Filed
pursuant to Rule 424(b)(2). Based upon the registration of 5,000,000
shares of MDU Resource Group, Inc.’s common stock, $1.00 par value, together
with the preference share purchase rights appurtenant thereto (collectively,
“common stock”), to be offered by means of this prospectus supplement and the
accompanying prospectus under Registration Statement No. 333-151215, a filing
fee of $6,257 has been calculated in accordance with Rule 457(c) on the basis of
the average of the high and low prices of the registrant’s common stock on the
New York Stock Exchange composite tape on September 3, 2008. This
filing fee has been previously transmitted to the Securities and Exchange
Commission. This paragraph shall be deemed to update the “Calculation
of Registration Fee” table in Registration Statement No.
333-151215.
PROSPECTUS
SUPPLEMENT
(To
Prospectus dated May 28, 2008)
Up
to 5,000,000 Shares
MDU
RESOURCES GROUP, INC.
Common
Stock
We have
entered into a sales agency financing agreement with Wells Fargo Securities,
LLC, or Wells Fargo, relating to shares of our common stock, $1.00 par value,
together with the preference share purchase rights appurtenant thereto
(collectively, “common stock”) offered by this prospectus supplement and the
accompanying prospectus. In accordance with the terms, and subject to
the conditions, of the sales agency financing agreement, we may offer and sell
up to 5,000,000 shares of our common stock from time to time through Wells Fargo
as our agent for the offer and sale of the shares. Wells Fargo is not
required to sell any specific number of shares but, subject to the terms and
conditions of the sales agency financing agreement, is required to use its
commercially reasonable efforts consistent with its normal trading and sales
practices to sell such shares. Sales of the shares, if any, will be
made at market prices prevailing at the time of sale. Wells Fargo
will receive from us a commission equal to 0.75% of the sales price of all
shares sold through it as agent under the sales agency financing
agreement.
Our
common stock is listed on the New York Stock Exchange under the symbol
“MDU.” On September 4, 2008, the last reported sale price of our
common stock on the New York Stock Exchange was $30.67 per share.
________________
See
“Risk Factors” beginning on page 5 of the accompanying prospectus and the
discussion of risk factors contained in our annual, quarterly and current
reports filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, which are incorporated by reference into this prospectus,
to read about certain factors you should consider before purchasing any of the
securities being offered.
________________
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these shares or passed upon the adequacy or accuracy
of this prospectus supplement or the accompanying prospectus. Any
representation to the contrary is a criminal offense.
________________
Wells
Fargo Securities, LLC
________________
The
date of this prospectus supplement is September 5, 2008.
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ABOUT THIS PROSPECTUS SUPPLEMENT
You
should rely only on the information incorporated by reference or provided in
this prospectus supplement, the accompanying prospectus and any “free writing
prospectus” we may authorize to be delivered to you. Neither we nor
Wells Fargo has authorized anyone else to provide you with different or
inconsistent information. If anyone provides you with different or
inconsistent information, you should not rely on it. Neither we nor
Wells Fargo is making an offer to sell these securities in any jurisdiction
where such offer or sale is not permitted. The information contained
in this prospectus supplement, the accompanying prospectus, any free writing
prospectus, and the documents incorporated by reference herein and therein is
accurate only as of the dates such information is or was presented, regardless
of the time of delivery of this prospectus supplement or of any sale of our
common stock. Our business, financial condition, results of
operations and prospects may have changed since those dates.
This
document is in two parts. The first part is this prospectus
supplement, which adds to and updates information contained in the accompanying
prospectus and the documents incorporated by reference into the accompanying
prospectus. The second part is the accompanying prospectus, which
gives more general information, some of which may not apply to this
offering. You should read this entire prospectus supplement, the
accompanying prospectus and any free writing prospectus carefully, including the
consolidated financial statements and other information incorporated by
reference herein and therein in their entirety before making an investment
decision. If the information in this prospectus supplement (or any
free writing prospectus) is different from, or inconsistent with, the
information in the accompanying prospectus, you should rely on the information
contained in this prospectus supplement (or any free writing
prospectus).
We have
entered into a sales agency financing agreement, dated as of September 5, 2008,
which we refer to as the sales agency financing agreement, with Wells Fargo
Securities, LLC, or Wells Fargo, under which we may offer and sell up to
5,000,000 shares of our common stock from time to time through Wells Fargo, as
our agent for the offer and sale of the shares. The sales, if any, of
the shares of common stock under this sales agency financing agreement will be
made in “at-the-market” offerings as defined in Rule 415 of the Securities Act
of 1933, including sales made directly on the New York Stock Exchange, the
principal existing trading market for our common stock, or on any other exchange
on which the common stock is then listed or admitted to trading and sales made
to or through a market maker or through an electronic communications
network.
From time
to time during the term of the sales agency financing agreement, and subject to
the terms and conditions set forth therein, we may deliver an issuance notice to
Wells Fargo specifying the length of the selling period (not to exceed 20
consecutive trading days), the amount of common stock to be sold (the aggregate
number of such shares not to exceed the product of (1) 75,000 times (2) the
number of trading days in any selling period without Wells Fargo’s prior written
consent, which may be withheld in its sole discretion) and the monthly floor
price below which sales may not be made. Upon receipt of an issuance
notice from us, and subject to the terms and conditions of the sales agency
financing agreement, Wells Fargo has agreed to use its commercially reasonable
efforts consistent with its normal trading and sales practices to sell such
shares on such terms and subject to the conditions set forth in the sales agency
financing agreement. We or Wells Fargo may suspend the offering of
shares of common stock at any time upon proper notice to the other, upon which
the selling period will immediately terminate. Settlement between us
and Wells Fargo for sales of common stock will occur on the third (3rd)
trading day immediately following the sale of any shares pursuant to the sales
agency financing agreement. The obligation of Wells Fargo under the
sales agency financing agreement to settle such purchases with us pursuant to
any issuance notice is subject to a number of conditions, which Wells Fargo
reserves the right to waive in its sole discretion.
We will
pay Wells Fargo a commission equal to 0.75% of the sales price of all shares
sold through it as agent under the sales agency financing
agreement. We have also agreed to reimburse Wells Fargo for its
reasonable documented out-of-pocket expenses up to a maximum of $75,000,
including fees, disbursements and expenses of counsel, in connection with the
sales agency financing agreement.
We will
deliver to the New York Stock Exchange copies of this prospectus supplement and
the accompanying prospectus pursuant to the rules of the exchange. We
will report at least quarterly the number of shares of common stock sold through
Wells Fargo, as agent.
Wells
Fargo and its affiliates have performed certain investment banking and advisory
and general financing, trustee and banking services for us from time to time for
which they have received customary fees and expenses. Wells Fargo and
its affiliates may, from time to time, engage in transactions with, and perform
services for, us in the ordinary course of our business.
An
affiliate of Wells Fargo is the administrative agent, and a lender to us, under
a credit facility and may receive a portion of any amounts repaid from the
proceeds of this offering. Because more than 10% of the net proceeds
of this offering may be paid to affiliates of a member of the FINRA which is
participating in this offering, this offering is being conducted in compliance
with Rule 2710(h) of the Conduct Rules of the FINRA.
In
connection with the sale of the common stock hereunder, Wells Fargo may be
deemed to be an “underwriter” within the meaning of the Securities Act of 1933,
and the compensation paid to Wells Fargo may be deemed to be underwriting
commissions or discounts. We have agreed to indemnify Wells Fargo
against certain civil liabilities, including under the Securities Act of
1933.
The
offering of common stock pursuant to the sales agency financing agreement will
terminate upon the earlier of (1) the sale of all shares of common stock subject
to the sales agency financing agreement, (2) termination of the sales agency
financing agreement by either Wells Fargo or us and (3) May 28,
2011. The sales agency financing agreement may be terminated by Wells
Fargo or us at any time upon 10 days notice, and upon one trading day’s notice
by Wells Fargo in certain circumstances, including certain bankruptcy events
relating to us or any
material
subsidiary, our failure to maintain a listing of our common stock on the New
York Stock Exchange or the occurrence of a material adverse change in our
Company.
We have
agreed not to directly or indirectly sell, offer to sell, contract to sell,
grant any option to sell or otherwise dispose of, shares of our common stock or
securities convertible into or exchangeable for shares of our common stock,
warrants or any rights to purchase or acquire our common stock during the period
beginning on the first trading day immediately prior to the date any issuance
notice is delivered to Wells Fargo and ending on the first trading day
immediately following the last settlement date with respect to shares of common
stock sold pursuant to the applicable issuance notice, without the prior written
consent of Wells Fargo. This consent may be given at any time without
public notice. The restriction described in this paragraph does not
apply to sales of:
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shares
we offer or sell pursuant to the sales agency financing
agreement;
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shares
we issue in connection with acquisitions of businesses, assets or
securities;
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shares
we issue upon conversion of convertible securities, or the exercise of
warrants, options or other rights disclosed in our filings with the
Securities and Exchange Commission;
or
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shares,
options to purchase shares or shares issuable upon the exercise of options
or other rights pursuant to any employee or director stock option or
benefit plan, stock purchase or ownership plan (whether currently existing
or adopted hereafter) or dividend reinvestment plan (but not shares
subject to a waiver to exceed plan limits in our stock purchase
plan).
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PROSPECTUS
MDU
RESOURCES GROUP, INC.
Debt
Securities
Common
Stock
and
Preference
Share Purchase Rights
We may
offer from time to time any combination of the securities described in this
prospectus in one or more offerings and in amounts authorized from time to
time. We will provide the specific terms of our securities, including
their offering prices, in supplements to this prospectus. The
supplements may also add, update or change information contained in this
prospectus. You should read this prospectus and any supplements
carefully before you invest.
Our
common stock is listed on the New York Stock Exchange under the symbol
“MDU.” Any common stock sold in this offering will be listed on the
New York Stock Exchange.
See
“Risk Factors” beginning on page 5 of this prospectus and as contained in our
annual, quarterly and current reports filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, which are incorporated by
reference into this prospectus, to read about certain factors you should
consider before investing in the securities being offered.
Our
principal executive offices are located at MDU Resources Group, Inc., 1200 West
Century Avenue, P.O. Box 5650, Bismarck, North Dakota 58506-5650, and our
telephone number is (701) 530-1000.
We may
offer our securities directly or through agents, underwriters or
dealers. The supplements to this prospectus will describe the terms
of any particular plan of distribution, including any underwriting
arrangements. The “Plan of Distribution” section on page 31 of this
prospectus provides more information on this topic.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or 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 28, 2008.
TABLE
OF CONTENTS
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This
prospectus is part of a registration statement that we filed with the Securities
and Exchange Commission, or SEC, utilizing a “shelf” registration, or continuous
offering, process. Under this shelf registration process, we may issue and sell,
from time to time, any combination of the securities described in this
prospectus in one or more offerings. The registration statement is
unlimited to the amount of securities that may be registered. The
actual amount of securities being issued from time to time will be disclosed
through a prospectus supplement filed at the time of issuance. As of
the date of this prospectus, our board of directors has authorized the issuance
of up to an aggregate offering price of $1,000,000,000 of any combination of
securities described in this prospectus in one or more offerings. Our
board of directors reviews this authorization on a periodic basis and the
aggregate amount of securities that we are authorized to issue pursuant to this
registration statement may be increased in the future.
This
prospectus provides you with a general description of the securities that we may
offer. Each time we sell securities, we will provide a prospectus supplement
that will contain specific information about the terms of that offering.
Material United States federal income tax considerations applicable to the
offered securities will be discussed in the applicable prospectus supplement, if
necessary. The prospectus supplement may also add, update or change information
contained in this prospectus. You should read both this prospectus and any
prospectus supplement together with additional information described under the
heading “Where You Can Find More Information About Us.”
For more
detailed information about the securities, you can read the exhibits to the
registration statement. Those exhibits have been either filed with the
registration statement or incorporated by reference to earlier SEC filings
listed in the registration statement.
WHERE YOU CAN FIND MORE INFORMATION ABOUT US
We file
annual, quarterly and other reports and other information with the
SEC. You can read and copy any information filed by us with the SEC
at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C.
20549. You can obtain additional information about the Public
Reference Room by calling the SEC at 1-800-SEC-0330.
In
addition, the SEC maintains an Internet site (http://www.sec.gov) that contains
reports, proxy and information statements, and other information regarding
issuers that file electronically with the SEC, including us. We also
maintain an Internet site (http://www.mdu.com). Information contained
on our Internet site does not constitute part of this prospectus.
The SEC
allows us to “incorporate by reference” the information that we file with the
SEC which means that we may disclose important information to you by referring
you to those documents in this prospectus. The information
incorporated by reference is an important part of this prospectus. We are
incorporating by reference the documents listed below and any future filings we
make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended, or Exchange Act, after the date of this
prospectus until we sell all of the securities described in this
prospectus. Any of those future filings will update, supersede and
replace the information contained in any documents incorporated by reference in
this prospectus at the time of the future filings.
