Filed pursuant to Rule 424(b)(2)
Registration No. 33-57835
Subject to Completion, dated April 10, 1995
PROSPECTUS SUPPLEMENT
(To Prospectus dated March 17, 1995)
$125,000,000
CAROLINA POWER & LIGHT COMPANY
SERIES A QUICSsm
% QUARTERLY INCOME CAPITAL SECURITIES
(SERIES A SUBORDINATED DEFERRABLE INTEREST DEBENTURES)
---------------------------
The % Quarterly Income Capital Securities (Series A Subordinated
Deferrable Interest Debentures) (the "Capital Securities") will mature on April
, 2025. Interest on the Capital Securities is payable quarterly, on March ,
June , September and December of each year, commencing June , 1995. The
Capital Securities will be redeemable at the option of Carolina Power & Light
Company ("CP&L"), in whole or in part, on or after April , 2000 at 100% of the
principal amount to be redeemed together with accrued interest to the redemption
date. The Capital Securities will be represented by a Global Security that will
be deposited with, or on behalf of, The Depository Trust Company (the
"Depositary") and will be available for purchase in denominations of $25 and any
integral multiple thereof. See "Certain Terms of the Capital Securities."
The obligations of CP&L under the Capital Securities are subordinate and
junior in right of payment to Senior Indebtedness (as defined in the
accompanying Prospectus) of CP&L. As of March 31, 1995, outstanding Senior
Indebtedness of CP&L aggregated approximately $3.1 billion.
Application will be made to have the Capital Securities listed on the New
York Stock Exchange.
---------------------------
See "Investment Considerations" for certain information relevant to an
investment in the Capital Securities, including the period and circumstances
during and under which payment of interest on the Capital Securities may be
deferred and the related U.S. federal income tax consequences.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO
WHICH IT RELATES. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL
OFFENSE.
[CAPTION]
<TABLE>
=============================================================================================================================
<S> <C> <C> <C>
Price to Underwriting Proceeds to
Public (1) Discount (2)(3) CP&L (3)(4)
<S> <C> <C> <C>
Per Capital Security................................ % % %
Total............................................... $ $ $
=============================================================================================================================
</TABLE>
(1) Plus accrued interest, if any, from the date of original issuance.
(2) CP&L has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(3) The Underwriting Discount will be % for any Capital Securities sold to
certain institutions. Therefore, to the extent that the Capital Securities
are sold to such institutions, the actual Underwriting Discount will be less
than, and the proceeds to CP&L will be greater than, the amounts shown.
(4) Before deducting estimated expenses of $ payable by CP&L.
---------------------------
The Capital Securities are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to their
right to reject any order in whole or in part. It is expected that the Capital
Securities will be ready for delivery in New York, New York, on or about
, 1995.
---------------------------
LEHMAN BROTHERS
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
MORGAN STANLEY & CO.
INCORPORATED
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
April , 1995
<PAGE>
This preliminary Prospectus Supplement and the information contained herein are
subject to completion or amendment and prospective purchasers are referred
to the related final Prospectus Supplement for definitive information
on any matter contained herein. This preliminary Prospectus Supplement shall
not constitute an offer to sell or the solicitation of an offer to buy nor
shall there be any sale of these securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
<PAGE>
SELECTED INFORMATION
The following material, which is presented herein solely to furnish limited
introductory information, is qualified in its entirety by, and should be
considered in conjunction with, the information appearing in this Prospectus
Supplement and in the accompanying Prospectus, including documents incorporated
therein.
THE OFFERING
<TABLE>
<S> <C>
Securities offered............................................ $125,000,000 aggregate principal amount of Capital Securities.
</TABLE>
CAROLINA POWER & LIGHT COMPANY
<TABLE>
<S> <C>
Business...................................................... Generation, transmission, distribution and sale of
electricity.
Service area.................................................. Portions of North Carolina and South Carolina comprising
approximately 30,000 square miles.
Customers billed as of December 31, 1994...................... Approximately 1.06 million
Installed generating capacity as of December 31, 1994
(in kilowatts).............................................. 9,613,000*
Sources of system energy supply for the twelve months ended
December 31, 1994*.......................................... Coal-43%, nuclear-42%, purchased power-13%, other-2%.
</TABLE>
- ---------------
* Includes 639,700 kilowatts of generating capacity owned by North Carolina
Eastern Municipal Power Agency in units jointly owned with CP&L.
FINANCIAL INFORMATION
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED DECEMBER 31,
--------------------------------------------------------
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Operating Revenues................................................ $2,876.6 $2,895.4 $2,766.8 $2,685.8 $2,617.1
Net Income........................................................ $ 313.2 $ 346.5 $ 379.6 $ 377.0 $ 380.4
Ratios of Earnings to Fixed Charges................................. 3.31x 3.23x 3.34x 3.08x 2.65x
</TABLE>
CAPITALIZATION
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1994
-----------------------------------------
ACTUAL RATIO ADJUSTED(a) RATIO
-------- ----- ----------- -----
<S> <C> <C> <C> <C>
Long-term Debt...................................................................... $2,530.8 48.1% $ 2,715.8 49.9%
Preferred Stock -- Redemption Not Required.......................................... 143.8 2.7 143.8 2.7
Common Stock Equity (b)............................................................. 2,586.2 49.2 2,581.2 47.4
-------- ----- ----------- -----
Total Capitalization.............................................................. $5,260.8 100.0% $ 5,440.8 100.0%
-------- ----- ----------- -----
-------- ----- ----------- -----
</TABLE>
- ---------------
(a) Adjusted reflects the following adjustments:
(1) Issuance of Capital Securities.
(2) The issuance on January 24, 1995 of $60 million principal amount of
First Mortgage Bonds, Secured Medium-Term Notes, 7.75% Series C, due
January 24, 1997.
(3) The repurchase of CP&L common stock under the stock repurchase
program initiated in 1994.
(b) Includes a reduction of $204.9 million representing unearned ESOP common
stock.
S-2
<PAGE>
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CAPITAL
SECURITIES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
---------------------------
INVESTMENT CONSIDERATIONS
Prospective purchasers of Capital Securities should carefully review the
information contained elsewhere in this Prospectus Supplement and in the
accompanying Prospectus and should particularly consider the following matters:
SUBORDINATION OF CAPITAL SECURITIES. The obligations of CP&L under the
Capital Securities are subordinate and junior in right of payment to Senior
Indebtedness of CP&L. As of March 31, 1995, outstanding Senior Indebtedness of
CP&L aggregated approximately $3.1 billion. There are no terms in the Capital
Securities that limit CP&L's ability to incur additional indebtedness, including
indebtedness that ranks senior to the Capital Securities. See "Description of
Debt Securities -- Subordination" in the accompanying Prospectus.
OPTION TO EXTEND INTEREST PAYMENT PERIOD. CP&L has the right under the
Indenture to extend the interest payment period from time to time on the Capital
Securities to a period not exceeding 20 consecutive quarters, and, as a
consequence, quarterly interest payments on the Capital Securities would be
deferred (but would continue to accrue interest) during any such extended
interest payment period. In the event that CP&L exercises this right, CP&L may
not declare or pay dividends on, or redeem, purchase or acquire, any of its
capital stock. Therefore, CP&L believes that the extension of an interest
payment period on the Capital Securities is unlikely. Prior to the termination
of any extension period, CP&L may further extend the interest payment period,
provided that such extension period, together with all such previous and further
extensions thereof, may not exceed 20 consecutive quarters or extend beyond the
maturity of the Capital Securities. Upon the termination of any extension period
and the payment of all amounts then due, CP&L may select a new extension period,
subject to the above requirements. See "Certain Terms of the Capital
Securities -- Option to Extend Interest Payment Period."
