorized by the laws thereof to take acknowledgments of deeds, certifying that
the person signing such request, consent or other instrument acknowledged to him
the execution thereof.
Section 12.03. Register Proves Ownership of Bond. The ownership of
Bonds shall be proved by the register of such Bonds.
The foregoing provisions of this Article are subject to the provisions
of Article Seventeen with respect to the calling of and voting at meetings of
Bondholders.
Any request, consent or vote of the holder of any Bond shall bind every
future holder of the same Bond and the holder of every Bond issued in exchange
therefor or in lieu thereof, in respect of anything done or suffered to be done
by the Trustee or the Company in pursuance of such request, consent or vote.
ARTICLE THIRTEEN
MERGER, CONSOLIDATION, TRANSFER OR LEASE
Section 13.01. Conditions of Merger. Nothing in this Restated Indenture
contained shall prevent any consolidation or merger of the Company with or into
any other corporation or corporations, or any conveyance, transfer or lease,
subject to the Lien of this Restated Indenture, of all or substantially all the
Trust Estate as an entirety to any corporation lawfully entitled to acquire or
lease and operate the same; provided, however, and the Company covenants and
agrees, that such consolidation, merger, conveyance, transfer or lease shall be
upon terms as fully to preserve and in no respect to impair the lien or security
of this Restated Indenture or any of the rights or powers of the Trustee or the
Bondholders hereunder; provided further, that every such lease shall be made
expressly subject to termination by the Company or by the Trustee at any time
upon the happening of an Event of Default hereunder, and also by the purchaser
at any sale hereunder of the property so leased, whether such sale be made under
the power of sale hereby conferred or pursuant to judicial proceedings; provided
further, that, upon and in connection with any such consolidation, merger,
conveyance or transfer, the due and punctual payment of the principal of and
interest on all the Bonds according to their tenor, and the due and punctual
performance and observance of all the covenants and conditions of this Restated
Indenture to be performed or observed by the Company, shall be assumed by the
successor corporation formed by such consolidation or into which such merger
shall have been made or which acquires by conveyance or transfer all or
substantially all the Trust Estate as an entirety; and such successor
corporation shall execute and deliver to the Trustee, simultaneously with such
consolidation, merger, conveyance or transfer, an indenture supplemental hereto
containing
(1) an agreement on the part of such successor
corporation punctually to make all the payments and to perform
and observe all the covenants and conditions of this Restated
Indenture which are to be made or performed or observed by the
Company, with the same effect and to the same extent as if the
maker of such agreement had been the party of the first part
hereto, and
(2) a grant, conveyance, transfer and mortgage of the
character described in Paragraph A or Paragraph B of Section
13.02;
provided further, that, upon and in connection with any such lease, the lessee
under such lease shall execute and deliver to the Trustee, simultaneously with
such lease, an indenture supplemental hereto containing a grant, conveyance,
transfer and mortgage subjecting to the direct Lien of this Restated Indenture
all properties and franchises of the character described in Paragraph B of
Section 13.02 which may be acquired by such lessee after the date of such lease.
Section 13.02. Conditions of Successor to Succeed to Rights of Company.
In case the Company, pursuant to Section 13.01, shall be consolidated with or
merged into any other corporation or corporations or shall convey or transfer,
subject to the Lien of this Restated Indenture, all or substantially all of the
Trust Estate as an entirety, the successor corporation formed by such
consolidation or into which the Company shall have been merged or which shall
have received a conveyance or transfer as aforesaid, upon causing to be recorded
the supplemental indenture referred to in said Section 13.01, shall succeed to
and be substituted for the Company with the same effect as if it had been named
herein as the party of the first part, subject, however, to the following
limitations and restrictions:
A. If said supplemental indenture shall contain a grant,
conveyance, transfer and mortgage in terms sufficient to include and
subject to the Lien of this Restated Indenture all property and
franchises then owned and which may be thereafter acquired by such
successor corporation (other than Excepted Property), thereupon and
thereafter such successor corporation may cause to be executed, either
in its own name or in the name of the Company, and delivered to the
Trustee for authentication, any Bonds issuable hereunder; and upon the
order of such successor corporation in lieu of the Company, and subject
to all the terms, conditions and restrictions in this Restated
Indenture prescribed, the Trustee shall authenticate and deliver any of
the Bonds which shall have been previously executed and delivered by
the Company to the Trustee for authentication, and any of such Bonds
which such successor corporation shall thereafter, in accordance with
the provisions of this Restated Indenture, cause to be executed and
delivered to the Trustee for such purpose. Such changes in phraseology
and form (but not in substance) may be made in such Bonds as may be
appropriate in view of such consolidation or merger or conveyance or
transfer. All such Bonds when issued by such successor corporation
shall in all respects have the same legal rank and security as the
Bonds theretofore or thereafter authenticated and delivered in
accordance with the terms of this Restated Indenture and issued, as
though all of said Bonds had been issued at the date of the execution
hereof.
B. If said supplemental indenture shall not contain the grant,
conveyance, transfer and mortgage described in the preceding Paragraph
A, then such successor corporation shall not be entitled to procure the
authentication and delivery of Bonds hereunder pursuant to Article
Four, Five or Six, and (notwithstanding the generality of the Granting
Clauses) this Restated Indenture shall not, by virtue of such
consolidation, merger, conveyance or transfer, or by virtue of said
supplemental indenture, become a lien upon any of the properties or
franchises of such successor corporation owned by it at the time of
such consolidation, merger, conveyance or transfer (unless such
successor corporation, in its discretion, shall subject the same to the
lien hereof), but this Restated Indenture shall become and be a lien
upon the following, and only the following, properties acquired by such
successor corporation after the date of such consolidation, merger,
conveyance or transfer, to wit:
(1) all betterments, extensions, improvements,
additions, repairs, renewals, replacements, substitutions and
alterations to, upon, for and of the Trust Estate and all
property constituting appurtenances of the Trust Estate;
(2) all Property Additions made the basis of the
withdrawal of cash from the Trustee or from the trustee,
mortgagee or other holder of a Prior Lien, or the release of
property from the Lien of this Restated Indenture; and all
property acquired or constructed with the proceeds of any
insurance on any part of the Trust Estate; and
(3) all property acquired in pursuance of Section
9.05 or of any other covenants herein contained to maintain
and preserve and keep the Trust Estate in good condition,
repair and working order, or in pursuance of some other
covenant or agreement herein contained to be performed by the
Company;
and in such event said supplemental indenture shall contain a grant,
conveyance, transfer and mortgage subjecting the property described in
the preceding Clauses (1), (2) and (3) of this Paragraph to the direct
Lien of this Restated Indenture.
ARTICLE FOURTEEN
CONCERNING THE TRUSTEE
Section 14.01. Qualification of Trustee. The Trustee shall at all times
be a corporation eligible under Section 14.07 and have a combined capital and
surplus of not less than $1,000,000. If the Trustee publishes reports of
condition at least annually, pursuant to law or to the requirements of any
supervising or examining authority referred to in Section 14.07, then for the
purposes of this Section the combined capital and surplus of the Trustee, shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published.
Section 14.02. Trustee's Duties and Obligations.
(a) The Trustee for itself and its successors hereby accepts
the trusts of this Restated Indenture. In case an Event of Default
shall happen and shall not be remedied, the Trustee shall exercise such
of the rights and powers vested in it by this Restated Indenture and
use the same degree of care and skill in their exercise as a prudent
man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) None of the provisions of this Restated Indenture shall be
construed as relieving the Trustee from liability for its own negligent
action, its own negligent failure to act, or its own wilful misconduct,
except that
(1) Unless an Event of Default shall have happened
and shall not have been remedied, the Trustee shall be under
no duty with respect to the performance of any duties except
such as are specifically set forth in this Restated Indenture,
and no implied covenant or obligation shall be read into this
Restated Indenture against the Trustee, but the duties and
obligations of the Trustee shall be determined solely by the
express provisions of this Restated Indenture.
(2) Unless an Event of Default shall have happened
and shall not have been remedied, the Trustee may, in the
absence of bad faith on the part of the Trustee, rely
conclusively, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificate or opinion furnished to it pursuant to and
conforming to the requirements of this Restated Indenture;
provided, however, that the trustee shall examine any
certificate or opinion required to be furnished to it by the
Company under any provision of this Restated Indenture to
determine whether such certificate or opinion conforms to the
requirements of this Restated Indenture.
(3) The Trustee shall not be liable for any error of
judgment made in good faith by a responsible officer or
officers of the Trustee, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts.
(4) None of the provisions in this Restated
Indenture contained shall require the Trustee to advance or
expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers if there is
reasonable ground for believing that the repayment of such
funds or liability is not reasonably assured to it (i) by the
security afforded to it by the terms of this Restated
Indenture, or ( ii ) by other reasonable security or
indemnity.
(5) The recitals herein and in the Bonds contained
shall be taken as the statements of the Company and shall not
be considered as made by, or imposing any obligation or
liability upon, the Trustee, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee
makes no representations as to the value or condition of the
Trust Estate or any part thereof, or as to the title of the
Company thereto or as to the validity or adequacy of the
security afforded thereby, or hereby, or as to the validity of
this Restated Indenture or of the Bonds or coupons issued
hereunder.
(6) The Trustee shall not be under any responsibility
or duty with respect to the disposition by the Company of the
Bonds or the application by the Company of the proceeds
thereof or of any moneys paid to the Company under any of the
provisions hereof.
(c) The Trustee may, at the expense of the Company, advise
with legal counsel to be selected and employed by it.
To the extent permitted by Paragraphs (a) and (b) of this
Section 14.02, the Trustee shall not be liable for any action taken or
suffered by it in good faith in accordance with the advice of such
counsel, and the Trustee shall not be under any responsibility, except
for the exercise of reasonable care, in respect of the selection,
appointment or approval of any engineer, appraiser or counsel or any
other person or firm for any of the purposes expressed in this Restated
Indenture.
(d) The Company shall pay to the Trustee, from time to time on
demand, reasonable compensation for all services rendered by the
Trustee hereunder (which shall not be limited to the compensation of
trustees of any express trust as provided by law) and also all
reasonable expenses, charges, counsel fees and other disbursements and
those of its agents, attorneys and employees, incurred in the
administration and execution of the trusts hereby created, and the
Company agrees to indemnify and save the Trustee harmless against and
from any liability or damages which it may incur or sustain in the
exercise and performance, without negligence or bad faith on the part
of the Trustee, of any of its powers and duties hereunder. The Trustee
shall have a lien for such compensation, expenses and indemnity on the
Trust Estate and the proceeds thereof prior to the lien of the Bonds.
(e) The Trustee shall not be personally liable for any debt
contracted or for any expenditure made by it in operating the business
of the Company or for any damage to persons or property or for any
salary or nonfulfillment of any contract in managing the property of
the Company or any part thereof, upon entry as herein provided, and the
Trust Estate is hereby charged with a paramount lien in favor of the
Trustee as security and indemnification against any such liability.
(f) To the extent permitted by the provisions of Paragraphs
(a) and (b) of this Section 14.02:
(1) The Trustee may rely upon and shall be protected
in acting upon any notice, resolution, request, consent,
order, certificate, report, opinion, statement, Bond,
obligation, appraisal or other paper or document believed by
it to be genuine and to have been signed or presented by the
proper party or parties or by a person or persons authorized
to act on his or their behalf.
(2) The Trustee may accept a certificate signed by
the Secretary (or an Assistant Secretary) of the Company,
under its corporate seal, as conclusive evidence that any
resolution has been duly adopted by the Board of Directors of
the Company and/or that the same is still in full force and
effect, and such certificate shall constitute full protection
to the Trustee for any action taken or omitted to be taken by
it in reliance thereon.
(3) The Trustee shall not be under any duty to
examine into or pass upon the validity or genuineness of any
obligations or other securities at any time pledged and
deposited hereunder, and the Trustee shall be entitled to
assume that any obligations or other securities presented for
pledge and deposit hereunder are genuine and valid and what
they purport to be, and that any endorsement or assignment
thereon is genuine and legal.
(4) The Trustee shall not be under any obligation to
see to the delivery or payment to it of any obligations or
evidences of indebtedness or other securities or cash required
to be delivered or paid to it, hereunder, except in those
cases where it is specifically herein provided that such
delivery or payment is a condition precedent to the granting
of an application hereunder, or to see that any of the
property hereby intended to be conveyed or assigned is
properly and legally subjected to the lien hereof. The Trustee
need not take any action to secure the conveyance to it of any
property acquired by the Company after the date of the
execution hereof, except in those cases where it is
specifically herein provided that the delivery of a
supplemental indenture or other instrument of conveyance is a
condition precedent to the granting of an application
hereunder.
(g) The Trustee may act as depositary for the Company or any
committee formed to protect the rights of holders of Bonds or any other
securities of the Company or to effect or aid in any reorganization
growing out of the enforcement of the Bonds or this Restated Indenture,
whether or not any such committee shall represent the holders of a
majority in amount of the Bonds at the time outstanding.
(h) The Trustee and any paying agent or other agent of the
Company may each acquire and hold Bonds and, subject to the provisions
of Sections 14.03, 14.04 and 14.05, may otherwise deal with the Company
in the same manner and to the same extent and with like effect as
though it were not Trustee or as though it were not such agent.
(i) Whenever it is provided in this Restated Indenture that
the Trustee shall take any action either upon the happening of a
specified event or upon the fulfillment of any condition or upon the
request of the Company or the Bondholders, the Trustee shall have full
power to give any and all notices and to do any and all acts and things
incidental to such action.
Section 14.03. Removal, Resignation and Discharge of Trustee.
(a) If the Trustee has or acquires any conflicting interest as
defined by Clause (d) of this Section, the Trustee shall within 90 days
after ascertaining that it has such a conflicting interest, either
eliminate such conflicting interest or resign by giving written notice
to the Company, but such resignation shall not become effective until
the appointment of a successor trustee and such successor's acceptance
of such appointment. The Company covenants to take prompt steps to have
a successor appointed in the manner hereinafter provided in Section
14.07. Upon giving such notice of resignation, the resigning Trustee
shall publish notice thereof, once a week for three successive calendar
weeks in one Authorized Newspaper in the City of Rapid City, South
Dakota and one in the Borough of Manhattan, the City of New York (in
each instance upon any day of the week). If the resigning Trustee fails
to publish notice within 10 days after giving written notice of its
resignation to the Company, the Company shall publish such notice.
( b ) In the event that the Trustee shall fail to comply with
the provisions of the preceding Clause (a) of this Section, the Trustee
shall within 10 days after the expiration of such 90-day period
transmit notice of such failure to the Bondholders in the manner and to
the extent provided in Clause (c) of Section 14.05 with respect to
reports pursuant to Clause (a) of Section 14.05.
(c) Any Bondholder who has been a bona fide holder of a Bond
or Bonds for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor if
the Trustee fails, after written request therefor by such holder, to
comply with the provisions of Clause (a) of this Section.
