Registration of Securities Pursuant to Dividend or Interest Reinvestment Plan — Form S-3
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-3D The Washington Water Power S-3D 23 142K
2: EX-5.A Opinion of Paine, Hamblen, Coffin, Brooke & Miller 4 15K
3: EX-5.B Opinion of Reid & Priest 4 15K
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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The Washington Water Power Company
(Exact name of Registrant as specified in its charter)
WASHINGTON 91-0462470
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1411 East Mission Avenue
Spokane, Washington 99202-2600
(509) 489-0500
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
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J.E. ELIASSEN, Vice President-Finance J. ANTHONY TERRELL
& Chief Financial Officer Reid & Priest
The Washington Water Power Company 40 West 57th Street
1411 East Mission Avenue New York, New York 10019
Spokane, Washington 99202-2600 (212) 603-2000
(509) 489-0500
(Names, addresses and telephone numbers of agents for service)
Approximate date of commencement of proposed sale to the public: May 16, 1994.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. / X /
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. / /
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Amount maximum maximum
Title of each class of securities to be offering price aggregate Amount of
to be registered registered per unit(1) offering price(1) registration fee
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Common Stock (no par value)......... 4,000,000 shares $15.75 $63,000,000 $21,724
Preferred Stock Purchase Rights..... 4,000,000 rights(2) (3)
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(1) Estimated solely for the purpose of calculating the registration
fee. The estimated offering price for the Common Stock is based on a sale
price of May 11, 1994.
(2) The Preferred Share Purchase rights ("Rights") are appurtenant to and will
trade with the Common Stock. The value attributable to the Rights, if any,
is reflected in the market price of the Common Stock.
(3) Since no separate consideration is paid for the Rights, the registration
fee for such securities is included in the fee for the Common Stock.
Pursuant to Rule 429, the prospectus filed as part of this Registration
Statement will be used as a combined prospectus in connection with this
Registration Statement and Registration Statement No. 33-40333.
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PROSPECTUS
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THE WASHINGTON WATER POWER COMPANY
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
Shares of Common Stock
(no par value)
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Revised Effective May 16, 1994
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The Dividend Reinvestment and Stock Purchase Plan (the "Plan") of The
Washington Water Power Company (the "Company") provides holders of shares of
its Common Stock with a simple and convenient method of purchasing additional
shares of Common Stock. Any Registered Shareholder of Common Stock is eligible
to participate in the Plan. The Plan provides that purchases of Common Stock
may be made monthly. Purchases will be made either using original issue stock
or on the open market, at the election of the Company. The price of shares
purchased on the open market will include a brokerage commission.
Participants in the Plan may:
- have cash dividends on all their shares of Common Stock automatically
reinvested or
- have their cash dividends reinvested and, in addition, may also make up
to $100,000 per calendar year in Optional Cash Payments or
- make only Optional Cash Payments up to $100,000 per calendar year and
receive cash dividends on their Certificate Shares held by them in
certificate form or
- have certificates for shares of Common Stock held for Safekeeping and
have cash dividends on shares so held reinvested.
Optional Cash Payments may be submitted at any time. Optional Cash Payments
received by the Company from participants at least one day prior to an
Investment Date will be invested during the Investment Period in which such
Investment Date occurs. The Investment Date will normally be the 15th of
each month.
Dividends on shares credited to a participant's reinvestment account must be
automatically reinvested in shares of Common Stock.
Optional Cash Payments, notices of withdrawals or termination and all other
written communications to the Company or the Agent with respect to the Plan
should be sent to:
Corporate Secretary
The Washington Water Power Company
Attn: Shareholder Services Department
P.O. Box 3647
Spokane, Washington 99220-3647
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PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------------
The date of this Prospectus is May 16, 1994.
TABLE OF CONTENTS
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Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Incorporation of Certain Documents by Reference . . . . . . . . . . . . . . . . . . . . . 3
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Question and Answer Summary of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . 5
The Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Advantages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Investment Date and Investment Period . . . . . . . . . . . . . . . . . . . . . . . . . 8
Optional Cash Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Purchases Under the Plan - General . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Source of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Purchase Price Under the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Reports to Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Safekeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Sale of Reinvestment Shares - General . . . . . . . . . . . . . . . . . . . . . . . . . 10
Certificates for Reinvestment Shares of Common Stock - Share Withdrawal . . . . . . . . 10
Cash for Reinvestment Shares of Common Stock - Cash Withdrawal . . . . . . . . . . . . 11
Termination of Account - General . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Termination of Account - Stock (Stock Termination) . . . . . . . . . . . . . . . . . . 11
Termination of Account - Cash (Cash Termination) . . . . . . . . . . . . . . . . . . . 11
Termination of Account - Stock and Cash (Combined Termination) . . . . . . . . . . . . 11
Disposition of All Shares Registered in Participant's Name . . . . . . . . . . . . . . 11
Rights Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Stock Dividend or Stock Split . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Voting of Reinvestment Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Federal Income Tax Consequences of Participation in the Plan . . . . . . . . . . . . . 12
Shareholders Subject to Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Responsibility of the Company and the Agent Under the Plan . . . . . . . . . . . . . . 13
Modification or Discontinuance of the Plan . . . . . . . . . . . . . . . . . . . . . . 13
Interpretation and Regulation of the Plan . . . . . . . . . . . . . . . . . . . . . . . 13
Description of Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Validity of New Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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AVAILABLE INFORMATION
The Washington Water Power Company (the "Company") is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Information, as of particular dates, concerning the
Company's directors and officers, their remuneration, the principal holders of
the Company's securities, and any material interest of such persons in
transactions with the Company is disclosed in proxy statements distributed to
shareholders of the Company and filed with the Commission. These reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Room 1024, Washington, DC; 7 World Trade Center, 13th Floor, New York,
NY; and 500 West Madison Street, 14th Floor, Chicago, IL; and can be inspected
at the office of the Commission at 915 Second Avenue, Seattle, WA; and copies
of such material can be obtained from the Public Reference Section of the
Commission, Washington, DC 20549 at prescribed rates. The Company's Common
Stock is listed on the New York and Pacific Stock Exchanges, and reports, proxy
statements and other information concerning the Company can be inspected at the
offices of such Exchanges.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates herein by reference, and as of any
time hereafter prior to the termination of the offering made by this Prospectus
the Company shall be deemed to have incorporated herein by reference, (1) the
Company's latest Annual Report on Form 10-K (the "Annual Report") filed
by the Company with the Commission pursuant to the Exchange Act, and (2) all
other reports and documents filed by the Company with the Commission pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
filing of the Latest Annual Report, and all of such documents shall be deemed
to be a part hereof from the respective dates of filing thereof. The documents
incorporated herein by reference are sometimes hereinafter called the
"Incorporated Documents". Any statement contained in an Incorporated Document
shall be deemed to be modified or superseded for all purposes to the extent
that a statement in this Prospectus or in any subsequently filed Incorporated
Document modifies or replaces such statement. The Incorporated Documents
incorporated herein by reference as of the date of this Prospectus are the
Annual Report on Form 10-K for the year ended December 31, 1993 and the
Quarterly Report on Form 10-Q for the quarter ended March 31, 1994.
The Company hereby undertakes to provide without charge to each
person, including each beneficial owner of Common Stock, to whom a copy of this
Prospectus has been delivered, on the written or oral request of any such
person, a copy of any or all of the Incorporated Documents, other than exhibits
thereto (unless such exhibits are specifically incorporated by reference into
such Incorporated Documents). Requests for such copies should be directed to
Ronald R. Peterson, Treasurer, by mail at The Washington Water Power Company,
P.O. Box 3727, Spokane, Washington 99220-3727, or by telephone at (509)
489-0500.