Should an extended interest payment period occur, holders of the Capital
Securities will continue to accrue income for U.S. federal income tax purposes
even though interest is not being paid on a current basis. As a result, such a
holder will include such interest in gross income for U.S. federal income tax
purposes in advance of the receipt of cash, and will not receive the cash from
CP&L related to such income if such a holder disposes of his or her Capital
Securities prior to the record date for payment of interest. See "U.S.
Taxation -- U.S. Holders."
APPLICATION OF PROCEEDS
CP&L intends to apply the net proceeds from the sale of the Capital
Securities to its ongoing construction and maintenance program, the redemption,
repurchase, repayment or retirement of other outstanding indebtedness and/or
other general corporate purposes.
CERTAIN TERMS OF THE CAPITAL SECURITIES
The following description of specific terms of the Capital Securities
should be read in conjunction with the description of the general terms and
provisions of the Debt Securities set forth in the accompanying Prospectus under
the caption "Description of Debt Securities." The following summary does not
purport to be complete and is subject in all respects to the provisions of, and
is qualified in its entirety by reference to, the description in the
accompanying Prospectus and the Indenture, dated as of March 1, 1995, from CP&L
to Bankers Trust Company, as Trustee, as supplemented by resolutions of the
Board of Directors of CP&L (the "Board") passed by the Board on March 15, 1995
and resolutions of the Executive Committee of the Board passed by the Executive
Committee on April , 1995. The Indenture, as so supplemented, is hereinafter
referred to in this Prospectus Supplement as the "Indenture."
PRINCIPAL AMOUNT, INTEREST AND MATURITY
The Capital Securities will be issued as a series of Debt Securities under
the Indenture. The Capital Securities will be limited in aggregate principal
amount to $125 million.
S-3
<PAGE>
<PAGE>
The Capital Securities are to mature April , 2025 and will bear interest
at the rate per annum shown in the title thereof payable quarterly on March ,
June , September and December of each year, commencing June , 1995, to
the persons in whose names the Capital Securities are registered at the close of
business on the relevant record dates, which will be the Business Day
(as hereinafter defined) prior to the relevant payment dates. The amount of
interest payable for any period will be computed on the basis of a 360-day year
of twelve 30-day months. Interest will accrue from the date of original issuance
to, but not including, the relevant payment date. In the event that any date on
which interest is payable on the Capital Securities is not a Business Day, then
payment of the interest payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. A "Business Day" shall mean any day other than a day on which
banking institutions in New York City are authorized or obligated by law to
close.
GLOBAL SECURITIES
The Capital Securities will be represented by a Global Security that will
be deposited with, or on behalf of, the Depositary, and will be available for
purchase in denominations of $25 and any integral multiple thereof.
The Depositary has advised CP&L and the Underwriters that the Depositary is
(i) a limited-purpose trust company organized under the New York Banking Law,
(ii) a "banking organization" within the meaning of the New York Banking Law,
(iii) a member of the Federal Reserve System, (iv) a "clearing corporation"
within the meaning of the New York Uniform Commercial Code and (v) a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934, as amended. The Depositary was created to hold securities
of its participating organizations ("participants") and to facilitate the
clearance and settlement of securities transactions, such as transfers and
pledges, among its participants in such securities through electronic
computerized book-entry changes in accounts of participants, thereby eliminating
the need for physical movement of securities certificates. Participants include
securities brokers and dealers (including the Underwriters), banks, trust
companies, clearing corporations and certain other organizations, some of whom
(and/or their representatives) own the Depositary. Access to the Depositary's
book-entry system is also available to others, such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a participant, either directly or indirectly. Persons who are not participants
may beneficially own securities held by the Depositary only through
participants.
A further description of the Depositary's procedures with respect to the
Capital Securities is set forth under "Global Securities" in the accompanying
Prospectus.
REDEMPTION
The Capital Securities will be redeemable at the option of CP&L, in whole
or in part, at any time on or after April , 2000 and prior to maturity, upon
not less than 30 nor more than 60 days' notice, at 100% of the principal amount
to be redeemed together with accrued interest to the redemption date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
CP&L shall have the right at any time and from time to time during the term
of the Capital Securities to extend the interest payment period to a period not
exceeding 20 consecutive quarters (an "Extension Period"), and at the end of
such Extension Period, CP&L shall pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for the Capital Securities
to the extent permitted by applicable law); provided, however, that during any
such Extension Period CP&L shall not declare or pay any dividend on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock or make any guarantee payments with respect to the foregoing.
Prior to the termination of any such Extension Period, CP&L may further extend
the interest payment period, provided that such Extension Period, together with
all such previous and further extensions thereof, may not exceed 20 consecutive
quarters or extend beyond the maturity of the Capital Securities. Upon the
termination of any Extension Period and the payment of all amounts then due,
CP&L may select a new Extension Period, subject to the above requirements. No
interest during an Extension Period, except at the end thereof, shall be due and
payable. CP&L shall give the holders of the Capital Securities notice of its
selection of such Extension Period ten Business Days prior to the earlier of (i)
the next interest payment date and (ii) the date CP&L is required to give notice
to holders of the Capital Securities (or, if applicable, to the New York Stock
Exchange or other applicable self-regulatory organization) of the record or
payment date of such interest payment, but in any event not less than two
Business Days prior to such record date.
S-4
<PAGE>
<PAGE>
DEFEASANCE
The provisions described in the accompanying Prospectus under the caption
"Description of Debt Securities -- Defeasance" are applicable to the Capital
Securities.
As is set forth in such description, under the provisions of the Indenture,
at CP&L's election, the Capital Securities will be deemed to have been paid for
purposes of the Indenture and the entire indebtedness of CP&L in respect thereof
will be deemed to have been satisfied and discharged, if there has been
irrevocably deposited with the Trustee or any Paying Agent in trust sufficient
cash or certain government securities, or a combination thereof, to fully
satisfy all principal of, and premium, if any, and interest on the Capital
Securities.
Under existing case law and regulations, such a defeasance might be treated
as a significant modification of the obligations in respect of the Capital
Securities which for federal income tax purposes may be treated as a taxable
exchange. If the defeasance were a taxable exchange, holders would recognize
gain or loss in the amount by which the fair market value of the Capital
Securities after the defeasance was greater or less than the holder's basis in
the Capital Securities prior to the defeasance. Such gain or loss, generally,
would be capital to holders for whom the Capital Securities are held as capital
assets. Prospective investors are urged to consult their own tax advisors as to
the specific consequences to them of such deposit.
PAYING AGENT AND REGISTRAR
Bankers Trust Company will act as Paying Agent and Registrar for the
Capital Securities.
U.S. TAXATION
GENERAL
This section is a summary of certain U.S. federal income tax considerations
that may be relevant to prospective purchasers of Capital Securities and
represents the opinion of Reid & Priest LLP, special tax counsel to CP&L,
insofar as it relates to matters of law and legal conclusions. This section is
based upon the current provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), existing and proposed regulations thereunder and current
administrative rulings and court decisions, all of which are subject to change.