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1.
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MDU
Resources’ Annual Report on Form 10-K for the year ended December 31, 2007
(including portions of the Annual Report to
Stockholders);
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2.
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MDU
Resources’ Quarterly Report on Form 10-Q for the quarter ended March 31,
2008;
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3.
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MDU
Resources’ Current Reports on Form 8-K, filed on January 8, January 22,
January 25, February 6, February 20, March 6, April 7, May 2 and May 20,
2008;
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4.
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MDU
Resources’ Registration Statement on Form 8-A, filed September 21, 1994,
Amendment No. 1 thereto, filed March 23, 2000, Amendment No. 2 thereto,
filed March 10, 2003, Amendment No. 3 thereto, filed January 21, 2004 and
Amendment No. 4 thereto, filed June 27,
2007;
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5.
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MDU
Resources’ Registration Statement on Form 8-A filed November 12, 1998, and
Amendment No. 1 thereto, filed March 23, 2000;
and
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6.
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Proxy
Statement for an annual meeting of stockholders held on April 22,
2008.
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You may
request a copy of these documents, at no cost to you, by writing or calling
Office of the Treasurer, MDU Resources Group, Inc., 1200 West Century Avenue,
P.O. Box 5650, Bismarck, North Dakota 58506-5650, telephone (701)
530-1000.
You
should rely only on the information contained in, or incorporated by reference
in, this prospectus and any prospectus supplement. We have not, and
any underwriters, agents or dealers have not, authorized anyone else to provide
you with different information. We are not, and any underwriters,
agents or dealers are not, making an offer of these securities in any state
where the offer is not permitted. You should not assume that the
information contained in this prospectus and any prospectus supplement is
accurate as of any date other than the date on the front of such document or
that the information incorporated by reference in this prospectus is accurate as
of any date other than the date of the document incorporated by
reference.
This
document contains or incorporates forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Exchange Act. Forward-looking statements are all statements other than
statements of historical fact, including without limitation those statements
that are identified by the words "anticipates," "estimates," "expects,"
"intends," "plans," "predicts" and similar expressions, and include statements
concerning plans, objectives, goals, strategies, future events or performance,
and underlying assumptions (many of which are based, in turn, upon further
assumptions) and other statements that are other than statements of historical
facts. From time to time, we may publish or otherwise make available
forward-looking statements of this nature.
Forward-looking
statements involve risks and uncertainties, which could cause actual results or
outcomes to differ materially from those expressed. Our expectations, beliefs
and projections are expressed in good faith and are believed by us to have a
reasonable basis, including without limitation, management's examination of
historical operating trends, data contained in our records and other data
available from third parties. Nonetheless, our expectations, beliefs or
projections may not be achieved or accomplished.
Any
forward-looking statement contained in this document or any document
incorporated by reference into this document speaks only as of the date on which
the statement is made, and we undertake no obligation to update any
forward-looking statement or statements to reflect events or circumstances that
occur after the date on which the statement is made or to reflect the occurrence
of unanticipated events. New factors emerge from time to time, and it is not
possible for us to predict all of the factors, nor can we assess the effect of
each factor on our business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those contained in
any forward-looking statement. All forward-looking statements, whether written
or oral and whether made by or on behalf of us, are expressly qualified by the
risk factors and cautionary statements contained in or incorporated by reference
into this prospectus, including statements contained within “Risk Factors”
beginning on page 5.
MDU RESOURCES GROUP, INC.
We are a
diversified natural resource company, which was incorporated under the laws of
the state of Delaware in 1924. Our principal executive offices are at
1200 West Century Avenue, P.O. Box 5650, Bismarck, North Dakota 58506-5650,
telephone (701) 530-1000.
Montana-Dakota
Utilities Co., one of our public utility divisions, through the electric and
natural gas distribution segments, generates, transmits and distributes
electricity and distributes natural gas in Montana, North Dakota, South Dakota
and Wyoming. Great Plains Natural Gas Co., another one of our public
utility divisions, distributes natural gas in western Minnesota and southeastern
North Dakota. Cascade Natural Gas Corporation, a wholly owned
subsidiary, distributes natural gas in Washington and Oregon. These operations
also supply related value-added products and services.
Through
our wholly owned subsidiary, Centennial Energy Holdings, Inc., we own WBI
Holdings, Inc., Knife River Corporation, MDU Construction Services Group, Inc.,
Centennial Energy Resources LLC and Centennial Holdings Capital
LLC.
WBI
Holdings is comprised of the pipeline and energy services and the natural gas
and oil production segments. The pipeline and energy services segment
provides natural gas transportation, underground storage and gathering services
through regulated and nonregulated pipeline systems primarily in the Rocky
Mountain and northern Great Plains regions of the United States. The
pipeline and energy services segment also provides energy-related management
services. The natural gas and oil production segment is engaged in
natural gas and oil acquisition, exploration, development and production
activities in the Rocky Mountain and Mid-Continent regions of the United States
and in and around the Gulf of Mexico.
Knife
River is comprised of the construction materials and contracting
segment. Knife River mines aggregates and markets crushed stone,
sand, gravel and related construction materials, including ready-mixed concrete,
cement, asphalt, liquid asphalt and other value-added products. It
also performs integrated construction services. Knife River operates in the
central, southern and western United States, and Alaska and Hawaii.
MDU
Construction Services is comprised of the construction services
segment. MDU Construction Services specializes in electric line
construction, pipeline construction, utility excavation, inside electrical
wiring, cabling and mechanical work, fire protection and the manufacture and
distribution of specialty equipment.
Centennial
Resources owns interests in the companies owning certain electric transmission
lines in Brazil, which are reflected in the other category.
Centennial
Capital insures various types of risks as a captive insurer for certain of our
subsidiaries. The function of the captive insurer is to fund the
deductible layers of the insured companies’ general liability and automobile
liability coverages. Centennial Capital also owns certain real and
personal property. These activities are reflected in the other
category.
Investing
in the securities involves certain risks. You are urged to read and consider the
risk factors relating to an investment in the securities described in our
annual, quarterly and current reports filed with the SEC under the Exchange Act,
which are incorporated by reference into this prospectus. Before making an
investment decision, you should carefully consider these risks as well as other
information that we include or incorporate by reference in this prospectus. The
risks and uncertainties we have described are not the only ones facing us. The
prospectus supplement applicable to each type or series of securities we offer
may contain a discussion of additional risks applicable to an investment in us
and the particular type of securities we are offering under that prospectus
supplement.
RATIO OF EARNINGS TO FIXED CHARGES
The
following table shows our ratio of earnings to fixed charges for the periods
indicated:
Fiscal
Years Ended December 31,
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2006
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2005
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2004
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2003
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6.5
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6.5
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6.7
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4.8
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4.7
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Our ratio
of earnings to fixed charges for the three months ended March 31, 2008 was
5.9.
Except as
may otherwise be set forth in the prospectus supplement, the net proceeds from
the sale of the securities will be added to our general funds and may be used
for the refunding of outstanding debt obligations, for corporate development
purposes (including the potential acquisition of businesses and/or business
assets), and for other general business purposes.
The
following description sets forth the general terms and provisions of the Debt
Securities that we may offer by this prospectus. We will describe the
particular terms of the Debt Securities, and provisions that vary from those
described below, in one or more prospectus supplements.
We may
issue the Debt Securities from time to time in the future, in one or more
series, under the Indenture, dated as of December 15, 2003, between us and The
Bank of New York, as trustee, or the Indenture Trustee, which may be amended and
supplemented from time to time (the “Indenture”). The Indenture and
its associated documents contain the full legal text of the matters described in
this section. Because this section is a summary, it does not describe
every aspect of the Debt Securities or the Indenture. This summary is
subject to and qualified in its entirety by reference to all the provisions of
the Indenture, including definitions of some of the terms used in the
Indenture. We also include references in parentheses to some of the
sections of the Indenture. The Indenture is on file with the SEC and
is incorporated by reference in this prospectus. You should read the
Indenture for a complete understanding of all of its provisions. This
summary also is subject to and qualified by reference to the description of the
particular terms of each series of Debt Securities described in the applicable
prospectus supplement or supplements. The Indenture has been
qualified under the Trust Indenture Act, and you should also refer to the Trust
Indenture Act for provisions that apply to the Debt Securities.
There is
no requirement under the Indenture that future issuances of debt securities be
issued exclusively under the Indenture, and we will be free to employ other
indentures or agreements containing provisions different from those included in
the Indenture or applicable to one or more issues of debt securities, in
connection with future issues of the other debt securities.
General
The
Indenture permits us to issue an unlimited amount of Debt Securities from time
to time. All Debt Securities of any one series need not be issued at
the same time, and a series may be reopened for issuances of additional Debt
Securities of that series. This means that we may from time to time,
without the consent of the existing holders of the Debt Securities of any
series, create and issue additional Debt Securities of a series having the same
terms and conditions as the previously-issued Debt Securities of that series in
all respects, except for issue date, issue price and, if applicable, the initial
interest payment on those additional Debt Securities. Additional Debt
Securities issued in this manner will be consolidated with, and will form a
single series with, the previously-issued Debt Securities of that
series. For more information, see the discussion below under
“Issuance of Additional Debt Securities.”
Until the
Release Date (described below), the Debt Securities will be issued on the basis
of, and primarily secured by, (a) the lien of one or more series of First
Mortgage Bonds issued by us under the Mortgage (as these terms are defined below
under DESCRIPTION OF THE FIRST MORTGAGE BONDS) and any other Class A Bonds
issued by us and delivered by us to the Indenture Trustee and (b) the lien of
the Indenture on our Electric and Gas Utility Property (as defined below under
“Lien of the Indenture”). On the Release Date, the Debt Securities
will cease to be secured and will become our unsecured general obligations,
ranking on a parity with our other senior unsecured indebtedness. For
more information, see the discussions below under
“Security,” “Issuance of Additional Debt Securities” and “Discharge
of Lien; Release Date”). As discussed below under “Discharge of Lien;
Release Date”, we may, at any time and subject to satisfying certain specified
conditions, require that any debt issued under the Indenture be unsecured and
rank equally with our unsecured and unsubordinated debt.
A
prospectus supplement and an officer’s certificate relating to any series of
Debt Securities being offered will include specific terms relating to that
offering. These terms will include some or all of the following terms
that apply to that series:
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the
title of the Debt Securities;
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any
limit upon the total principal amount of the Debt
Securities;
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the
dates, or the method to determine these dates, on which the principal of
the Debt Securities will be payable and how it will be
paid;
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the
interest rate or rates which the Debt Securities will bear, or how the
rate or rates will be determined, the interest payment dates for the Debt
Securities and the regular record dates for interest
payments;
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any
right to delay the interest payments for the Debt
Securities;
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the
percentage, if less than 100%, of the principal amount of the Debt
Securities that will be payable if the maturity of the Debt Securities is
accelerated;
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any
date or dates on which the Debt Securities may be redeemed at our option
and any restrictions on those
redemptions;
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any
sinking fund or other provisions that would obligate us to repurchase or
otherwise redeem the Debt
Securities;
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any
additions to the events of default under the Indenture or additions to our
covenants under the Indenture for the benefit of the holders of Debt
Securities;
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if
the Debt Securities will be issued in denominations other than multiples
of $1,000;
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if
payments on the Debt Securities may be made in a currency or currencies
other than United States dollars; and, if so, the means through which the
equivalent principal amount of any payment in United States dollars is to
be determined for any purpose;
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any
rights or duties of another entity to assume our obligations with respect
to the Debt Securities;
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any
collateral, security, assurance or guarantee for the Debt Securities;
and
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any
other terms of the Debt Securities not inconsistent with the terms of the
Indenture.
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(Indenture,
Section 301.)
We may
sell Debt Securities at a discount below their principal
amount. United States federal income tax considerations applicable to
Debt Securities sold at an original issue discount may be described in the
prospectus supplement. In addition, important United States federal
income tax or other tax considerations applicable to any Debt Securities
denominated or payable in a currency or currency unit other than United States
dollars may be described in the prospectus supplement.
Except as
may otherwise be described in the applicable prospectus supplement, the
covenants contained in the Indenture will not afford holders of Debt Securities
protection in the event of a highly-leveraged transaction involving
us.
Redemption
We will
set forth any terms for the redemption of Debt Securities of any series in the
applicable prospectus supplement. Unless we indicate differently in a
prospectus supplement, and except with respect to Debt Securities redeemable at
the option of the holder of those Debt Securities, Debt Securities will be
redeemable upon notice to holders by mail at least 30 days prior to the
redemption date. (Indenture, Section 504.) If less than all of the
Debt Securities of any series or any tranche thereof are to be redeemed, the
Indenture Trustee will select the Debt Securities to be redeemed. In
the absence of any provision for selection, the Indenture Trustee will choose a
method of random selection as it deems fair and
appropriate. (Indenture, Section 503.)