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THE COMPANY
The Company is an investor-owned company primarily engaged as a
combination electric and natural gas utility serving a 26,000-square-mile area
known as the Inland Northwest in eastern Washington and northern Idaho with a
population estimated to be in excess of 750,000. Also, WP Natural Gas, an
operating division, provides natural gas service in northeast and southwest
Oregon and the South Lake Tahoe region in California with a population
estimated to be in excess of 450,000. The Company's utility operations include
the generation, purchase, transmission, distribution and sale of electric
energy on both a retail and wholesale basis plus the purchase, transportation,
distribution and sale of natural gas.
In addition to its utility operations, the Company owns Pentzer
Corporation, parent company to the majority of the Company's non-utility
businesses. Pentzer's portfolio of investments includes companies involved in
advertising display manufacturing, bindery services, electronic technology,
energy services, financial services, real estate development and
telecommunications. Pentzer's business strategy is to acquire controlling
interests in a broad range of middle market companies, to help these companies
grow through internal development and strategic acquisitions, and to sell the
portfolio investments either to the public or to strategic buyers when it
becomes most advantageous in meeting Pentzer's return on invested capital
objectives.
The Company was incorporated in 1889 under the laws of the State of
Washington and has its principal offices at 1411 East Mission Avenue, Spokane,
Washington 99202. Its telephone number is (509) 489-0500 or 1-800-727-9170.
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DEFINITIONS
When the following terms are used in the Plan, they will have the
meanings indicated.
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TERM MEANING
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Agent -- The Washington Water Power Company when acting in
its capacity as administrator of the Plan, or an
Agent duly appointed by The Washington Water Power
Company to act as administrator of the Plan.
Authorization Form -- Form to be used to enroll in the Plan directing
the Company as Agent to purchase additional shares
of Common Stock for the participant's account
through the following investment options:
Dividend Reinvestment-Reinvest dividends on all
shares of Common Stock held by a participant in
shares of Common Stock of the Company. Optional
Cash Payments may also be invested under this
option. Optional Cash Payments Only-Investment of
only Optional Cash Payments in additional shares of
Common Stock of the Company.
In each case, cash dividends on shares of Common
Stock credited to the participant's reinvestment
account must be automatically reinvested in
additional shares of Common Stock of the Company.
Broker -- A securities broker-dealer, selected by the
Company, registered under the Securities Exchange
Act of 1934, acting as an independent agent in the
purchase and sale of Common Stock under the Plan.
Certificate Shares -- Certificates for shares held by you or your broker
registered in your name.
Commission -- Securities and Exchange Commission.
Common Stock -- Common Stock of The Washington Water Power
Company.
Company -- The Washington Water Power Company. The Company,
in its capacity as Agent for the participants, is
referred to herein as the "Agent."
Composite Tape -- The record of composite quotations reported by The
Wall Street Journal.
Dividend Payment Date -- The date fixed by the Company's Board of Directors
on which declared Common Stock dividends are
payable. These dates are normally the 15th day
of March, June, September and December.
Ex-dividend Date -- Fourth business day prior to the Record Date.
Investment Date -- The 15th day of every month or, if no trading of
the Company's Common Stock occurs on such date, the
last preceding date on which trading occurred.
Investment Period -- The 30-day period (beginning five business days
prior to each Investment Date) during which
dividends and/or Optional Cash Payments are
invested in Common Stock of the Company.
Optional Cash Payments -- Cash payments, up to $100,000 per calendar year,
made to purchase additional shares of Common Stock
under the Plan.
Plan -- The Washington Water Power Company Dividend
Reinvestment and Stock Purchase Plan.
Record Date -- Closing date fixed by the Company's Board of
Directors to establish shareholders of record for
payment of dividends, voting privileges and other
matters. The Record Dates for the payment of
dividends are approximately the 20th day of February,
May, August and November.
Registered Shareholder -- Holder of Common Stock recorded as such on the
Company's books.
Reinvestment Shares -- Shares held in the shareholder's reinvestment
account. These may include any shares purchased
under the Plan and/or Certificate Shares previously
held by the shareholder which are now being held by
the Agent for Safekeeping in the shareholder's
reinvestment account.
Safekeeping -- An arrangement by which participants may deposit
their Common Stock shares held in certificate form
with the Company/Agent. The certificates presented
are cancelled and those shares are then credited to
the participant's reinvestment account and held in
the name of the Agent.
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QUESTION AND ANSWER SUMMARY OF THE PLAN
(THIS QUESTION AND ANSWER SUMMARY OF THE PLAN DOES NOT PURPORT TO BE COMPLETE.
FOR FURTHER INFORMATION, PLEASE REFER TO THE OTHER PORTIONS OF
THE PLAN SET FORTH HEREIN.)
Q: 1. How do I enroll in the Plan or change my method of participation in
the Plan?
A: By use of the Authorization Form submitted to shareholders with
the Prospectus or by advising the Company's Shareholder Services
Department in writing of your desire to do so.
Q: 2. What amount of Optional Cash Payments is allowed?
A: Any amount up to a maximum of $100,000 per calendar year. No
minimum amount is required.
Q: 3. How do I make Optional Cash Payments?
A: By submitting your check or money order, payable to "WWP - Dividend
Reinvestment" with your Authorization Form or with the top portion
of your reinvestment statement of account.
Q: 4. When can Optional Cash Payments be made?
A: Optional Cash Payments may be submitted at any time. Optional
Cash Payments received by the Company from participants at least
one day prior to an Investment Date will be invested during the
Investment Period in which such Investment Date occurs. See
"Purchases Under the Plan - General."
Q: 5. When are the Investment Dates?
A: Normally the 15th of each month, or the last preceding date on which
trading of the Company's Common Stock occurred if the 15th is a
Saturday, Sunday, national holiday, or if no trading occurs on the
15th.
Q: 6. At what price are shares purchased for my account?
A: See "Purchase Price Under the Plan."
Q: 7. How will Reinvestment Shares be held for my account?
A: Reinvestment Shares credited to your reinvestment account will be
issued to the Agent and held by the Agent until written notification
is received from you regarding your desire to receive a certificate
and/or cash for Reinvestment Shares held in your reinvestment
account. Dividends on Reinvestment Shares held by the Agent must be
automatically reinvested.
Q: 8. What options are available to me when terminating my account or when
making withdrawals from my account?
A: Options for terminating your account:
a. Closing your account and receiving a certificate for your
whole Reinvestment Shares and a check for any fractional
Reinvestment Share. See "Termination of Account - Stock (Stock
Termination)."
b. Closing your account and receiving a check for your
Reinvestment Shares. See "Termination of Account - Cash (Cash
Termination)."
c. Closing your account and receiving a certificate for a portion
of your whole Reinvestment Shares and a check for the balance
of your whole and fractional Reinvestment Shares. See
"Termination of Account - Stock and Cash (Combined
Termination)."
Options available for making withdrawals while still remaining in
the Plan:
a. Receiving a certificate for a portion of your whole
Reinvestment Shares yet remaining in the Plan. See
"Certificates for Reinvestment Shares of Common Stock - Share
Withdrawal."
b. Receiving a check for a portion of your whole Reinvestment
Shares yet remaining in the Plan. You must specify the NUMBER
OF REINVESTMENT SHARES, not dollars, when using this option.
See "Cash for Reinvestment Shares of Common Stock - Cash
Withdrawal."