Subsequent changes may cause tax consequences to vary substantially from the
consequences described below.
No attempt has been made in this section to discuss all U.S. federal income
tax matters affecting purchasers of Capital Securities. Moreover, the discussion
focuses on holders of Capital Securities who are individual citizens or
residents of the United States that hold the Capital Securities as a capital
asset and has only limited application to corporations, estates, trusts,
non-resident aliens or other taxpayers with special circumstances. Accordingly,
each prospective purchaser of Capital Securities should consult, and should
depend on, his or her own tax advisor in analyzing the federal, state, local and
foreign tax consequences of the purchase, ownership or disposition of Capital
Securities.
U.S. HOLDERS
For purposes of this discussion, a "U.S. Holder" is any beneficial owner
that is (i) a citizen or resident of the United States, (ii) a domestic
corporation or (iii) otherwise subject to U.S. federal income taxation on a net
income basis in respect of the Capital Securities.
Under the original issue discount rules of Code sections 1271 ET SEQ. and
the Treasury regulations thereunder, interest on Capital Securities will be
included in the income of a U.S. Holder as it accrues in accordance with a
constant yield method, rather than when it is paid, regardless of the U.S.
Holder's regular method of accounting for tax purposes. U.S. Holders may
therefore include interest in income for taxable years prior to the year in
which the interest is actually received. This should be significant, however,
only during an Extension Period.
A U.S. Holder will generally recognize gain or loss on the sale or other
disposition of the Capital Securities equal to the difference between the amount
realized from the sale or other disposition and the tax basis of the Capital
Securities. Such gain or loss will be capital gain or loss, and will be
long-term capital gain or loss if the Capital Securities have been held for more
than one year. The tax basis of the Capital Securities will generally equal the
amount paid for them, increased by the amount of any accrued but unpaid
interest.
S-5
<PAGE>
<PAGE>
U.S. ALIEN HOLDERS
For purposes of this discussion, a "U.S. Alien Holder" is any holder that
is (i) a nonresident alien individual or (ii) a foreign corporation, partnership
or estate or trust, in either case not subject to U.S. federal income tax on a
net income basis in respect of Capital Securities.
Under current U.S. federal income tax law, subject to the subsection
captioned "Backup Withholding and Information Reporting" below:
(i) Payments by CP&L or any of its paying agents to a U.S. Alien
Holder will not be subject to U.S. federal withholding tax provided that
(a) the beneficial owner of Capital Securities does not actually or
constructively own 10% or more of the total combined voting power of all
classes of capital stock of CP&L that are entitled to vote, (b) the
beneficial owner of Capital Securities is not a controlled foreign
corporation that is related to CP&L through stock ownership and (c) either
(x) the beneficial owner of Capital Securities certifies to CP&L or its
agent, under penalties of perjury, that it is a U.S. Alien Holder and
provides its name and address or (y) the holder of Capital Securities is a
securities clearing organization, bank or other financial institution that
holds customers' securities in the ordinary course of its trade or business
(a "financial institution"), and such financial institution certifies to
CP&L or its agent, under penalties of perjury, that such certification has
been received from the beneficial owner by it or by another financial
institution between it and the beneficial owner and furnishes CP&L or its
agent with a copy thereof; and
(ii) a U.S. Alien Holder of Capital Securities will generally not be
subject to U.S. federal income or withholding tax on any gain realized on
the sale or exchange of Capital Securities unless such holder is present in
the United States for 183 days or more in the taxable year of sale and
either has a "tax home" in the United States or certain other requirements
are met.
BACKUP WITHHOLDING AND INFORMATION REPORTING
In general, information reporting requirements will apply to payments of
principal and interest on Capital Securities, and the proceeds of the sale of
Capital Securities prior to maturity within the United States, with respect to
non-corporate U.S. Holders, and "backup withholding" at a rate of 31% will apply
to such payments if the U.S. Holder fails to provide an accurate taxpayer
identification number or to report all interest and dividends required to be
shown on its federal income tax returns.
Information reporting and backup withholding will not apply to payments of
principal and interest made by CP&L or a paying agent to a U.S. Alien Holder on
Capital Securities if the certification described in clause (i) (c) under the
caption "U.S. Alien Holders" above is received, provided that the payor does not
have actual knowledge that the holder is a U.S. Holder.
Payments of the proceeds from the sale by a U.S. Alien Holder of Capital
Securities made to or through a foreign office of a broker will not be subject
to information reporting or backup withholding, except that if the broker is a
U.S. person, a controlled foreign corporation for U.S. tax purposes or a foreign
person 50% or more of whose gross income is effectively connected with a U.S.
trade or business for a specified three-year period, information reporting may
apply to such payments. Payments of proceeds from the sale of Capital Securities
to or through the U.S. office of a broker is subject to information reporting
and backup withholding unless the U.S. Alien Holder or beneficial owner
certifies as to its non-U.S. status or otherwise establishes an exemption from
information reporting and backup withholding.
S-6
<PAGE>
<PAGE>
UNDERWRITING
The Underwriters named below have severally agreed to purchase from CP&L
the following respective principal amounts of Capital Securities:
<TABLE>
<CAPTION>
UNDERWRITER PRINCIPAL AMOUNT
----------- ----------------
<S> <C>
Lehman Brothers Inc................................................................. $
Goldman, Sachs & Co.................................................................
Merrill Lynch, Pierce, Fenner & Smith Incorporated..................................
Morgan Stanley & Co. Incorporated...................................................
PaineWebber Incorporated............................................................
Prudential Securities Incorporated..................................................
----------------
$125,000,000
----------------
----------------
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent, and that the
Underwriters will be obligated to purchase all of the Capital Securities if any
are purchased.
CP&L has been advised by the several Underwriters that they propose to
offer the Capital Securities to the public initially at the price to public set
forth on the cover page of this Prospectus Supplement and to certain dealers at
such price less a concession not in excess of % of the principal amount of
the Capital Securities; that the Underwriters and such dealers may reallow a
discount not in excess of % of such principal amount on sales to certain
other dealers; and that after the initial public offering, the price to public
and concession and discount to dealers may be changed by the Underwriters.
The Capital Securities are a new issue of securities with no established
trading market. CP&L has been advised by the Underwriters that they presently
intend to make a market in the Capital Securities, as permitted by applicable
laws and regulations. The Underwriters are not obligated, however, to make a
market in the Capital Securities and any such market making may be discontinued
at any time at the sole discretion of the Underwriters. Accordingly, no
assurance can be given as to the liquidity of, or the trading market for, the
Capital Securities.
The Underwriters and certain of their affiliates engage in transactions
with and perform services for CP&L in the ordinary course of business, for which
they have received customary compensation.
CP&L has agreed to indemnify the Underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as amended.
LEGAL MATTERS
Statements as to U.S. taxation in this Prospectus Supplement under the
caption "U.S. TAXATION" have been passed upon for CP&L by Reid & Priest LLP,
special tax counsel to CP&L, and are stated herein on their authority as
experts.