Debt
securities will cease to bear interest on the redemption date. We
will pay the redemption price and any accrued interest to the redemption date
upon surrender of any Debt Security for redemption. (Indenture,
Section 505.) If only part of a Debt Security is redeemed, the
Indenture Trustee will deliver to the holder of the Debt Security a new Debt
Security of the same series for the remaining portion without
charge. (Indenture, Section 506.)
We may
make any redemption at our option conditional upon the receipt by the paying
agent, on or prior to the date fixed for redemption, of money sufficient to pay
the redemption price. If the paying agent has not received the money
by the date fixed for redemption, we will not be required to redeem the Debt
Securities. (Indenture, Section 504.)
Payment
and Paying Agents
Except as
may be provided in the applicable prospectus supplement, interest, if any, on
each Debt Security payable on any interest payment date will be paid to the
person in whose name that Debt Security is registered at the close of business
on the regular record date for that interest payment date. However,
interest payable at maturity will be paid to the person to whom the principal is
paid. If there has been a default in the payment of interest on any
Debt Security, the defaulted interest may be paid to the holder of that Debt
Security as of the close of business on a date between 10 and 15 days before the
date proposed by us for payment of the defaulted interest or in any other manner
permitted by any securities exchange on which that Debt Security may be listed,
if the Indenture Trustee finds it workable. (Indenture, Section
307.)
Unless
otherwise specified in the applicable prospectus supplement, principal, premium,
if any, and interest on the Debt Securities at maturity will be payable upon
presentation of the Debt Securities at the corporate trust office of The Bank of
New York, in the city of New York, as our paying agent. However, we
may choose to make payment of interest by check mailed to the address of the
persons entitled to payment. We may change the place of payment on
the Debt Securities, appoint one or more additional paying agents (including
MDU) and remove any paying agent, all at our discretion. (Indenture,
Section 702.)
Registration
and Transfer
Unless
otherwise specified in the applicable prospectus supplement, the transfer of
Debt Securities may be registered, and Debt Securities may be exchanged for
other Debt Securities of the same series or tranche, of authorized denominations
and with the same terms and principal amount, at the offices of the Indenture
Trustee in New York, New York. (Indenture, Section
305.) We may designate one or more additional places, or change the
place or places previously designated, for registration of transfer and exchange
of the Debt Securities. (Indenture,
Section
702.) Unless otherwise specified in the applicable prospectus
supplement, no service charge will be made for any registration of transfer or
exchange of the Debt Securities. However, we may require payment to
cover any tax or other governmental charge that may be imposed in connection
with a registration of transfer or exchange. We will not be required
to execute or to provide for the registration, transfer or exchange of any Debt
Security
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during
the 15 days before an interest payment
date;
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during
the 15 days before giving any notice of redemption;
or
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selected
for redemption except the unredeemed portion of any Debt Security being
redeemed in part.
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(Indenture,
Section 305.)
Security
Except as
described below under this heading and under “Issuance of Additional Debt
Securities,” and subject to the exceptions discussed under “Discharge of Lien;
Release Date,” all Debt Securities will be secured, equally and ratably,
by:
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(1)
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the
first lien of an equal principal amount of First Mortgage Bonds delivered
by us to the Indenture Trustee, and other Class A Bonds as described
below; as discussed under DESCRIPTION OF THE FIRST MORTGAGE BONDS –
“Security and Priority,” the Mortgage constitutes a first mortgage lien on
the Mortgaged Property; and
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(2)
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the
lien of the Indenture, which is junior to the lien of the Mortgage, upon
our Electric and Gas Utility Property (as defined below under Lien of the
Indenture). If we acquire any property that is subject to a
Class A Mortgage (as described below), the lien of the Indenture would be
junior to the lien of that Class A Mortgage with respect to any of our
Electric and Gas Utility Property subject to the lien of that Class A
Mortgage.
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See
“Discharge of Lien; Release Date” for a discussion of provisions of the
Indenture pursuant to which, subject to the satisfaction of the specified
conditions, the lien of the Indenture would be discharged and the Debt
Securities would become our unsecured obligations.
Class
A Bonds
As
discussed below under “Consolidation, Merger and Conveyance of Assets,” we will
be permitted to merge or consolidate with another company upon meeting specified
requirements. Following a merger or consolidation of another company
into us, we could deliver to the Indenture Trustee first mortgage bonds issued
under an existing mortgage on the properties of the other company as the basis
for the issuance of additional Debt Securities. In this event, the
Debt Securities would be secured, additionally, by the first lien of the first
mortgage bonds and by the lien of the Indenture on the mortgaged property
acquired from the other company, which would be junior to the lien of the
existing mortgage. The Mortgage and all the other mortgages are
collectively referred to in this document as the “Class A Mortgages,” and
all first mortgage bonds issued under the Class A Mortgages are
collectively referred to in this document as the “Class A
Bonds.” (Indenture, Section 1706.)
Class A
Bonds, including First Mortgage Bonds, that are the basis for the authentication
and delivery of Debt Securities (a) will be delivered to, and registered in
the name of, the Indenture Trustee or its nominee and will be owned and held by
the Indenture Trustee, subject to the provisions of the Indenture, for the
benefit of the holders of all Debt Securities outstanding from time to time;
(b) will mature or be subject to mandatory redemption on the same dates,
and in the same principal amounts, as the Debt Securities; and (c)(i) may,
but need not, bear interest and (ii) may, but need not, contain provisions
for their redemption at our option, any redemption to be made at a redemption
price or prices not less than the principal amount of the Class A
Bonds. (Indenture, Sections 1602 and 1701.) To the extent
that Class A Bonds do not bear interest, holders of Debt Securities will not
have the benefit of the lien of a Class A Mortgage in respect of an amount
equal to accrued interest, if any, on the Debt Securities;
however,
the holders will nevertheless have the benefit of the lien of the Indenture in
respect of the amount of accrued interest.
Any
payment by us of principal of or premium or interest on the Class A Bonds
delivered to and held by the Indenture Trustee will be applied by the Indenture
Trustee to the payment of any principal, premium or interest, as the case may
be, in respect of the Debt Securities which is then due. Our
obligation under the Indenture to make payment in respect of the Debt Securities
will be deemed satisfied and discharged to the extent of the
payment. If, at the time of any payment of principal of Class A
Bonds, there is no principal then due in respect of the Debt Securities, the
proceeds of the payment will constitute “Funded Cash” and will be held by the
Indenture Trustee as part of the collateral for the Debt Securities, to be
withdrawn, used or applied as provided in the Indenture. If, at the
time of any payment of premium or interest on Class A Bonds, there is no premium
or interest then due on the Debt Securities, the payment will be remitted to us
at our request; except that, if any event of default under the Indenture, as
described below, has occurred and is continuing, the payment will be held as
part of the collateral for the Debt Securities until the event of default under
the Indenture has been cured or waived. (Indenture, Section
1702.) See “Withdrawal of Cash” below.
Any
payment by us on Debt Securities authenticated and delivered on the basis of the
delivery to the Indenture Trustee of Class A Bonds (other than by application of
the proceeds of a payment in respect of the Class A Bonds) will, to that extent,
be deemed to satisfy and discharge our obligations, if any, to make a
corresponding payment, in respect of the Class A Bonds which is then
due. (Indenture, Section 1702.)
The
Indenture Trustee may not sell, assign or otherwise transfer any Class A Bonds
except to a successor trustee under the Indenture. (Indenture,
Section 1704.) At the time any Debt Securities that have been
authenticated and delivered upon the basis of Class A Bonds cease to be
outstanding (other than as a result of the application of the proceeds of the
payment or redemption of the Class A Bonds), the Indenture Trustee will
surrender to us, or upon our order, an equal principal amount of the Class A
Bonds. (Indenture, Section 1703.)
When the
aggregate principal amount of all Class A Bonds outstanding under all Class A
Mortgages, other than those held by the Indenture Trustee, does not exceed the
greater of 5% of the net book value of our Electric and Gas Utility Property (as
described below) or 5% of our Capitalization (as described below), then, at our
request and subject to satisfaction of specified conditions, the Class A Bonds
held by the Indenture Trustee will be deemed satisfied and discharged, the
Indenture Trustee will surrender the Class A Bonds for cancellation, and the
Debt Securities will become our senior unsecured debt, subject to Permitted
Secured Debt and the exceptions described below. (Indenture, Section
1811.) See “Discharge of Lien; Release Date” below.
At the
date of this prospectus, the only Class A Mortgage is the Mortgage, and the
only Class A Bonds issuable at this time are First Mortgage Bonds issuable under
the Mortgage. When all of the outstanding First Mortgage Bonds which
are not held by the Indenture Trustee do not exceed the greater of 5% of the net
book value of our Electric and Gas Utility Property or 5% of our Capitalization,
and assuming no other Class A Mortgage exists at the time, the Indenture
may become unsecured. At the date of this prospectus, the test for
the Indenture and the Debt Securities to become unsecured has been satisfied but
the lien of the Indenture has not been discharged.
“Capitalization”
means the total of all the following items appearing on, or included in, our
unconsolidated balance sheet; (i) liabilities for indebtedness maturing more
than 12 months from the date of determination, and (ii) common stock, common
stock expense, accumulated other comprehensive income or loss, preferred stock,
preference stock, premium on common stock and retained earnings (however the
foregoing may be designated), less, to the extent not otherwise deducted, the
cost of shares of our capital stock held in our treasury, if
any. Capitalization is determined in accordance with generally
accepted accounting principles and practices applicable to the type of business
in which we are engaged, and may be determined as of the date not more than 60
days prior to the happening of the event for which the determination is being
made.
Lien
of the Indenture
The
Indenture creates a lien on substantially all of our fixed electricity
generation, transmission and distribution, and natural gas distribution,
properties owned by us immediately prior to July 1, 2000, together with
improvements, extensions and additions to, and renewals, replacements and
substitutions of or for, any part or parts of these
properties,
other than Excepted Property (as defined below). At the date of this
prospectus, these properties
are located in the states of North Dakota, South Dakota, Montana and
Wyoming. These properties, regardless of whether the Release Date has
occurred, are sometimes referred to as our “Electric and Gas Utility
Property.” At the date of this prospectus, substantially all of this
property is included within the category of property, plant and equipment on our
balance sheet, this property had a net book value as of March 31, 2008 of
approximately $558.8 million and this property, while subject to the lien of the
Indenture, is also subject to the prior lien of the Mortgage. For so
long as the Release Date has not occurred, the Debt Securities will have the
benefit of the first mortgage lien of the Mortgage on the Mortgaged Property to
the extent of the aggregate principal amount of First Mortgage Bonds held by the
Indenture Trustee, and also the benefit of the lien of any additional
Class A Mortgage on any property subject to that Class A Mortgage to the
extent of the aggregate principal amount of Class A Bonds, issued under that
Class A Mortgage, held by the Indenture Trustee.
Permitted
Liens
The lien
of the Indenture is subject to Permitted Liens described in the Indenture. These
Permitted Liens include liens existing at the execution date of the Indenture
such as the lien of the Mortgage, liens on property at the time we acquire the
property such as the lien of any other Class A Mortgage, tax liens and other
governmental charges which are not delinquent or which are being contested in
good faith, mechanics’, construction and materialmen’s liens, specified judgment
liens, easements, reservations and rights of others (including governmental
entities) in, and defects of title in, our property, specified leases and
leasehold interests, liens to secure public obligations, rights of others to
take minerals, timber, electric energy or capacity, gas, water, steam or other
products produced by us or by others on our property, rights and interests of
Persons other than us arising out of agreements relating to the common ownership
or joint use of property, and liens on the interests of those Persons in the
property, liens which have been bonded or for which other security arrangements
have been made, liens created in connection with the issuance of tax-exempt
bonds, purchase money liens and liens related to the construction or acquisition
of property, or the development or expansion of property, liens which secure
specified Debt Securities equally and ratably with other obligations, and
additional liens on any of our property (other than Excepted Property, as
described below) to secure debt for borrowed money in an aggregate principal
amount not exceeding the greater of 10% of our Net Tangible Assets (as described
below) or 10% of our Capitalization. (Indenture, Granting Clauses and
Sections 101 and 707.)
The
Indenture provides that the Indenture Trustee will have a lien, prior to the
lien on behalf of the holders of Debt Securities, upon the collateral for the
Debt Securities for the payment of its reasonable compensation and expenses and
for indemnity against specified liabilities. (Indenture, Section
1007.) This lien would be a Permitted Lien under the
Indenture.