(d) The Trustee shall be deemed to have a conflicting interest
if the Bonds are in default (exclusive of any period of grace or
requirement of notice) and--
(1) the Trustee is trustee under another indenture
under which any other securities or certificates of interest
or participation in any other securities of the Company are
outstanding, unless such other indenture is a collateral trust
indenture under which the only collateral consists of Bonds
issued under this Restated Indenture, provided that there
shall be excluded from the operation of this Paragraph another
indenture or indentures under which other securities or
certificates of interest or participation in other securities
of the Company are outstanding if the Company shall have
sustained the burden of proving on application to the
Securities and Exchange Commission and after opportunity for
hearing thereon, that the trusteeship under this Restated
Indenture and such other indenture is not so likely to involve
a material conflict of interest as to make it necessary in the
public interest or for the protection of investors to
disqualify the Trustee from acting as such under one of such
indentures;
(2) the Trustee or any of its directors or executive
officers is an obligor upon the Bonds or an underwriter for
the Company;
(3) the Trustee directly or indirectly controls or is
directly or indirectly controlled by or under direct or common
control with the Company or an underwriter for the Company;
(4) the Trustee or any of its directors or executive
officers is a director, officer, partner, employee, appointee
or representative of the Company, or of an underwriter (other
than the Trustee itself) for the Company who is currently
engaged in the business of underwriting, except that (A) one
individual may be a director and/or executive officer of the
Trustee and a director and/or executive officer of the
Company, but may not be at the same time an executive officer
of both the Trustee and the Company; (B) if and so long as the
number of directors of the trustee in office is more than
nine, one additional individual may be a director and/or an
executive officer of the Trustee and a director of the
Company; and (C) the Trustee may be designated by the Company
or by an underwriter for the Company to act in the capacity of
transfer agent, registrar, custodian, paying agent, fiscal
agent, escrow agent or depositary or in any other similar
capacity or subject to the provisions of Paragraph (1) of this
Clause (d), to act as trustee whether under an indenture or
otherwise;
(5) 10 per centum or more of the voting securities of
the Trustee is beneficially owned either by the Company or by
any director, partner or executive officer thereof, or 20 per
centum or more of such voting securities is beneficially
owned, collectively, by any two or more of such persons; or 10
per centum or more of the voting securities of the Trustee is
beneficially owned either by an underwriter for the Company or
by any director, partner or executive officer thereof, or is
beneficially owned, collectively, by any two or more such
persons;
(6) the Trustee is the beneficial owner of or holds
as collateral security for an obligation which is in default,
(A) 5 per centum or more of the voting securities or 10 per
centum or more of any other class of security of the Company,
not including the Bonds issued under this Restated Indenture
and securities issued under any other indenture under which
the Trustee is also trustee, or (B) 10 per centum or more of
any class of security of an underwriter for the Company;
(7) the Trustee is the beneficial owner of or holds
as collateral security for an obligation which is in default,
5 per centum or more of the voting securities of any person
who, to the knowledge of the Trustee, owns 10 per centum or
more of the voting securities of, or controls directly or
indirectly or is under direct or indirect common control with,
the Company;
(8) the Trustee is the beneficial owner of or holds
as collateral security for an obligation which is in default,
10 per centum or more of any class of security of any person
who, to the knowledge of the Trustee, owns 50 per centum or
more of the voting securities of the Company; or
(9) the Trustee owns on May 15 in any calendar year
in the capacity of executor, administrator, testamentary or
inter vivos trustee, guardian, committee or conservator, or in
any other similar capacity an aggregate of 25 per centum or
more of the voting securities, or of any class of security, of
any person, the beneficial ownership of a specified percentage
of which would have constituted a conflicting interest under
Paragraph (6), (7), or (8) of this Clause (d). As to any such
securities of which the Trustee acquired ownership through
becoming executor, administrator or testamentary trustee of an
estate, which included them, the provisions of the preceding
sentence shall not apply for a period of two years from the
date of such acquisition, to the extent that such securities
included in such estate do not exceed 25 per centum of such
voting securities or 25 per centum of any such class of
security. Promptly after May 15, in each calendar year, the
Trustee shall make a check of its holdings of such securities
in any of the above-mentioned capacities as of such May 15. If
the Company fails to make payment in full of principal or
interest upon the Bonds when and as the same become due and
payable, and such failure continues for 30 days thereafter,
the Trustee shall make a prompt check of its holdings of such
securities in any of the above-mentioned capacities as of the
date of the expiration of such 30-day period and after such
date, notwithstanding the foregoing provisions of this
Paragraph (9), all such securities so held by the Trustee,
with sole or joint control over such securities vested in it,
shall, but only so long as such failure shall continue, be
considered as though beneficially owned by the Trustee for the
purposes of Paragraphs (6), (7) and (8) of this Clause (d).
The specification of percentages in Paragraphs (5) to
(9), inclusive, of this Clause (d) shall not be construed as
indicating that the ownership of such percentages of the
securities of a person is or is not necessary or sufficient to
constitute direct or indirect control for the purposes of
Paragraph (3) or (7) of this Clause (d).
For the purposes of Paragraphs (6), (7), (8) and (9)
of this Clause (d), (A) the term "security" and "securities"
shall include only such securities as are generally known as
corporate securities, but shall not include any note or other
evidence of indebtedness issued to evidence an obligation to
repay monies lent to a person by one or more banks, trust
companies or banking firms or any certificate of interests or
participation in any such note or evidence of indebtedness;
(B) an obligation shall be deemed to be in default when a
default in payment of principal shall have continued for 30
days or more and shall not have been cured; and (C) the
Trustee shall not be deemed to be the owner or holder of (i)
any security which it holds as collateral security (as trustee
or otherwise) for an obligation which is not in default as
above defined, or (ii) any security which it holds as
collateral security under this Restated Indenture,
irrespective of any default hereunder; or (iii) any security
which it holds as agent for collection, or as custodian,
escrow agent or depositary, or in any similar representative
capacity.
The percentages of voting securities and other securities specified in
this Section shall be calculated in accordance with the following provisions:
(a) A specified percentage of the voting securities of the
Trustee, the Company or any other person referred to in this Section
(each of whom is referred to as a "person" in this Paragraph) means
such amount of the outstanding voting securities of such person as
entitled the holder or holders thereof to cast such specified
percentage of the aggregate votes which the holders of all the
outstanding voting securities of such person are entitled to cast in
the direction or management of the affairs of such person.
(b) A specified percentage of a class of securities of a
person means such percentage of the aggregate amount of securities of
the class outstanding.
(c) The term "amount," when used in regard to securities,
means the principal amount if relating to evidences of indebtedness,
the number of shares if relating to capital shares, and the number of
units if relating to any other kind of security.
(d) The term "outstanding" means issued and not held by or for
the account of the issuer. The following securities shall not be deemed
outstanding within the meaning of this definition:
(1) Securities of an issuer held in a sinking fund
relating to securities of the issuer of the same class;
(2) Securities of an issuer held in a sinking fund
relating to another class of securities of the issuer, if the
obligation evidenced by such other class of securities is not
in default as to principal or interest or otherwise;
(3) Securities pledged by the issuer thereof as
security for an obligation of the issuer not in default as to
principal or interest or otherwise;
(4) Securities held in escrow if placed in escrow
by the issuer thereof;
provided, however, that any voting securities of an issuer shall be
deemed outstanding if any person other than the issuer is entitled to
exercise the voting rights thereof.
(e) A security shall be deemed to be of the same class as
another security if both securities confer upon the holder or holders
thereof substantially the same rights and privileges; provided,
however, that, in the case of secured evidences of indebtedness, all of
which are issued under a single indenture, differences in the interest
rates or maturity dates of various series thereof shall not be deemed
sufficient to constitute such series different classes; and provided,
further, that, in the case of unsecured evidences of indebtedness,
differences in the interest rates or maturity dates thereof shall not
be deemed sufficient to constitute them securities of different
classes, whether or not they are issued under a single indenture.
The term "voting securities" means and includes any security
presently entitling the owner or holder thereof to vote in the
direction or management of the affairs of a person, or any security
issued under or pursuant to any trust, agreement, or arrangement
whereby a trustee or trustees or agent or agents for the owner or
holder of such security are presently entitled to vote in the direction
or management of the affairs of a person.
The term "director" means any director of a corporation, or
any individual performing similar functions with respect to any
organization whether incorporated or unincorporated.
The term "executive officer" means the president, every
vice-president, every trust officer, the cashier, the secretary, and
the treasurer of a corporation, and any individual customarily
performing similar functions with respect to any organization whether
incorporated or unincorporated, but shall not include the chairman of
the board of directors.
The term "underwriter" when used with reference to the Company
means every person, who, within three years prior to the time as of
which the determination is made, has purchased from the Company with a
view to, or has sold for the Company in connection with, the
distribution of any security of the Company which is outstanding at the
time the determination is made, or has participated or has had a direct
or indirect participation in any such direct undertaking, or has
participated or has had a participation in the direct or indirect
underwriting of any such undertaking, but such term shall not include a
person whose interest was limited to a commission from an underwriter
or dealer not in excess of the usual and customary distributors' or
sellers' commission.
The provisions of this Section 14.03 which have been made
specifically applicable to the Trustee, shall also apply to any
co-Trustee appointed pursuant to Section 14.09.
In the event that any person other than the Company shall at
any time become an obligor upon any of the Bonds, so long as such
person shall continue to be such obligor the provisions of this Section
14.03, in addition to being applicable to the Trustee, to any
co-Trustee and to the Company, shall be applicable to the Trustee, such
co-Trustee, and such obligor with the same effect as if the name of
such obligor were substituted for that of the Company in said
provisions.
Section 14.04. Special Account in Case of Default.
(a) Subject to the provisions of Clause (b) of this Section,
if the Trustee shall be or become a creditor, directly or indirectly,
secured or unsecured, of the Company within three months prior to a
default, as defined in Clause (e) of this Section, or subsequent to
such a default, then, unless and until such default shall be cured, the
Trustee shall set apart and hold in a special account for the benefit
of the Trustee individually, the holders of the Bonds, and the holders
of other indenture securities ( as defined in Clause (e) of this
Section):
(1) an amount equal to any and all reductions in the
amount due and owing upon any claim as such creditor in
respect of principal or interest, effected after the beginning
of such three-month period and valid as against the Company
and its other creditors, except any such reduction resulting
from the receipt or disposition of any property described in
Paragraph (2) of this Clause (a), or from the exercise of any
right of setoff which the Trustee could have exercised if a
petition in bankruptcy had been filed by or against the
Company upon the date of such default; and
(2) all property received by the Trustee in respect
of any claim as such creditor, either as security therefor, or
in satisfaction or composition thereof, or otherwise, after
the beginning of such three-month period, or an amount equal
to the proceeds of any such property, if disposed of, subject,
however, to the rights, if any, of the Company and its other
creditors in such property or such proceeds.
(b) Nothing contained in this Section 14.04 shall affect the
right of the Trustee:
(1) to retain for its own account (i) payments made
on account of any such claim by any person (other than the
Company) who is liable thereon, and (ii) the proceeds of the
bona fide sale of any such claim by the Trustee to a third
person, and (iii) distributions made in cash, securities or
other property in respect of claims filed against the Company
in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or
applicable State law;
(2) to realize, for its own account, upon any
property held by it as security for any such claim, if such
property was so held prior to the beginning of such
three-month period;
(3) to realize, for its own account, but only to the
extent of the claim hereinafter mentioned, upon any property
held by it as security for any such claim, if such claim was
created after the beginning of such three-month period and
such property was received as security therefor simultaneously
with the creation thereof; and if the Trustee shall sustain
the burden of proving that at the time such property was so
received the Trustee had no reasonable cause to believe that a
default, as defined in Clause (e) of this Section 14.04, would
occur within three months; or
(4) to receive payment on any claim referred to in
Paragraph (2) or (3) of this Clause (b) against the release of
any property held as security for such claim as provided in
said Paragraph (2) or (3), as the case may be, to the extent
of the Fair Value of such property.
For the purposes of Paragraphs (2), (3) and (4) of this Clause
(b), property substituted after the beginning of such three-month
period for property held as security at the time of such substitution
shall, to the extent of the Fair Value of the property released, have
the same status as the property released, and, to the extent that any
claim referred to in any of such Paragraphs is created in renewal of or
in substitution for or for the purpose of repaying or refunding any
preexisting claim of the Trustee as such creditor, such claim shall
have the same status as such preexisting claim.
(c) If the Trustee shall be required to account, as in this
Section 14.04 provided, the funds and property held in such special
account and the proceeds thereof shall be apportioned between the
Trustee, the Bondholders, and the holders of any other indenture
securities in such manner that the Trustee, the Bondholders, and the
holders of other indenture securities realize, as a result of payments
from such special account, and payments of dividends on claims filed
against the Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable
State law, the same percentage of their respective claims, figured
before crediting to the claim of the Trustee anything on account of the
receipt by it from the Company of the funds and property in such
special account and before crediting to the respective claims of the
Trustee, the Bondholders, and the holders of other indenture securities
dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the
Federal Bankruptcy Act or applicable State law, but after crediting
thereon receipts on account of the indebtedness represented by their
respective claims from all sources other than such dividends and from
the funds and property so held in such special account. As used in this
Clause (c), with respect to any claim, the term "dividends" shall
include any distribution with respect to such claim in bankruptcy or
receivership or in proceedings for reorganization pursuant to the
Federal Bankruptcy Act or applicable State law, whether such
distribution is made in cash, securities, or other property, but shall
not include any such distribution with respect to the secured portion,
if any, of such claim.
The court in which such bankruptcy, receivership or
proceedings for reorganization is pending shall have jurisdiction (1)
to apportion between the Trustee, the Bondholders, and the holders of
other indenture securities, in accordance with the provisions of this
Clause (c), the funds and property held in such special account and the
proceeds thereof, or (2) in lieu of such apportionment, in whole or in
part, to give to the provisions of this Clause (c) due consideration in
determining the fairness of the distributions to be made to the
Trustee, the Bondholders, and the holders of other indenture
securities, with respect to their respective claims, in which event it
shall not be necessary to liquidate or to appraise the value of any
securities or other property held in such special account or as
security for any such claim or to make a specific allocation of such
distributions as between the secured and unsecured portions of such
claims or otherwise to apply the provisions of this Clause (c) as a
mathematical formula.
(d) Any Trustee who has resigned or been removed after the
beginning of such three-month period shall be subject to the provisions
of this Section 14.04 as though such resignation or removal had not
occurred. If any Trustee has resigned or been removed prior to the
beginning of such three-month period, it shall be subject to the
provisions of this Section 14.04 if and only if--
(i) the receipt of property or reduction of claim
which would have given rise to the obligation to account, if
such Trustee had continued as Trustee, occurred after the
beginning of such three months' period; and
(ii) such receipt of property or reduction of claim
occurred within three months after such resignation or
removal.
(e) As used in this Section 14.04, the term "default" means
any failure to make payment in full of the principal of or interest
upon the Bonds or upon the other indenture securities when and as such
principal or interest becomes due and payable; and the term "other
indenture securities" means securities upon which the Company is an
obligor (as defined in the Trust Indenture Act of 1939) outstanding
under any other indenture (1) under which the Trustee is also trustee,
(2) which is qualified under the Trust Indenture Act of 1939 and (3)
under which a default exists at the time of the apportionment of the
funds and property held in said special account.
(f) None of the foregoing provisions of this Section 14.04
shall be applicable in respect of a creditor relationship arising
from--
(1) the ownership or acquisition of securities issued
under any indenture, or any security or securities having a
maturity of one year or more at the time of acquisition by the
Trustee;
(2) advances authorized by a receivership or
bankruptcy court of competent jurisdiction, or by this
Restated Indenture, for the purpose of preserving the property
subject to the lien of this Restated Indenture or of
discharging tax liens or other prior liens or encumbrances on
the Trust Estate, if notice of such advance and of the
circumstances surrounding the making thereof is given to the
Bondholders as provided in Clauses (a), (b) and (c) of Section
14.05 with respect to advances by the Trustee as such;
(3) disbursements made in the ordinary course of
business in the capacity of trustee under an indenture,
transfer agent, registrar, custodian, paying agent, fiscal
agent or depositary, or other similar capacity;
(4) an indebtedness created as a result of services
rendered or premises rented; or an indebtedness created as a
result of goods or securities sold in a cash transaction, as
defined in this Clause (f);
(5) the ownership of stock or other securities of a
corporation organized under the provisions of Section 25 (a)
of the Federal Reserve Act, as amended, which is directly or
indirectly a creditor of the Company; or
(6) the acquisition, ownership, acceptance, or
negotiation of any drafts, bills of exchange, acceptances or
obligations which fall within the classification of
self-liquidating paper as defined in this Clause (f).
The term "security" or "securities" as used in this Clause (f)
shall have the same meaning as the definition of the word "security" in
the Securities Act of 1933, as amended.
The term "cash transaction" as used in this Clause (f) means
any transaction in which full payment for goods or securities sold is
made within seven days after delivery of the goods or securities in
currency or in checks or other orders drawn upon banks or bankers and
payable upon demand.
The term "self-liquidating papers" as used in this Clause (f)
means any draft, bill of exchange, acceptance or obligation which is
made, drawn, negotiated or incurred by the Company for the purpose of
financing the purchase, processing, manufacture, shipment, storage or
sale of goods, wares or merchandise and which is secured by documents
evidencing title to, possession of, or a lien upon, the goods, wares or
merchandise or the receivables or proceeds arising from the sale of
goods, wares or merchandise previously constituting the security,
provided the security is received by the Trustee simultaneously with
the creation of the creditor relationship with the obligor arising from
the making, drawing, negotiating or incurring of the draft, bill of
exchange, acceptance or obligation.
The term "Trustee" as used in this Section 14.04 shall include
any co-Trustee appointed pursuant to Section 14.09.