S-7
<PAGE>
<PAGE>
(This Page Left Blank Intentionally)
<PAGE>
PROSPECTUS
$700,000,000
CAROLINA POWER & LIGHT COMPANY
FIRST MORTGAGE BONDS
DEBT SECURITIES
Carolina Power & Light Company ("CP&L") intends to offer from time to time
up to $700,000,000 aggregate principal amount of its securities, at least
$450,000,000 of which will consist of First Mortgage Bonds of CP&L (the "New
Bonds") and the remaining $250,000,000 of which will consist of either New Bonds
or other debt securities of CP&L (such other debt securities, the "Debt
Securities", and, together with the New Bonds, the "Securities"), or any
combination thereof, in one or more series at prices and on terms to be
determined at the time of sale.
For each issue of Securities for which this Prospectus is being delivered
(the "Offered Bonds" or the "Offered Debt Securities", as the case may be, and,
together, the "Offered Securities") there will be an accompanying Prospectus
Supplement (the "Prospectus Supplement") that sets forth, without limitation and
to the extent applicable, the specific designation, aggregate principal amount,
denomination, maturity, premium, if any, rate of interest (which may be fixed or
variable) or method of calculation thereof, time of payment of interest, any
terms for redemption, any sinking fund provisions, any subordination provisions
(in the case of the Debt Securities only), the initial public offering price,
the names of any underwriters or agents, the principal amounts, if any, to be
purchased by underwriters, the compensation of such underwriters or agents and
any other special terms of the Offered Securities. The Prospectus Supplement
relating to the Offered Securities will also contain information concerning
certain U.S. federal income tax considerations, if applicable to the Offered
Securities.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------------
The Securities may be sold directly by CP&L or through agents designated
from time to time or through dealers or underwriters. If any agents of CP&L or
any underwriters are involved in the sales of the Offered Securities, the names
of such agents or such underwriters and any applicable commissions or discounts
will be set forth in the Prospectus Supplement.
---------------------------
The date of this Prospectus is March 17, 1995
<PAGE>
<PAGE>
AVAILABLE INFORMATION
CP&L is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities
and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by CP&L with the Commission can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the following Regional Offices of the Commission: New York
Regional Office, 7 World Trade Center, 13th Floor, New York, New York 10048 and
Chicago Regional Office, 500 West Madison Street, 14th Floor, Chicago,
Illinois 60661-2511. Copies of such material can also be obtained at
prescribed rates from the Public Reference Section of the Commission, 450
Fifth Street, N.W., Washington, D.C. 20549. Such reports, proxy statements and
other information can also be inspected at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005, and the Pacific
Stock Exchange Incorporated, 301 Pine Street, San Francisco, California 94104,
on which CP&L's Common Stock is listed.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which are on file with the Commission (File No.
1-3382) under the Exchange Act, are incorporated by reference in this Prospectus
and made a part hereof:
(a) CP&L's most recently filed Annual Report on Form 10-K;
(b) CP&L's Quarterly Reports on Form 10-Q filed since the end of CP&L's
fiscal year covered by its most recent Annual Report on Form 10-K; and
(c) CP&L's Current Reports on Form 8-K filed since the end of CP&L's fiscal
year covered by its most recent Annual Report on Form 10-K.
All other documents subsequently filed by CP&L pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering
of the Securities hereunder shall be deemed to be incorporated herein by
reference. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
CP&L will provide without charge to each person, including any beneficial
owner, to whom a copy of this Prospectus has been delivered, on the written or
oral request of any such person, a copy of any or all of the documents referred
to above which have been or may be incorporated in this Prospectus by reference,
other than exhibits to such documents (unless such exhibits are specifically
incorporated by reference into such documents). Requests for copies of such
documents should be directed to Robert F. Drennan, Jr., Manager -- Financial
Planning and Analysis, Treasury Department, Carolina Power & Light Company, 411
Fayetteville Street, Raleigh, North Carolina 27601-1748, telephone 919-546-7474.
THE COMPANY
CP&L is a public service corporation formed under the laws of North
Carolina in 1926 and is engaged in the generation, transmission, distribution
and sale of electricity in portions of North Carolina and South Carolina. The
principal executive offices of CP&L are located at 411 Fayetteville Street,
Raleigh, North Carolina 27601-1748, telephone 919-546-6111.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth CP&L's historical ratio of earnings to fixed
charges for each of the indicated periods.
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED DECEMBER 31,
- ----------------------------------------------
1994 1993 1992 1991 1990
- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C>
3.31x 3.23x 3.34x 3.08x 2.65x
</TABLE>
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APPLICATION OF PROCEEDS
Except as otherwise described in the Prospectus Supplement, the net
proceeds from the sale of the Offered Securities will be used primarily for
CP&L's ongoing construction and maintenance program, for the redemption,
repurchase, repayment, or retirement of outstanding indebtedness or for other
general corporate purposes. Any proceeds not immediately so applied when
received may be invested temporarily, pending such application, in U.S.
government or agency obligations, commercial paper, bank certificates of
deposit, or repurchase agreements collateralized by U.S. government or agency
obligations, or will be deposited with banks.
DESCRIPTION OF NEW BONDS
GENERAL
The New Bonds are to be issued under a Mortgage and Deed of Trust, dated as
of May 1, 1940, with The Bank of New York (formerly Irving Trust Company) (the
"Mortgage Trustee") and Frederick G. Herbst (W.T. Cunningham, successor), as
Trustees, as supplemented by indentures supplemental thereto, all of which are
collectively referred to as the "Mortgage." All First Mortgage Bonds of CP&L
(including the New Bonds) issued and to be issued under the Mortgage are
hereinafter sometimes referred to as "Bonds." The statements herein concerning
the New Bonds and the Mortgage are merely an outline and do not purport to be
complete. Such statements make use of the terms defined in the Mortgage and are
qualified in their entirety by express reference to the sections and articles of
the Mortgage cited herein.
Reference is made to the Prospectus Supplement for the following terms of
the Offered Bonds (among others): (i) the designation, series and aggregate
principal amount of the Offered Bonds; (ii) the percentage or percentages of
their principal amount at which such Offered Bonds will be issued; (iii) the
date or dates on which the Offered Bonds will mature; (iv) the rate or rates
(which may be either fixed or variable), and/or the method of determination of
such rate or rates, per annum at which the Offered Bonds will bear interest; (v)
the date or dates on which such interest will be payable; (vi) the denominations
in which the Offered Bonds are authorized to be issued; (vii) whether such
Offered Bonds are to be issued in whole or in part in the form of one or more
global Bonds and, if so, the identity of the depositary for such global Bonds;
(viii) redemption terms, if any; and (ix) any other specific terms.
FORM AND EXCHANGES
The New Bonds will be issuable in the form of registered bonds without
coupons. They will be exchangeable without charge for other New Bonds of
different authorized denominations, in each case for a like aggregate principal
amount, and may be transferred without charge, other than for applicable stamp
taxes or other governmental charges.
INTEREST AND PAYMENT
Reference is made to the Prospectus Supplement for the interest rate or
rates (which may be either fixed or variable), and/or the method of
determination of such rate or rates, of the Offered Bonds and the date or dates
on which such interest is payable. Except as otherwise provided in the
Prospectus Supplement relating to the Offered Bonds, principal and interest are
payable at The Bank of New York in New York City.
CP&L has covenanted to pay interest on any overdue principal and (to the
extent that payment of such interest is enforceable under applicable law) on any
overdue installment of interest on the Bonds of all series at the rate of 6% per
annum. (Mortgage, Sec. 78.)