Excepted
Property
The lien
of the Indenture does not cover, among other things, the following types of
property:
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all
properties acquired by us on or after July 1, 2000, including the
properties acquired in the merger with Great Plains Energy Corp. and Great
Plains Natural Gas Co. (which include all our gas distribution properties
located in the state of Minnesota and certain gas distribution properties
located in the southeastern part of North Dakota) and the properties
acquired in the merger with Cascade Natural Gas Corporation (which include
all our gas distribution properties located in the states of Washington
and Oregon), but excluding improvements, extensions and additions to, and
renewals, replacements and substitutions of or for, any part or parts of
the fixed electricity generation, transmission and distribution, and
natural gas distribution, properties owned by us immediately prior to July
1, 2000 unless otherwise excepted from the lien of the
Indenture;
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all
property of subsidiaries, including Centennial Energy Holdings, Inc., WBI
Holdings, Inc., Knife River Corporation, MDU Construction Services Group,
Inc., Centennial Energy Resources LLC, Centennial Holdings Capital LLC,
Centennial Energy Resources International, Inc., Fidelity Exploration
& Production Company and any other
subsidiaries;
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all
cash and securities (including the capital stock of the subsidiaries
mentioned in the preceding bullet and any other subsidiaries) not paid,
deposited or held under the Indenture, and all policies of insurance on
the lives of our officers;
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all
contracts, leases and other agreements of all kinds, contract rights,
bills, notes and other instruments, accounts receivable, transition
property, claims, demands and
judgments;
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all
governmental and other licenses, permits, franchises, consents and
allowances; intellectual property rights and other general
intangibles;
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all
vehicles, movable equipment, aircraft and
vessels;
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all
merchandise and appliances acquired for the purpose of resale in the
ordinary course and conduct of our business, and all materials and
supplies held for consumption in operation or held in advance of use
thereof for fixed capital purposes;
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all
electric energy, gas, steam and other materials and products generated,
manufactured, produced or purchased by us for sale, distribution or use in
the ordinary course and conduct of our
business;
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all
property which is the subject of a lease agreement designating us as
lessee, and all our right, title and interest in and to the property and
in, to and under the lease agreement, whether or not the lease agreement
is intended as security;
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all
property which prior to the execution date of the Indenture has been
released from the lien of the
Mortgage;
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all
property which subsequent to the execution date of the Indenture has been
released from the lien of the Indenture;
and
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any
and all property not acquired or constructed by us for use in our
electricity generation, transmission and distribution, and natural gas
distribution business.
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We
sometimes refer to property of ours not covered by the lien of the Indenture as
“Excepted Property.” (Indenture, Granting Clauses.)
We may
enter into supplemental indentures with the Indenture Trustee, without the
consent of the holders, in order to subject additional property (including
property that would otherwise be excepted from the lien) to the lien of the
Indenture. (Indenture, Section 1301.) This property would
then constitute Property Additions and part of the collateral for the Debt
Securities, and would be available as a basis for the issuance of Debt
Securities. See “Issuance of Additional Debt
Securities.”
The
Indenture provides that after-acquired properties (other than Excepted Property)
that are improvements, extensions or additions to, or renewals, replacements or
substitutions of or for, any part or parts of our Electric and Gas Utility
Property will be subject to the lien of the Indenture. (Indenture,
Second Granting Clause.) We may also elect to subject additional
property to the lien of the Indenture by amending the Indenture.
See
“Discharge of Lien; Release Date” for a discussion of provisions of the
Indenture pursuant to which, subject to the satisfaction of specified
conditions, all the collateral for the Debt Securities would be released from
the lien of the Indenture, the Class A Bonds held by the Indenture Trustee would
be surrendered for cancellation, and Debt Securities would become our unsecured
obligations.
Issuance
of Additional Debt Securities
Subject
to the issuance restrictions described below, the maximum principal amount of
Debt Securities that may be authenticated and delivered under the Indenture is
unlimited. (Indenture, Section 301.) Prior to the Release
Date,
Debt
Securities of any series may be issued from time to time on the basis of, and in
an aggregate principal amount not exceeding:
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the
aggregate principal amount of Class A Bonds delivered to the Indenture
Trustee;
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70%
of the Cost or Fair Value to us (whichever is less) of Property Additions
(as described below) which do not constitute Funded Property (generally,
Property Additions which have been made the basis of the authentication
and delivery of Debt Securities, the release of collateral for the Debt
Securities or the withdrawal of cash, which have been substituted for
retired Funded Property or which have been used for other specified
purposes) after specified deductions and additions, primarily including
adjustments to offset property
retirements;
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the
aggregate principal amount of retired Debt Securities, but if Class A
Bonds had been made the basis for the authentication and delivery of the
retired Debt Securities, only after the discharge of the related
Class A Mortgage; or
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an
amount of cash deposited with the Indenture
Trustee.
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(Indenture,
Sections 1602 through 1605.)
Property
Additions generally include any property that is owned by us and is subject to
the lien of the Indenture. (Indenture, Section 103.)
We expect
that, until the Release Date, we will issue Debt Securities primarily on the
basis of First Mortgage Bonds. However, we have the right to issue
additional Debt Securities on the basis of Property Additions, retired Debt
Securities and cash deposits, and Class A Bonds not issued under the
Mortgage.
Release
of Property
Unless an
event of default under the Indenture has occurred and is continuing, we may
obtain the release from the lien of the Indenture of any collateral for the Debt
Securities, except for cash held by the Indenture Trustee, upon delivery to the
Indenture Trustee of an amount in cash equal to the amount, if any, by which the
Cost of the property to be released (or, if less, the Fair Value to us of the
property at the time it became Funded Property) exceeds the aggregate
of:
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an
amount equal to the aggregate principal amount of obligations secured by
Purchase Money Liens upon the property to be released and delivered to the
Indenture Trustee;
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an
amount equal to the Cost or Fair Value to us (whichever is less) of
certified Property Additions not constituting Funded Property after
specified deductions and additions, primarily including adjustments to
offset property retirements (except that these adjustments need not be
made if the Property Additions were acquired or made within the 90-day
period preceding the release);
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the
aggregate principal amount of Debt Securities that we would be entitled to
issue on the basis of retired Debt Securities (with the entitlement being
waived by operation of the
release);
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any
amount of cash and/or an amount equal to the aggregate principal amount of
obligations secured by Purchase Money Liens upon the property released
delivered to the trustee or other holder of a lien prior to the lien of
the Indenture, subject to specified limitations described
below;
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the
aggregate principal amount of Debt Securities delivered to the Indenture
Trustee (with the Debt Securities to be canceled by the Indenture
Trustee); and
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any
taxes and expenses incidental to any sale, exchange, dedication or other
disposition of the property to be
released.
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(Indenture,
Section 1803.)
Property
that is not Funded Property may generally be released from the lien of the
Indenture without depositing any cash or property with the Indenture Trustee as
long as (a) the aggregate amount of Cost or Fair Value to us (whichever is
less) of all Property Additions which do not constitute Funded Property
(excluding the property to be released) after some deductions and additions,
primarily including adjustments to offset property retirements, is not less than
zero or (b) the Cost or Fair Value (whichever is less) of property to be
released does not exceed the aggregate amount of the Cost or Fair Value to us
(whichever is less) of Property Additions acquired or made within the 90-day
period preceding the release. (Indenture, Section 1804.)
The
Indenture provides simplified procedures for the release of property which has
been released from the lien of a Class A Mortgage, minor properties and
property taken by eminent domain, and provides for dispositions of certain
obsolete property and grants or surrender of certain rights without any release
or consent by the Indenture Trustee. (Indenture Sections 1802, 1805,
1807 and 1808.)
If we
retain any interest in any property released from the lien of the Indenture, the
Indenture will not become a lien on the property or the interest in the property
or any improvements, extensions or additions to, or any renewals, replacements
or substitutions of or for, any part or parts of the
property. (Indenture, Section 1810.)
Withdrawal
of Cash
Unless an
event of default under the Indenture has occurred and is continuing, and subject
to specified limitations, cash held by the Indenture Trustee may, generally,
(1) be withdrawn by us (a) to the extent of the Cost or Fair Value to
us (whichever is less) of Property Additions not constituting Funded Property,
after specified deductions and additions, primarily including adjustments to
offset retirements (except that these adjustments need not be made if the
Property Additions were acquired or made within the 90-day period preceding the
withdrawal) or (b) in an amount equal to the aggregate principal amount of
Debt Securities that we would be entitled to issue on the basis of retired Debt
Securities (with the entitlement to the issuance being waived by operation of
the withdrawal) or (c) in an amount equal to the aggregate principal amount
of any outstanding Debt Securities delivered to the Indenture Trustee, or
(2) upon our request, be applied to (a) the purchase of Debt
Securities or (b) the payment (or provision for payment) at stated maturity
of any Debt Securities or the redemption (or provision for payment) of any Debt
Securities which are redeemable (Indenture, Section 1806); except that cash
deposited with the Indenture Trustee as the basis for the authentication and
delivery of Debt Securities, as well as cash representing a payment of principal
of Class A Bonds, may, in addition, be withdrawn in an amount equal to the
aggregate principal amount of Class A Bonds delivered to the Indenture
Trustee. (Indenture, Sections 1605 and 1702.)
Discharge
of Lien; Release Date
At any
time when the aggregate principal amount of all Class A Bonds outstanding under
all Class A Mortgages, other than those held by the Indenture Trustee, does not
exceed the greater of 5% of the net book value of our Electric and Gas Utility
Property or 5% of our Capitalization, the Indenture may be amended and
supplemented, without the consent of the holders of Debt Securities or any other
Debt Securities, to eliminate all terms and conditions relating to collateral
for the Debt Securities, with the result that our obligations under the
Indenture and the Debt Securities would be entirely unsecured. We
refer to the date on which the elimination of collateral occurs as the “Release
Date.” As of the date of this prospectus, the test for making our
obligations under the Indenture and the Debt Securities unsecured has been met
but we have not yet sought to satisfy the conditions to establish the Release
Date.
The
occurrence of the Release Date is subject to our delivery of the following
documents to the Indenture Trustee:
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a
company order requesting execution and delivery by the Indenture Trustee
of a supplemental indenture and other instruments necessary to discharge,
cancel, terminate or satisfy the lien of the
Indenture;
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an
officer’s certificate stating that
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(1)
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to
the knowledge of the officer, no event of default under the Indenture has
occurred and is continuing; and
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(2)
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the
aggregate principal amount of all Class A Bonds outstanding under all
Class A Mortgages, other than those held by the Indenture Trustee, does
not exceed the greater of 5% of the net book value of our Electric and Gas
Utility Property or 5% of our Capitalization;
and
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an
opinion of counsel to the effect that none of our Electric and Gas Utility
Property, other than Excepted Property, is subject to any lien other than
the lien of the Indenture and Permitted
Liens.
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Upon the
execution and delivery of the amendment of the Indenture as contemplated above,
the lien of the Indenture will be deemed to have been satisfied and discharged
and the Indenture Trustee will release the collateral for the Debt Securities
from the lien of the Indenture and surrender all Class A Bonds held by the
Indenture Trustee under the Indenture to the respective Class A Trustee for
cancellation. (Indenture, Section 1811.)
As of
March 31, 2008, we had $50.5 million aggregate principal amount of First
Mortgage Bonds outstanding, $30.0 of which were held by the Indenture Trustee
for the benefit of holders of debt securities that were previously issued under
the Indenture. The aggregate principal amount of our outstanding
first mortgage bonds, other than those held by the Indenture Trustee, was $20.5
million and satisfies the lien release requirements under the
Indenture.
Limitation
on Secured Debt
So long
as any of the Debt Securities remain outstanding, we will not issue any Secured
Debt other than Permitted Secured Debt (in each case as defined below) without
the consent of the holders of a majority in principal amount of the outstanding
Debt Securities of all series with respect to which this covenant is made,
considered as one class; provided, however, that this covenant will not prohibit
the creation or existence of any Secured Debt if either:
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we
make effective provision whereby all Debt Securities then outstanding will
be secured equally and ratably with the Secured Debt;
or
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we
deliver to the Indenture Trustee bonds, notes or other evidences of
indebtedness secured by the lien which secures the Secured Debt in an
aggregate principal amount equal to the aggregate principal amount of the
Debt Securities then outstanding and meeting other requirements set forth
in the Indenture.
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“Secured
Debt” means Debt created, issued, incurred or assumed by us which is secured by
a lien upon any of our property (other than Excepted Property). For
purposes of this covenant, any Capitalized Lease Liabilities will be deemed to
be Debt secured by a lien on our property.
“Debt”
means:
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our
indebtedness for borrowed money evidenced by a bond, debenture, note or
other written instrument or agreement by which we are obligated to repay
the borrowed money;
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any
guaranty by us of any indebtedness of another person;
and
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any
Capitalized Lease Liabilities.