In the event that any person other than the Company shall at
any time become an obligor upon any of the Bonds, so long as such
person shall continue to be such obligor the provisions of this Section
14.04, in addition to being applicable to the Trustee, any co-Trustee
and the Company, shall be applicable to the Trustee, and co-Trustee,
and such obligor with the same effect as if the name of such obligor
were substituted for that of the Company in said provisions.
Section 14.05. Trustee's Annual Report to Bondholders.
(a) The Trustee shall transmit to the Bondholders as
hereinafter provided, on or before August 1 of each year, a brief
report as of May 15 with respect to any of the following events which
may have occurred within the previous 12 months (but if no such event
has occurred within such period, no report need be transferred)
(1) any change to its eligibility and its
qualifications under Sections 14.01 and Sections 14.03 and
14.07;
(2) the creation of or any material change to a
relationship specified in Section 310(b)(1) through Section
310(b)(10) of the Trust Indenture Act;
(3) the character and amount of any advances (and if
the Trustee elects so to state, the circumstances surrounding
the making thereof) made by it as Trustee which remain unpaid
on the date of such report, and for the reimbursement of which
it claims or may claim a lien or charge, prior to that of the
Bonds, on the Trust Estate or on property or funds held or
collected by it as Trustee, if such advances so remaining
unpaid aggregate more than 1/2 of 1% of the principal amount
of the Bonds outstanding on such date;
(4) any change of the amount, interest rate and
maturity date of all other indebtedness owing to it, in its
individual capacity, on the date of such report, by the
Company and by any other person who may be an obligor upon any
of the Bonds, with a brief description of any property held as
collateral security therefor, except an indebtedness based
upon a creditor relationship arising in any manner described
in Paragraph (2), (3), (4) or (6) of Clause (f) of Section
14.04;
(5) any change of the property and funds physically
in the possession of the Trustee in such capacity on the date
of such report;
(6) any release, or release and substitution, of
property subject to the lien of this Restated Indenture (and
the consideration therefor, if any) which it has not
previously reported, provided, however, that to the extent
that the aggregate value as shown by the release papers of any
or all of such released properties does not exceed an amount
equal to one per cent (1%) of the principal amount of Bonds
then outstanding, the report need only indicate the number of
such releases, the total value of property released as shown
by the release papers, the aggregate amount of cash received
and the aggregate value of property received in substitution
therefor as shown by the release papers;
(7) any additional issue of Bonds which it has not
previously reported; and
(8) any action taken by the Trustee in the
performance of its duties under this Restated Indenture which
it has not previously reported and which in its opinion
materially affects the Bonds or the Trust Estate, except
action in respect of a default, notice of which has been or is
to be withheld by the Trustee in accordance with the
provisions of Section 11.01.
(b) The Trustee shall transmit to the Bondholders, as
hereinafter provided, a brief report with respect to--
(1) the release, or release and substitution, of
property subject to the Lien of this Restated Indenture (and
the consideration therefor, if any) unless the Fair Value of
such property, as set forth in the Certificate required by
Section 7.02 or Section 7.08, is less than (i) 10 per centum
of the principal amount of Bonds outstanding at the time of
such release, or such release and substitution and (ii)
$100,000, such report to be transmitted within 90 days after
such time; and
(2) the character and amount of any advances (and if
the Trustee elects so to state, the circumstances surrounding
the making thereof) made by it as Trustee, since the date of
the last report transmitted pursuant to the provisions of
Clause (a) of this Section 14.05 (or if no such report has
been transmitted, since the date of execution of this Restated
Indenture), for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Bonds, on the
Trust Estate or on property or funds held or collected by it
as Trustee and which it has not previously reported pursuant
to this Paragraph (2), if such advances remaining unpaid at
any time aggregate more than 10 per centum of the principal
amount of the Bonds outstanding at such time, such report to
be transmitted within 90 days after such time.
(c) Reports pursuant to this Section 14.05 shall be
transmitted by mail--
(1) to all registered holders of the Bonds, as the
names and addresses of such holders appear upon the
registration books of the Company;
(2) to such holders of Bonds as have, within the two
years preceding such transmission, filed their names and
addresses with the Trustee for that purpose; and
(3) except in the case of reports pursuant to Clause
(b) of this Section 14.05, to each Bondholder whose name and
address is preserved at the time by the Trustee, as provided
in Clause (a) of Section 9.17.
(d) The Trustee shall, at the time of the transmission to the
Bondholders of any report pursuant to this Section 14.05, file a copy
of such report with each stock exchange upon which the Bonds are listed
and with the Securities and Exchange Commission.
Section 14.06. Removal and Resignation of Trustee. The Trustee may at
any time resign and be discharged from the trusts created by this Restated
Indenture by giving written notice thereof to the Company and thereafter
publishing notice thereof, specifying a date when such resignation shall take
effect, once a week for three successive calendar weeks in one Authorized
Newspaper in the City of Rapid City, South Dakota and one Authorized Newspaper
in the Borough of Manhattan, The City of New York (in each instance upon any day
of the week, and in any such newspaper), and such resignation shall take effect
upon the day specified in such notice unless previously a successor Trustee
shall have been appointed in the manner provided in Section 14.07, in which
event such resignation shall take effect immediately upon the appointment of
such successor Trustee and its acceptance of such appointment. This Section
shall not be applicable to resignations pursuant to Section 14.03.
The Trustee may be removed at any time with or without cause by the
holders of a majority in amount of the Bonds then outstanding, by an instrument
or concurrent instruments in writing, signed in triplicate by such holders, of
which one copy shall be filed with the Company and one with the Trustee.
Section 14.07. Disqualification and Appointment of Successor Trustee.
In case at any time the Trustee shall cease to be a corporation organized and
doing business under the laws of the United States of America or of any State
which (a) is authorized under such laws to exercise corporate trust powers and
(b) is subject to supervision or examination by Federal or State authority, or
shall cease to have a combined capital and surplus of at least $1,000,000 then
the Trustee shall resign immediately; and, in the event that the Trustee does
not resign immediately in such case, then it may be removed forthwith by an
instrument or concurrent instruments in writing filed with the Trustee and
either (i) signed and sealed by the President or a Vice-President of the Company
with its corporate seal attested by a Secretary or an Assistant Secretary of the
Company, or (ii) signed and acknowledged by the holders of a majority in
principal amount of the Bonds then outstanding hereunder or by their
attorneys-in-fact duly authorized.
In case at any time the Trustee shall resign or be removed (unless the
Trustee shall be removed as provided in Clause (c) of Section 14.03 in which
event the vacancy shall be filed as provided in said Clause (c)) or otherwise
become incapable of acting, a successor to the Trustee may be appointed by the
holders of at least a majority in amount of the Bonds then outstanding by an
instrument or concurrent instruments in writing signed by such Bondholders and
delivered to such successor Trustee, notification thereof being given to the
Company and the retiring Trustee; but until a success Trustee shall be appointed
by the Bondholders as herein authorized, the Company, by an instrument in
writing executed by order of its Board of Directors, shall appoint a successor
Trustee to fill such vacancy and the Company shall publish notice of such
appointment once in each of two successive calendar weeks in one Authorized
Newspaper in the City of Rapid City, South Dakota and one in the Borough of
Manhattan, The City of New York, in each instance upon any day of the week. Any
successor Trustee so appointed by the Company shall immediately and without
further act be superseded by a successor Trustee appointed in the manner above
provided by the holders of at least a majority in amount of the Bonds then
outstanding.
If in a proper case no appointment of a successor Trustee shall be made
pursuant to the foregoing provisions of this Section within six months after a
vacancy shall have occurred in the office of Trustee the holder of any Bond
outstanding hereunder or any retiring Trustee may apply to any court of
competent jurisdiction to appoint a successor Trustee. Said court may thereupon
after such notice, if any, as said court may deem proper and prescribe, appoint
a successor Trustee.
Every Trustee appointed under the provisions of this Section shall be a
trust company or bank organized and doing business under the laws of the State
of New York or under the laws of the United States of America, having its
principal office for the transaction of business in the Borough of Manhattan,
The City of New York, and (a) which shall be a corporation having a capital and
surplus aggregating at least $1,000,000 on the date of its appointment, (b)
which shall be authorized under such laws to exercise corporate trust powers,
and (c) which shall be subject to supervision or examination by Federal or State
authority.
Any successor Trustee appointed hereunder shall execute an instrument
accepting such appointment hereunder and shall deliver one counterpart thereof
to the Company and one counterpart thereof to the retiring Trustee. Upon the
execution and delivery of such instrument of acceptance, such successor Trustee
shall, without any further act, deed or conveyance, become vested with all the
estate, properties, rights, powers and trusts of its predecessor in the trust
hereunder with like effect as if originally named as Trustee herein; but the
Trustee retiring shall, nevertheless, if and when requested in writing by either
the successor Trustee or by the Company, and upon payment of its lawful charges
and disbursements then unpaid, if any, execute and deliver an instrument or
instruments conveying and transferring to the successor trustee, upon the trusts
herein expressed, all the estate, properties, rights, power and trusts of the
Trustee so retiring, and shall duly assign, transfer and deliver to the
successor Trustee so appointed in its place all property and money held by it
hereunder. Should any deed, conveyance or instrument in writing from the Company
be required by any successor Trustee for more fully and certainly vesting in and
confirming to it the said estates, properties, rights, powers and trusts, then
any and all such deeds, conveyances and instruments in writing shall, on request
of such successor Trustee, be made, executed, acknowledged and delivered by the
Company.
Section 14.08. Merger of Trustee. Any corporation into which the
Trustee hereunder may be merged or with which it may be consolidated or any
corporation resulting from any merger or consolidation to which the Trustee
shall be a party, or any corporation which shall otherwise become the lawful
successor to the assets and business of the Trustee as an entirety or
substantially as an entirety, shall be the successor of the Trustee hereunder
without the execution or filing of any instrument or any further act on the part
of any of the parties hereto, anything herein contained to the contrary
notwithstanding, provided such corporation shall be a corporation organized and
doing business under the laws of the State of New York, or under the laws of the
United States of America, having its principal office for the transaction of
business in the Borough of Manhattan, The City of New York, and shall be
authorized under such laws to exercise corporate trust powers and shall be
subject to supervision or examination by Federal or State authority and shall
have a combined capital and surplus of at least $1,000,000.
Section 14.09. Appointment of Co-Trustee. At any time or times, in
order to conform to any legal requirements, the Trustee and the Company shall
have power to appoint, and upon request of the Trustee, the Company shall join
with the Trustee in the execution and delivery of all instruments and the
performance of all acts necessary or proper to appoint, another trust company or
bank or one or more persons, approved by the Trustee, either to act as
co-trustee or co-trustees of all or any part of the trust estate jointly with
the Trustee, or to act as substitute trustee or trustees of any part of the
same, and in any case with all such of the powers, rights, duties, obligations
and immunities hereby conferred or imposed on the Trustee, and for such term, if
any limitation is placed thereon, as may be specified in the instrument of
appointment, the same to be exercised jointly with the Trustee, except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations shall be exercised and performed by such co-trustee or co-trustees
or substitute trustee or trustees; and, if an event of default shall have
happened and shall not have been remedied or if the Company shall fail to join
with the Trustee in any such appointment within five days after being requested
by the Trustee so to do, the Trustee shall have power, without any action on the
part of the Company and without the necessity of the execution of any such
instrument of appointment by the Company, to appoint such co-trustee or
co-trustees or substitute trustee or trustees as aforesaid, and to execute all
instruments and perform all acts necessary or convenient and proper for such
purpose. The Trustee may receive the opinion of any counsel selected and
approved by it as to the necessity or propriety of appointing any such
co-trustee or substitute trustee and as to the form and effect of any such
instrument to be executed or any act to be taken to effect such appointment and
as to any other matter arising under this Section, and, subject to the
provisions of Section 14.02, such opinion shall be full protection to Trustee
for any action taken or omitted to be taken by it pursuant thereto.
Section 14.10. Notice. Any notice to or demand upon the Trustee may be
served or presented, and such demand shall be made, at the principal office of
the Trustee. Any notice to or demand upon the Company shall be deemed to have
been sufficiently given or served by the Trustee on the Company, for all
purposes, by being sent by overnight delivery service addressed as follows:
BLACK HILLS CORPORATION
625 Ninth Street
Rapid City, SD 57701
or addressed to the Company at such other address as may be filed in writing by
the Company with the Trustee.
ARTICLE FIFTEEN
DEFEASANCE
Section 15.01. Conditions to Discharge Restated Indenture. The Trustee
shall forthwith cause satisfaction and discharge of this Restated Indenture to
be entered upon the record at the cost and charge of the Company, upon receipt
by and deposit with the Trustee of the following:
A. A RESOLUTION OF THE BOARD, requesting the satisfaction and
discharge of the Restated Indenture.
B. CASH, in trust, at or before maturity, sufficient under the
provisions of Section 1.05, among other provisions hereof, to discharge
the entire indebtedness on all Bonds outstanding hereunder or to redeem
all such Bonds outstanding hereunder or to redeem all such Bonds,
provided, however, that in lieu of all or any part of such cash, the
Company shall have the right to deliver to and deposit with the
Trustee:
(1) BONDS outstanding hereunder, for cancellation by
the Trustee, such Bonds to be deemed to be paid and retired.
C. A WRITTEN ORDER OF THE COMPANY, expressed to be
irrevocable, authorizing the Trustee to give notice of redemption of
the Bonds, if any, to be redeemed as aforesaid, in compliance with
Section 10.03, or proof satisfactory to the Trustee that said notice
has been given.
D. CASH, sufficient to pay all other sums payable hereunder by
the Company (except in respect of the refund or reimbursement of taxes,
assessments or other governmental charges, for which the holders of
Bonds shall look only to the Company).
E. A CERTIFICATE OF THE COMPANY, complying with the provisions
of Section 1.02, stating that the cash and/or Bonds, if any, deposited
with the Trustee pursuant to Paragraph B of this Section 15.01 and the
cash, if any, deposited with the Trustee pursuant to Paragraph D of
this Section 15.01 are sufficient to comply with the requirements of
the respective Paragraphs and that all conditions precedent which
relate to the satisfaction and discharge of this Restated Indenture
have been complied with.
F. AN OPINION OF COUNSEL, complying with the provisions of
Section 1.02, stating that all conditions precedent which relate to the
satisfaction and discharge of this Restated Indenture have been
complied with, and that the resolutions, cash, Bonds, certificates and
other instruments which have been or are therewith delivered to the
Trustee conform to the requirements of this Restated Indenture and
constitute sufficient authority under this Restated Indenture for the
Trustee to satisfy and discharge the Restated Indenture, and that, upon
the basis thereof, the Trustee may lawfully satisfy and discharge the
Indenture.
The Company may at any time surrender to the Trustee for cancellation
by it any Bonds previously authenticated and delivered hereunder which the
Company may have acquired in any manner whatsoever, and such Bonds, upon such
surrender and cancellation, shall be deemed to be paid and retired.
Section 15.02. Discharge of Restated Indenture. Upon compliance by the
Company with the provisions of Section 15.01 these presents and the estates and
rights hereby granted shall cease, determine and be void, and the Trustee shall
forthwith cause satisfaction and discharge of this Restated Indenture to be
entered upon the record at the cost and expense of the Company and shall execute
and deliver such instruments of satisfaction as may be necessary and shall
deliver and pay to or upon the Written Order of the Company all securities, cash
(except cash deposited under Section 15.01 and other cash held for the payment
or redemption of Bonds) and other personal property held by it under this
Restated Indenture.