REDEMPTION AND PURCHASE OF BONDS
The New Bonds may be redeemable, in whole or in part, on at least 30 days'
notice at the general redemption prices set forth in the Prospectus Supplement
for all redemptions including redemptions (i) for the basic improvement fund,
(ii) for the maintenance and replacement fund, (iii) for the sinking fund, if
any, which may be established for a New Bond of a designated interest rate and
maturity, (iv) with certain deposited cash, (v) with the proceeds of released
property or (vi) at the option of CP&L. Reference is made to the Prospectus
Supplement for the redemption terms, if any, of the Offered Bonds.
If at the time notice of redemption is given the redemption moneys are not
on deposit with the Mortgage Trustee, the redemption may be subject to their
deposit with the Mortgage Trustee on or before the date fixed for redemption and
such notice shall be of no effect unless such moneys are so received.
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Cash deposited under any provisions of the Mortgage (with certain
exceptions) may be applied to the purchase of Bonds of any series.
(Mortgage, Art. X.)
IMPROVEMENT FUND
As to each outstanding series of Bonds, basic improvement fund payments are
required in an amount equal to 1/2 of 1% per year of the greatest amount of
Bonds of such series outstanding prior to the year in which such payment is due.
Payments may be made in cash or principal amount of Bonds of the particular
series, or credit may be taken for property additions at 100% (70% in the case
of all outstanding series of Bonds issued prior to the Bonds of the Eleventh
Series) of cost or fair value, or credit may be taken for Bonds of any series or
prior lien bonds retired. The requirement may be anticipated at any time.
Additional improvement fund payments in an amount equal to 1/2 of 1% per year
are required by the terms of each outstanding series of Bonds issued prior to
the Bonds of the Eleventh Series, making a total of 1% as to each of those
series. CP&L has reserved the right to amend the Mortgage, without any consent
or other action by the holders of the Bonds of the Eleventh Series or any
subsequently created series (including each series of the New Bonds), to
eliminate the basic improvement fund payments of 1/2 of 1% with respect to each
series (including each series of the New Bonds). (Mortgage, Sec. 39; First
through Ninth Supplementals, Sec. 3; Tenth Supplemental, Sec. 5.)
MAINTENANCE AND REPLACEMENT FUND
There shall be expended for each year 15% of the adjusted gross operating
revenues for maintenance and replacements in respect of the mortgaged property
and certain automotive equipment of CP&L. Excess expenditures for such purposes
in any year may be credited against the requirements in any subsequent year. If
CP&L is not permitted by regulatory authority to include 15% of such revenues
for such purposes in operating expenses, the requirements are correspondingly
reduced. Such requirements may be met by depositing cash with the Mortgage
Trustee, certifying expenditures for maintenance and repairs, certifying gross
property additions, certifying gross expenditures for certain automotive
equipment, or by taking credit for Bonds and prior lien bonds retired. Such cash
may be withdrawn on expenditures for gross property additions or on waiver of
the right to issue Bonds or be applied to the purchase or redemption of Bonds of
such series as may be designated by CP&L. See "Redemption and Purchase of
Bonds."
CP&L has reserved the right to amend the Mortgage, without any consent or
other action by holders of the Bonds of the Twenty-third Series or any
subsequently created series (including each series of the New Bonds), to
eliminate the maintenance and replacement fund payments with respect to the
Bonds of the Twenty-third Series and any subsequently created series (including
each series of the New Bonds). (Mortgage, Sec. 38; Twenty-second Supplemental,
Sec. 7.)
SPECIAL PROVISIONS FOR RETIREMENT OF BONDS
If, during any twelve month period, property is disposed of by order of or
to any governmental authority, resulting in the receipt of $10,000,000 or more
as proceeds therefor, CP&L (subject to certain conditions) must apply such
proceeds, less certain deductions, to the retirement of Bonds. The Bonds are
redeemable at the general redemption prices for this purpose, but only a
pro-rata portion of each series of Bonds then outstanding (including each series
of the New Bonds) is redeemable for this purpose. CP&L has reserved the right to
amend the Mortgage to eliminate the foregoing special provisions for retirement
of Bonds. (Mortgage, Sec. 64; Ninth Supplemental, Sec. 6.)
SECURITY
The New Bonds and any other Bonds will be secured by the Mortgage, which
constitutes, in the opinion of General Counsel for CP&L, a first mortgage lien
on all of the present properties of CP&L (except as stated below), subject to
(a) leases of minor portions of CP&L's property to others for uses which, in the
opinion of such counsel, do not interfere with CP&L's business, (b) leases of
certain property of CP&L not used in its electric utility business, and (c)
excepted encumbrances, minor defects and irregularities. There are excepted from
the lien: all merchandise, equipment, materials or supplies held for sale and
fuel, oil and similar consumable materials and supplies; vehicles and
automobiles; cash, securities, receivables and all contracts, leases and
operating agreements not pledged or required so to be; and electric energy and
other products.
The Mortgage contains provisions for subjecting to the lien thereof
(subject to limitations in the case of consolidation, merger or sale of
substantially all of CP&L's assets) property, other than property of the kind
excepted above, acquired after the date of delivery of the Mortgage. (Mortgage,
Art. XV.)
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The Mortgage provides that the Trustees shall have a lien upon the
mortgaged property, prior to the Bonds, for the payment of their reasonable
compensation and expenses and for indemnity against certain liabilities.
(Mortgage, Sec. 96.)
ISSUANCE OF ADDITIONAL BONDS
The maximum principal amount of Bonds which may be issued under the
Mortgage is unlimited. Bonds of any series may be issued from time to time on
the basis of (1) 70% of property additions after adjustments to offset
retirements; (2) retirement of Bonds or prior lien bonds; or (3) deposit of
cash. With certain exceptions in the case of (2) above, the issuance of Bonds is
subject to adjusted net earnings for 12 out of the preceding 15 months before
interest and income taxes being (a) at least twice the annual interest
requirements on, or (b) at least 10% of the principal amount of, all Bonds at
the time outstanding, including the additional issue, and all indebtedness of
prior or equal rank. Such adjusted net earnings are computed after provision for
repairs, maintenance and retirement of property equal to the maintenance and
replacement fund requirements for such period. Cash so deposited may be
withdrawn upon the basis stated in clauses (1) and (2) above. See "Modification
of the Mortgage."
Property additions must consist of electric property, or property used or
useful in connection therewith, acquired after December 31, 1939, but may not
include securities, vehicles or automobiles. CP&L has reserved the right to
amend the Mortgage, without any consent or other action of the holders of the
Twenty-fourth Series or any subsequently created series (including each series
of the New Bonds), to make available as property additions any form of space
satellites (including solar power satellites), space stations and other
analogous facilities. CP&L estimates that, as of December 31, 1994, there were
approximately $2.2 billion of net property additions available for the issuance
of Bonds, which, using the test specified in clause (1) of the previous
paragraph, would provide a basis for the issuance of approximately $1.5 billion
of additional Bonds as of such date.
The Mortgage contains restrictions upon the issuance of Bonds against
property subject to liens and upon the increase of the amount of such liens.
(Mortgage, Secs. 4-7, 20-30 and 46; Twenty-third Supplemental, Sec. 5.)