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“Debt”
does not include, among other things:
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indebtedness
under any installment sale or conditional sale agreement or any other
agreement relating to indebtedness for the deferred purchase price of
property or services;
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any
trade obligations (including any obligations under power or other
commodity purchase agreements and any associated hedges or derivatives) or
other obligations in the ordinary course of
business;
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obligations
under any lease agreement that are not Capitalized Lease Liabilities;
or
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any
liens securing indebtedness, neither assumed nor guaranteed by us nor on
which we customarily pay interest, existing upon real estate or rights in
or relating to real estate acquired by us for substation, transmission
line, transportation line, distribution line or right of way
purposes.
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“Permitted
Secured Debt” means, as of any particular time:
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Class
A Bonds and Debt Securities issued prior to the Release
Date;
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Secured
Debt which matures less than one year from the date of the issuance or
incurrence and is not extendible at the option of the issuer; and any
refundings, refinancings and/or replacements of any the Secured Debt by or
with Secured Debt that matures less than one year from the date of the
refunding, refinancing and/or replacement and is not extendible at the
option of the issuer;
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Secured
Debt secured by Purchase Money Liens or any other liens existing or placed
upon property at the time of, or within one hundred eighty (180) days
after, the acquisition thereof by us, and any refundings, refinancings
and/or replacements of any the Secured Debt; provided, however, that no
Purchase Money Lien or other Lien of this type will extend to or cover any
of our property other than (1) the property so acquired and
improvements, extensions and additions to the property and renewals,
replacements and substitutions of or for the property or any part or parts
of the property and (2) with respect to Purchase Money Liens, other
property subsequently acquired by
us;
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Secured
Debt relating to governmental obligations the interest on which is not
included in gross income for purposes of federal income taxation pursuant
to Section 103 of the Internal Revenue Code of 1986, as amended (or any
successor provision of law), for the purpose of financing or refinancing,
in whole or in part, costs of acquisition or construction of property to
be used by us, to the extent that the lien which secures the Secured Debt
is required either by applicable law or by the issuer of the governmental
obligations or is otherwise necessary in order to establish or maintain
the exclusion from gross income; and any refundings, refinancings and/or
replacements of any Secured Debt by or with similar Secured
Debt;
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Secured
Debt (i) which is related to the construction or acquisition of
property not previously owned by us or (ii) which is related to the
financing of a project involving the development or expansion of our
property and (iii) in either case, the obligee in respect of which
has no recourse to us or any of our property other than the property
constructed or acquired with the proceeds of the transaction or the
project financed with the proceeds of the transaction (or the proceeds of
the property or the project); and any refundings, refinancings and/or
replacements of any Secured Debt by or with Secured Debt described in
clause (iii) above; and
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in
addition to the Permitted Secured Debt described above, Secured Debt not
otherwise so permitted in an aggregate principal amount not exceeding the
greater of 10% of our Net Tangible Assets or 10% of our
Capitalization.
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“Net
Tangible Assets” means the amount shown as total assets on our unconsolidated
balance sheet, less (i) intangible assets including, but without limitation,
such items as goodwill, trademarks, trade names, patents, unamortized debt
discount and expense and other regulatory assets carried as assets on our
unconsolidated balance sheet and (ii) appropriate adjustments, if any, on
account of minority interests. Net Tangible Assets will be determined
in accordance with generally accepted accounting principles and practices
applicable to the type of business in which we are engaged.
“Capitalized
Lease Liabilities” means the amount, if any, shown as liabilities on our
unconsolidated balance sheet for capitalized leases of electric transmission and
distribution property not owned by us, which amount
will be
determined in accordance with generally accepted accounting principles and
practices applicable to the type of business in which we are
engaged.
(Indenture,
Section 707.)
Defeasance
We will
be discharged from our obligations on the Debt Securities of a particular series
if we irrevocably deposit with the Indenture Trustee or any paying agent, other
than us, sufficient cash or government securities to pay the principal,
interest, any premium and any other sums when due on the stated maturity date or
a redemption date of that series of Debt Securities. (Indenture,
Section 801.)
Consolidation,
Merger and Conveyance of Assets
Under the
terms of the Indenture, we may not consolidate with or merge into any other
entity or convey, transfer or lease as or substantially as an entirety to any
entity our Electric and Gas Utility Property, unless:
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the
surviving or successor entity, or an entity which acquires by conveyance
or transfer or which leases our Electric and Gas Utility Property as, or
substantially as, an entirety, is organized and validly existing under the
laws of any domestic jurisdiction and it expressly assumes our obligations
on all Debt Securities then outstanding under the Indenture and if the
consolidation, merger, conveyance, sale or other transfer occurs prior to
the Release Date, confirms the lien of the Indenture on the collateral for
the Debt Securities;
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in
the case of a lease, the lease is made expressly subject to termination by
us or by the Indenture Trustee and by the purchaser of the property so
leased at any sale thereof at any time during the continuance of an event
of default under the Indenture;
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we
shall have delivered to the Indenture Trustee an officer’s certificate and
an opinion of counsel as provided in the Indenture;
and
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immediately
after giving effect to the transaction, no event of default under the
Indenture, or event which, after notice or lapse of time or both, would
become an event of default under the Indenture, shall have occurred and be
continuing.
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(Indenture,
Section 1201.) In the case of the conveyance or other transfer of the Electric
and Gas Utility Property as or substantially as an entirety to any other person,
upon the satisfaction of all the conditions described above, we would be
released and discharged from all our obligations under the Indenture and on the
Debt Securities then outstanding unless we elect to waive release and
discharge. (Indenture, Section 1204.)
The
Indenture does not prevent or restrict:
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any
conveyance or other transfer, or lease, of any part of our Electric and
Gas Utility Property that does not constitute the entirety, or
substantially the entirety, of our Electric and Gas Utility Property; or
(Indenture, Section 1205.)
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any
conveyance, transfer or lease of any of our properties where we retain
Electric and Gas Utility Property with a fair value in excess of 143% of
the aggregate principal amount of all outstanding Debt Securities, and any
other outstanding debt securities that rank equally with, or senior to,
the Debt Securities with respect to the Electric and Gas Utility Property,
other than any Class A Bonds held by the Indenture
Trustee. This fair value will be determined within 90 days of
the conveyance, transfer or lease by an independent expert that we select
and that is approved by the Indenture Trustee. (Indenture,
Section 1206.)
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The terms
of the Indenture do not restrict us in a merger in which we are the surviving
entity. (Indenture, Section 1205.)
Events
of Default
“Event of
default,” when used in the Indenture with respect to Debt Securities, means any
of the following:
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failure
to pay interest on any Debt Security for 30 days after it is
due;
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failure
to pay the principal of or any premium on any Debt Security when
due;
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failure
to perform any other covenant in the Indenture that continues for 90 days
after we receive written notice from the Indenture Trustee, or we and the
Indenture Trustee receive a written notice from the holders of at least
33% in aggregate principal amount of the outstanding Debt
Securities;
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events
of bankruptcy, insolvency or our reorganization as specified in the
Indenture;
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as
long as the Indenture Trustee holds any outstanding Class A Bonds which
were delivered as the basis for the authentication and delivery of
outstanding Debt Securities, the occurrence of a matured event of default
under the related Class A Mortgage (other than a matured event of default
which (i) is not a failure to make payments on Class A Bonds and is not of
similar kind or character to the event of default relating to events of
bankruptcy, insolvency or reorganization, referred to above, and (ii) has
not resulted in the acceleration of the outstanding Class A Bonds under
the Class A Mortgage); provided, however, that the waiver or cure of the
event of default under a Class A Mortgage will constitute a waiver and
cure of the corresponding event of default under the Indenture, and the
rescission and annulment of the consequences thereof will constitute a
rescission and annulment of the corresponding consequences under the
Indenture; or
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any
other event of default included in any supplemental indenture or officer’s
certificate for that series of Debt
Securities.
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(Indenture,
Sections 901 and 1301.)
Remedies
If an
event of default under the Indenture occurs and is continuing, then the
Indenture Trustee or the holders of at least 33% in aggregate principal amount
of the outstanding Debt Securities may declare the principal amount of all of
the Debt Securities to be due and payable immediately.
At any
time after a declaration of acceleration has been made and before a judgment or
decree for payment of the money due has been obtained by the Indenture Trustee,
the event of default under the Indenture giving rise to the declaration of
acceleration will be considered cured, and the declaration and its consequences
will be considered rescinded and annulled, if:
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we
have paid or deposited with the Indenture Trustee a sum sufficient to
pay:
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(1)
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all
overdue interest on all outstanding Debt
Securities;
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(2)
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the
principal of and premium, if any, on the outstanding Debt Securities that
have become due otherwise than by the declaration of acceleration and
overdue interest thereon;
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(3)
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interest
on overdue interest to the extent lawful;
and
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(4)
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all
amounts due to the Indenture Trustee under the Indenture;
and
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any
other event of default under the Indenture with respect to the Debt
Securities of that series has been cured or waived as provided in the
Indenture.
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(Indenture,
Section 902.)
There is
no automatic acceleration, even in the event of our bankruptcy, insolvency or
reorganization.
Subject
to the Indenture, under specified circumstances and to the extent permitted by
law, if an event of default under the Indenture occurs and is continuing prior
to the Release Date, the Indenture Trustee has the power to appoint a receiver
of the collateral for the Debt Securities, and is entitled to all other remedies
available to mortgagees and secured parties under the Uniform Commercial Code or
any other applicable law. (Indenture, Section 917.)
Upon the
occurrence and continuance of an event of default under the Indenture after the
Release Date, the remedies of the Indenture Trustee and the holders under the
Indenture would be limited to the rights of unsecured creditors.
In
addition to every other right and remedy provided in the Indenture, the
Indenture Trustee may exercise any right or remedy available to the Indenture
Trustee in its capacity as owner and holder of Class A Bonds which arises as a
result of a default or matured event of default under any Class A Mortgage,
whether or not an event of default under the Indenture has occurred and is
continuing. (Indenture, Section 916.)
Other
than its duties in case of an event of default under the Indenture, the
Indenture Trustee is not obligated to exercise any of its rights or powers under
the Indenture at the request, order or direction of any of the holders, unless
the holders offer the Indenture Trustee a reasonable
indemnity. (Indenture, Section 1003.) If they provide this reasonable
indemnity, the holders of a majority in principal amount of the outstanding Debt
Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Indenture Trustee, or
exercising any power conferred upon the Indenture Trustee. The
Indenture Trustee is not obligated to comply with directions that conflict with
law or other provisions of the Indenture. (Indenture, Section
912.)
No holder
of Debt Securities will have any right to institute any proceeding under the
Indenture, or any remedy under the Indenture, unless:
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the
holder has previously given to the Indenture Trustee written notice of a
continuing event of default under the
Indenture;
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the
holders of a majority in aggregate principal amount of the outstanding
Debt Securities of all series have made a written request to the Indenture
Trustee, and have offered reasonable indemnity to the Indenture Trustee to
institute proceedings; and
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the
Indenture Trustee has failed to institute any proceeding for 60 days after
notice and has not received during that period any direction from the
holders of a majority in aggregate principal amount of the outstanding
Debt Securities, inconsistent with the written request of holders referred
to above.
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(Indenture,
Section 907.) However, these limitations do not apply to a suit by a
holder of an Debt Security for payment of the principal, premium, if any, or
interest on the Debt Security on or after the applicable due
date. (Indenture, Section 908.)
We will
provide to the Indenture Trustee an annual statement by an appropriate officer
as to our compliance with all conditions and covenants under the
Indenture. (Indenture, Section 705.)
Modification
and Waiver
Without
the consent of any holder of Debt Securities, we and the Indenture Trustee may
enter into one or more supplemental indentures for any of the following
purposes:
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to
evidence the assumption by any permitted successor of our covenants in the
Indenture and in the Debt
Securities;
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to
permit an entity acquiring a substantial portion of our Electric and Gas
Utility Property to assume a pro rata share of the outstanding Debt
Securities based upon the net book value of the Electric and Gas Utility
Property
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acquired
by that entity and to release us and our properties from any obligations
or liens under the Indenture with respect to those assumed Debt
Securities, provided that the assumed Debt Securities will be secured by a
lien on the acquired Electric and Gas Utility Property to substantially
the same extent and upon substantially the same terms as provided in the
Indenture except for the substitution of the acquiring entity for
us;
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to
add one or more covenants or other provisions for the benefit of the
holders of all or any series or tranche of Debt Securities, or to
surrender any right or power conferred upon
us;
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to
add additional events of default under the Indenture for all or any series
of Debt Securities;
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to
change or eliminate or add any provision to the Indenture; provided,
however, if the change will adversely affect the interests of the holders
of Debt Securities of any series in any material respect, the change,
elimination or addition will become effective
only:
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(1)
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when
the consent of the holders of Debt Securities of such series has been
obtained in accordance with the Indenture;
or
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(2)
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when
no Debt Securities of the affected series remain outstanding under the
Indenture;
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to
provide additional security for any Debt
Securities;
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to
establish the form or terms of Debt Securities of any other series as
permitted by the Indenture;
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to
provide for the authentication and delivery of bearer securities with or
without coupons;
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to
evidence and provide for the acceptance of appointment by a separate or
successor Trustee or co-trustee;
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to
provide for the procedures required for use of a noncertificated system of
registration for the Debt Securities of all or any
series;
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to
change any place where principal, premium, if any, and interest shall be
payable, Debt Securities may be surrendered for registration of transfer
or exchange and notices to us may be
served;
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to
amend and restate the Indenture as originally executed and as amended from
time to time, with additions, deletions and other changes that do not
adversely affect the interests of the holders of Debt Securities of any
series in any material respect;
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to
cure any ambiguity or inconsistency;
or
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after
the Release Date, to amend the Indenture to eliminate any provisions
related to the lien of the Indenture, collateral for the Debt Securities
and Class A Bonds which are no longer
applicable.