To avail yourself of any of the options described above, complete
the appropriate space on the reverse side of the top portion of your
reinvestment statement of account or submit a written request to the
Company. It generally takes approximately 10 to 15 days to complete
any of the transactions. However, requests for Stock Terminations
received AFTER a Record Date will NOT be processed until after the
related Dividend Payment Date. Also, requests for Combined
Terminations, Cash Terminations and Cash Withdrawals received ON OR
AFTER an Ex-dividend Date will not be processed until after the
related Dividend Payment Date. THESE REQUESTS WILL BE PROCESSED AS
PROMPTLY AS POSSIBLE AFTER THAT DIVIDEND PAYMENT DATE. Requests for
Share Withdrawals can be processed at any time and will be processed
as promptly as possible after receipt of the request.
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Q: 9. Can I make a cash payment to reach a goal of a certain number of
whole Reinvestment Shares?
A: Yes, but since your cash payment must be in the Company's hands at
least one day prior to the Investment Date, you would only be
able to approximate the cash payment that you should make in order
to reach your goal. After taking into consideration the approximate
number of Reinvestment Shares which may be purchased with any
dividend that is to be reinvested, you can estimate the cash payment
required to purchase a certain number of Reinvestment Shares by
using the current market price of the Company's Common Stock. You
must also take into account that you will pay a brokerage commission
when shares are being purchased on the open market. A request for a
certificate for a specific number of Reinvestment Shares should be
made AFTER you receive the reinvestment statement of account which
reflects that you have either reached or exceeded your goal.
Q: 10. If I elect to receive cash, what amount will I receive for my
Reinvestment Shares?
A: The amount cannot be determined until the Reinvestment Shares are
sold. Your Reinvestment Shares will be sold by the Agent through
the Broker as promptly as practicable, and you will receive the
proceeds of the sale less any brokerage commission.
Q: 11. Can the Agent sell shares for which I have certificates, as well as
Reinvestment Shares held in my account?
A: No, the Agent is only allowed to sell Reinvestment Shares.
Q: 12. Do I have to pay tax on the dividends which are reinvested?
A: Reinvested dividends are currently fully taxable. In the event it
is determined that any portion of the dividend is estimated to be a
non-taxable return of capital, shareholders would receive such
information on the Form 1099-DIV in January of each year.
Q: 13. Can I receive a cash dividend on a portion of the shares for which I
have certificates and reinvest the dividend on the remainder of
those Certificate Shares?
A: The Plan does not provide for partial reinvestment in such a manner.
However, you may contact the Company's Shareholder Services
Department if you wish to transfer a portion of the shares for which
you have certificates to a second account so that you could receive
a cash dividend on those Certificate Shares. In addition, a
shareholder may also "partially reinvest dividends" by receiving
cash dividends on the portion of Certificate Shares retained in
his/her name, and reinvest the dividends on any shares which he/she
has deposited for Safekeeping.
Q: 14. Can I get cash dividends on Reinvestment Shares?
A: Dividends on Reinvestment Shares held by the Agent in its name for
your reinvestment account must be automatically reinvested. If you
wish to receive cash dividends on any or all whole Reinvestment
Shares (instead of having them reinvested), you must first withdraw
the Reinvestment Shares from your reinvestment account. (See
"Certificates for Reinvestment Shares of Common Stock - Share
Withdrawal.") You must also be enrolled in the Optional Cash
Payments Only feature of the Plan, which allows you to receive cash
dividends on any Certificate Shares you may hold.
Q: 15. If I submit an Optional Cash Payment, how soon will my account be
credited with a dividend on the Reinvestment Shares purchased with
my cash payment?
A: The Record Dates for the payment of dividends are approximately the
20th of February, May, August and November. The Dividend Payment
Dates are normally the 15th of March, June, September and December.
Therefore, holders of Reinvestment Shares purchased with Optional
Cash Payments as of December 15, January 15 and February 15 would
ordinarily be entitled to dividends on March 15; holders of
Reinvestment Shares purchased with Optional Cash Payments as of
March 15, April 15 and May 15 would ordinarily be entitled to
dividends on June 15; and so on.
Q: 16. Can I forward the Certificate Shares I hold to the Company for
Safekeeping?
A: Yes, you may elect to have the Company hold shares for any stock
certificates now held by you. The stock certificates in your name
would be cancelled, and the shares for such certificates would be
credited to your reinvestment account and held by the Agent. The
dividends on any shares held in this manner must be reinvested.
Please note that it is the responsibility of the participant to
retain his/her records relative to the cost of any Certificate
Shares deposited for Safekeeping. See "Safekeeping" for additional
information, or contact the Shareholder Services Department for
specific instructions.
Q: 17. Can beneficial owners of the Company's Common Stock, whose shares
are registered in names other than their own, participate in the
Plan?
A: Yes, beneficial owners may participate directly by having some or
all of their shares transferred into their names. Or, they may
participate indirectly by requesting their record holders (such as
their
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broker or bank nominee) to participate on their behalf. Such
indirect participation must be through the registered holder of the
shares.
Q: 18. When can I expect to receive my reinvestment statements of account?
A: Generally, no later than ten to fifteen days after the end of an
Investment Period in which a transaction occurred. For example, the
Investment Period for a June 15 Investment Date would end no later
than July 7. You could expect to receive your reinvestment
statement on or about July 17.
Q: 19. What happens when a participant sells or transfers all of the
Certificate Shares registered in his/her name?
A: If a participant sells all Certificate Shares of stock registered
in his/her name, the Agent will, unless otherwise instructed by
the participant, continue to reinvest the dividends on the
Reinvestment Shares credited to his/her account under the Plan as
long as there is a balance.
If a participant transfers all Certificate Shares of stock
registered in his/her name into a new shareholder registration,
the Agent will not automatically transfer the reinvestment share
balance to the new account. The participant must contact the Agent
to request the transfer of Reinvestment Shares.
Q: 20. Can I transfer my shares to someone else?
A: Yes, Reinvestment Shares may be transferred to names other than the
account name. Appropriate documentation with guaranteed
signature(s) would be required. Please contact the Shareholder
Services Department for specific instructions.
Q: 21. What information will I receive that I need to retain to allow me to
determine the cost basis of shares acquired through the Plan?
A: It is important that you retain each year's December reinvestment
statement of account as well as the last reinvestment statement
you receive from the Company when your reinvestment account is
terminated.
It is also critical that you retain all information relative to the
cost of Common Stock Certificate Shares previously held by you which
have been credited to your reinvestment account for Safekeeping by
the Agent.
THE PLAN
PURPOSE
The purpose of the Plan is to provide Registered Shareholders of the
Company's Common Stock with a simple and convenient method of investing cash
dividends and/or Optional Cash Payments in additional shares of Common Stock of
the Company at regular intervals, and with a method of selling those shares of
Common Stock held by the Agent for the participants. Purchases will be made
either using original issue stock or on the open market, at the election of the
Company. The price of shares purchased on the open market will include a
brokerage commission. No commission will be paid on any original issue shares
which might be purchased directly from the Company under the Plan. Should it
be necessary to utilize both open market and original issue shares for any
particular Investment Period, the brokerage commission applicable to the open
market shares will be included in the average price per share of all shares
purchased.
ADVANTAGES
Participants in the Plan may (a) have cash dividends on all the shares
of Common Stock registered in their names automatically reinvested or (b) have
their cash dividends reinvested and, in addition, may also make up to $100,000
per calendar year in Optional Cash Payments or (c) make only Optional Cash
Payments up to $100,000 per calendar year and continue to receive cash
dividends on their Certificate Shares. Dividends on Reinvestment Shares must
be automatically reinvested.