DIVIDEND RESTRICTIONS
So long as any Bonds remain outstanding, and unless otherwise specified in
the Prospectus Supplement with respect to the New Bonds, cash dividends and
distributions on common stock are restricted to aggregate net income available
therefor (after preferred dividends) since December 31, 1948, plus $3,000,000.
No portion of retained earnings at December 31, 1994 is restricted by this
provision. See "Modification of the Mortgage."
MODIFICATION OF THE MORTGAGE
The rights of the Bondholders may be modified with the consent of 70% of
the Bonds and, if less than all series of Bonds are affected, the consent also
of 70% of the Bonds of each series affected. CP&L has reserved the right to
amend the Mortgage, without any consent or other action by holders of the Bonds
of the Fourteenth Series or any subsequently created series (including each
series of the New Bonds), to substitute for the foregoing provision a provision
to the effect that the rights of the Bondholders may be modified with the
consent of holders of 66 2/3% of the Bonds, and, if less than all series of
Bonds are affected, the consent also of holders of 66 2/3% of the Bonds of each
series affected. In general, no modification of the terms of payment of
principal or interest, and no modification affecting the lien or reducing the
percentage required for modification, is effective against any Bondholder
without such Bondholder's consent. (Mortgage, Art. XVIII; Thirteenth
Supplemental, Sec. 5.)
CP&L may reserve the right to amend the Mortgage, without the consent of
the holders of one or more series of New Bonds or of any subsequently created
series, as follows: (i) to reduce the percentage of the holders of the Bonds who
must consent to certain modifications of the Mortgage to a majority of the
holders of all Bonds adversely affected; (ii) to except from the lien of the
Mortgage all property not funded or eligible to be funded under the Mortgage for
the issuance of Bonds, the release of property or any other purpose under the
Mortgage; (iii) to increase the period during which the net earnings test may be
calculated from 15 months to 18 months; (iv) to allow the release of property
from the lien of the Mortgage at cost or at the value of such property at the
time it became funded property; (v) to simplify the release of unfunded property
from the lien of the Mortgage, if after the release CP&L will have at least one
dollar ($1) in unfunded property remaining; (vi) to increase the amount of
funded property that may be released or retired on the basis of the retirement
of Bonds from 100% to 143%; and (vii) to eliminate the annual certificate from
CP&L to the Mortgage Trustee regarding the amounts accrued, expended or
appropriated for maintenance or property retirements. In addition, CP&L may
elect to modify the dividend covenant applicable to a particular series of New
Bonds to provide that CP&L may declare and pay dividends in cash or
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property on its common stock only out of Surplus, as defined, or out of net
profits for the fiscal year or the preceding fiscal year. However, dividends may
not be paid out of net profits if the Capital of CP&L, as defined, has been
diminished to a specified extent.
DEFAULTS AND NOTICE THEREOF
An event of default is defined as being: default in payment of principal of
Bonds; default for 30 days in payment of interest on Bonds; default in payment
of interest on or principal of prior lien bonds continued beyond grace periods;
default for 60 days in payment of installments of funds for retirement of Bonds
(including the improvement and maintenance and replacement funds); certain
events in bankruptcy, insolvency or reorganization; and default for 90 days
after notice in performance of other covenants. (Mortgage, Sec. 65.) The
Trustees may withhold notice of default (except in payment of principal,
interest or funds for retirement of Bonds) if they think it in the interest of
the Bondholders. (Mortgage, Sec. 66; Third Supplemental, Sec. 15.)
In case of a default, holders of 25% of the Bonds may declare the principal
and interest due and payable, but the holders of a majority may annul such
declaration and destroy its effect if such default has been cured. (Mortgage,
Sec. 67.) No holder of Bonds may enforce the lien of the Mortgage unless such
holder has given the Trustees written notice of a default and unless the holders
of 25% of the Bonds have requested the Trustees in writing to act and have
offered the Trustees reasonable opportunity to act. (Mortgage, Sec. 80.) The
Trustees are not required to risk their funds or incur personal liability if
there is a reasonable ground for believing that repayment to the Trustees is not
reasonably assured. (Mortgage, Sec. 94.) Holders of a majority of the Bonds may
direct the time, method and place of conducting any proceedings for any remedy
available to the Trustees, or exercising any trust or power conferred upon the
Trustees. (Mortgage, Sec. 71.)
EVIDENCE TO BE FURNISHED TO THE MORTGAGE TRUSTEE UNDER THE MORTGAGE
Compliance with Mortgage provisions is evidenced by written statements of
CP&L's officers or persons selected or paid by CP&L (such as an engineer with
respect to the value of property being certified or released, an accountant with
respect to a net earnings certificate and counsel with respect to property
titles and compliance with the Mortgage generally). In certain major matters (as
required by Section 314(d) of the Trust Indenture Act of 1939, as amended) the
accountant or engineer must be independent. Various certificates and other
papers are required to be filed annually and upon the happening of various
events. General periodic evidence is required to be furnished as to compliance
with the conditions and covenants under the Mortgage.
CONCERNING THE MORTGAGE TRUSTEE
In the regular course of business, CP&L obtains short-term funds from
several banks including, in certain instances, The Bank of New York.
DESCRIPTION OF DEBT SECURITIES
GENERAL
The Debt Securities may be issued in one or more new series under an
Indenture or Indentures (the "Indenture") between CP&L and Bankers Trust
Company, or other trustee to be named, as Trustee (each, a "Trustee"). The
statements herein concerning (i) the Indenture, (ii) one or more supplemental
indentures, board resolutions or officer's certificates establishing the Debt
Securities and (iii) the Debt Securities (the forms of each of which are filed,
or will be filed, as exhibits to the Registration Statement of which this
Prospectus forms a part, or as an exhibit to a Current Report on Form 8-K to be
incorporated by reference in this Prospectus) are merely an outline and do not
purport to be complete. Such statements make use of the terms defined in the
Indenture and are qualified in their entirety by express reference to the
sections of the Indenture cited herein.
The Debt Securities will be unsecured obligations of CP&L and, if so
provided in the Prospectus Supplement relating to a particular series of Debt
Securities, will be subordinated obligations of CP&L (the "Subordinated Debt
Securities"). Except as may otherwise be described in the Prospectus Supplement,
separate Indentures will be used for Subordinated Debt Securities (the
"Subordinated Indenture") and for Debt Securities that are not Subordinated Debt
Securities.