ARTICLE SIXTEEN
SUPPLEMENTAL INDENTURES
Section 16.01. Modification of Restated Indenture Through Supplemental
Indentures. Without any consent or other action of Bondholders, the Company,
when authorized by a Resolution of the Board, and the Trustee, from time to time
and at any time, subject to the restrictions in this Restated Indenture
contained, may, and when so required by this Restated Indenture, shall, enter
into such indentures supplemental hereto as may or shall by them be deemed
necessary or desirable, for one or more of the following purposes:
A. To correct the description of any property hereby
conveyed or pledged or intended so to be, or to assign, convey,
mortgage, pledge, transfer and set over unto the Trustee, additional
property of the Company;
B. To add to the conditions, limitations and restrictions on
the authentication and delivery of, and on the authorized amount,
terms, provisions and purposes of issue of, Bonds or any series of
Bonds, as herein set forth, other conditions, limitations and
restrictions thereafter to be observed;
C. To add to the covenants and agreements of the Company in
this Restated Indenture contained other covenants and agreements
thereafter to be observed by the Company, and/or to surrender any right
or power herein reserved to or conferred upon the Company;
D. To provide for the creation of any series of Bonds (other
than Existing Bonds), designating the series to be created and
specifying the form and provisions of the Bonds of such series as
hereinbefore provided or permitted;
E. To provide a sinking, amortization, improvement or other
analogous fund for the benefit of all or any of the Bonds or any one or
more series, of such character and of such amount (subject to the
provisions of Section 2.04) and upon such terms and conditions as shall
be contained in such supplemental indenture;
F. To provide the terms and conditions of the exchange of
Bonds of one series for Bonds of another or other series, or of the
exchange of Bonds of one denomination or kind for Bonds of another
denomination or kind, of the same series;
G. To provide that the principal of the Bonds of any series
may be converted at the option of the holders into capital stock, bonds
and/or other securities, and the terms and conditions of such
conversion;
H. To change, alter, modify, vary or eliminate any of the
terms, provisions, restrictions or conditions of this Restated
Indenture except as otherwise in this Section provided; provided,
however, that any such changes, alterations, modifications, variations
or eliminations made in a supplemental indenture pursuant to this
Paragraph (unless said supplemental indenture is made in compliance
with Section 17.09) shall be expressly stated in such supplemental
indenture to become, and shall become, effective only when there are no
Bonds outstanding of any series authenticated and delivered prior to
the execution of such supplemental indenture; provided further, that
such supplemental indenture shall be specifically referred to in the
text of all Bonds of any series authenticated and delivered after the
execution of such supplemental indenture; provided further, that the
Trustee may, in its uncontrolled discretion, decline to enter into any
such supplemental indenture which, in its opinion, may not afford
adequate protection to the Trustee when the same shall become
operative;
I. For any other purpose not inconsistent with the terms of
this Restated Indenture and which shall not impair the security of the
same, or for the purpose of curing any ambiguity or of curing,
correcting or supplementing any defective or inconsistent provisions
contained herein or in any supplemental indenture;
J. To provide for the procedures required to permit the
Company to utilize, at its option, a noncertificated system of
registration for all or any series of the Bonds; and/or
K. To enter into a restatement of the Indenture without
material modifications and including all amendments contained in
supplements that remain in effect, with authority to reorganize
material, renumber and letter, include reference headings and remove
language no longer applicable and clarify any ambiguities in the
Indenture as amended.
No such Supplemental Indenture shall eliminate, nor contain any
provision in contravention of, any provision of this Restated Indenture required
to be included herein by any provision of Sections 310 to 317, inclusive, of the
Trust Indenture Act of 1939, insofar as such provision affects the Existing
Bonds or any other series of Bonds to which the provisions of this paragraph
have been made applicable by specific provision of the Supplemental Indenture
creating them.
Section 16.02. Authority of Trustee. The Trustee is authorized to join
with the Company in the execution of any such supplemental indenture, to make
the further agreements and stipulations which may be therein contained, and to
accept the conveyance, transfer and assignment of any property thereunder. Any
supplemental indenture executed in accordance with any of the provisions of this
Article shall thereafter form a part of this Restated Indenture; and all the
terms and conditions contained in any such supplemental indenture as to any
provision authorized to be contained therein shall be and be deemed to be part
of the terms and conditions of this Restated Indenture for any and all purposes,
and, if deemed necessary or desirable by the Trustee, any of such terms or
conditions may be set forth in reasonable and customary manner in the Bonds of
the series to which such supplemental indenture shall apply. In case of the
execution and delivery of any supplemental indenture, express reference may be
made thereto in the text of the Bonds of any series authenticated and delivered
thereafter, if deemed necessary or desirable by the Trustee.
Section 16.03. Trustee's Discretion. In each and every case provided
for in this Article, the Trustee shall be entitled to exercise its discretion in
determining whether or not any proposed supplemental indenture, or any term or
provision therein contained, is proper or desirable, having in view the purposes
of such instrument, the needs of the Company, and the rights and interest of the
Bondholders, and the Trustee shall, subject to the provisions of Section 14.02,
be under no responsibility or liability to the Company or to any Bondholder or
to anyone whomsoever, for any act or thing which it may do or decline to do in
good faith, subject to the provisions of this Article, in the exercise of such
discretion. Subject to the provisions of Section 14.02, the Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion of
Counsel, complying with the provisions of Section 1.02, as conclusive evidence
that any such supplemental indenture complies with the provisions of this
Restated Indenture, and that it is proper for the Trustee, under the provisions
of this Article, to join in the execution of such supplemental indenture.
ARTICLE SEVENTEEN
MEETING OF BONDHOLDERS
Section 17.01. Modification of Restated Indenture by Bondholders.
Modifications and alterations of this Restated Indenture and/or of any indenture
supplemental hereto and/or of the rights and obligations of the Company and/or
of the holders of outstanding Bonds issued hereunder may be made as provided in
Sections 17.02 to 17.11, inclusive.
Sections 17.02. Calling Meetings of Bondholders and Notice. The Trustee
may at any time call a meeting of the Bondholders affected by the business to be
submitted to the meeting and it shall call such a meeting on the Written Request
of the Company, given pursuant to a Resolution of the Board, or on the written
request of the holders of not less than a majority in principal amount of the
Bonds affected by the business to be submitted to the meeting and outstanding at
the time of such request. In the event the trustee shall fail for 10 days to
call a meeting, after being thereunto requested by the company or such
Bondholders as aforesaid, the holders of not less than a majority in principal
amount of the Bonds affected by the business to be submitted to the meeting, or
the Company pursuant to a Resolution of the Board, may call such meeting. Every
such meeting shall be held in the Borough of Manhattan, The City of New York, or
such other place as the Company, with the written consent of the Trustee, may
appoint. In the case of every such meeting called by the Trustee written notice
thereof, stating the place and time thereof and in general terms the business to
be submitted, shall be mailed by the Trustee not less than 30 days before such
meeting to each registered holder of outstanding Bonds affected by the business
to be submitted to the meeting, addressed to him at his address appearing on the
Bond register of the Company, (b) to each other holder of any Bond affected by
the business to be submitted to the meeting whose name and address appears in
the information preserved at the time by the Trustee as provided in Section
9.17, and (c) to the Company, and shall be published by the Trustee once in each
of the four successive calendar weeks immediately preceding the week in which
the meeting is to be held, in at least one Authorized Newspaper in the Borough
of Manhattan, The City of New York (such publication to be made upon any day of
the week and in any such newspaper, but the publication in the first calendar
week to be made not less than 28 days prior to the date of such meeting);
provided, however, that the mailing of such notice to any Bondholder affected by
the business to be submitted to the meeting, shall in no case be a condition
precedent to the holding of such meeting, and neither failure so to mail such
notice to any such holder or holders nor any defect in such notice shall affect
the validity of the proceedings taken at such meeting. If such meeting is called
by the Company or Bondholders affected by the business to be submitted to the
meeting, notice of such meeting shall be sufficient for all purposes hereof if
given by newspaper publication as aforesaid, stating the place and time of the
meeting and in general terms the business to be transacted. Any meeting of
Bondholders, including any adjourned meeting, shall be valid without notice if
the holders of all outstanding Bonds affected by the business to be submitted to
the meeting are present in person or by proxy and if the Company and the Trustee
are present by duly authorized representatives, or if notice is waived in
writing before or after the meeting by the Company, the holders of all
outstanding Bonds affected by the business to be submitted to the meeting, or by
such as are not present in person or by proxy, and by the Trustee.
Section 17.03. Qualifications of Bondholders to Vote. Officers and
nominees of the Company may attend such meeting but shall not be entitled to
vote thereat. Officers and nominees of the Trustee may attend such meeting and
may vote thereat Bonds held by them in their individual or any other capacity
but not Bonds held by the Trustee as such hereunder. Attendance by Bondholders
may be in person or by proxy. In order that the holders of Bonds payable to
bearer and their proxies may attend and vote without producing their Bonds, the
Trustee, with respect to any such meeting called by the Trustee, may make and
from time to time vary such regulations as it shall think fit for the deposit of
Bonds with or the exhibition of Bonds to any banks, bankers or trust companies,
and for the issue, to the persons depositing or exhibiting such Bonds, of
certificates by such depositaries entitling the holders thereof to be present
and vote at any such meeting and to appoint proxies to represent them and vote
for them at any such meeting in the same way as if the persons so present and
voting, either personally or by proxy, were the actual bearers of the Bonds in
respect of which such certificates shall have been issued, notwithstanding any
transfer of such Bonds subsequent to the issuance of such certificates, and any
regulations so made shall be binding and effective. Each such certificate shall
state the date on which the Bond or bonds in respect of which such certificate
was issued were deposited with or exhibited to such bank, banker or trust
company and the series, maturities and serial numbers of such Bonds. Any such
certificate which does not require such Bond or Bonds to be deposited and remain
on deposit until after the meeting or until surrender of such certificate, shall
either (a) recite that the Bond or Bonds in respect of which such certificate
was issued have been endorsed by any such bank, banker or trust company with a
notation as to the issuance of such certificate (and all such Bonds shall be so
endorsed and no Bond so endorsed may be voted at the meeting except by the
holder of the certificate or the duly authorized proxy of such holder), or (b)
shall entitle the holder thereof or his proxy to vote at any meeting only if the
Bond or Bonds in respect of which it was issued are not produced at the time of
the meeting by any person and are not at the time of the meeting registered in
the name of any person. In the event that two or more such certificates of the
kind referred to in (b) above shall be issued with respect to the same Bond, the
certificate bearing the latest date shall be recognized and be deemed to
supersede any such certificate or certificates previously issued in respect of
such Bond. If any such meeting shall have been called by Bondholders affected by
the business to be submitted to the meeting, or by the Company as aforesaid upon
failure of the Trustee to call the same after having been so requested to do
under the provisions of Section 17.02, regulations to like effect for such
deposit of Bonds with, or such exhibition of Bonds to, and issues of
certificates by, any bank or trust company organized under the laws of the
United States of American or of any State thereof, having a capital of not less
than $250,000, shall be similarly binding and effective for all purposes hereof
if adopted or approved by the Bondholders calling such meeting, or by the Board
of Directors of the Company if such meeting shall have been called by the
Company, provided that in either such case copies of such regulations shall be
filed with the Trustee. Modifications of any such regulations, whether made by
the Trustee, the Company or the Bondholders, shall not be made during the period
from the date of first publication of notice of any such meeting to the final
adjournment thereof.
Section 17.04. Proxy Voting Allowed. Subject to the restrictions
specified in Sections 17.03 and 17.07, any registered holder of outstanding
Bonds affected by the business to be submitted to the meeting, and any holder of
a certificate provided for in Section 17.03 for bonds affected by the business
to be submitted, shall be entitled in person or by proxy to attend and vote at
such meeting as holder of the Bonds registered or certified in the name of such
holder, without producing such Bonds. all others seeking to attend or vote at
such meeting in person or by proxy, must, if required by any authorized
representative of the Trustee or the Company or by any other bondholder entitled
to vote at such meeting, produce the Bonds claimed to be owned or represented at
such meeting, and everyone seeking to attend or vote shall, if required as
aforesaid, produce such further proof of Bond ownership or personal identity as
shall be satisfactory to the authorized representative of the Trustee, or, if
none be present, then to the Inspectors of Votes hereinafter provided for.
Proxies shall be acknowledged before an officer authorized to take
acknowledgments of instruments to be recorded in the jurisdiction where such
acknowledgment is taken, and all proxies and certificates presented at any
meeting shall be delivered to said Inspectors of Votes and filed with the
Trustee.
Section 17.05. Conduct of Meeting. Persons named by the Trustee, if
represented at the meeting, shall act as temporary Chairman and Secretary,
respectively of the meeting, but if the Trustee shall not be represented or
shall fail to nominate such persons or if any person so nominated shall not be
present, the Bondholders and proxies present and entitled to vote shall, by a
majority vote, irrespective of the amount of their holdings, elect other persons
from those present to fill such vacancy or vacancies. A permanent Chairman and a
permanent Secretary of such meeting shall be elected from those present by the
Bondholders and proxies present and entitled to vote, by a majority vote
irrespective of the amount of their holdings. The Trustee, if represented at the
meeting, shall appoint two Inspectors of Votes who shall count all votes cast at
such meeting, except votes on the election of a Chairman and Secretary, both
temporary and permanent, as aforesaid, and who shall make and file with the
permanent Secretary of the meeting their verified written report in duplicate of
all such votes so cast at said meeting. If the Trustee shall not be represented
at the meeting or shall fail to nominate such Inspectors of Votes or if either
Inspector of Votes fails to attend the meeting, the vacancy shall be filled by
appointment by the permanent Chairman of the meeting.
Section 17.06. Quorum for Meeting. Subject to the provisions of this
Section and Section 17.10, the persons entitled to vote with respect to not less
than 66_% in principal amount of the Bonds outstanding hereunder when such
meeting is held must be present at such meeting in person or by proxy in order
to constitute a quorum for the transaction of business, less than a quorum,
however, having power to adjourn; provided, however, that in case one or more
series of Bonds outstanding under this Restated Indenture, but less than all of
the series of Bonds outstanding, are affected thereby, then the persons entitled
to vote with respect to not less than 66_% in principal amount of the Bonds of
each series affected thereby shall also be present to constitute a quorum. The
determination of the Trustee as to which series of Bonds are to be affected
shall be conclusive. If such meeting is adjourned by less than a quorum for more
than 30 days, notice thereof shall forthwith be mailed by the Trustee if such
meeting shall have been called by it (a) to the Company, (b) to each registered
holder of outstanding Bonds entitled to notice, addressed to him at his address
appearing on the Bond register of the Company, and (c) to each holder of any
such Bond payable to bearer who shall have filed with the Trustee an address for
notices, addressed to him at such address, or whose name and address appears in
the information preserved at the time by the Trustee as provided in Section
9.17, and shall be published at least once in each 30-day period of such
adjournment in one Authorized Newspaper in the Borough of Manhattan, The City of
New York (upon any day of the week and in any such newspaper); provided,
however, that the mailing of such notice to any Bondholder affected by the
business to be considered at such adjourned meeting shall in no case be a
condition precedent to the holding of such meeting, and neither failure so to
mail such notice to any such holder or holders nor any defect in such notice
shall affect the validity of the proceedings taken at such meeting. If such
meeting shall have been called by Bondholders or by the Company after the
failure of the Trustee to all the same after being requested so to do in
accordance with the provisions of Section 17.02, notice of such adjournment
shall be published by the permanent Chairman and the permanent Secretary of the
meeting in the newspaper and for the number of times specified in this Section
and shall be sufficient if so published.
Section 17.07. Vote Required. Subject to the provisions of this Section
and of Sections 17.06 and 17.10, any modification or alteration of this Restated
Indenture and/or of any indenture supplemental hereto and/or of the rights and
obligations of the Company and/or of the holders of Bonds issued hereunder in
any particular (including, without limitation, waiver of a default in compliance
with provisions of this Restated Indenture or of any such supplemental
indenture) may be made at a meeting of Bondholders duly convened and held in
accordance with the provisions of this Article, but only by resolution duly
adopted by the affirmative vote of the persons entitled to vote with respect to
at least 66_% in principal amount of the Bonds then outstanding and entitled to
consent and of the persons entitled to vote with respect to not less than 66_%
in principal amount of the Bonds then outstanding and entitled to consent of
each series affected in case one or more but less than all of the series of
Bonds issued under this Restated Indenture are to be affected, or adopted as
provided in Section 18.11, and approved by a Resolution of the Board as
hereinafter specified; provided, however, that so such modification or
alteration shall
(A) postpone the date fixed herein or in the Bonds for the
payment of the principal of, or any installment of interest on, the
Bonds,
(B) reduce the principal of, or the rate of interest payable
on, the Bonds, or
(C) reduce the percentage of the principal amount of Bonds
required for the authorization of any such modification or alteration,
or
(D) modify, without the written consent of the Trustee, the
rights, duties or immunities of the Trustee.
For all purposes of this Article, the Trustee shall, subject to the
provisions of Section 14.02, be entitled to rely upon an Opinion of Counsel with
respect to the extent, if any, as to which any action to be submitted to, or
taken at, such meeting affects the rights under this Restated Indenture or under
any indenture supplemental hereto of any holders of Bonds of any series then
outstanding hereunder.