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(Indenture,
Section 1301.)
The
holders of at least a majority in aggregate principal amount of the Debt
Securities of all series then outstanding may waive compliance by us with some
restrictive provisions of the Indenture. (Indenture, Section 706.)
The holders of not less than a majority in principal amount of the outstanding
Debt Securities may waive any past default under the Indenture, except a default
in the payment of principal, premium, if any, or interest and certain covenants
and provisions of the Indenture that cannot be modified or be amended without
the consent of the holder of each outstanding Debt Security of any series
affected. (Indenture, Section 913.)
The
consent of the holders of a majority in aggregate principal amount of the Debt
Securities of all series then outstanding, considered as one class, is required
for all other modifications to the Indenture. However, if less than
all of the series of Debt Securities outstanding are directly affected by a
proposed supplemental indenture, then
the
consent only of the holders of a majority in aggregate principal amount of the
outstanding Debt Securities of all series that are directly affected, considered
as one class, will be required. No amendment or modification may
without the consent of all the holders of the Debt Securities of all series then
outstanding:
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change
the stated maturity of the principal of, or any installment of principal
of or interest on, any Debt Security, or reduce the principal amount of
any Debt Security or its rate of interest or change the method of
calculating that interest rate or reduce any premium payable upon
redemption, or change the currency in which payments are made, or impair
the right to institute suit for the enforcement of any payment on or after
the stated maturity of any Debt
Security;
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create
any lien ranking prior to the lien of the Indenture with respect to more
than 10% of the collateral for the Debt Securities or, except as provided
in the Indenture in connection with releases, the withdrawal of cash held
by the Indenture Trustee and the Release Date, terminate the lien of the
Indenture on more than 10% of the collateral for the Debt Securities or
deprive any holder of the benefits of the security of the lien of the
Indenture;
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reduce
the percentage in principal amount of the outstanding Debt Securities of
any series the consent of the holders of which is required for any
supplemental indenture or any waiver of compliance with a provision of the
Indenture or any default thereunder and its consequences, or reduce the
requirements for quorum or voting;
or
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modify
some of the provisions of the Indenture relating to supplemental
indentures, waivers of some covenants and waivers of past defaults with
respect to the Debt Securities of any
series.
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A
supplemental indenture that changes the Indenture solely for the benefit of one
or more particular series of Debt Securities, or modifies the rights of the
holders of Debt Securities of one or more series, will not affect the rights
under the Indenture of the holders of the Debt Securities of any other
series. (Indenture, Section 1302.)
The
Indenture provides that Debt Securities owned by us or anyone else required to
make payment on the Debt Securities shall be disregarded and considered not to
be outstanding in determining whether the required holders have given a request
or consent. (Indenture, Section 101.)
We may
fix in advance a record date to determine the required number of holders
entitled to give any request, demand, authorization, direction, notice, consent,
waiver or similar act of the holders, but we have no obligation to do
so. If we fix a record date, that request, demand, authorization,
direction, notice, consent, waiver or other act of the holders may be given
before or after that record date, but only the holders of record at the close of
business on that record date will be considered holders for the purposes of
determining whether holders of the required percentage of the outstanding Debt
Securities have authorized or agreed or consented to the request, demand,
authorization, direction, notice, consent, waiver or other act of the
holders. For that purpose, the outstanding Debt Securities will be
computed as of the record date.
Any
request, demand, authorization, direction, notice, consent, election, waiver or
other act of a holder of any Debt Security will bind every future holder of that
Debt Security and the holder of every Debt Security issued upon the registration
of transfer of or in exchange for that Debt Security. A transferee
will also be bound by acts of the Indenture Trustee or us in reliance thereon,
whether or not notation of that action is made upon the Debt
Security. (Indenture, Section 106.)
Voting
of Class A Bonds
The
Indenture provides that the Indenture Trustee will, as holder of Class A Bonds
delivered as the basis for the issuance of Debt Securities, attend meetings of
bondholders under the related Class A Mortgage, or deliver its proxy in
connection with those meetings, that relate to matters with respect to which it,
as a holder, is entitled to vote or consent. The Indenture provides
that, so long as no event of default under the Indenture has occurred and is
continuing, the Indenture Trustee will, as holder of the Class A Bonds, vote or
consent (without any consent or other
action by
the holders of the Debt Securities, except as described in the proviso of
paragraph (7) below) in favor of any amendments or modifications to the Class A
Mortgage of substantially the same tenor and effect as follows:
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(1)
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to
modify any Class A Mortgage to allow us to issue Class A Bonds up to 70%
of the lower of (a) the fair value to us of the property subject to the
lien of that Class A Mortgage as of a valuation date specified by us and
(b) the cost of that property as of the valuation
date;
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(2)
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to
make certain technical amendments to the
Mortgage;
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(3)
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to
delete the net earnings test for the issuance of Class A Bonds and all
references to it in any Class A
Mortgage;
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(4)
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to
amend any Class A Mortgage so we may pay dividends and distributions to
our common stockholders and repurchase our common stock so long as our
shareholders’ equity is positive;
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(5)
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to
amend any Class A Mortgage to permit an entity acquiring a substantial
portion of the property subject to the lien of that Class A Mortgage to
assume a pro rata share of the outstanding Class A Bonds issued under that
Class A Mortgage based upon the net book value of that property acquired
by that entity and to release us and our properties from any obligations
or liens under that Class A Mortgage with respect to those assumed Class A
Bonds, provided that the assumed Class A Bonds will be secured by a first
lien on that acquired property to substantially the same extent and upon
substantially the same terms as provided in that Class A Mortgage except
for the substitution of the acquiring entity for
us;
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(6)
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to
conform any provision of a Class A Mortgage in all material respects to
the correlative provision of the Indenture, to add to a Class A Mortgage
any provision not otherwise contained therein which conforms in all
material respects to a provision contained in the Indenture, to delete
from a Class A Mortgage any provision to which the Indenture contains no
correlative provision and any combination of the foregoing;
and/or
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(7)
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with
respect to any amendments or modifications to any Class A Mortgage
other than those amendments or modifications referred to in clauses (1)
through (6) above, vote all the Class A Bonds delivered under the
Class A Mortgage, or consent with respect thereto, proportionately
with the vote or consent of holders of all other Class A Bonds outstanding
under the Class A Mortgage the holders of which are eligible to vote
or consent, as evidenced by a certificate delivered by the trustee under
the Class A Mortgage; provided, however, that the Indenture Trustee
will not vote in favor of, or consent to, any amendment or modification of
a Class A Mortgage which, if it were an amendment or modification of
the Indenture, would require the consent of holders of Debt Securities as
described under “Modification and Waiver,” without the prior consent of
holders of Debt Securities which would be required for an amendment or
modification of the Indenture. (Indenture, Section
1705.)
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As
described more fully in DESCRIPTION OF THE FIRST MORTGAGE BONDS – “Modification”
below, we may make amendments to, or eliminate some of the covenants in, the
Mortgage with the consent of the holders of 60% of the outstanding First
Mortgage Bonds issued under the Mortgage. A holder of Debt Securities
would no longer benefit from the covenants contained in the Mortgage should the
Indenture Trustee vote these First Mortgage Bonds to amend or eliminate the
covenants as described above.
Resignation
of a Trustee
The
Indenture Trustee may resign at any time by giving written notice to us or may
be removed at any time by an act of the holders of a majority in principal
amount of all series of Debt Securities then outstanding delivered to the
Indenture Trustee and us. No resignation or removal of the Indenture
Trustee and no appointment of a successor trustee will be effective until the
acceptance of appointment by a successor trustee. So long as no event
of
default
or event which, after notice or lapse of time, or both, would become an event of
default has occurred and is continuing and except with respect to a trustee
appointed by act of the holders, if we have delivered to the Indenture Trustee a
resolution of our Board of Directors appointing a successor trustee and the
successor has accepted the appointment in accordance with the terms of the
Indenture, the Indenture Trustee will be deemed to have resigned and the
successor will be deemed to have been appointed as trustee in accordance with
the Indenture. (Indenture, Section 1010.)
Notices
Notices
to holders of Debt Securities will be given by mail to the addresses of the
holders as they may appear in the security register for Debt
Securities. (Indenture, Section 108.)
Title
We, the
Indenture Trustee, and any of our or the Indenture Trustee’s agents, may treat
the person in whose name Debt Securities are registered as the absolute owner
thereof, whether or not the Debt Securities may be overdue, for the purpose of
making payments and for all other purposes irrespective of notice to the
contrary. (Indenture, Section 308.)
Governing
Law
The
Indenture is, and the Debt Securities will be, governed by, and construed in
accordance with, the laws of the state of New York except where otherwise
required by law. (Indenture, Section 114.)
Information
about the Indenture Trustee
The
Indenture Trustee is The Bank of New York. In addition to acting as
Indenture Trustee, The Bank of New York also acts as the Mortgage
Trustee. The Bank of New York also acts, and may act, as trustee
under various other of our and our affiliates’ indentures, trusts and
guarantees. We and our affiliates maintain, or may maintain in the
future, deposit accounts and credit and liquidity facilities and conduct other
banking transactions with The Bank of New York and its affiliates in the
ordinary course of business.
As
discussed above under DESCRIPTION OF THE DEBT SECURITIES – “Security” and
“Discharge of Lien; Release Date,” until the Release Date, the Debt Securities
will be issued on the basis of, and primarily secured by, one or more series of
first mortgage bonds issued by us under the Indenture of Mortgage, dated as of
May 1, 1939, made by and between MDU (formerly Montana-Dakota Utilities Co.) and
The New York Trust Company (The Bank of New York, as successor Corporate Trustee
(the “Mortgage Trustee”)) and all indentures supplemental thereto (including the
(Forty-Fifth) Supplemental Indenture, dated as of April 21, 1992, which
contains, in Part II thereof, a Restatement of Indenture) (collectively, the
“Mortgage”) and delivered by us to the Indenture Trustee. In this
prospectus we refer to all first mortgage bonds issued or to be issued under the
Mortgage, including first mortgage bonds delivered to the Indenture Trustee, as,
collectively, the “First Mortgage Bonds.”
Until the
Release Date, we will issue First Mortgage Bonds in an aggregate principal
amount equal to the aggregate principal amount of the Debt Securities, in one or
more series, under the Mortgage, in fully registered form. First Mortgage Bonds
are, or will be, secured by a first mortgage lien on the Mortgaged Property as
described below under “Security and Priority.” All First Mortgage
Bonds are equally secured and rank equally with respect to each
other.
The
Mortgage and its associated documents contain the full legal text of the matters
described in this section. Because this section is a summary, it does
not describe every aspect of the First Mortgage Bonds or the
Mortgage. This summary is subject to and qualified in its entirety by
reference to all the provisions of the Mortgage, including definitions of terms
used in the Mortgage, which may be used in this document without
definition. We also include references in parentheses to sections of
the Mortgage. Whenever we refer to particular sections or
defined
terms of the Mortgage in this prospectus or in a prospectus supplement, the
references are to the Restatement of Indenture described above, and all
amendments or modifications to the Restatement of Indenture, if
any. The Mortgage is on file with the SEC and is incorporated by
reference in this prospectus. You should read the Mortgage for a
complete understanding of all of its provisions. This summary also is
subject to and qualified by reference to the description of the particular terms
of the First Mortgage Bonds described in the applicable prospectus supplement or
supplements. The Mortgage has been qualified under the Trust
Indenture Act, and you should refer to the Trust Indenture Act for provisions
that apply to the First Mortgage Bonds.