Reference is made to the Prospectus Supplement relating to any particular
issue of Offered Debt Securities for the following terms: (1) the title of such
Debt Securities; (2) any limit on the aggregate principal amount of such Debt
Securities or the series of which they are a part; (3) the date or dates on
which the principal of any of such Debt Securities will be
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payable; (4) the rate or rates (which may be fixed or variable) and/or the
method of determination of such rate or rates at which any of such Debt
Securities will bear interest, if any, the date or dates from which any such
interest will accrue, the Interest Payment Dates on which any such interest will
be payable and the Regular Record Date for any such interest payable on any
Interest Payment Date; (5) the place or places where (i) the principal of,
premium, if any, and interest on any of such Debt Securities will be payable,
(ii) registration of transfer of such Debt Securities may be effected, (iii)
exchanges of such Debt Securities may be effected and (iv) notices and demands
to or upon CP&L in respect of such Debt Securities may be served; the Security
Registrar for such Debt Securities and, if such is the case, that the principal
of such Debt Securities shall be payable without presentment or surrender
thereof; (6) the period or periods within which, or the date or dates on which,
the price or prices at which and the terms and conditions upon which any of such
Debt Securities may be redeemed, in whole or in part, at the option of CP&L; (7)
the obligation or obligations, if any, of CP&L to redeem or purchase any of such
Debt Securities pursuant to any sinking fund or other mandatory redemption
provisions or at the option of the Holder thereof, and the period or periods
within which, or the date or dates on which, the price or prices at which and
the terms and conditions upon which any of such Debt Securities shall be
redeemed or purchased, in whole or in part, pursuant to such obligation, and
applicable exceptions to the requirements of a notice of redemption in the case
of mandatory redemption or redemption at the option of the Holder; (8) the
denominations in which any of such Debt Securities will be issuable, if other
than denominations of $1,000 and any integral multiple thereof; (9) if the
amount payable in respect of principal of or any premium or interest on any of
such Debt Securities may be determined with reference to an index or other fact
or event ascertainable outside the Indenture, the manner in which such amounts
will be determined; (10) if other than the currency of the United States, the
currency or currencies, including composite currencies in which the principal of
or any premium or interest on any of such Debt Securities will be payable; (11)
if the principal of or any premium or interest on any of such Debt Securities is
to be payable, at the election of CP&L or the Holder thereof, in a coin or
currency other than in which such Debt Securities are stated to be payable, the
period or periods within which and the terms and conditions upon which, such
election is to be made; (12) if other than the principal amount thereof, the
portion of the principal amount of any of such Debt Securities which shall be
payable upon declaration of acceleration of the Maturity thereof; (13) if the
principal of or premium or interest on such Debt Securities are to be payable,
or are to be payable at the election of CP&L or a Holder thereof, in securities
or other property, the type and amount of such securities or other property, or
the formulary or other method or other means by which such amount shall be
determined, and the period or periods within which, and the terms and conditions
upon which, any such election may be made; (14) the terms, if any, pursuant to
which such Debt Securities may be converted into or exchanged for shares of
capital stock or other securities of CP&L or any other Person; (15) the
obligations or instruments, if any, which shall be considered to be Eligible
Obligations in respect of such Debt Securities denominated in a currency other
than Dollars or in a composite currency, and any additional or alternative
provisions for the reinstatement of CP&L's indebtedness in respect of such Debt
Securities after the satisfaction and discharge thereof; (16) if such Debt
Securities are to be issued in global form, (i) any limitations on the rights of
the Holder or Holders of such Debt Securities to transfer or exchange the same
or to obtain the registration of transfer thereof, (ii) any limitations on the
rights of the Holder or Holders thereof to obtain certificates therefor in
definitive form in lieu of temporary form and (iii) any and all other matters
incidental to such Debt Securities; (17) if such Debt Securities are to be
issuable as bearer securities; (18) any limitations on the rights of the Holders
of such Debt Securities to transfer or exchange such Debt Securities or to
obtain the registration of transfer thereof, and if a service charge will be
made for the registration of transfer or exchange of such Debt Securities, the
amount or terms thereof; (19) any exceptions to the provisions governing
payments due on legal holidays or any variations in the definition of Business
Day with respect to such Debt Securities; (20) any addition to the Events of
Default applicable to any of such Debt Securities and any addition to the
covenants of CP&L for the benefit of the Holders of such Debt Securities; and
(21) any other terms of such Debt Securities of such series, or any Tranche
thereof, not inconsistent with the provisions of the Indenture. (Section 301).
Debt Securities may be sold at a substantial discount below their principal
amount. Certain special United States federal income tax considerations (if any)
applicable to Debt Securities sold at an original issue discount may be
described in the applicable Prospectus Supplement. In addition, certain special
United States federal income tax or other considerations (if any) applicable to
any Debt Securities which are denominated in a currency or currency unit other
than Dollars may be described in the applicable Prospectus Supplement.
Except as may otherwise be described in the Prospectus Supplement, the
covenants contained in the Indenture would not afford Holders of Debt Securities
protection in the event of a highly-leveraged transaction involving CP&L.
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SUBORDINATION
If so provided in the applicable Prospectus Supplement, the Subordinated
Debt Securities will be subordinate and junior in right of payment to all Senior
Indebtedness of CP&L.
No payment of principal of (including redemption and sinking fund
payments), premium, if any, or interest on, the Subordinated Debt Securities may
be made if any Senior Indebtedness is not paid when due, any applicable grace
period with respect to such default has ended and such default has not been
cured or waived, or if the maturity of any Senior Indebtedness has been
accelerated because of a default. Upon any distribution of assets of CP&L to
creditors upon any dissolution, winding-up, liquidation or reorganization,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all principal of, and premium, if any, and interest due or to
become due on, all Senior Indebtedness must be paid in full before the Holders
of the Subordinated Debt Securities are entitled to receive or retain any
payment. (Section 1502). The rights of the Holders of the Subordinated Debt
Securities will be subrogated to the rights of the Holders of Senior
Indebtedness to receive payments or distributions applicable to Senior
Indebtedness until all amounts owing on the Subordinated Debt Securities are
paid in full. (Section 1504).
The term "Senior Indebtedness" is defined in the Subordinated Indenture to
mean obligations (other than non-recourse obligations and the indebtedness
issued under the Subordinated Indenture) of, or guaranteed or assumed by, CP&L
for borrowed money (including both senior and subordinated indebtedness for
borrowed money (other than the subordinated Debt Securities)) or for the payment
of money relating to any lease which is capitalized on the consolidated balance
sheet of CP&L and its subsidiaries in accordance with generally accepted
accounting principles as in effect from time to time, or indebtedness evidenced
by bonds, debentures, notes or other similar instruments, and in each case,
amendments, renewals, extensions, modifications and refundings of any such
indebtedness or obligations, whether existing as of the date of the Subordinated
Indenture or subsequently incurred by CP&L.
The Subordinated Indenture does not limit the aggregate amount of Senior
Indebtedness that CP&L may issue. As of January 31, 1995, outstanding Senior
Indebtedness of CP&L aggregated approximately $2.8 billion.
FORM, EXCHANGE, AND TRANSFER
Unless otherwise specified in the applicable Prospectus Supplement, the
Debt Securities of each series will be issuable only in fully registered form
without coupons and in denominations of $1,000 and any integral multiple
thereof. (Sections 201 and 302).
At the option of the Holder, subject to the terms of the Indenture and the
limitations applicable to global securities, Debt Securities of any series will
be exchangeable for other Debt Securities of the same series, of any authorized
denomination and of like tenor and aggregate principal amount. (Section 305).
Subject to the terms of the Indenture and the limitations applicable to
global securities, Debt Securities may be presented for exchange as provided
above or for registration of transfer (duly endorsed or accompanied by a duly
executed instrument of transfer) at the office of the Security Registrar or at
the office of any transfer agent designated by CP&L for such purpose. CP&L may
designate itself the Security Registrar. No service charge will be made for any
registration of transfer or exchange of Debt Securities, but CP&L may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. Such transfer or exchange will be effected upon
the Security Registrar or such transfer agent, as the case may be, being
satisfied with the documents of title and identity of the person making the
request. (Section 305). Any transfer agent (in addition to the Security
Registrar) initially designated by CP&L for any Debt Securities will be named in
the applicable Prospectus Supplement. CP&L may at any time designate additional
transfer agents or rescind the designation of any transfer agent or approve a
change in the office through which any transfer agent acts, except that CP&L
will be required to maintain a transfer agent in each Place of Payment for the
Debt Securities of each series. (Section 602).