No such Supplemental Indenture shall eliminate, nor contain any
provision in contravention of, any provision of this Restated Indenture required
to be included herein by any provision of Sections 310 to 317, inclusive, of the
Trust Indenture Act of 1939, insofar as such provision affects the Existing
Bonds, or any other series of Bonds to which the provisions of this paragraph
have been made applicable by specific provision of the Supplemental Indenture
creating them.
Section 17.08. Records of Meetings and Notices. A record in duplicate
of the proceedings of each meeting of Bondholders shall be prepared by the
permanent Secretary of the meeting and shall have attached thereto the original
reports of the Inspectors of Votes, and affidavits by one or more persons having
knowledge of the facts, showing a copy of the notice of the meeting and a copy
of the notice of adjournment thereof, if required under the provisions of
Section 17.06, and showing that said notices were mailed and published as
provided in Section 17.02, and, in a proper case, as provided in Section 17.06.
Such record shall be signed and verified by the affidavits of the permanent
Chairman and the permanent Secretary of the meeting, and one duplicate thereof
shall be delivered to the Company and the other to the Trustee for preservation
by the Trustee. Any record so signed and verified shall be proof of the matters
therein stated until the contrary is proved, and if such record shall also be
signed and verified by the affidavit of a duly authorized representative of the
Trustee, such meeting shall be deemed conclusively to have been duly convened
and held and such record shall be conclusive, and any resolution or proceeding
stated in such record to have been adopted or taken, shall be deemed
conclusively to have been duly adopted or taken by such meeting. A true copy of
any resolution adopted by such meeting shall be mailed by the Trustee to each
registered holder of outstanding Bonds entitled to vote at such meeting
addressed to him at his address appearing on the Bond register of the Company
and to each other holder of any such Bond whose name and address appears in the
latest information furnished to or received by the trustee as provided in
Section 9.17; and proof of such mailing by the affidavit of some person having
knowledge of the fact shall be filed with the Trustee, but neither failure to
mail copies of such resolution as aforesaid, nor any defect therein, shall
affect the validity thereof. No such resolution shall be binding unless and
until such resolution is approved by a Resolution of the Board filed by the
Company with the Trustee, but if such Resolution of the Board is adopted and
filed with the Trustee, the resolution so adopted at such meeting of Bondholders
shall be binding upon the Company, the Trustee and the holders of all Bonds
issued hereunder, at the expiration of 60 days after such filing, except in the
event of a final decree of a court of competent jurisdiction setting aside such
resolution, or annulling the action taken thereby in a legal action or equitable
proceeding for such purposes commenced within such 60-day period; provided,
however, that no such resolution of the Bondholders or of the Company shall in
any manner be so construed as to change or modify any of the rights, immunities
or obligations of the Trustee without its written assent thereto. Nothing in
this Article contained shall be deemed or construed to authorize or permit, by
reason of any call of a meeting of Bondholders or of any right expressly or
impliedly conferred hereunder to make such a call, any hindrance or delay in the
exercise of any right or rights conferred upon or reserved to the Trustee or to
the Bondholders under any of the provisions of this Restated Indenture or of the
Bonds.
Section 17.09. Actions Noted on Bonds. Bonds authenticated and
delivered after the date of any Bondholders' meeting may bear a notation in form
approved by the Trustee as to the action taken at meetings of Bondholders
theretofore held, and, upon demand of the holder of any Bond outstanding at the
date of any such meeting and affected thereby and upon presentation of his Bond
for the purpose at the principal office of the Trustee, the Company shall cause
suitable notation to be made on such Bond, by endorsement or otherwise, of any
action taken at any meeting of Bondholders theretofore held. If the Company or
the Trustee shall so determine, new Bonds so modified as, in the opinion of the
Trustee and the Board of Directors of the company, to conform to such
Bondholders' resolution, shall be executed, authenticated and delivered, and,
upon demand of the holders of any Bonds then outstanding and affected by such
resolution, shall be issued, without cost to such Bondholders, in exchange for
such outstanding Bonds upon surrender of such Bonds. The Company or the Trustee
may require Bonds outstanding to be presented for notation or exchange as
aforesaid if either shall see fit to do so. An instrument or instruments
supplemental to this Restated Indenture embodying any modification or alteration
of this Restated Indenture or of any indenture supplemental hereto made at any
Bondholders' meeting and approved by Resolution of the Board, as aforesaid, may
be executed by the Trustee and the Company, and, upon demand of the Trustee or
if so specified in any resolution adopted by any such Bondholders' meeting,
shall be executed by the Company and the Trustee. The Trustee shall, subject to
the provisions of Section 14.02, be fully protected in relying upon an Opinion
of Counsel as conclusive evidence that any such supplemental indenture complies
with the provisions of this Restated Indenture and that it is proper for the
Trustee, under the provisions of this Article to join in the execution thereof.
Section 17.10. Nullification of Article Seventeen. Anything in this
Article contained to the contrary notwithstanding, the Company may at any time,
or from time to time, by Resolution of the Board filed with the Trustee,
stipulate that, from and after the date of the filing of such Resolution with
the Trustee, none of the provisions of this Article shall be of any force or
effect whatever either with respect to (1) all Bonds theretofore authenticated
and delivered by the Trustee hereunder and then outstanding, and/or (2) any
Bonds and/or all Bonds thereafter authenticated and delivered by the Trustee
hereunder, and in any such event a supplemental indenture setting out in detail
the stipulations contained in such Resolution of the Board shall be made.
Section 17.11. Written Consent in Lieu of Meeting. Anything in this
Article contained to the contrary notwithstanding, the Trustee shall receive the
written consent or consents of the holders of 66_% or more in principal amount
of the Bonds then outstanding and entitled to consent and of the holders of 66_%
or more in principal amount of the Bonds then outstanding and entitled to
consent of each series affected in case one or more but less than all of the
series of Bonds issued under this Restated Indenture are to be affected, in lieu
of the holding of a meeting pursuant to this Article Eighteen and in lieu of all
action at such a meeting.
Section 17.12. Trustee's Expenses. The Company covenants to reimburse
the Trustee for any expense incurred by it in the performance of its duties
under the provisions of this Article.
ARTICLE EIGHTEEN
MISCELLANEOUS PROVISIONS
Section 18.01. Binding on Successors and Assigns. Whenever in this
Restated Indenture either of the parties hereto is named or referred to, this
shall be deemed to include (unless the context indicates the contrary) the
successors or assigns of such party, and except as expressly provided to the
contrary all the covenants and agreements in this Restated Indenture contained
by or on behalf of the Company or by or on behalf of the Trustee shall bind and
enure to the benefit of the respective successors and assigns of such parties,
whether so expressed or not.
Section 18.02. Rights Limited to Company, Bondholders and Trustee.
Nothing in this Restated Indenture, expressed or implied, is intended or shall
be construed to confer upon, or to give to, any person or corporation, other
than the parties hereto and the holders of the Bonds outstanding hereunder, any
right, remedy, or claim under or by reason of this Restated Indenture or any
covenant, condition or stipulation hereof; and all the covenants, stipulations,
promises and agreements in this Restated Indenture contained by or on behalf of
the Company shall be for the sole and exclusive benefit of the parties hereto,
and of the holders of the Bonds outstanding hereunder.
Section 18.03. Trust Indenture Act Controls. If any provision of this
Restated Indenture limits, qualifies, or conflicts with another provision
required to be included herein by any of Sections 310 to 317, inclusive, of the
Trust Indenture Act of 1939, as amended, the provision required so to be
included shall control, and the Restated Indenture shall be deemed to be amended
accordingly.
Section 18.04. Headings. The headings to Articles and Sections
are only for ease of reference and are not to be asserted or used to interpret
this Restated Indenture.
Section 18.05. Complete Agreement. This Restated Indenture completely
restates and amends the Indenture without any interruption of the Lien of the
Indenture, which continues under the Restated Indenture against the Trust Estate
described herein. This Restated Indenture states the complete agreement of the
parties hereto without any reference to the Original Indenture and the
thirty-one supplemental indentures thereto.
Section 18.06. Receipt of Copy. The Company, by the execution
hereof, acknowledges that a true copy of this Restated Indenture has been
delivered to and received by it.
Section 18.07. Executed in Counterparts. This Restated Indenture
may be executed in several counterparts, all or any of which may be treated
for all purposes as one original and shall constitute and be one and the same
instrument.
IN WITNESS WHEREOF, BLACK HILLS CORPORATION has caused its corporate
name to be hereunto affixed, and this instrument to be signed and sealed by its
President or a Vice-President, and its corporate seal to be attested by its
Secretary or an Assistant Secretary for and in its behalf, and THE CHASE
MANHATTAN BANK in evidence of its acceptance of the trust hereby created, has
caused its corporate name to be hereunto affixed, and this instrument to be
signed and sealed by one of its Vice-Presidents or Assistant Vice-Presidents and
attested by its Secretary or an Assistant Secretary.
BLACK HILLS CORPORATION
By /s/ Gary R. Fish
Attest:
/s/ Roxann R. Basham
Secretary
Signed, sealed and delivered by
BLACK HILLS CORPORATION
in the presence of:
/s/ Rhonda R. Lingle
/s/ Lorna Zacher
- ----------------------------
THE CHASE MANHATTAN BANK
By /s/ Glenn McKeever
Vice-President
Attest:
Trust Officer
Signed, sealed and delivered by
THE CHASE MANHATTAN BANK
in the presence of:
/s/ William G. Keenan
- ----------------------------
/s/ N. Rodngnez
- ----------------------------
STATE OF NEW YORK
COUNTY OF NEW YORK
On this 17th day of September, 1999, before me, the undersigned
officer, personally appeared Glenn G. McKeever who acknowledged himself
to be the Vice President of The Chase Manhattan Bank, a New York corporation,
and that he, as such Vice-President being authorized so to do, executed the
foregoing instrument for the purposes therein contained by signing the name of
the corporation by himself as Vice-President.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Emily Laye
Notary Public
(SEAL) My commission expires: December 31, 1999
STATE OF SOUTH DAKOTA
COUNTY OF PENNINGTON
On this 8th day of September, 1999, before me, the undersigned
officer, personally appeared Gary R. Fish, who acknowledged himself to be the
President and Chief Operating Officer of Nonregulated Energy Group of Black
Hills Corporation, a corporation, and that he, as such corporate officer being
authorized so to do, executed the foregoing instrument for the purposes therein
contained by signing the name of the corporation by himself as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Barbara Rask
Notary Public
(SEAL) My commission expires: July 25, 2005
Exhibit 4.4
STATEMENT OF DESIGNATIONS, PREFERENCES
AND RELATIVE RIGHTS AND LIMITATIONS
OF
NO PAR PREFERRED STOCK, SERIES 2000-A
OF
BLACK HILLS CORPORATION
------------------
Pursuant to Section 47-3-7
of the South Dakota Codified Laws
------------------
Black Hills Corporation, a corporation organized and existing under the
South Dakota Codified Laws, does hereby certify that pursuant to the provisions
of Section 47-3-7 of the South Dakota Codified Laws, and the provisions of its
Restated Articles of Incorporation, its Board of Directors, at a meeting held on
January 6, 2000, duly adopted the following resolution establishing the rights,
preferences, privileges and restrictions of a series of cumulative preferred
stock, having no par value, of the corporation which resolution remains in full
force and effect as of the date hereof:
"WHEREAS, the Board of Directors of Black Hills Corporation (the
"Corporation") is authorized, within the limitations and restrictions stated in
its Restated Articles of Incorporation (the "Articles of Incorporation"), to fix
from time to time by resolution or resolutions adopted prior to the issuance of
any shares of each particular series of cumulative preferred stock, having no
par value (the "No Par Preferred Stock"), the distinctive serial designations of
such series, the consideration for the No Par Preferred Stock, the annual
dividend rate for the particular series, the redemption prices per share for the
particular series and such other characteristics of, and any restrictive or
other provisions (including the right to convert shares of such series into
shares of common stock of the Corporation) relating to, the shares of the
particular series, not inconsistent with the provisions of Article Second of the
Articles of Incorporation applicable to all series; and
WHEREAS, it is the desire of the Board of Directors of the Corporation,
pursuant to its authority as aforesaid, to authorize the issuance, and to
designate and fix the terms of a series of No Par Preferred Stock and the number
of shares constituting such series;
NOW, THEREFORE, BE IT RESOLVED, that pursuant to Article Second,
Subdivision (K) of the Articles of Incorporation, there is hereby authorized
such series of No Par Preferred Stock on the terms and with the provisions
herein set forth:
1. Certain Definitions.
Unless the context otherwise requires, the terms defined in this Section 1
shall have, for all purposes of this resolution, the meanings specified (with
terms defined in the singular having comparable meanings when used in the
plural). Capitalized terms used herein which are not otherwise defined shall
have the meanings ascribed thereto in the Articles of Incorporation.
Automatic Conversion Date. The term "Automatic Conversion Date" shall have
the meaning set forth in Section 8(a)(ii) below.
Common Stock. The term "Common Stock" shall mean the common stock, par
value $1.00 per share, of the Corporation.
Common Stock Dividend Payment Date. The term "Common Stock Dividend Payment
Date" shall have the meaning set forth in Section 4(a) below.
Conversion Date. The term "Conversion Date" shall have the meaning set
forth in Section 8(c) below.
Conversion Price. The term "Conversion Price" shall have the meaning set
forth in Section 8(d) below.
Convertible Securities. The term "Convertible Securities" shall have the
meaning set forth in Section 8(e)(iii) below.
Current Market Price. The term "Current Market Price" shall mean the
current market price of the Common Stock as computed in accordance with Section
8(e)(xi) below.
Initial Issue Date. The term "Initial Issue Date" shall mean the date that
shares of No Par Preferred Stock, Series 2000-A are first issued by the
Corporation.
Liquidation. The term "Liquidation" shall mean any liquidation, dissolution
or winding up of the affairs of the Corporation, whether voluntary or
involuntary; provided, that neither the voluntary sale, conveyance, lease,
exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or assets of the
Corporation, nor the consolidation or merger of the Corporation with one or more
other entities, shall, by itself, be deemed a Liquidation.
Liquidation Preference Amount. The term "Liquidation Preference Amount"
shall mean an amount equal to the sum of (i) $1,000 per share of No Par
Preferred Stock, Series 2000-A, plus (ii) all accrued and unpaid dividends
thereon calculated in accordance with Sections 4(a) and 4(b) hereof.
No Par Preferred Stock, Series 2000-A. The term "No Par Preferred Stock,
Series 2000-A", shall mean the series of No Par Preferred Stock authorized
hereby.
Person. The term "Person" shall mean an individual or a corporation,
limited liability company, partnership, trust, or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
Post-Redemption Record Date. The term "Post-Redemption Record Date" shall
have the meaning set forth in Section 5(a) below.
Preferred Dividend. The term "Preferred Dividend" shall have the meaning
set forth in Section 4(a) below.
Preferred Dividend Payment Date. The term "Preferred Dividend Payment Date"
shall have the meaning set forth in Section 4(a) below.
Preferred Dividend Rate. The term "Preferred Dividend Rate" shall have the
meaning set forth in Section 4(a) below.
Preferred Quarterly Dividend Period. The term "Preferred Quarterly Dividend
Period" shall have the meaning set forth in Section 4(a) below.
Pre-Redemption Record Date. The term "Pre-Redemption Record Date" shall
have the meaning set forth in Section 5(a) below.
Quoted Price. The term "Quoted Price" shall have the meaning set forth in
Section 8(e)(xi) below.
Redeemed Shares. The term "Redeemed Shares" shall have the meaning set
forth in Section 5(a) below.
Redemption Date. The term "Redemption Date" shall have the meaning set
forth in Section 5(a) below.
Redemption Notice Date. The term "Redemption Notice Date" shall mean the
date of delivery by the Corporation of a notice of redemption of the No Par
Preferred Stock, Series 2000-A in accordance with Subsection (B) of Article
Second of the Articles of Incorporation.
Redemption Price. The term "Redemption Price" shall have the meaning set
forth in Section 5(a) below.
Trading Days. The term "Trading Days" shall have the meaning set forth in
Section 8(e)(xi) below.
2. Designation.
The series of No Par Preferred Stock authorized hereby shall be designated
as the "No Par Preferred Stock, Series 2000-A." The number of shares
constituting such series shall initially be Twenty-One Thousand Five Hundred
(21,500). The No Par Preferred Stock, Series 2000-A, shall have no par value.
3. Consideration.
The consideration for the No Par Preferred Stock, Series 2000-A shall for
all purposes be deemed to be $1,000 per share.