Full investment of funds is possible under the Plan because the Plan
permits fractions of shares, as well as whole shares, to be credited to
participants reinvestment accounts. In addition, dividends in respect of such
fractions, as well as whole shares, will be credited to participants'
reinvestment accounts. Participants can avoid the cumbersome safekeeping of
certificates for Reinvestment Shares credited to their reinvestment accounts
and may also elect to deposit Certificate Shares of the Company's Common Stock
now held in their name into their reinvestment account for Safekeeping. The
deposit of such shares protects participants against loss, theft, or
destruction of stock certificates. Certificates so deposited will be held in
the name of the Agent. The dividends on all Reinvestment Shares held by the
Agent must be automatically reinvested. Regular
7
quarterly statements of account will be provided to all participants in the
Plan. In addition, statements of account will be provided for months in which
transactions affecting a participant's reinvestment account take place.
Under the Plan, purchases and sales of the Company's Common Stock on
the open market for each participant will be aggregated for the purpose of
making stock transactions in large volume. Thus, brokerage commissions are
expected to be significantly less than participants would ordinarily pay if
they purchased or sold the shares individually. Any such savings are therefore
shared by all participants. The amount of the brokerage commission may be
negotiated with the Broker from time to time. No other administrative fee or
service charge will be paid by participants in connection with purchases or
sales made on the open market.
ADMINISTRATION
The Company is the Agent for participants in the Plan and will
administer the Plan, keep records, send statements of account and perform for
the participants other duties relating to the Plan. Common Stock purchased
under the Plan, as well as Certificate Shares placed with the Agent for
Safekeeping, will be registered in the name of the Agent as Agent for the
participants in the Plan.
PARTICIPATION
All Registered Shareholders of the Company's Common Stock are eligible
to participate in the Plan. Beneficial owners of the Company's Common Stock
whose shares are registered in names other than their own may participate
directly by having some or all of their shares transferred into their names, or
they may participate indirectly by requesting their record holders (such as a
broker or bank nominee) to participate on their behalf. Such indirect
participation must be through the registered holder of the shares.
A Registered Shareholder of the Company's Common Stock may enroll in
the Plan by signing an Authorization Form and returning it in the envelope
provided. An Authorization Form may be obtained at any time upon request to
the Shareholder Services Department of the Company at P.O. Box 3647, Spokane,
Washington 99220-3647, or by telephoning the Shareholder Services Department at
(509) 489-0500 or 1-800-727-9170.
A participant may change the method of participation in the Plan by
completing a new Authorization Form to indicate the manner of future
participation and sending it to the Agent. Authorization Forms may be obtained
by writing the Company at the address given in the preceding paragraph.
A Registered Shareholder of Common Stock may enroll in the Plan at any
time. With respect to Optional Cash Payments, if the Authorization Form and
Optional Cash Payment are received at least one day prior to an Investment
Date, participation in the Plan will begin with that Investment Date. With
respect to reinvestment of dividends, if the Authorization Form is received by
the Company on or before a Record Date, participation in the Plan will begin
with the next following Dividend Payment Date.
COSTS
Brokerage commissions are paid by participants in connection with
purchases and sales of Reinvestment Shares made on the open market under the
Plan. All other costs of administration of the Plan are to be paid by the
Company.
INVESTMENT DATE AND INVESTMENT PERIOD
The Investment Date will normally be the 15th of every month or, if no
trading of the Company's Common Stock occurs on such date, the last preceding
date on which trading occurred.
The Investment Period for investing dividends and/or Optional Cash
Payments in Common Stock of the Company will be the 30-day period beginning
five business days prior to the Investment Date.
OPTIONAL CASH PAYMENTS
In addition to the investment of quarterly dividends, a participant in
the Plan may also make up to $100,000 per calendar year in Optional Cash
Payments. There is no minimum amount required. Shares will be purchased
monthly during the Investment Period. The same amount of money need not be
sent each time an Optional Cash Payment is made. There is no obligation to
make Optional Cash Payments.
An Optional Cash Payment may be made by a participant when joining the
Plan by enclosing the payment with the Authorization Form. Thereafter,
Optional Cash Payments should be accompanied by the top portion of the
statement of account provided to the participant. Optional Cash Payments
should be made by check or money order payable to "WWP - Dividend Reinvestment."
8
Optional Cash Payments received by the Company from participants at
least one day prior to an Investment Date will be invested in Common Stock
during the Investment Period in which such investment date occurs. Optional
Cash Payments received after the time specified above will be held and invested
in Common Stock during the next Investment Period. No interest will be paid on
Optional Cash Payments held by the Company.
Any Optional Cash Payment will be refunded if a written request for
such refund is received by the Company more than forty-eight (48) hours prior
to an Investment Date.
Any participant who elects to make Optional Cash Payments only and who
does not make at least one cash payment within the same quarter in which
enrolled will automatically be dropped from the Plan. A Registered Shareholder
may re-enroll in the Plan at any time.
Cash payments will not be accepted by the Company if a participant
imposes any restrictions with respect to the number of shares to be purchased,
the price at which shares are to be purchased, the timing of the purchase, or
what the participant's balance will be following a purchase. In addition, the
Company cannot purchase shares for a participant without advance payment, nor
can it refund any part of a participant's cash payment after shares are
purchased. It is not possible for the Company to tell a participant in advance
how much money to send for the purchase of a full or fractional share because
the price per share will not be known at the time an Optional Cash Payment is
made.
PURCHASES UNDER THE PLAN - GENERAL
On each Dividend Payment Date, the Company will pay to the Agent any
cash dividends on the Certificate Shares of Common Stock registered in each
participant's name as well as on Reinvestment Shares of Common Stock credited
to the participant's reinvestment account. The Agent will promptly apply such
dividends and any Optional Cash Payments received from such participant at
least one day prior to such Dividend Payment Date to the purchase of additional
shares of Common Stock for the reinvestment account of such participant, by one
or both of the methods described below. On each Investment Date which is not
also a Dividend Payment Date, the Company will pay to the Agent any Optional
Cash Payments received from such participant at least one day prior to such
Investment Date. The Agent will promptly apply such Optional Cash Payments to
the purchase of additional shares of Common Stock for the reinvestment account
of such participant, by one or both of the methods described below. See
"Source of Shares."
Each participant's reinvestment account will be credited with that
number of shares, including fractional share (computed to four decimal places),
as of the last day of an Investment Period, or as of such earlier date on which
all purchases for an Investment Period are completed, at a price per share
equal to the total amount invested for the participant's reinvestment account
divided by the average price (including brokerage commissions, if applicable)
for all purchases for all participants during an Investment Period.
Purchases will be made either using original issue stock or on the
open market, at the election of the Company. The price of shares purchased on
the open market will include a brokerage commission.
Dividends, as and when declared by the Board of Directors of the
Company, will be paid on shares purchased on the open market or purchased
directly from the Company on subsequent Dividend Payment Dates.
SOURCE OF SHARES
OPEN MARKET PURCHASES
Shares purchased under the Plan on the open market will be purchased
by the Broker. Subject to certain limitations, the Broker has full discretion
as to all matters relating to open market purchases, including determination of
the number of shares, if any, to be purchased on any day or at any time of day,
the price paid for such shares, the markets on which such shares are purchased
(including on any securities exchange, on the over-the-counter market or in
negotiated transactions) and the persons (including other brokers and dealers)
from or through whom such purchases are made.
PURCHASES DIRECTLY FROM THE COMPANY
Shares purchased directly from the Company will be original issue
stock.
PURCHASE PRICE UNDER THE PLAN
PRICE OF COMMON STOCK PURCHASED ON THE OPEN MARKET
The price of the Common Stock purchased on the open market with
reinvested dividends and/or with Optional Cash Payments will be the average
cost of such shares, including brokerage commissions, incurred in connection
with the purchase of such shares during an Investment Period. The price per
share will be
9
determined by dividing the total cost (including all brokerage commissions) of
all shares purchased with Optional Cash Payments and/or reinvested dividends
during an Investment Period by the total number of shares purchased during such
Investment Period.