Security
and Priority
In the
opinion of our General Counsel, the First Mortgage Bonds now or hereafter issued
will be secured, together with all other First Mortgage Bonds, by a valid and
direct first mortgage lien on substantially all of the fixed properties owned
and all franchises held by us immediately prior to July 1, 2000, together with
improvements, extensions and additions to, and renewals, replacements and
substitutions of or for, any part or parts of these properties, other than
property excepted or released from the Mortgage (as described below), subject to
the lien of taxes for the current year and the lien of taxes and assessments not
yet delinquent and to specified exceptions and reservations which do not, in the
opinion of counsel, materially affect our title to or right to use the
properties. This property, other than property excepted and
released from the Mortgage, is sometimes referred to as the “Mortgaged
Property.” There are excepted from Mortgaged Property all
properties acquired by us on or after July 1, 2000, including the properties
acquired in the merger with Great Plains Energy Corp. and Great Plains Natural
Gas Co. (which include all our gas distribution properties located in the state
of Minnesota and all gas distribution properties located in the southeastern
part of North Dakota), and the properties acquired in the merger with Cascade
Natural Gas Corporation (which include all our gas distribution properties
located in the states of Washington and Oregon), but excluding improvements,
extensions and additions to, and renewals, replacements and substitutions of or
for, any part or parts of the Mortgaged Property owned by us immediately prior
to July 1, 2000 unless otherwise excepted from the lien of the
Mortgage. There are also excepted from Mortgaged Property all cash,
receivables and securities (including the capital stock of Centennial Energy
Holdings, Inc., WBI Holdings, Inc., Knife River Corporation, MDU Construction
Services Group, Inc., Centennial Energy Resources LLC, Centennial Holdings
Capital LLC, Centennial Energy Resources International Inc, Fidelity Exploration
& Production Company and any other subsidiaries); some contracts;
merchandise, appliances, materials or supplies; electric energy, gas, steam and
other products; and automobiles, tractors, ships, railroad cars and aircraft and
various other transportation equipment. The property of subsidiaries,
including Centennial Energy Holdings, Inc., WBI Holdings, Inc., Knife River
Corporation, MDU Construction Services Group, Inc., Centennial Energy Resources
LLC, Centennial Holdings Capital LLC, Centennial Energy Resources International,
Inc., Fidelity Exploration & Production Company and any other subsidiaries),
is not subject to the lien of the Mortgage. We have released and transferred
certain properties from the lien of the Mortgage since July 1, 2000, and may
release additional property subject to the lien of the Mortgage against various
credits, including:
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cash
deposited with the Mortgage
Trustee,
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the
principal amount of bonds or other obligations deposited with the Mortgage
Trustee secured by a purchase money mortgage on the property released up
to 70% of the fair value to us of that property,
or
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the
fair value in cash of bonds or other obligations of municipal corporations
or other governmental subdivisions possessing taxing
power.
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We may
withdraw cash held by the Mortgage Trustee against various credits,
including
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the
principal amount of refundable bonds not previously used under the
Mortgage,
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70%
of the net bondable value of property additions,
or
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the
lesser of cost or fair value to us of property which is already subject to
the lien of the Mortgage, but which has not yet been used as a credit
under any provisions of the
Mortgage.
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Property
not used as the basis for the issuance of First Mortgage Bonds or otherwise as a
credit under the Mortgage may in effect be released without substitution of
equivalent property.
The
Mortgage provides that after-acquired properties (other than the excepted
property and released property described above) that are improvements,
extensions or additions to, or renewals, replacements or substitutions of or
for, any part or parts of the Mortgaged Property will be subject to the lien of
the Mortgage. (Mortgage, Forty-Ninth Supplemental Indenture.) We also
may elect to subject additional property to the lien of the Mortgage by amending
the Mortgage.
Issuance
of Additional First Mortgage Bonds
We may
issue additional First Mortgage Bonds ranking equally with outstanding First
Mortgage Bonds in a principal amount equal to:
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(1)
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70%
of the net bondable value of property additions we
acquire;
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(2)
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the
amount of cash deposited with the Mortgage Trustee;
and
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(3)
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the
amount of refundable First Mortgage Bonds surrendered to the Mortgage
Trustee.
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(Mortgage,
Sections 3.04 through 3.06.)
The First
Mortgage Bonds will be issued against property additions, refunded First
Mortgage Bonds and/or the deposit of cash. On March 31, 2008, we had
approximately $431 million of available Property Additions and $253 million of
refunded First Mortgage Bonds. See the discussion above under
"Security and Priority."
With some
exceptions in the case of (3) above, additional First Mortgage Bonds may be
issued only if our net earnings available for interest after depletion, as
defined in the Mortgage, for any twelve consecutive calendar months within the
fifteen calendar months immediately preceding the month in which the application
for the additional First Mortgage Bonds is made, are in the aggregate equal to
at least two times the amount of the annual stated interest charges on all First
Mortgage Bonds thereafter to be outstanding, and on all permitted equal or prior
lien debt, if any. (Mortgage, Sections 1.01 and 3.03.) For
the twelve months ended March 31, 2008, our net earnings available for interest
were $132.7 million or 42.5 times the annual stated interest charges on all
First Mortgage Bonds and permitted equal or prior lien debt outstanding on that
date, which would have permitted us to issue approximately $555 million of
additional First Mortgage Bonds.
Property
available for use as property additions includes property useful in the energy
business in any form (other than gas but including gas distribution property)
and water and steam heat property. The property may be located
anywhere in the United States of America or its coastal waters and may also
include space satellites (including solar power satellites), space stations and
other analogous facilities. (Mortgage, Section 1.01.)
Dividend
Restrictions
So long
as any of the First Mortgage Bonds are outstanding, we may declare and pay
dividends in cash or property on our common stock only out of Surplus, as
defined in the Mortgage, or out of net profits for the fiscal year or the
preceding fiscal year. However, we may not pay dividends out of net
profits if the Capital of the Company, as defined in the Mortgage, has been
diminished to a specified extent. (Mortgage, Section
2.01.)
Maintenance
and Depreciation Provisions
We are
required to make expenditures necessary to maintain the mortgaged property in
good repair, except that we may abandon any property, and to make provisions for
depreciation and for depletion of depletable fixed assets in accordance with
good accounting practices and in accordance with any applicable rules of any
regulatory authority having jurisdiction. (Mortgage, Section
6.06.)
Modification
Modifications
of the terms of the Mortgage may be made with our consent by an affirmative vote
of at least 60% in principal amount of outstanding First Mortgage Bonds and of
at least 60% in principal amount of outstanding First Mortgage Bonds of any
series especially affected by the modification; but no modification may be made
which will affect the terms of payment of the principal at maturity of, or
interest on, any First Mortgage Bond. (Mortgage, Article
XV.)
Voting
of First Mortgage Bonds Held by the Indenture Trustee
The
Indenture Trustee will, as holder of the First Mortgage Bonds, attend meetings
of bondholders under the Mortgage, or deliver its proxy in connection with those
meetings, as to matters with respect to which it is entitled to vote or
consent. See DESCRIPTION OF THE DEBT SECURITIES – “Voting of Class A
Bonds.”
Defaults
and Notice of Defaults
"Events
of default" include the failure to pay principal, failure for 30 days to pay
interest or to make any required deposit in any fund for the purchase or
redemption of First Mortgage Bonds (including any sinking fund or improvement
and sinking fund), failure for 90 days after written notice to perform any other
covenant, and various events in bankruptcy or insolvency. (Mortgage,
Article IX.)
The
Trustees under the Mortgage are required to give notice to Bondholders of any
continuing event of default known to them, but other than for a default in the
payment of principal or interest or a sinking fund installment, the Trustees may
withhold notice if the responsible officers of the Corporate Trustee in good
faith determine that the withholding is in the interests of the
Bondholders. (Mortgage, Section 13.03.)
Satisfaction
and Discharge
Once we
make due provision for the payment of all of the First Mortgage Bonds and paying
all other sums due under the Mortgage, the Mortgage will cease to be of further
effect and may be discharged. (Mortgage, Article XVI.)
Annual
Report to the Mortgage Trustee
We must
give the Mortgage Trustee an annual statement as to whether or not we have
fulfilled our obligations under the Mortgage throughout the preceding calendar
year.
Common
Stock -
General
The
following is a description of our common stock. This description is
not complete, and we qualify it by referring to our restated certificate of
incorporation, amended bylaws and Mortgage, all of which we incorporate into
this document by reference, and the laws of the state of Delaware. We
also refer you to the rights agreement, dated as of November 12, 1998, between
us and Norwest Bank Minnesota, NA (now, Wells Fargo Bank, N.A.), as rights
agent, that we incorporate into this document by reference.
Our
restated certificate of incorporation authorizes us to issue 502,000,000 shares
of stock, divided into four classes:
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500,000
shares of preferred stock, $100 par
value;
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1,000,000
shares of preferred stock A, without par
value;
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500,000
shares of preference stock, without par value;
and
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500,000,000
shares of common stock, $1.00 par
value.
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Dividend
Rights
Under our
restated certificate of incorporation, we may declare and pay dividends on our
common stock, out of surplus or net profits, only if we have paid or provided
for full cumulative dividends on all outstanding shares of preferred and
preference stock. As of May 28, 2008, we had no preference stock
outstanding.
In
addition to these provisions, our Mortgage includes a covenant generally to the
effect that we may declare and pay dividends in cash or property on our common
stock only either (1) out of "surplus" or (2) in case there is no "surplus," out
of net profits for the fiscal year in which the dividend is declared and/or the
preceding fiscal year. For purposes of this test, "surplus" means the
excess of our net assets over our "capital"; and "capital" means that part of
the consideration received by us for any of our shares of common stock which has
been determined to be "capital."
Voting
Rights
Our
common stock has one vote per share. The holders of our common stock
are entitled to vote on all matters to be voted on by
stockholders. The holders of our common stock do not have cumulative
voting rights.
The
holders of our preferred stock, preferred stock A and preference stock do not
have the right to vote, except as our board of directors establishes
or as provided in our restated certificate of incorporation or bylaws or as
determined by state law.
Our
restated certificate of incorporation gives the holders of our preferred stock,
preferred stock A or the preference stock the right to vote if dividends are
unpaid, in whole or in part, on their shares for one year. The
holders have one vote per share until we pay the dividend arrearage, declare
dividends for the current dividend period and set aside the funds to pay the
current dividends. In addition, the holders of some series of our
preferred stock and preferred stock A, and/or the holders of our preference
stock, must approve amendments to the restated certificate of incorporation in
some instances.
Liquidation
Rights
If we
were to liquidate, the holders of the preferred stock, preferred stock A and the
preference stock have the right to receive specified amounts, as set forth in
our restated certificate of incorporation, before we can make any payments to
the holders of our common stock. After the preferred and preference
stock payments are made, the holders of our common stock are entitled to share
in all of our remaining assets available for distribution to
stockholders.
Other
Rights
Our
common stock is not liable to further calls or assessment. The
holders of our common stock have no preemptive rights. Our common
stock cannot be redeemed, and it does not have any conversion rights or sinking
fund provisions.
Effects
on Our Common Stock if We Issue Preferred or Preference Stock
Our board
of directors has the authority, without further action by the stockholders, to
issue up to 500,000 shares of preferred stock, 1,000,000 shares of preferred
stock A and 500,000 shares of preference stock, each in one or more
series. Our board of directors has the authority to determine the
terms of each series of any preferred or preference stock, within the limits of
the restated certificate of incorporation and the laws of the state of
Delaware. These terms include the number of shares in a series,
dividend rights, liquidation preferences, terms of redemption, conversion rights
and voting rights.
If we
issue any preferred or preference stock, we may negatively affect the holders of
our common stock. These possible negative effects include diluting
the voting power of shares of our common stock and affecting the market price of
our common stock. In addition, the ability of our board of directors
to issue preferred or preference stock may delay or prevent a change in control
of MDU Resources.
As of
March 31, 2008, we had 158,000 shares of preferred stock outstanding, and we
have reserved 125,000 shares of Series B preference stock for issuance in
connection with our rights plan.
Provisions
of our Restated Certificate of Incorporation and our Bylaws That Could Delay or
Prevent a Change in Control
Our
restated certificate of incorporation and bylaws contain provisions which will
make it difficult to obtain control of MDU Resources if our board of directors
does not approve the transaction. The provisions include the
following:
Provisions
Relating to our Board of Directors
Board
Elections
Our
restated certificate of incorporation was amended in 2007 to provide for a
declassified board of directors. Beginning with the annual meeting of
stockholders held in 2008, each director whose term is ending will be elected
annually for a one-year term. Those directors elected at the annual
meetings of stockholders held in 2006 and 2007 shall continue to serve for the
full three-year terms to which each such director was elected. The
declassification of the board of directors will be phased in from 2008 –
2010. During this period, the remaining classifications may prevent
stockholders from changing the membership of the entire board of directors in a
relatively short period of time.