4. Dividends.
(a) The holders of the shares of No Par Preferred Stock, Series 2000-A
shall be entitled to receive cumulative quarterly cash dividends at a dividend
rate equal to 1% per annum per share (the "Preferred Dividend Rate") computed on
the basis of $1,000 per share, when and as declared by the Board of Directors of
the Corporation or a duly authorized committee thereof, out of funds legally
available for the payment of dividends; in preference to and in priority over
any dividends upon Common Stock (the "Preferred Dividend"). Quarterly dividend
periods (each a "Preferred Quarterly Dividend Period") shall commence on
February 28, May 31, August 31, and November 30, in each year, except that the
first Preferred Quarterly Dividend Period shall commence on the date of issuance
of the No Par Preferred Stock, Series 2000-A and shall end on and include the
day immediately preceding the first day of the next Preferred Quarterly Dividend
Period. Dividends on the shares of No Par Preferred Stock, Series 2000-A shall
be payable in arrears on March 1, June 1, September 1 and December 1 of each
year (each, a "Preferred Dividend Payment Date"), commencing March 1, 2000 [or
June 1 in the event Closing occurs after March 1]. Each such dividend shall be
paid to the holders of record of the No Par Preferred Stock, Series 2000-A as
they shall appear on the stock register of the Corporation on such record date,
not exceeding 45 days nor less than 10 days preceding such Preferred Dividend
Payment Date, as shall be fixed by the Board of Directors of the Corporation or
a duly authorized committee thereof. If any date on which dividends would
otherwise be payable is a Saturday, Sunday or a day on which banking
institutions in the State of South Dakota are authorized or obligated by law or
executive order to close, then the dividends otherwise payable on such date
shall instead be payable on the next succeeding business day. In addition to the
Preferred Dividend, the holders of record of No Par Preferred Stock, Series
2000-A, shall be entitled to receive, when and as declared by the Board of
Directors or a duly authorized committee thereof out of funds legally available
therefor, dividends (cash or otherwise) in an amount equal to the amount of any
dividend declared (other than a dividend declared under a stockholder rights
plan or in connection with the implementation of a stockholders rights plan)
payable with respect to the Common Stock multiplied by the number of shares of
Common Stock into which each share of No Par Preferred Stock, Series 2000-A is
convertible pursuant to Section 8 hereof (it being assumed for such purposes
that all conditions to conversion have been met, whether or not such conditions
have in fact been so met), as of the record date for the determination of
holders of shares of Common Stock and No Par Preferred Stock, Series 2000-A
entitled to receive such dividends. No dividend shall be declared or paid with
respect to Common Stock (other than a dividend declared under a stockholder
rights plan or in connection with the implementation of a stockholders rights
plan) unless such a dividend is declared and paid with respect to the No Par
Preferred Stock, Series 2000-A. The record dates and payment dates (the "Common
Stock Dividend Payment Date") with respect to the No Par Preferred Stock, Series
2000-A shall be the same as the record and payment dates with respect to the
payment of dividends with respect to the Common Stock.
(b) The amount of any dividends accrued on any share of the No Par
Preferred Stock, Series 2000-A on any Preferred Dividend Payment Date shall be
deemed to be the amount of any unpaid dividends accumulated thereon to and
including such Preferred Dividend Payment Date, whether or not earned or
declared. Accumulated and unpaid dividends shall not bear interest. The amount
of dividends accrued on any share of the No Par Preferred Stock, Series 2000-A
on any date other than a Preferred Dividend Payment Date shall be deemed to be
the sum of (i) the amount of any unpaid dividends accumulated thereon to and
including the last preceding Preferred Dividend Payment Date, whether or not
earned or declared, and (ii) an amount determined by multiplying (x) the
Preferred Dividend Rate by (y) a fraction, the numerator of which shall be the
number of days from the last preceding Preferred Dividend Payment Date to and
including the date on which such calculation is made and the denominator of
which shall be the full number of days in such Preferred Quarterly Dividend
Period.
5. Redemption.
(a) The Corporation by resolution of its Board of Directors may redeem the
No Par Preferred Stock, Series 2000-A, in whole or in part, at any time. The
redemption price per share (the "Redemption Price") for such shares of No Par
Preferred Stock, Series 2000-A so redeemed shall equal the Liquidation
Preference Amount on the date fixed for redemption (the "Redemption Date").
Notwithstanding such redemption, if the Redemption Date falls prior to the
record date of any dividend payable on Common Stock (other than a dividend
declared under a stockholder rights plan or in connection with the
implementation of a stockholder rights plan), the holders of record of any
shares of No Par Preferred Stock, Series 2000-A so redeemed (the "Redeemed
Shares") shall be entitled to receive on the next Common Stock Dividend Payment
Date following the next record date for the payment of dividends on Common Stock
(the "Post-Redemption Record Date") provided that the Post-Redemption Record
Date occurs within twelve months of the Redemption Date, an amount equal to the
product of the number of shares of Common Stock into which such Redeemed Shares
were convertible on the Redemption Date (assuming for such purpose that the
Redeemed Shares were convertible on the Redemption Date) multiplied by (A) the
dividend payable on each share of Common Stock multiplied by (B) a fraction the
numerator of which is the number of days elapsed from the last Common Stock
dividend record date prior to the Redemption Date (the "Pre-Redemption Record
Date") to the Redemption Date and the denominator of which is the number of days
elapsed from the Pre-Redemption Record Date to the Post-Redemption Record Date.
(b) Nothing in this Section 5 shall be construed to preclude a holder of No
Par Preferred Stock, Series 2000-A from converting any or all of its shares of
No Par Preferred Stock, Series 2000-A in accordance with Section 8 at any time
prior to the close of business on the third full business day prior to the
Redemption Date.
6. Voting Rights; Priority.
(a) The No Par Preferred Stock, Series 2000-A, except as provided in the
Articles of Incorporation or as otherwise required by law, shall have no voting
rights.
(b) The No Par Preferred Stock, Series 2000-A shall rank pari passu with
each other series of Preferred Stock as to dividends and distribution of assets
on liquidation.
7. Liquidation Preference.
(a) In the event of any Liquidation, holders of the No Par Preferred Stock,
Series 2000-A shall have the rights set forth in Article Second of the Articles
of Incorporation.
(b) Written notice of any Liquidation of the Corporation, stating a payment
date and the place where the distributive amounts shall be payable, shall be
given by mail, postage prepaid, not less than 30 days prior to the payment date
stated therein, to the holders of record of the No Par Preferred Stock, Series
2000-A at their respective addresses as the same shall appear on the books of
the Corporation.
8. Conversion.
(a) Each share of No Par Preferred Stock, Series 2000-A shall be (i)
convertible at the option of the holder thereof into validly issued, fully paid
and nonassessable shares of Common Stock, in an amount determined in accordance
with Section 8(d) below, at any time prior to the fifth (5th) anniversary of the
Initial Issue Date, and (ii) automatically converted into validly issued, fully
paid and nonassessable shares of Common Stock, in an amount determined in
accordance with Section 8(d) below, if outstanding on the fifth (5th)
anniversary of the Initial Issue Date (the "Automatic Conversion Date").
(b) Immediately following the conversion of No Par Preferred Stock, Series
2000-A into Common Stock on the Conversion Date (i) such converted shares of No
Par Preferred Stock, Series 2000-A shall be deemed no longer outstanding and
(ii) the Persons entitled to receive the Common Stock upon the conversion of
such converted No Par Preferred Stock, Series 2000-A shall be treated for all
purposes as having become the owners of record of such Common Stock. Upon the
issuance of shares of Common Stock upon conversion of No Par Preferred Stock,
Series 2000-A pursuant to this Section 8, such shares of Common Stock shall be
deemed to be duly authorized, validly issued, fully paid and nonassessable.
(c) To convert No Par Preferred Stock, Series 2000-A into Common Stock at
the option of the holder pursuant to Section 8(a)(i), a holder must give written
notice to the Corporation at its principal office that such holder elects to
convert No Par Preferred Stock, Series 2000-A into Common Stock, and the number
of shares to be converted. Such conversion, to the extent permitted by law,
regulation, rule or other requirement of any governmental authority and the
provisions hereof, including but not limited to Section 5(b), shall be deemed to
have been effected as of the close of business on the date on which the holder
delivers such notice to the Corporation (such date and the Automatic Conversion
Date are each referred to herein as the "Conversion Date" for purposes of any
conversion of No Par Preferred Stock, Series 2000-A pursuant to Section 8(a)).
Promptly after the Conversion Date, the holder shall (i) surrender the
certificate or certificates evidencing the shares of No Par Preferred Stock,
Series 2000-A converted or to be converted, duly endorsed in a form reasonably
satisfactory to the Corporation, at the office of the Corporation or of the
transfer agent for the No Par Preferred Stock, Series 2000-A, (ii) state in
writing the name or names in which the certificate or certificates for shares of
Common Stock are to be issued, (iii) provide evidence reasonably satisfactory to
the Corporation that such holder has satisfied any conditions, contained in any
agreement or any legend on the certificates representing the No Par Preferred
Stock, Series 2000-A, relating to the transfer thereof, if shares of Common
Stock are to be issued in a name or names other than the holder's, and (iv) pay
any transfer or similar tax if required as provided in Section 8(j) below. As
soon as practical following receipt of the foregoing, the Corporation shall
deliver to such former holder of No Par Preferred Stock, Series 2000-A, a
certificate representing the shares of Common Stock issued upon the conversion,
together with a new certificate representing the unconverted portion, if any, of
the shares of No Par Preferred Stock, Series 2000-A, formerly represented by the
certificate or certificates surrendered for conversion.
(d) For the purposes of the conversion of No Par Preferred Stock, Series
2000-A into Common Stock pursuant to Section 8(a), each share of No Par
Preferred Stock, Series 2000-A shall be convertible into the number of shares of
Common Stock equal to the Liquidation Preference Amount divided by the
Conversion Price in effect on the Conversion Date. The number of full shares of
Common Stock issuable to a single holder upon conversion of the No Par Preferred
Stock, Series 2000-A shall be based on the aggregate Liquidation Preference
Amount of all shares of No Par Preferred Stock, Series 2000-A owned by such
holder. The Conversion Price initially shall equal $35.00. In the event the
Corporation delivers a notice of redemption of the No Par Preferred Stock,
Series 2000-A in accordance with Subsection (B) of Article Second of the
Articles of Incorporation, the Conversion Price shall be adjusted to equal the
lesser of (i) the Conversion Price then in effect and (ii) the Current Market
Price (as hereinafter defined) on the Redemption Notice Date. In order to
prevent dilution of the conversion rights granted hereunder, the Conversion
Price shall be subject to adjustment from time to time in accordance with
Sections 8(e) through 8(h).
(e) The number of shares issuable upon conversion and the Conversion Price
(and each component thereof) are subject to adjustment by the Corporation from
time to time upon the occurrence of the events enumerated in this Section 8;
provided, however, there shall be no such adjustment in connection with a
dividend declared under, or in connection with the implementation of, a
stockholder rights plan which would entitle the Common Stock issuable upon
conversion of the No Par Preferred Stock, Series 2000-A to the same rights as
the Common Stock outstanding on the date of such dividend declaration.
(i) Changes in Capital Stock.
(A) If the Corporation (i) pays a dividend or makes a
distribution on its Common Stock in shares of its Common Stock,
(ii) subdivides, by stock split, reclassification or otherwise,
its outstanding shares of Common Stock into a greater number of
shares, (iii) combines its outstanding shares of Common Stock
into a smaller number of shares, (iv) makes a distribution on its
Common Stock in shares of its capital stock other than Common
Stock or (v) issues by reclassification of its Common Stock any
shares of its capital stock, then the Conversion Price (and each
component thereof) in effect immediately prior to such action
shall be proportionately adjusted so that each holder of shares
of No Par Preferred Stock, Series 2000-A may receive the
aggregate number and kind of shares of capital stock of the
Corporation which such holder would have owned immediately
following such action if such holder had converted all of his
shares of No Par Preferred Stock, Series 2000-A into Common Stock
immediately prior to such action.
(B) The adjustment shall become effective immediately after
the record date in the case of a dividend or distribution and
immediately after the effective date in the case of a
subdivision, combination or reclassification.
(C) If after an adjustment a holder of shares of No Par
Preferred Stock, Series 2000-A upon conversion may receive shares
of two or more classes of capital stock of the Corporation, the
Corporation shall determine the allocation of the adjusted
Conversion Price between the classes of capital stock. After such
allocation, the conversion privilege and the Conversion Price of
each class of capital stock shall thereafter be subject to
adjustment on terms comparable to those applicable to Common
Stock in this Section 8(e)(i).
(D) Any adjustments made pursuant to this Section 8(e)(i)
shall be made successively.
(ii) Common Stock Issue.
(A) If the Corporation issues any additional shares of
Common Stock for a consideration per share less than the Current
Market Price (as hereinafter defined) on the date the Corporation
fixes the offering price of such additional shares, the
Conversion Price shall be adjusted as set forth below, such that
a holder of shares of No Par Preferred Stock, Series 2000-A, upon
conversion of his shares of No Par Preferred Stock, Series 2000-A
into shares of Common Stock, shall have the right to receive that
number of shares of Common Stock which, after giving effect to
the following adjustment, such holder would receive if such
holder elected to convert his shares of No Par Preferred Stock,
Series 2000-A into Common Stock. The Conversion Price shall be
adjusted to the number determined by multiplying the Conversion
Price in effect immediately prior to such issuance or sale by a
fraction, the numerator of which shall be the sum of (i) the
number of shares of Common Stock outstanding immediately prior to
the issuance or sale of such additional shares of Common Stock
plus (ii) the number of such additional shares which the
aggregate consideration received (or by express provision hereof
deemed to have been received) by the Corporation for such
additional shares so issued or sold would purchase at a
consideration per share equal to the Current Market Price, and
the denominator of which shall be the number of shares of Common
Stock outstanding immediately after the issuance or sale of such
additional shares of Common Stock. For the purposes of this
Section 8(e)(ii), the date as of which the Current Market Price
shall be determined shall be the date of the actual issuance or
sale of such shares.
(B) The adjustment shall be made successively whenever any
such issuance is made, and shall become effective immediately
after such issuance.
(C) This Section 8(e)(ii) does not apply to:(i) any of the
transactions described in Sections 8(e)(i), 8(e)(iii) and
8(e)(iv), (ii) the conversion of the shares of No Par Preferred
Stock, Series 2000-A, (iii) up to 2,300,000 shares of Common
Stock (as adjusted for stock splits, reverse stock splits, stock
dividends and reclassifications) to be issued to officers,
directors, employees, consultants and advisors of the Corporation
and its subsidiaries pursuant to stock purchase, 401(k) or stock
option plans or agreements or other incentive stock arrangements
approved by the Board of Directors of the Corporation, (iv)
shares of Common Stock issued in an arms-length transaction to
either acquire another business or other properties or assets as
approved by the Board of Directors of the Corporation wherein the
Board of Directors has determined that the fair market value of
the Common Stock issued in connection with such acquisition does
not exceed the fair market value of the business, properties and
assets acquired, (v) the issuance and sale of Common Stock in an
underwritten public offering, and (vi) the issuance and sale of
Common Stock pursuant to a dividend reinvestment plan of the
Corporation.
(iii) Rights Issue.