PRICE OF COMMON STOCK PURCHASED DIRECTLY FROM THE COMPANY
The price of the Common Stock purchased directly from the Company with
reinvested dividends or with Optional Cash Payments will be the average of the
high and low sale prices of the Common Stock as reported on the Composite Tape
for the applicable Investment Date.
Should it be necessary to utilize both open market and original issue
shares for any particular Investment Period, the brokerage commission
applicable to the open market shares will be included in the average price per
share of all shares purchased.
REPORTS TO PARTICIPANTS
Each participant in the Plan will receive from the Company a quarterly
statement of account. In addition, statements will be provided for months in
which transactions affecting a participant s reinvestment account take place.
Statements will be provided as soon as practicable after an Investment Period.
These statements are a participant's continuing record of the cost of purchases
and should be retained for income tax purposes. In addition, each participant
will receive copies of the same communications sent to each other holder of
Common Stock, including the Company's Quarterly Report to Shareholders, the
Annual Report to Shareholders, the Notice of Annual Meeting and Proxy Statement
and Internal Revenue Service information for reporting dividends paid. Each
participant will receive notice relating to any modification made to the Plan.
SAFEKEEPING
A participant may elect to deposit Certificate Shares of the Company's
Common Stock now held in his/her name into his/her reinvestment account for
Safekeeping. Certificate Shares so deposited will be held in the name of the
Agent. The dividends on all shares held by the Agent will be automatically
reinvested.
Certificates for Safekeeping should be sent with a completed
Safekeeping Authorization Form by registered mail to The Washington Water Power
Company, Shareholder Services Department, P.O. Box 3647, Spokane, Washington
99220-3647. The certificate(s) should not be endorsed.
It is suggested that participants use registered mail when sending
stock certificate(s) declaring a value equal to 2% of the market value of the
shares on the date of mailing. This amount would be the approximate cost of
replacing the certificate(s) should they be lost in the mail.
It is the responsibility of the participant to retain his/ her records
relative to the cost of any Certificate Shares deposited for Safekeeping as, in
most cases, the Company/Agent would have no knowledge of the purchase price of
such Certificate Shares.
SALE OF REINVESTMENT SHARES - GENERAL
SELLING PARTICIPANTS SHOULD BE AWARE THAT THE COMMON STOCK PRICE MAY
FALL DURING THE PERIOD BETWEEN A REQUEST FOR SALE, ITS RECEIPT BY THE COMPANY,
AND THE ULTIMATE SALE ON THE OPEN MARKET BY THE BROKER. THIS RISK SHOULD BE
EVALUATED BY THE PARTICIPANT AND IS A RISK TO BE BORNE SOLELY BY THE
PARTICIPANT.
CERTIFICATES FOR REINVESTMENT SHARES OF COMMON STOCK - SHARE WITHDRAWAL
Certificates for Reinvestment Shares of Common Stock credited to a
participant's reinvestment account under the Plan will be issued to the Agent
or its nominee as Agent for the participant. The number of Reinvestment Shares
credited to a reinvestment account will be shown on the participant's statement
of account. This convenience protects against loss, theft or destruction of
stock certificates, permits ownership of a fractional share and reduces the
cost to be borne by the Company.
Certificates for any number of whole Reinvestment Shares credited to a
reinvestment account will be issued upon the written request of a participant
intending to remain in the Plan, and the Reinvestment Shares represented by
such certificates will be deducted from the participant's reinvestment account.
Any remaining whole Reinvestment Shares and any fraction of a share will
continue to be credited to the participant's reinvestment account.
Certificates for fractional shares will not be issued under any circumstances.
Reinvestment Shares may not be pledged. A participant who wishes to
pledge such Reinvestment Shares must request that certificates for such
Reinvestment Shares be issued in the participant's name.
10
CASH FOR REINVESTMENT SHARES OF COMMON STOCK - CASH WITHDRAWAL
A participant intending to remain in the Plan may request that a
portion of the whole Reinvestment Shares credited to the participant's
reinvestment account be sold. A participant must specify the number of
Reinvestment Shares which are to be sold. The Reinvestment Shares sold will be
deducted from the participant's reinvestment account, and any remaining whole
Reinvestment Shares and any fraction of a share will continue to be credited to
the participant's reinvestment account. The participant will receive a check
for the proceeds of the sale less brokerage commission. See "Sale of
Reinvestment Shares - General."
A request for a Cash Withdrawal received on or after an Ex-dividend
Date will not be processed until after the related Dividend Payment Date. Such
request, however, will be processed as promptly as possible after that Dividend
Payment Date.
TERMINATION OF ACCOUNT - GENERAL
Any Optional Cash Payment sent to the Company prior to a request to
terminate will be invested by the Company unless return of the amount is
specifically indicated in the request to terminate. After termination of the
reinvestment account, all subsequent dividends will be paid by check to the
former participant unless re-enrolled in the Plan. See Stock Termination, Cash
Termination, and Combined Termination below for specific details.
TERMINATION OF ACCOUNT - STOCK (STOCK TERMINATION)
When a participant closes the account or upon discontinuation of the
Plan by the Company, certificates for whole Reinvestment Shares credited to a
participant's reinvestment account will be issued and a check will be issued
for any fractional share. Such payment for the fractional share will be based
on the last sale price of the Common Stock as reported on the Composite Tape
for the day on which the termination request is received by the Company.
A request for a Stock Termination received after a Record Date will
not be processed until after the related Dividend Payment Date. Such request,
however, will be processed as promptly as possible after that Dividend Payment
Date.
TERMINATION OF ACCOUNT - CASH (CASH TERMINATION)
In lieu of receiving certificates for whole Reinvestment Shares, the
participant may, upon terminating the reinvestment account, request that all of
the Reinvestment Shares, both whole and fractional, credited to the
reinvestment account be sold. The participant will receive a check for the
proceeds of the sale less brokerage commission. See "Sale of Reinvestment
Shares - General."
A request for a Cash Termination received on or after an Ex-dividend
Date will not be processed until after the related Dividend Payment Date. Such
request, however, will be processed as promptly as possible after that Dividend
Payment Date.
TERMINATION OF ACCOUNT - STOCK AND CASH (COMBINED TERMINATION)
A participant may, upon terminating the reinvestment account, request
that a certificate be issued for a portion of the whole Reinvestment Shares
credited to the reinvestment account and that the balance of the whole and
fractional shares credited to the reinvestment account be sold. The
participant will receive a certificate for the whole Reinvestment Shares
specified and will also receive a check for the proceeds of the sale of the
remaining Reinvestment Shares less brokerage commission. See "Sale of
Reinvestment Shares - General."
A request for a Combined Termination received on or after an
Ex-dividend Date will not be processed until after the related Dividend Payment
Date. Such request, however, will be processed as promptly as possible after
that Dividend Payment Date.
DISPOSITION OF ALL SHARES REGISTERED IN PARTICIPANT'S NAME
If a participant disposes of all Certificate Shares of Common Stock
registered in the participant's name, the Company will continue to reinvest the
dividends on the Reinvestment Shares credited to the participant's reinvestment
account until notified in writing by such participant that the participant
wishes to terminate the reinvestment account.