Number
of Directors, Vacancies, Removal of Directors
Our
restated certificate of incorporation provides that our board of directors will
have at least six and at most 15 directors. Two-thirds of the
continuing directors decide the exact number of directors at a given
time. Our board fills any new directorships it creates and any
vacancies.
Our
directors may be removed only for cause and then only by a majority of the
shares entitled to vote.
Meetings
of Stockholders
No
Cumulative Voting
Our
restated certificate of incorporation does not provide for cumulative
voting.
Advance Notice Provisions
Our
bylaws require that for a stockholder to nominate a director or bring other
business before an annual meeting, the stockholder must give notice not less
than 120 days prior to the date corresponding to the date on which we first
mailed our proxy materials for the prior year’s annual meeting.
Our
restated certificate of incorporation prevents stockholders from calling a
special meeting. In addition, our restated certificate of
incorporation provides that stockholder action may be taken only at a
stockholders’ meeting.
Amendment
of Restated Certificate of Incorporation
Our
restated certificate of incorporation requires the affirmative vote of 80% of
the common stock entitled to vote in order to amend some of its provisions,
including provisions relating to the board of directors, unless two-thirds of
the continuing directors approve the amendment.
Provisions
Relating to the Authorization of Business Combinations
Our
restated certificate of incorporation requires the affirmative vote of 80% of
the common stock entitled to vote for directors in order to authorize certain
types of business combinations. Any business combination must also
meet specified fair price and procedural requirements. However, if
two-thirds of our continuing directors approve the business combination, then
the vote of 80% of the common stock and the fair price provisions will not be
required.
There is
also a provision permitting our board of directors to consider specified factors
in determining whether or not to approve some types of business combinations as
specified in our restated certificate of incorporation.
Provisions
of Delaware Law That Could Delay or Prevent a Change in Control
We are
subject to the provisions of Section 203 of the General Corporation Law of
Delaware. With some exceptions, this law prohibits us from engaging
in some types of business combinations with a person who owns 15% or more of our
outstanding voting stock for a three-year period after that person acquires the
stock. This prohibition does not apply if our board of directors
approved of the business combination or the acquisition of our stock before the
person acquired 15% of the stock. A business combination includes
mergers, consolidations, stock sales, asset sales and other transactions
resulting in a financial benefit to the interested stockholder.
Transfer
Agent; Registrar
The
transfer agent and registrar for our common stock is Wells Fargo Bank, N.A.,
Saint Paul, Minnesota.
General
On
November 12, 1998, the board of directors declared a dividend of one preference
share purchase right for each outstanding share of common stock, par value $1.00
per share. The dividend was paid on December 1, 1998 to the
stockholders of record on that date.
Our board
of directors has adopted a rights agreement to protect our stockholders from
coercive or otherwise unfair takeover tactics. The rights
agreement, by its terms, will expire on December 31, 2008. In general
terms, it works by imposing a significant penalty upon any person or group which
acquires 15% or more of our outstanding common stock without the approval of the
board of directors. The rights agreement should not interfere with
any merger or other business combination approved by our board of
directors.
For those
interested in the specific terms of the rights agreement between us and Wells
Fargo Bank, N.A., as the rights agent, dated as of November 12, 1998, we are
providing the following summary description. Please note, however,
that this description is only a summary, and is not complete, and should be read
together with the entire rights agreement, a copy of which is available from us
free of charge.
The
Rights
Our board
of directors authorized the issuance of a preference share purchase right with
respect to each issued and outstanding share of our common stock on December 1,
1998. The preference share purchase rights will initially trade with,
and will be inseparable from, the common stock. The preference share
purchase rights are
evidenced
only by certificates that represent shares of common stock. New
preference share purchase rights will accompany any new shares of common stock
that we issue after December 1, 1998 until the distribution date described
below.
Exercise
Price
Each
preference share purchase right will allow its holder to purchase from us
four-ninths of one one-thousandths of a share of Series B preference stock for
$125 per one one-thousandths of a share of Series B preference stock, once the
preference share purchase rights become exercisable. This portion of
a share of Series B preference stock will give the stockholder approximately the
same dividend and liquidation rights as would one share of common
stock. Prior to exercise, the preference share purchase right does
not give its holder any dividend, voting, or liquidation rights.
Exercisability
The
preference share purchase rights will not be exercisable until:
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10
days after the public announcement that a person or group has become an
“acquiring person” by obtaining beneficial ownership of 15% or more of MDU
Resources’ outstanding common stock, or, if
earlier,
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10
business days (or a later date determined by our board of directors before
any person or group becomes an acquiring person) after a person or group
begins a tender or exchange offer which, if consummated, would result in
that person or group becoming an acquiring
person.
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We refer
to the date when the preference share purchase rights become exercisable as the
“distribution date.” Until that date, the common stock certificates will also
evidence the preference share purchase rights, and any transfer of shares of
common stock will constitute a transfer of preference share purchase
rights. After that date, the preference share purchase rights will
separate from the common stock and be evidenced by book-entry credits or by
preference share purchase rights certificates that we would mail to all eligible
holders of common stock. Any preference share purchase rights held by
an acquiring person are void and may not be exercised.
Our board
of directors may reduce the threshold at which a person or group becomes an
acquiring person from 15% to not less than 10% of the outstanding common
stock.
Consequences
of a Person or Group Becoming an Acquiring Person
Flip
In. If a person or group becomes an acquiring person, all holders of
preference share purchase rights except the acquiring person may, for $125,
purchase shares of our common stock with a market value of $250, based on the
market price of the common stock prior to the acquisition.
Flip
Over. If we are later acquired in a merger or similar transaction
after the “preference share purchase rights distribution date,” all holders of
preference share purchase rights except the acquiring person may, for $125,
purchase shares of the acquiring corporation with a market value of $250, based
on the market price of the acquiring corporation’s stock prior to the
merger.
Preference
Share Provisions
Each one
one-thousandth of a share of Series B preference stock, if issued:
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will
not be redeemable.
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will
entitle holders to quarterly dividend payments of $.001 per share, or an
amount equal to the dividend paid on one share of common stock, whichever
is greater.
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will
entitle holders upon liquidation either to receive $1.00 per share or an
amount equal to the payment made on one share of common stock, whichever
is greater.
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will
have no voting power, except as otherwise provided by Delaware law or our
restated certificate of
incorporation.
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will
entitle holders to a per share payment equal to the payment made on one
share of common stock, if shares of our common stock are exchanged via
merger, consolidation, or a similar
transaction.
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The value
of one one-thousandth interest in a share of Series B preference stock should
approximate the value of one share of common stock.
Expiration
The
preference share purchase rights will expire on December 31, 2008.
Redemption
Our board
of directors may redeem the preference share purchase rights for $.01 per
preference share purchase right at any time before any person or group becomes
an acquiring person. If the board of directors redeems any preference
share purchase rights, it must redeem all of the preference share purchase
rights. Once the preference share purchase rights are redeemed, the
only right of the holders of preference share purchase rights will be to receive
the redemption price of $.00444 per preference share purchase
right. The redemption price will be adjusted if we have a stock split
of, or stock dividends on, our common stock.
Exchange
After a
person or group becomes an acquiring person, but before an acquiring person owns
50% or more of our outstanding common stock, our board of directors may
extinguish the preference share purchase rights by exchanging one share of
common stock or an equivalent security for each preference share purchase right,
other than preference share purchase rights held by the acquiring
person.
Anti-Dilution
Provisions
Our board
of directors may adjust the purchase price of a share of Series B preference
stock, the number of shares of Series B preference stock issuable and the number
of outstanding preference share purchase rights to prevent dilution that may
occur from a stock dividend, a stock split, a reclassification of the Series B
preference stock or common stock. No adjustments to the exercise
price of less than 1% will be made.
Amendments
The terms
of the rights agreement may be amended by our board of directors without the
consent of the holders of the preference share purchase
rights. However, our board may not amend the rights agreement to
lower the threshold at which a person or group becomes an acquiring person to
below 10% of our outstanding common stock. In addition, our board may
not cause a person or group to become an acquiring person by lowering this
threshold below the percentage interest that the person or group already
owns. After a person or group becomes an acquiring person, the board
may not amend the agreement in a way that adversely affects holders of the
preference share purchase rights.
We may
sell the securities offered by this prospectus in one or more of the following
ways from time to time: (i) to underwriters for resale to the public
or to institutional investors; (ii) directly to institutional investors; or
(iii) through agents to the public or to institutional investors. The
prospectus supplement with respect to the securities being sold will set forth
the terms of the offering of those securities, including the name or names of
any
underwriters
or agents, the purchase price of the securities and the net proceeds to us from
the sale, any underwriting discounts or agency fees and other items constituting
underwriters’ or agents’ compensation, any initial public offering price, and
any discounts or concessions allowed or reallowed or paid to
dealers.
If
underwriters participate in the sale, the securities will be acquired by the
underwriters for their own account and may be resold from time to time in one or
more transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale.
If the
securities are sold by agents, commissions payable by us to those agents will be
set forth in a related prospectus supplement. Unless otherwise
indicated in a prospectus supplement, any agent will be acting on a reasonable
efforts basis for the period of its appointment.
Unless
otherwise set forth in the prospectus supplement, the obligations of the
underwriters to purchase the securities will be subject to conditions precedent
and the underwriters will be obligated to purchase all the securities being
offered if any are purchased.
We may
make sales of our common stock to or through one or more underwriters or agents
in at-the-market offerings, we will do so pursuant to the terms of a
distribution agreement between us and the underwriters or agents. If
we engage in at-the-market sales pursuant to a distribution agreement, we will
issue and sell shares of our common stock to or through one or more underwriters
or agents, which may act on an agency basis or on a principal
basis. During the term of any such distribution agreement, we may
sell shares on a daily basis in exchange transactions or otherwise as we agree
with the underwriters or agent. The distribution agreement may
provide that any shares of our common stock sold will be sold at prices related
to the then prevailing market prices for our securities. Therefore,
exact figures regarding net proceeds to us or commissions to be paid are
impossible to determine and will be described in a prospectus
supplement. Pursuant to the terms of the distribution agreement, we
also may agree to sell, and the relevant underwriters or dealers may agree to
solicit offers to purchase, blocks of our common stock. The
terms of each such distribution agreement will be set forth in more detail in a
prospectus supplement to this prospectus. To the extent that any
named underwriter or agent acts as principal pursuant to the terms of a
distribution agreement, or if we offer to sell shares of our common stock
through another broker-dealer acting as underwriter, then such named underwriter
may engage in certain transactions that stabilize, maintain or otherwise affect
the price of our common stock. We will describe any such activities
in the prospectus supplement relating to the transaction. To the
extent that any named broker dealer or agent acts as agent on a best efforts
basis pursuant to the terms of a distribution agreement, such broker dealer or
agent will not engage in any such stabilization transactions.
Underwriters
and agents may be entitled under agreements entered into with us to
indemnification against securities civil liabilities, including liabilities
under the Securities Act of 1933. Underwriters and agents may engage
in transactions with, or perform services for, us in the ordinary course of
business.
Each
series of securities offered by this prospectus will be a new issue and, except
for the common stock, which is listed on the New York Stock Exchange, will have
no established trading market. We may elect to list any series of new
securities on an exchange, or in the case of the common stock, on any additional
exchange, but unless otherwise indicated in the prospectus supplement, we have
no obligation to cause any securities to be so listed. Any
underwriters that purchase securities for public offering and sale may make a
market in the securities, but such underwriters will not be obligated to do so
and may discontinue any market making at any time without notice. We
make no assurance as to the liquidity of, or the trading markets for, any
securities.
The
consolidated financial statements, the related financial statement
schedule, incorporated in this Prospectus by reference from the Company's Annual
Report on Form 10-K for the year ended December 31, 2007, and the effectiveness
of MDU Resources Group, Inc.'s internal control over financial reporting, have
been audited by Deloitte & Touche LLP, an independent registered public
accounting firm, as stated in their reports, which are incorporated herein by
reference. Such financial statements and financial statement schedule have been
so incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
The
validity of the securities will be passed upon for us by Paul K. Sandness, Esq.,
our General Counsel, and also by Thelen Reid Brown Raysman & Steiner LLP,
875 Third Avenue, New York, New York 10022.
________________________
You
should rely only on the information incorporated by reference or provided in
this prospectus or any prospectus supplement or in any written communication
from us specifying the final terms of a particular offering of
securities. We have not authorized anyone else to provide you with
additional or different information. We are not making an offer of
these securities in any jurisdiction where the offer is not
permitted. You should not assume that the information in this
prospectus or any prospectus supplement is accurate as of any date other than
the date on the front of those documents or that the information incorporated by
reference is accurate as of any date other than the date of the document
incorporated by reference.
Up
to 5,000,000 Shares
MDU
RESOURCES GROUP, INC.
Common
Stock
Wells
Fargo Securities, LLC
The
date of this prospectus supplement is September 5, 2008