(A) If the Corporation issues or sells any warrants or
options or other rights entitling the holders of Common Stock to
subscribe for or purchase either any additional shares of Common
Stock or evidences of indebtedness, shares of stock or other
securities which are convertible into or exchangeable, with or
without payment of additional consideration in cash or property,
for additional shares of Common Stock (such convertible or
exchangeable evidence of indebtedness, shares of stock or other
securities hereinafter being called "Convertible Securities"),
and the consideration per share for which additional shares of
Common Stock may at any time thereafter be issuable pursuant to
such warrants, options or other rights or pursuant to the terms
of such Convertible Securities (when added to the consideration
per share of Common Stock, if any, received for such warrants,
options or other rights), shall be less than the Current Market
Price at the time of the issuance of the warrants, options or
other rights, then the Conversion Price shall be adjusted as
provided below, such that a holder of shares of the No Par
Preferred Stock, Series 2000-A, upon conversion of his shares of
No Par Preferred Stock, Series 2000-A into shares of Common
Stock, shall have the right to receive that number of shares of
Common Stock which, after giving effect to the following
adjustment, such holder would receive if such holder elected to
convert his shares of No Par Preferred Stock, Series 2000-A into
Common Stock. The Conversion Price shall be adjusted to the
number determined by multiplying the current Conversion Price by
a fraction, (A) the numerator of which shall be the sum of (i)
the number of shares of Common Stock outstanding on the record
date plus (ii) the quotient of (x) the number of additional
shares of Common Stock covered by such warrants, options or
rights, multiplied by the sales price per share of additional
shares covered by such warrants, options or other rights, divided
by (y) the Current Market Price per share of Common Stock on the
record date, and (B) the denominator of which shall be the sum of
(i) the number of shares of Common Stock outstanding on the
record date and (ii) the number of additional shares of Common
Stock covered by such warrants, options or other rights. For
purposes of this Section 8(e)(iii), the foregoing adjustment
shall be made on the basis that (i) the maximum number of
additional shares of Common Stock issuable pursuant to all such
warrants, options or other rights or necessary to effect the
conversion or exchange of all such Convertible Securities shall
be deemed to have been issued and (ii) the aggregate
consideration for such maximum number of additional shares shall
be deemed to be the minimum consideration received and receivable
by the Corporation for the issuance of such additional shares
(plus the consideration, if any, received for such warrants,
options or other rights) pursuant to such warrants, options or
other rights or pursuant to the terms of such Convertible
Securities.
(B) The adjustment shall be made successively whenever any
such warrants, options or other rights are issued and shall
become effective immediately after the record date for the
determination of shareholders entitled to receive the warrants,
options or other rights.
(C) This Section 8(e)(iii) does not apply to (i) the
conversion of the shares of No Par Preferred Stock, Series 2000-A
and (ii) the issuance of options or other rights to purchase
shares of Common Stock referenced in Section 8(e)(ii)(C)(iii).
(iv) Convertible Securities Issue.
(A) If the Corporation issues Convertible Securities (other
than securities issued in transactions described in Section
8(e)(iii)) and the consideration per share for which additional
shares of Common Stock may at any time thereafter be issuable
pursuant to the terms of such Convertible Securities is less than
the Current Market Price on the date of issuance of such
securities, the Conversion Price shall be adjusted as provided
below, such that a holder of shares of No Par Preferred Stock,
Series 2000-A, upon conversion of his shares of No Par Preferred
Stock, Series 2000-A into shares of Common Stock, shall have the
right to receive that number of shares of Common Stock which,
after giving effect to the following formula, such holder would
receive if such holder elected to convert his shares of No Par
Preferred Stock, Series 2000-A into Common Stock. The Conversion
Price shall be adjusted to the number determined by multiplying
the current Conversion Price by a fraction, (A) the numerator of
which shall be the sum of (i) the number of shares of Common
Stock outstanding immediately prior to the issuance of such
securities and (ii) the quotient of (x) the aggregate
consideration received for the issuance of such securities,
divided by (y) the Current Market Price per share on the date of
issuance of such securities and (B) the denominator of which
shall be the sum of (i) the number of shares of Common Stock
outstanding immediately prior to the issuance of such securities
and (ii) the maximum number of shares deliverable upon conversion
or in exchange for such securities at the initial conversion or
exchange rate. The adjustment shall be made on the basis that (i)
the maximum number of additional shares of Common Stock necessary
to effect the conversion or exchange of all such Convertible
Securities shall be deemed to have been issued and (ii) the
aggregate consideration for such maximum number of additional
shares of Common Stock shall be deemed to be the minimum
consideration received and receivable by the Corporation for the
issuance of such additional shares pursuant to the terms of such
Convertible Securities. No adjustment of the Conversion Price
shall be made under this Section 8(e)(iv) upon the issuance of
any Convertible Securities which are issued pursuant to the
exercise of any warrants or other subscription or purchase rights
therefor, if such adjustment shall previously have been made upon
the issuance of such warrants or other rights pursuant to Section
8(e)(iii).
(B) The adjustment shall be made successively whenever any
such issuance is made, and shall become effective immediately
after such issuance.
(C) This Section 8(e)(iv) does not apply to the conversion
of the shares of No Par Preferred Stock, Series 2000-A.
(v) Conversion Price Date. For purposes of Sections 8(e)(iii) and
8(e)(iv), the date as of which the Conversion Price shall be computed
shall be the earliest of (i) the date on which the Corporation shall
take a record of the holders of its Common Stock for the purpose of
entitling them to receive any warrants or other rights referred to in
Section 8(e)(iii) or to receive any Convertible Securities, (ii) the
date on which the Corporation shall enter into a firm contract for the
issuance of such warrants or other rights or Convertible Securities or
(iii) the date of the actual issuance of such warrants or other rights
or Convertible Securities.
(vi) No Compound Adjustment. No adjustment of the Conversion Price
shall be made under Section 8(e)(ii) upon the issuance of any
additional shares of Common Stock which are issued pursuant to the
exercise of any warrants or other subscription or purchase rights or
pursuant to the exercise of any conversion or exchange rights in any
Convertible Securities, if such adjustment shall previously have been
made upon the issuance of such warrants or other rights or upon the
issuance of such Convertible Securities (or upon the issuance of any
warrants or other rights therefor), pursuant to Sections 8(e)(iii) and
8(e)(iv).
(vii) Readjustment. If any warrants or other rights (or any portions
thereof) which shall have given rise to an adjustment pursuant to
Section 8(e)(iii) or conversion rights pursuant to Convertible
Securities which shall have given rise to an adjustment pursuant to
Section 8(e)(iv) shall have expired or terminated without the exercise
thereof and/or if by reason of the terms of such warrants or other
rights or Convertible Securities there shall have been an increase or
increases, with the passage of time or otherwise, in the price payable
upon the exercise or conversion thereof, then the Conversion Price
hereunder shall be readjusted (but to no greater extent than
originally adjusted), taking into account all transactions described
in Sections 8(e)(i) through 8(e)(iv) hereof that have occurred in the
interim, on the basis of (i) eliminating from the computation any
additional shares of Common Stock corresponding to such warrants or
other rights or conversion rights as shall have expired or terminated,
(ii) treating the additional shares of Common Stock, if any, actually
issued or issuable pursuant to the previous exercise of such warrants
or other rights or of conversion rights pursuant to any Convertible
Securities as having been issued for the consideration actually
received and receivable therefor and (iii) treating any of such
warrants or other rights or conversion rights pursuant to any
Convertible Securities which remain outstanding as being subject to
exercise or conversion on the basis of such exercise or Conversion
Price as shall be in effect at the time; provided, however, that any
consideration which was actually received by the Corporation in
connection with the issuance or sale of such warrants or other rights
shall form part of the readjustment computation even though such
warrants or other rights shall have expired or terminated without the
exercise thereof.
(viii) Consideration Received. To the extent that any additional
shares of Common Stock, any warrants, options or other rights to
subscribe for or purchase any additional shares of Common Stock, or
any Convertible Securities shall be issued for cash consideration, the
consideration received by the Corporation therefor shall be deemed to
be the amount of the cash received by the Corporation therefor, or, if
such additional shares, warrants, options or other rights or
Convertible Securities are sold to underwriters or dealers for public
offering without a subscription offering, the initial public offering
price, in any such case excluding any amounts paid or receivable for
accrued interest or accrued dividends and without deduction of any
compensation, discounts or expenses paid or incurred by the
Corporation for and in the underwriting of, or otherwise in connection
with, the issuance thereof. If and to the extent that such issuance
shall be for a consideration other than cash, then, except as herein
otherwise expressly provided, the amount of such consideration shall
be deemed to be the fair value of such consideration at the time of
such issuance as determined by the Board of Directors of the
Corporation. If additional shares of Common Stock shall be issued as
part of a unit with warrants or other rights, then the amount of
consideration for the warrant or other right shall be deemed to be the
amount determined at the time of issuance by the Board of Directors of
the Corporation. If the Board of Directors of the Corporation shall
not make any such determination, the consideration for the warrant,
option or other right shall be deemed to be zero.
(ix) Other Conversions. If a state of facts shall occur which, without
being specifically controlled by the provisions of this Section 8,
would not fairly protect the conversion rights of the holders of
shares of No Par Preferred Stock, Series 2000-A in accordance with the
essential intent and principles of such provisions, then the Board of
Directors of the Corporation shall make an adjustment in the
application of such provisions, in accordance with such essential
intent and principles, so to protect such conversion rights.
(x) De Minimis Adjustment. Anything herein to the contrary
notwithstanding, no adjustment in the Conversion Price shall be
required unless such adjustment, either by itself or with other
adjustments not previously made, would require a change of at least
one percent (1%) in the Conversion Price; provided, however, that any
adjustment which by reason of this Section 8(e)(x) is not required to
be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 8 shall be
made to the nearest one-tenth of a cent ($.001) (rounded to the
nearest cent ($.01) with respect to any monetary amount to be actually
paid) or to the nearest one hundredth (0.01) of a share, as the case
may be.
(xi) Current Market Price. For the purpose of any computation
hereunder, the "Current Market Price" on any date will be the average
of the last reported sale prices per share (the "Quoted Price") of the
Common Stock on each of the fifteen consecutive Trading Days (as
defined below) preceding the date of the computation. The Quoted Price
of the Common Stock on each day will be (A) the last reported sales
price of the Common Stock on the principal stock exchange on which the
Common Stock is listed, or (B) if the Common Stock is not listed on a
stock exchange, the last reported sales price of the Common Stock on
the principal automated securities price quotation system on which
sale prices of the Common Stock are reported, or (C) if the Common
Stock is not listed on a stock exchange and sale prices of the Common
Stock are not reported on an automated quotation system, the mean of
the high bid and low asked price quotations for the Common Stock as
reported by National Quotation Bureau Incorporated if at least two
securities dealers have inserted both bid and asked quotations for the
Common Stock on a day will be the Quoted Price of the Common Stock on
that day as determined by a member firm of the New York Stock
Exchange, Inc. selected by the Board of Directors. If no two
securities dealers have inserted such bid and ask quotations, or such
Quoted Prices otherwise are not available, the Current Market Price
means the fair market value of the Common Stock as of the date prior
to the date on which the Current Market Price is determined, which
such fair market value shall be determined by the Board of Directors
of the Corporation. As used with regard to the No Par Preferred Stock,
Series 2000-A, the term "Trading Day" means (x) if the Common Stock is
listed on at least one stock exchange, a day on which there is trading
on the principal stock exchange on which the Common Stock is listed,
(y) if the Common Stock is not listed on a stock exchange, but sale
prices of the Common Stock are reported on an automated quotation
system, a day on which trading is reported on the principal automated
quotation system on which sales of the Common Stock are reported, or
(z) if the Common Stock is not listed on a stock exchange and sale
prices of the Common Stock are not reported on an automated quotation
system, a day on which quotations are reported by National Quotation
Bureau Incorporated.
(f) No fractional shares of Common Stock shall be issued upon the
conversion of No Par Preferred Stock, Series 2000-A. If any fractional interest
in a share of Common Stock would, except for the provisions of this subparagraph
(f), be deliverable upon the conversion of any No Par Preferred Stock, Series
2000-A, the Corporation shall, in lieu of delivering the fractional share
therefor, adjust such fractional interest by payment to the holder of such
converted No Par Preferred Stock, Series 2000-A of an amount in cash equal
(computed to the nearest cent) to the Current Market Price of such fractional
interest on the Conversion Date.
(g) Whenever the Conversion Price is adjusted, as herein provided, the
Corporation shall promptly mail a notice of the adjustment to holders of No Par
Preferred Stock, Series 2000-A. Failure to give such notice, or any defect
therein, shall not affect the legality or validity of the action resulting in
the adjustment to the Conversion Price. The Corporation shall forthwith maintain
at its principal executive office and file with the transfer agent, if any, for
No Par Preferred Stock, Series 2000-A, a statement, signed by the Chairman of
the Board, or the President, or a Vice President of the Corporation and by its
chief financial officer or an Assistant Treasurer, showing in reasonable detail
the facts requiring such adjustment and the Conversion Price after such
adjustment. Such transfer agent shall be under no duty or responsibility with
respect to any such statement except to exhibit the same from time to time to
any holder of No Par Preferred Stock, Series 2000-A desiring an inspection
thereof.
(h) If there shall occur any capital reorganization or any reclassification
of the capital stock of the Corporation, consolidation or merger of the
Corporation with or into another entity, or the conveyance of all or
substantially all of the assets of the Corporation to another person or entity,
each share of No Par Preferred Stock, Series 2000-A shall thereafter be
convertible into the number of shares or other securities or property to which a
holder of the number of shares of Common Stock of the Corporation deliverable
upon conversion of such No Par Preferred Stock, Series 2000-A would have been
entitled upon such reorganization, reclassification, consolidation, merger or
conveyance; and, in any such case, appropriate adjustment (as determined in good
faith in the sole discretion of the Board of Directors of the Corporation) shall
be made in the application of the provisions herein set forth with respect to
the rights and interests thereafter of the holders of the No Par Preferred
Stock, Series 2000-A, to the end that the provisions set forth herein (including
provisions with respect to changes in and other adjustments of the Conversion
Price) shall be applicable, as nearly as reasonably may be, in relation to any
shares or other property thereafter deliverable upon the conversion of the No
Par Preferred Stock, Series 2000-A.
(i) The Corporation shall at all times reserve and keep available, out of
its authorized but unissued shares of Common Stock or treasury shares thereof,
solely for the purpose of issuance upon the conversion of No Par Preferred
Stock, Series 2000-A, the full number of shares of Common Stock deliverable upon
the conversion of all No Par Preferred Stock, Series 2000-A from time to time
outstanding. The Corporation shall from time to time, in accordance with the
laws of the State of South Dakota, take all action within its power required to
increase the authorized amount of its Common Stock if at any time the authorized
number of shares of Common Stock remaining unissued shall not be sufficient to
permit the conversion of all of the No Par Preferred Stock, Series 2000-A at the
time outstanding.
(j) The Corporation shall pay any documentary, stamp or similar issue or
transfer tax due on the issue of shares of Common Stock upon conversion of the
No Par Preferred Stock, Series 2000-A into Common Stock. The Corporation shall
not, however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of any security in a name other than
that in which the No Par Preferred Stock, Series 2000-A so converted was
registered, and no such issue or delivery shall be made unless and until the
person who requested such issue has paid to the Corporation the amount of any
such tax, or has established to the satisfaction of the Corporation that such
tax has been paid.
9. Exclusion of Other Rights.
Except as otherwise required by law, shares of No Par Preferred Stock,
Series 2000-A shall not have any preferences or relative, participating,
optional or other special rights, other than those specifically set forth in
this resolution and in the Statement of Designations filed pursuant hereto (as
such Statement may be amended from time to time) and in the Articles of
Incorporation.
10. Reissuance of No Par Preferred Stock, Series 2000-A.
Shares of No Par Preferred Stock, Series 2000-A that have been issued and
reacquired in any manner, including shares purchased, redeemed, converted or
exchanged, shall (upon compliance with any applicable provisions of South Dakota
Codified Laws) have the status of authorized and unissued shares of No Par
Preferred Stock undesignated as to series and may be redesignated and reissued
as part of any series of No Par Preferred Stock, except No Par Preferred Stock,
Series 2000-A.
11. No Retirement Fund; Waivers. The Corporation shall not be required to
set aside any funds as a retirement fund for purposes of Article Second,
Subsection (D) of the Articles of Incorporation. To the extent applicable, any
rights that the holders of the No Par Preferred Stock, Series 2000-A may have
under Article Second, Subsection (G)(4) of the Articles of Incorporation with
respect to a dividend declared under a stockholder rights plan or in connection
with the implementation of a stockholder rights plan are waived. To the extent
applicable, the holders of the No Par Preferred Stock, Series 2000-A waive any
rights they may have under Article Second, Subsection (G)(3) of the Articles of
Incorporation with respect to the creation, through merger or other
reorganization, of a holding company ("Holdco") for the Company, provided that
in connection therewith the holders shall receive, in exchange for their shares
of No Par Preferred Stock, Series 2000-A shares of preferred stock of Holdco
having identical designations, preferences and relative rights and limitations
as set forth herein.
12. Headings of Subdivisions.
The headings of the various subdivisions hereof are for convenience of
reference only and shall not affect the interpretation of any of the provisions
hereof.