RIGHTS OFFERING
A rights offering takes place when the Company issues to the existing
shareholders the right to purchase additional shares of Common Stock of the
Company in proportion to the shares they already own. In a rights offering by
the Company, rights on all Reinvestment Shares will be issued to the Agent or
its nominee. The
11
Company as Agent will sell such rights, credit each participant's reinvestment
account in proportion to the whole and fractional shares held therein on the
Record Date for such rights, and apply the proceeds to the purchase of
additional shares of Common Stock of the Company. Any participant who wishes
to exercise, transfer or sell stock purchase rights on the participant's
Reinvestment Shares must request, prior to the Record Date for the issuance of
any such rights, that the whole Reinvestment Shares credited to the
participant's reinvestment account be withdrawn from the reinvestment account
and registered in the participant's name. See "Certificates for Reinvestment
Shares of Common Stock - Share Withdrawal."
Rights on Certificate Shares registered in the name of the participant
will be mailed directly to the participant in the same manner as to
shareholders not participating in the Plan.
STOCK DIVIDEND OR STOCK SPLIT
Any stock dividends or split shares distributed by the Company on
Reinvestment Shares credited to the reinvestment account of a participant will
be added to the participant's reinvestment account. Stock dividends or split
shares distributed on Certificate Shares registered in the name of the
participant will be mailed directly to the participant in the same manner as to
shareholders who are not participants in the Plan.
VOTING OF REINVESTMENT SHARES
Each participant in the Plan will receive a Notice of Annual Meeting,
a Proxy Statement, a proxy card and the Company's Annual Report to
Shareholders. The proxy card will include Reinvestment Shares held in the
participant's reinvestment account as well as any shares for which a
participant has certificates. The proxy card may be completed, signed and
forwarded to the Company in the return envelope provided for such purpose. If
the returned proxy card is properly signed and marked for voting, all the
shares covered by such proxy will be voted as marked. If no instructions are
received on a returned proxy card, properly signed, with respect to any item
thereon, all of the participant's shares will be voted with respect to such
item(s) in accordance with the recommendations of the Company's management.
FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN
The following is a summary of Federal income tax consequences of
participating in the Plan. The tax consequences to a particular investor may
vary on account of the particular circumstances. A participant should consult
his or her tax advisor as to the income tax consequences based upon his or her
particular circumstances and as to the consequences under state and local law.
In general, a participant will be treated as having received dividends
reinvested under the Plan and such dividends shall be fully taxable currently.
While the specific tax rules vary slightly depending upon whether dividends are
used to purchase shares on the open market or to purchase shares directly from
the Company, in general, a participant will be treated as receiving an amount
of taxable income equal to the amount of dividends to which he or she was
entitled. A participant who purchases shares with Optional Cash Payments will
recognize no taxable income upon such purchases.
In general, the tax basis of shares purchased with reinvested
dividends and/or with optional cash payments, will be the applicable price
determined in the above section entitled "Purchase Price Under the Plan." The
holding period for full or fractional shares purchased for a participant will
commence no later than the date following the day on which the shares are
credited to the participant's account.
All distributions will be treated as dividends and will be taxable as
ordinary income to the extent of the Company's earnings and profits. Form
1099-Div sent to each participant annually will indicate the total amount of
dividends paid to the participant.
A participant does not realize any taxable income when such
participant receives certificates for Reinvestment Shares credited to a
reinvestment account, either upon such participant's request, or upon
termination of the investment account, or upon discontinuation of the Plan by
the Company. However, gain or loss will be realized by the participant when
whole shares are sold by the Plan pursuant to such participant's request. In
addition, a participant who receives a cash payment for a fraction of a share
credited to a reinvestment account will realize a gain or loss with respect to
such fraction. The amount of any such gain or loss would be the difference
between the amount which the participant receives for such participant's shares
or fraction of a share and his tax basis therefor.
Temporary "Backup Withholding" regulations have been promulgated by
the Internal Revenue Service. Under these regulations, dividends which are
reinvested pursuant to the Plan may be subject to the withhold-
12
ing tax generally applicable to dividends unless the participant provides the
Company with the participant's taxpayer identification number. Any amount so
withheld will be treated as a taxable dividend received by the participant
under the foregoing rules and will be reflected on such participant's Form
1099-Div together with other dividends actually received by such participant.
For other tax consequences of participation in the Plan, including
state and local income taxation, participants should consult their tax advisor.
The above Federal Income Tax discussion is based on Federal income tax law as
in effect as of the date hereof. Participants should consult their tax advisors
with respect to the impact of any future legislative proposals or legislation
enacted after the date of this Prospectus.
SHAREHOLDERS SUBJECT TO WITHHOLDING
In the case of foreign shareholders who elect to have their dividends
reinvested and whose dividends are subject to United States income tax
withholding, or in the case of domestic shareholders whose dividends are
subject to backup withholding, the Agent will invest in Common Stock an amount
equal to the net dividends of such participants, after deduction of the
withholding amount. The amount so withheld will be reflected on a Form
1099-DIV in January as tax withheld.
RESPONSIBILITY OF THE COMPANY AND THE AGENT UNDER THE PLAN
Neither the Company, the Company as Agent, nor the Broker will be
liable for any act done in good faith or for any good faith omission to act,
including, without limitation, any claim of liability arising out of failure to
terminate a participant's account upon such participant's death prior to
receipt of notice in writing of such death or with respect to any fluctuation
in market value before or after any purchase or sale of Reinvestment Shares.
The participant should recognize that neither the Company, the Company
as Agent, nor the Broker can assure the participant of a profit or protect the
participant against a loss on shares purchased or sold under the Plan.
MODIFICATION OR DISCONTINUANCE OF THE PLAN
The Company reserves the right to suspend, modify or discontinue the
Plan at any time by action of its Board of Directors. Notice of any such
suspension, modification or discontinuance will be given to all participants.
Upon discontinuance of the Plan by the Company, certificates for whole
Reinvestment Shares held in a participant's account under the Plan will be
issued and a cash payment will be made for any fractional share.
INTERPRETATION AND REGULATION OF THE PLAN
The Company reserves the right to interpret and regulate the Plan as
it deems necessary or desirable in connection with its operation.
DESCRIPTION OF COMMON STOCK
The authorized capital stock of the Company consists of 10,000,000
shares of Preferred Stock, cumulative, without nominal or par value, which is
issuable in series, and 200,000,000 shares of Common Stock without nominal or
par value. Following is a brief description of certain of the rights and
privileges attaching to the Common Stock of the Company. For a complete
description, reference is made to the Company's Restated Articles of
Incorporation, as amended (the "Articles"), and to the laws of the State of
Washington. The following summary, which does not purport to be complete, is
qualified in its entirety by such reference.
DIVIDEND RIGHTS
After full provision for all Preferred Stock dividends declared or in
arrears, the holders of Common Stock of the Company are entitled to receive
such dividends as may be lawfully declared from time to time by the Board of
Directors of the Company.
VOTING RIGHTS
The holders of the Common Stock have sole voting power, except as
indicated below or as otherwise provided by law, and each holder of Common
Stock is entitled to vote cumulatively for the election of directors. If
dividends payable on any shares of Preferred Stock shall be in arrears in an
amount equal to the aggregate amount of dividends accumulated on such shares of
Preferred Stock over the eighteen (18) month period ended on such date, the
holders of such stock become entitled, as one class, to elect a majority of the
Board of
13
Directors, which right does not cease until all defaults in the payment of
dividends on the Preferred Stock shall have been cured. In addition, the
consent of various proportions of the Preferred Stock at the time outstanding
is required to adopt any amendment to the Articles which would authorize any
new class of stock ranking prior to or on a parity with the Preferred Stock as
to certain matters, to increase the authorized number of shares of the
Preferred Stock or to change any of the rights or preferences of outstanding
Preferred Stock.
CLASSIFIED BOARD OF DIRECTORS
Both the Articles and the Company's Bylaws, as amended (the "Bylaws")
provide for a Board of Directors divided into three classes, each of which will
generally serve for a term of three years, with only one class of directors
being elected in each year. The Articles and Bylaws also provide that
directors may be removed only for cause and only by the affirmative vote of the
holders of at least a majority of the Common Stock. The Articles and Bylaws
further require an affirmative vote of the holders of at least 80% of the
Common Stock to alter, amend or repeal the provisions relating to the
classification of the Board of Directors and the removal of members from, and
the filling of vacancies on, the Board of Directors.
CHANGE IN CONTROL
The Articles contain a "fair price" provision which requires the
affirmative vote of the holders of at least 80% of the Common Stock for the
consummation of certain business combinations, including mergers,
consolidations, recapitalizations, certain dispositions of assets, certain
issuances of securities, liquidations and dissolutions involving the Company
and a person or entity who is or, under certain circumstances, was, a
beneficial owner of 10% or more of the outstanding shares of Common Stock (an
"Interested Shareholder") unless (a) such business combination shall have been
approved by a majority of the directors unaffiliated with the Interested
Shareholder or (b) certain minimum price and procedural requirements are met.
The Articles provide that the "fair price" provision may be altered, amended or
repealed only by the affirmative vote of the holders of at least 80% of the
Common Stock.
PREFERRED SHARE PURCHASE RIGHTS
Reference is made to the Rights Agreement, dated as of February 16,
1990, as amended ("Rights Agreement"), between the Company and The Bank of New
York, successor Rights Agent to First Chicago Trust Company of New York, filed
with the Securities and Exchange Commission. The following statements are
qualified in their entirety by such reference.
The Company has adopted a shareholder rights plan pursuant to which
holders of Common Stock outstanding on March 2, 1990 or issued thereafter have
been granted one preferred share purchase right ("Right") on each outstanding
share of Common Stock. The description and terms of the Rights are set forth
in the Rights Agreement. Certain of the capitalized terms used in the
following description have the meanings set forth in the Rights Agreement.
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Company's Board of Directors, except pursuant to
an offer conditioned on a substantial number of Rights being acquired. The
Rights should not interfere with any merger or other business combination
approved by the Board of Directors of the Company prior to the time that a
person or group has acquired beneficial ownership of 10% or more of the Common
Stock since until such time the Rights may be redeemed as hereinafter
described.
Each Right, initially evidenced by and traded with the shares of
Common Stock, entitles the registered holder to purchase one two-hundredth of a
share of Preferred Stock of the Company, without par value ("Preferred
Shares"), at an exercise price of $40, subject to certain adjustments,
regulatory approval and other specified conditions. The Rights will be
exercisable only if a person or group acquires 10% or more of the Common Stock
or announces a tender offer, the consummation of which would result in the
beneficial ownership by a person or group of 10% or more of the Common Stock.
If any person or group acquires 10% or more of the outstanding Common
Stock, each Right will entitle its holder (other than such person or members of
such group), subject to regulatory approval and other specified conditions, to
purchase that number of shares of Common Stock or Preferred Shares having a
market value of twice the Right's exercise price. In addition, in the event
that any person or group has acquired 10% or more of the outstanding Common
Stock or the Company consolidates or merges with or into, or sells 50% or more
of its assets or earning power to, any person or group, or engages in certain
"self-dealing" transactions with any
14
person or group owning 10% or more of the outstanding Common Stock, proper
provision will be made so that each Right would thereafter entitle its holder
to purchase that number of the acquiring company's common shares having a
market value at that time of twice the Right's exercise price.
At any time after a person or group acquires more than 10% but less
than 50% of the outstanding Common Stock, the Board of Directors of the Company
may, subject to any necessary regulatory approval, require each outstanding
Right to be exchanged for one share of Common Stock or cash, securities or
other assets having a value equal to the market value of one share of Common
Stock.
The Rights may be redeemed, at a redemption price of $.005 per Right,
by the Board of Directors of the Company at any time until any person or group
has acquired 10% or more of the Common Stock. Under certain circumstances, the
decision to redeem the Rights will require the concurrence of a majority of the
Continuing Directors. The Rights will expire on February 16, 2000.
LIQUIDATION RIGHTS
In the event of any liquidation of the Company, after satisfaction of
the preferential liquidation rights of the Preferred Stock, the holders of the
Common Stock would be entitled to share ratably in all assets of the Company
available for distribution to stockholders.
PRE-EMPTIVE RIGHTS
No holder of any stock of the Company has any pre-emptive rights.
MISCELLANEOUS
The presently outstanding shares of Common Stock of the Company are
fully paid and nonassessable and, upon the sales as herein described, the
shares of Common Stock will continue to be fully paid and nonassessable.
The Common Stock of the Company is listed on the New York and Pacific
Stock Exchanges.
The New York Transfer Agent and Registrar for the Common Stock is The
Bank of New York, 101 Barclay Street, 11th Floor, New York, New York 10286.
The Company, P.O. Box 3647, Spokane, Washington 99220-3647, is an additional
Transfer Agent and Registrar for the Common Stock.
USE OF PROCEEDS
Unless shares of Common Stock are purchased directly from the Company,
the Company will receive no proceeds from the offering of Common Stock under
the Plan. The Company does not know the number of shares of Common Stock that
will ultimately be sold pursuant to the Plan, the prices at which such shares
will be sold, or the number of shares, if any, that will be purchased directly
from the Company, and therefore, cannot estimate the amount of proceeds to be
received from any purchase of such shares. To the extent that shares are
purchased directly from the Company, the proceeds are expected to be used for
the Company's construction program, the interim financing of such construction
program, the refunding of other securities of the Company, or to reimburse the
treasury for funds previously expended for such purposes.
VALIDITY OF NEW COMMON STOCK
The validity of the Common Stock issued by the Company under the Plan
has been passed upon for the Company by Paine, Hamblen, Coffin, Brooke &
Miller, Spokane, Washington, General Counsel for the Company and Reid & Priest,
New York, New York. Reid & Priest has relied as to all matters of Washington,
California, Idaho, Montana and Oregon law upon the opinion of Paine, Hamblen,
Coffin, Brooke & Miller. Paine, Hamblen, Coffin, Brooke & Miller and Reid &
Priest are not aware of any court decision applying Washington law that
addresses plans similar to the Rights Agreement. However, such counsel have
concluded that a court applying such law, in the context of the authorization
and issuance of shareholder rights similar to the Rights, would most likely
look to and apply Delaware corporate law. Accordingly, the opinions of such
counsel, insofar as the Rights are concerned, are based upon such conclusion,
and Paine, Hamblen, Coffin, Brooke & Miller has relied as to such matters of
Delaware corporate law upon the opinion of Reid & Priest.
15
EXPERTS
The financial statements and related financial statement schedules
incorporated in this prospectus by reference from the Company's Annual Report
have been audited by Deloitte & Touche, independent auditors, as stated in
their reports, which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
The statements made as to matters of law and legal conclusions under
"Federal Income Tax Consequences of Participation in the Plan" have been
reviewed by Reid & Priest. Such statements are set forth herein in reliance
upon the opinion of that firm given upon their authority as experts.
16
[Download Table]
======================================= =======================================
THE WASHINGTON WATER
POWER COMPANY
[LOGO]
Dividend Reinvestment
and Stock Purchase Plan
No person has been authorized to give
any information or to make any repre-
sentations, other than those contained Shares of Common Stock
in this Prospectus, in connection with
the offer described herein; and, if (no par value)
given or made, such information or
representations must not be relied upon
as having been authorized by the
Company. This Prospectus does not con-
stitute an offering of any securities
other than those to which it specifi-
cally relates, nor an offering of any
securities in any jurisdiction to any
person to whom it is unlawful to make
such offer in such jurisdiction.