13. Severability of Provisions.
If any right, preference or limitation of the No Par Preferred Stock,
Series 2000-A set forth in this resolution and in the Statement of Designations
for the No Par Preferred Stock, Series 2000-A (as such Statement may be amended
from time to time) is invalid, unlawful or incapable of being enforced by reason
of any rule or law or public policy, all other rights, preferences and
limitations set forth in such Statement of Designations (as so amended) which
can be given effect without the invalid, unlawful or unenforceable right,
preference or limitation shall, nevertheless, remain in full force and effect,
and no right, preference or limitation herein set forth shall be deemed
dependent upon any other such right, preference or limitation unless so
expressed herein.
14. Notice.
All notices and other communications required or permitted to be given to
the Corporation hereunder shall be made by hand delivery or registered or
certified mail, return receipt requested, to the Corporation at its principal
executive offices (currently located on the date of the adoption of these
resolutions at Black Hills Corporation, 625 Ninth Street, P.O. Box 1400, Rapid
City, South Dakota 57709), Attention: Secretary. Minor imperfections in any such
notice shall not affect the validity thereof.
IN WITNESS WHEREOF, Black Hills Corporation has caused this statement to be
signed by _______________________, its __________________, this ____ day of
___________, 2000.
BLACK HILLS CORPORATION,
a South Dakota corporation
By:
Name:
Title:
STATE OF SOUTH DAKOTA
COUNTY OF PENNINGTON
On the ____ day of _________, 2000, before me, the undersigned
officer, personally appeared __________________________-_, who acknowledged
h__self to be the _______________________ of ____________________________, a
corporation, and that _he, as such __________________, being authorized so to
do, executed the foregoing instrument for the purposes therein contained, by
signing the name of the corporation by h__self as ________________________.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
--------------------------------
Notary Public
(SEAL)
Exhibit 5
May 9, 2000
[e-mail: jknooney@mtnlaw.com]
Board of Directors of
Black Hills Corporation
Re: Opinion of Counsel--Form S-4
This letter is sent to you on behalf of the firm as counsel to Black
Hills Corporation, a South Dakota corporation (the "Company"), in connection
with the proposed formation of a holding company structure through Black Hills
Holding Company, a South Dakota corporation (the "Holding Company"), through a
statutory share exchange (the "Share Exchange") between Company and Holding
Company pursuant to an Agreement and Plan of Exchange (the "Exchange
Agreement").
This opinion is being rendered in connection with the filing by Company
of a Registration Statement on Form S-4 (the "Registration Statement") relating
to the registration under the Securities Act of 1933, as amended (the "Act") of
21,800,000 shares of common stock, par value $1 per share, of the Company (the
"Company Common Stock"), to be issued in the Share Exchange. Related to this
opinion, we have examined copies of (i) the Exchange Agreement; (ii) the
Registration Statement; (iii) the Articles of Incorporation and Bylaws of the
Company, as in effect on the date hereof; (iv) resolutions adopted by the Board
of Directors of the Company related to the Share Exchange and the issuance and
delivery of the Company's Common Stock and in connection therewith; and (v) such
other documents, certificates, and other records as we have deemed necessary or
appropriate.
Based upon the foregoing, and subject to the qualification herein
expressed, we are of the opinion that:
(1) The Company is a corporation, duly organized, validly existing, and in good
standing under the laws of the State of South Dakota; and
(2) The Company Common Stock will be validly issued, fully paid, and
nonassessable when (i) the Registration Statement shall have become effective
under the Act; (ii) the Company's Board of Directors shall have taken the
appropriate action to authorize the issuance of the Common Stock; (iii) the
Company's shareholders shall have approved the Share Exchange; (iv) the Company
shall have received all necessary regulatory approvals required to consummate
the Share Exchange; and (v) the Share Exchange shall have been consummated in
accordance with the terms of the Exchange Agreement and consistent with the laws
of the State of South Dakota.
We express no opinions as to matters of law except as it concerns
matters governed by the laws of the State of South Dakota; and in particular,
but not limited thereto, we do not express any opinions as to the federal income
tax consequences to holders of the Company's Common Stock as it concerns the
Share Exchange.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and to the reference to our firm in said Registration
Statement and the Proxy Statement and Prospectus constituting a part thereof.
Sincerely yours,
/s/ Morrill Thomas Nooney & Braun
JKN:bjr
Exhibit 8
May 9, 2000
Black Hills Corporation
625 Ninth Street
Rapid City, SD 57709
Ladies and Gentlemen:
Black Hills Corporation ("Black Hills") has asked for our opinion regarding
certain federal income tax consequences of a proposed share exchange (the "Share
Exchange") in which Black Hills Holding Corporation (the "Holding Company") will
acquire all of the common stock of Black Hills (the "Black Hills Stock"). As
explained in more detail below, we believe that the proposed Share Exchange will
qualify as a tax-free transaction under the Internal Revenue Code of 1986, as
amended (the "Code"), so that the participants in the exchange will not
recognize any income, gain or loss as a result of the exchange. A more specific
statement of our conclusions follows the summary of the relevant facts and the
analysis that supports our conclusions, set forth immediately below,
respectively. Our conclusions are based on our review of (i) drafts of relevant
documents, including the proxy statement for Black Hills's annual meeting of
shareholders, and the Plan of Share Exchange between Black Hills and the Holding
Company (the "Agreement"), (ii) the representations provided in the letter to
us, of even date herewith, from Black Hills and the Holding Company, and (iii)
other information that Black Hills has provided to us.
FACTS
Incorporated in South Dakota in 1941, Black Hills is an energy and
communications company primarily consisting of four principal businesses:
electricity production, energy extraction and production, energy marketing, and
communications. Black Hills conducts its public utility electric operations
under the assumed name of Black Hills Power and Light Company, operates its
energy extraction and production businesses through its subsidiaries Wyodak
Resources (related to coal), and Black Hills Exploration and Production
(formerly Western Production Company) (related to oil and natural gas), and its
energy marketing and communication operations through Black Hills Capital Group
and its affiliates.
Black Hills's utility operations include the generation, purchase, transmission,
distribution and sale of electric power and energy to approximately 57,679
customers in 11 counties in western South Dakota, northeastern Wyoming and
southeastern Montana, an area with a population estimated at 165,000. The
largest community served is Rapid City, South Dakota, a major retail, wholesale
and health care center, with a population, including environs, estimated at
75,000.
The Black Hills Stock is the only class of stock outstanding. The Black Hills
Stock is common stock that is widely-held and traded on the New York Stock
Exchange.
The Holding Company was incorporated in South Dakota on April 28, 2000 for the
purpose of carrying out the Share Exchange. The Holding Company is a direct,
wholly owned subsidiary of Black Hills. On the Effective Date (as defined in the
Agreement), the Holding Company will become the parent of Black Hills.
Currently, the Holding Company has few assets and has not engaged in any
business operations. All the business operations conducted by Black Hills and
its subsidiaries immediately before the Effective Date will continue to be
conducted by Black Hills and its subsidiaries immediately after the Effective
Date. The only difference is that Black Hills will be a subsidiary of the
Holding Company. The consolidated assets and liabilities of Black Hills and its
subsidiaries immediately before the effective date will be the same as the
consolidated assets and liabilities of the Holding Company and its subsidiaries
immediately after the Effective Date.
The Holding Company will not be subject to regulation by the Federal Energy
Regulatory Commission, the South Dakota Public Utility Commission or the Wyoming
Public Service Commission, except to the extent that the rules and orders of
those agencies impose restrictions on the Holding Company's relationship with
Black Hills or Black Hills's relationship with other subsidiaries of the Holding
Company. The Holding Company will be a "public utility holding company" under
the Public Utility Holding Company Act of 1935. However, the Holding Company
expects to obtain an exemption from most of the provisions of that law.
To carry out the purposes described above, Black Hills management has proposed
that the Holding Company be established as a holding company that will own all
of the Black Hills Stock. Pursuant to the terms of the Agreement, the
establishment of the Holding Company as a holding company will be accomplished
by means of a statutory "Share Exchange" under the South Dakota Business
Corporation Act. As a result of the Share Exchange, the holders of Black Hills
Stock (the "Shareholders") will be deemed to have exchanged their Black Hills
Stock for the Holding Company common stock (the "Holding Common Stock"), as
provided in certain Articles of Share Exchange (the "Articles") that will be
filed with the South Dakota Secretary of State. The deemed exchange will occur
by operation of law, without any further act by the Shareholders. The Articles
will provide for the cancellation of the Holding Common stock owned by Black
Hills immediately prior to the Share Exchange.
Completion of the Share Exchange is subject to several conditions. The Share
Exchange must be approved by a vote of a majority of those Shareholders entitled
to vote on the matter. In addition, the Holding Common Stock that will be issued
in the deemed exchange must be covered by a Registration Statement under the
Securities Act of 1933 and must be listed on the New York Stock Exchange.
ANALYSIS
In general, under Section 351(a) of the Code, transfers of property to a
corporation in exchange for its stock qualify for tax-free treatment if the
transferors, in the aggregate, control the corporation after the transfer. For
this purpose, "control" is defined in Section 368(c) of the Code to mean the
ownership of 80 percent of the corporation's voting stock and 80 percent of each
class of the corporation's nonvoting stock.
The proposed Share Exchange will meet the requirements for tax-free treatment
under Section 351(a) of the Code. The holders of Black Hills Stock will be
deemed by operation of law to have transferred property, in the form of their
Black Hills Stock, to the Holding Company. They will own all of the stock of the
Holding Company immediately after the exchange. The Holding Common Stock
currently owned by Black Hills will be canceled as part of the transaction.
Consequently, the former holders of Black Hills Stock will "control" Holding
Company, within the meaning of Section 368(c) of the Code, immediately after the
Share Exchange.
When an owner of property transfers that property to a corporation in a tax-free
exchange to which Section 351(a) of the Code applies, the transferor's basis in
the stock received is determined by reference to the basis of the transferred
property. This "substituted basis" rule ensures that the taxation of any
unrealized appreciation in the transferred property is merely deferred. Under
Section 358(a)(1) of the Code, the transferor's basis in the transferred
property serves as the starting point for the basis of the stock received.
Sections 358(a)(1)(A) and (B) of the Code provide for various adjustments to
this basis when the transferor receives cash or property other than stock of the
transferee corporation, or when the transferor recognizes a loss on the
exchange. None of these adjustments will apply in the present case. Thus, the
basis of shares of the Holding Common Stock received by a Shareholder in the
Share Exchange will equal the Shareholder's tax basis in the shares of Black
Hills Stock exchanged therefor.
Section 1223(1) of the Code provides that the holding period of property
received in a "substituted basis" transaction includes the holding period of the
property surrendered in the exchange if the taxpayer held that property as a
capital asset. Because the deemed exchange of Black Hills Stock for the Holding
Common Stock will be a substituted basis transaction, if a holder of Black Hills
Stock holds that stock as a capital asset, the holding period for that stock
will be tacked on to the holding period of the Holding Common Stock received in
the Share Exchange.
Under Section 1032(a) of the Code, a corporation recognizes no gain or loss on
its receipt of cash or other property in exchange for stock of the corporation.
Section 1032(a) of the Code, by its terms, will apply to the Holding Company's
acquisition of property, in the form of Black Hills Stock, in exchange for the
Holding Company's own stock. Therefore, the Holding Company will recognize no
gain or loss as a result of the Share Exchange.
A corporation generally recognizes no gain or loss on the transfer of its shares
between shareholders because the transfer does not involve property owned by the
corporation. In certain cases, a purchaser of a controlling interest in the
stock of a corporation may elect to have the transaction treated as a purchase
of the corporation's assets. In the present case, the Holding Company will not
acquire the Black Hills Stock by purchase, and in any event would not make an
election to treat the transaction as a transfer of Black Hills's assets even if
such an election were possible. Therefore, the Share Exchange will not involve
an actual or constructive transfer of any assets owned by Black Hills, and
accordingly Black Hills will recognize no gain or loss as a result of the Share
Exchange.
OPINION
For the reasons explained above, assuming the accuracy of the facts stated in
this letter and the representations made in your letter to us of even date
herewith, in our opinion:
(1) For federal income tax purposes, no income, gain or loss will
be recognized by a Black Hills common shareholder upon the receipt by
such shareholder of Holding Company common stock solely in exchange
for such shareholder's Black Hills common stock.
(2) The aggregate tax basis of shares of the Holding Common Stock
received by a former holder of Black Hills common stock in the Share
Exchange will equal the shareholder's tax basis in the shares of Black
Hills Stock exchanged. The holding period for the Holding Common Stock
received will include the holding period for the Black Hills Stock
exchanged if and to the extent that such shares were held as capital
assets at the time the Share Exchange occurred.
(3) For federal income tax purposes, no gain or loss will be
recognized by the Holding Company or Black Hills on account of either
the Share Exchange or the issuance of shares of the Holding Common
Stock to the former Black Hills shareholders pursuant to the
Agreement.
(4) For federal income tax purposes, the tax basis of the Black
Hills Stock received by the Holding Company will be the same as Black
Hills's net asset basis immediately before the Share Exchange, subject
to adjustments under Treasury Regulations relating to consolidated
groups; and the Holding Company's holding period in the Black Hills
Stock received in the Share Exchange will include the period during
which that stock was held by the Shareholders.
The opinions stated above are based on the Code, Treasury Regulations
promulgated thereunder, court decisions, and published rulings of the Internal
Revenue Service currently in effect. Each of these authorities is subject to
change and any such changes could affect the validity of the above opinions. To
the extent that the opinions address the federal income tax consequences of the
Share Exchange to holders of Black Hills Stock, the opinions assume that the
shareholders are not subject to special treatment because of unique
circumstances, as could be the case, for example, for foreign corporations or
individuals who are not citizens or residents of the United States.
We hereby consent to (i) the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the registration statement regarding the
issuance of the Holding Common Stock and (ii) the reference to our firm under
the heading "Certain Income Tax Consequences" in the Proxy Statement/Prospectus
that constitutes a part of the registration statement. In giving such consent,
we do not admit that we are in the category of persons whose consent is required
under Section 7 of the Securities Act of 1933.
Very truly yours,
MORGAN, LEWIS & BOCKIUS LLP
Exhibit 21
BLACK HILLS CORPORATION
SUBSIDIARY OF REGISTRANT
Wyodak Resources Development Corp.
a Delaware corporation
Black Hills Energy Capital, Inc.
a Delaware corporation
SUBSIDIARIES OF WYODAK RESOURCES DEVELOPMENT CORP.
DAKSOFT, Inc.
a South Dakota corporation
Landrica Development Company
a South Dakota corporation
Black Hills Exploration and Production, Inc.
a Wyoming corporation
Black Hills Generation, Inc.
a Wyoming corporation
Black Hills Capital Group, Inc.
a South Dakota corporation
SUBSIDIARY OF BLACK HILLS ENERGY CAPITAL, INC.
Black Hills Independent Power Fund, Inc.
a Texas corporation
SUBSIDIARIES OF BLACK HILLS CAPITAL GROUP, INC.
Black Hills Fiber Systems, Inc.
a South Dakota corporation
Black Hills Coal Network, Inc.
a South Dakota corporation
Enserco Energy, Inc.
a South Dakota corporation
Black Hills Energy Resources, Inc.
a South Dakota corporation
SUBSIDIARY OF BLACK HILLS FIBER SYSTEMS, INC.
Black Hills FiberCom, LLC
a South Dakota corporation
SUBSIDIARY OF ENSERCO ENERGY, INC.
VariFuel, LLC
a South Dakota corporation
SUBSIDIARY OF BLACK HILLS ENERGY RESOURCES, INC.
Black Hills Energy Pipeline, LLC
a Delaware corporation
Black Hills Millenium Pipeline, Inc.
a South Dakota corporation
Black Hills Energy Terminal, LLC
a South Dakota corporation
Black Hills Millenium Terminal, Inc.
a South Dakota corporation
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of Black Hills Corporation on Form S-4
of our report dated January 26, 2000 included in Black Hills Corporation's Form
10-K for the year ended December 31, 1999 and to all references to our Firm
included in this registration statement.
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota,
May 8, 2000
UT YEAR DEC-31-1999 DEC-31-1999 PER-BOOK 347,184,000 117,005,000 181,199,000 29,418,000 0 674,806,000 21,739,000 40,658,000 162,239,000 216,606,000 0 0 160,700,000 97,579,000 0 0 1,330,000 0 0 0 190,561,000 674,806,000 791,875,000 15,789,000 729,984,000 745,773,000 46,102,000 6,425,000 52,527,000 15,460,000 37,067,000 0 37,067,000 22,602,000 13,189,000 75,678,000 1.73 1.73