Neither the delivery of this
Prospectus nor any sale made hereunder
shall, under any circumstances, create
any implication that there has not
been any change in the affairs of the
Company or its subsidiaries since ----------
the date hereof. PROSPECTUS
----------
======================================= =======================================
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION (ESTIMATED).
[Download Table]
Filing fee--Securities and Exchange Commission . . . . . . . . . $21,724
Fees of state regulatory authorities . . . . . . . . . . . . . . 2,252
Legal counsel fees . . . . . . . . . . . . . . . . . . . . . . . 5,000
Auditors' fees . . . . . . . . . . . . . . . . . . . . . . . . . 1,000
Listing fees . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000
Printing, including Form S-3, prospectus, exhibits, etc. . . . . 15,000
Miscellaneous expenses . . . . . . . . . . . . . . . . . . . . . 15,024
-------
Total Estimated Expenses . . . . . . . . . . . . . . . . $69,000
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article Seventh of the Company's Restated Articles of Incorporation
("Articles") provides, in part, as follows:
"The Corporation shall, to the full extent permitted by
applicable law, as from time to time in effect, indemnify any person
made a party to, or otherwise involved in, any proceeding by reason of
the fact that he or she is or was a director of the Corporation
against judgments, penalties, fines, settlements and reasonable
expenses actually incurred by him or her in connection with any such
proceeding. The Corporation shall pay any reasonable expenses
incurred by a director in connection with any such proceeding in
advance of the final determination thereof upon receipt from such
director of such undertakings for repayment as may be required by
applicable law and a written affirmation by such director that he or
she has met the standard of conduct necessary for indemnification, but
without any prior determination, which would otherwise be required by
Washington law, that such standard of conduct has been met. The
Corporation may enter into agreements with each director obligating
the Corporation to make such indemnification and advances of expenses
as are contemplated herein. Notwithstanding the foregoing, the
Corporation shall not make any indemnification or advance which is
prohibited by applicable law. The rights to indemnity and advancement
of expenses granted herein shall continue as to any person who has
ceased to be a director and shall inure to the benefit of the heirs,
executors and administrators of such a person."
The Company has entered into indemnification agreements with each
director as contemplated in Article Seventh of the Articles.
Article IX of the Company's Bylaws contains a similar provision as that
contained in the Articles and in addition, provides in part, as follows:
"SECTION 2. LIABILITY INSURANCE. The Corporation shall have
the power to purchase and maintain insurance on behalf of any person
who is, or was a director, officer, employee, or agent of the
Corporation or is or was serving at the request of the Corporation as
a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, other enterprise, or employee
benefit plan against any liability asserted against him and incurred
by him in any such capacity or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him
against such liability under the laws of the State of Washington."
Reference is made to Washington business corporation act 23B.08.510,
which sets forth the extent to which indemnification is permitted under the
laws of the State of Washington.
Insurance is maintained on a regular basis (and not specifically in
connection with this offering) against liabilities arising on the part of
directors and officers out of their performance in such capacities or arising
on the part of the Company out of its foregoing indemnification provisions,
subject to certain exclusions and to the policy limits.
ITEM 16. EXHIBITS.
Reference is made to the Exhibit Index on page II-5 hereof.
II-1
ITEM 17. UNDERTAKING
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; or (iii) to
include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that the registrant need not file a post-effective
amendment to include the information required to be included by
subsection (i) or (ii) if such information is contained in periodic
reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Exchange Act, which are incorporated by reference 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) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant s annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item 15
above, or otherwise, the registrant has been informed that in the opinion of
the 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 against the registrant 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.
II-2
POWER OF ATTORNEY
The Registrant hereby appoints each Agent for Service named in this
Registration Statement as its attorney-in-fact to sign in its name and behalf,
and to file with the Commission, any and all amendments, including post-
effective amendments, to this Registration Statement, and each director and/or
officer of the Registrant whose signature appears below hereby appoints each
such Agent for Service as his attorney-in-fact with like authority to sign in
his name and behalf, in any and all capacities stated below, and to file with
the Commission, any and all such amendments.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Spokane and State of Washington on the 16th day of
May, 1994.
THE WASHINGTON WATER POWER COMPANY
By /s/ PAUL A. REDMOND
---------------------------------
Paul A. Redmond
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
date indicated.
Signature Title Date
--------- ----- ----
/s/PAUL A. REDMOND Principal Executive
--------------------------------------- Officer and Director May 16, 1994
Paul A. Redmond (Chairman of the Board,
President and Chief Executive Officer)
Principal
/s/J.E. ELIASSEN Financial and
--------------------------------------- Accounting Officer May 16, 1994
J.E. Eliassen (Vice President - Finance
and Chief Financial Officer)
/s/DAVID A. CLACK
--------------------------------------- Director May 16, 1994
David A. Clack
/s/DUANE B. HAGADONE
--------------------------------------- Director May 16, 1994
Duane B. Hagadone
/s/ROBERT S. JEPSON JR.
--------------------------------------- Director May 16, 1994
Robert S. Jepson Jr.
/s/EUGENE W. MEYER
--------------------------------------- Director May 16, 1994
Eugene W. Meyer
--------------------------------------- Director
Gen. H. Norman Schwarzkopf
/s/B. JEAN SILVER
--------------------------------------- Director May 16, 1994
B. Jean Silver
/s/LARRY A. STANLEY
--------------------------------------- Director May 16, 1994
Larry A. Stanley
/s/R. JOHN TAYLOR
--------------------------------------- Director May 16, 1994
R. John Taylor
/s/EUGENE THOMPSON
--------------------------------------- Director May 16, 1994
Eugene Thompson
II-3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of The Washington Water Power Company on Form S-3 of our reports
dated January 28, 1994 (February 15, 1994, as to Note 14), appearing in the
Annual Report on Form 10-K of The Washington Water Power Company for the year
ended December 31, 1993, and to the reference to us under the heading "Experts"
in the Prospectus, which is part of this Registration Statement.
/s/DELOITTE & TOUCHE
Seattle, Washington
May 16, 1994
II-4
EXHIBIT INDEX
Previously Filed++
With
Registration As
Exhibit Number Exhibit
------- ----------------- -------
4(a) 1-3701 4(a) Restated Articles of Incorporation, as
(with Form 10-Q amended, of the Company.
for quarter ended
March 31, 1994)
4(b) 1-3701 3(b) Bylaws of the Company, as amended.
(with 1993
Form 10-K)
4(c) 1-3701 4(n) Rights Agreement dated as of February 16,
(with Form 8-K 1990, between the Company and First
dated Chicago Trust Company.
February 16, 1990)
4(d) 1-3701 4(b) Amendment No. 1 to Rights Agreement dated
(with Form 10-Q May 10, 1994, between the Company and The
for quarter ended Bank of New York, as successor Rights
March 31, 1994) Agent.
5(a) * Opinion of Paine, Hamblen, Coffin,
Brooke & Miller.
5(b) * Opinion of Reid & Priest.
8 * Opinion of Reid & Priest
(see Exhibit 5(b)).
23 * See Page II-4 for the consent of Deloitte
& Touche. The consents of Paine, Hamblen,
Coffin, Brooke & Miller and Reid & Priest
are included in their opinions filed as
Exhibits 5(a) and 5(b) above.
24 * See Page II-3 for Power of Attorney.
--------------------------
++ Incorporated herein by reference.
* Filed herewith.
II-5
Dates Referenced Herein and Documents Incorporated by Reference
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