CP&L will not be required to (i) issue, register the transfer of, or
exchange any Debt Security or any Tranche thereof during a period beginning at
the opening of business 15 days before the day of mailing of a notice of
redemption of any such Debt Security called for redemption and ending at the
close of business on the day of such mailing or (ii) register the transfer of or
exchange any Debt Security so selected for redemption, in whole or in part,
except the unredeemed portion of any such Debt Security being redeemed in part.
(Section 305).
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PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of interest on a Debt Security on any Interest Payment Date will be made to the
person in whose name such Debt Security (or one or more Predecessor Securities)
is registered at the close of business on the Regular Record Date for such
interest. (Section 307).
Unless otherwise indicated in the applicable Prospectus Supplement,
principal of and any premium and interest on the Debt Securities of a particular
series will be payable at the office of such Paying Agent or Paying Agents as
CP&L may designate for such purpose from time to time. Unless otherwise
indicated in the applicable Prospectus Supplement, the corporate trust office of
the Trustee in New York City will be designated as CP&L's sole Paying Agent for
payments with respect to Debt Securities of each series. Any other Paying Agents
initially designated by CP&L for the Debt Securities of a particular series will
be named in the applicable Prospectus Supplement. CP&L may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent or
approve a change in the office through which any Paying Agent acts, except that
CP&L will be required to maintain a Paying Agent in each Place of Payment for
the Debt Securities of a particular series. (Section 602).
All moneys paid by CP&L to a Paying Agent for the payment of the principal
of or any premium or interest on any Debt Security which remain unclaimed at the
end of two years after such principal, premium or interest has become due and
payable will be repaid to CP&L, and the Holder of such Debt Security thereafter
may look only to CP&L for payment thereof. (Section 603).
REDEMPTION
Any terms for the optional or mandatory redemption of Debt Securities will
be set forth in the applicable Prospectus Supplement or a supplement thereto.
Except as shall otherwise be provided in the applicable Prospectus Supplement
with respect to Debt Securities that are redeemable at the option of the Holder,
Debt Securities will be redeemable only upon notice by mail not less than 30 nor
more than 60 days prior to the date fixed for redemption, and, if less than all
the Debt Securities of a series, or any Tranche thereof, are to be redeemed, the
particular Debt Securities to be redeemed will be selected by such method as
shall be provided for any particular series, or in the absence of any such
provision, by such method of random selection as the Security Registrar deems
fair and appropriate. (Section 403 and 404).
Any notice of redemption at the option of CP&L may state that such
redemption will be conditional upon receipt by the Paying Agent or Agents, on or
prior to the dated fixed for such redemption, of money sufficient to pay the
principal of and premium, if any, and interest, if any, on such Debt Securities
and that if such money has not been so received, such notice will be of no force
and effect and CP&L will not be required to redeem such Debt Securities.
(Section 404).
CONSOLIDATION, MERGER, AND SALE OF ASSETS
CP&L may not consolidate with or merge into any other person or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, unless (i) the corporation formed by such consolidation or into which
CP&L is merged or the Person which acquires by conveyance or transfer, or which
leases, the property and assets of CP&L substantially as an entirety shall be a
Person organized and validly existing under the laws of any domestic
jurisdiction and such Person expressly assumes CP&L's obligations on the Debt
Securities and under the Indenture, (ii) immediately after giving effect to the
transaction, no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall have occurred and be
continuing, and (iii) CP&L will have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel as provided in the Indenture. (Section
1101).
EVENTS OF DEFAULT
Each of the following will constitute an Event of Default under the
Indenture with respect to Debt Securities of any series: (a) failure to pay any
interest on any Debt Securities of such series within 60 days after the same
becomes due and payable; (b) failure to pay principal or premium, if any, on any
Debt Security of such series within three Business Days after the same becomes
due and payable; (c) failure to perform or breach of any other covenant or
warranty of CP&L in the Indenture (other than a covenant or warranty of CP&L in
the Indenture solely for the benefit of one or more series of Debt Securities
other than such series) for 60 days after written notice to CP&L by the Trustee,
or to CP&L and the Trustee by the Holders of at least 33% in principal amount of
the Debt Securities of such series outstanding under the Indenture as provided
in the Indenture; (d) certain events of bankruptcy, insolvency or
reorganization; and (e) any other Event of Default specified in the applicable
Prospectus Supplement with respect to Debt Securities of particular series.
(Section 801).
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No Event of Default with respect to the Debt Securities necessarily
constitutes an Event of Default with respect to the Debt Securities of any other
series issued under the Indenture.
If an Event of Default with respect to any series of Debt Securities occurs
and is continuing, then either the Trustee or the Holders of not less than 33%
in principal amount of the Outstanding Debt Securities of such series may
declare the principal amount (or if the Debt Securities of such series are
discount notes or similar Debt Securities, such portion of the principal amount
as may be specified in the applicable Prospectus Supplement) of all of the Debt
Securities of such series to be due and payable immediately; provided, however,
that if an Event of Default occurs and is continuing with respect to more than
one series of Debt Securities, the Trustee or the Holders of not less than 33%
in aggregate principal amount of the Outstanding Debt Securities of all such
series, considered as one class, may make such declaration of acceleration and
not the Holders of the Debt Securities of any one of such series.
At any time after the declaration of acceleration with respect to the Debt
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained, the Event or Events of Default
giving rise to such declaration of acceleration will, without further act, be
deemed to have been waived, and such declaration and its consequences will,
without further act, be deemed to have been rescinded and annulled, if
(a) CP&L has paid or deposited with the Trustee a sum sufficient to pay
(1) all overdue interest on all Debt Securities of such series;
(2) the principal of and premium, if any, on any Debt Securities of
such series which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates prescribed therefor
in such Debt Securities;
(3) interest upon overdue interest at the rate or rates prescribed
therefor in such Debt Securities, to the extent that payment of such
interest is lawful; and
(4) all amounts due to the Trustee under the Indenture;
(b) any other Event or Events of Default with respect to the Debt
Securities of such series, other than the nonpayment of the principal of the
Debt Securities of such series which has become due solely by such declaration
of acceleration, have been cured or waived as provided in the Indenture.
(Section 802).
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders, unless such Holders
shall have offered to the Trustee reasonable indemnity. (Section 903). Subject
to such provisions for the indemnification of the Trustee, the Holders of a
majority in principal amount of the Outstanding Debt Securities of any series
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee, with respect to the Debt Securities of that
series. (Section 812).
No Holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the Indenture, or for the appointment of a
receiver or a trustee, or for any other remedy thereunder, unless (i) such
Holder has previously given to the Trustee written notice of a continuing Event
of Default with respect to the Debt Securities of such series, (ii) the Holders
of not less than a majority in aggregate principal amount of the Outstanding
Debt Securities of such series have made written request to the Trustee, and
such Holder or Holders have offered reasonable indemnity to the Trustee to
institute such proceeding as trustee and (iii) the Trustee has failed to
institute such proceeding, and has not received from the Holders of a majority
in aggregate principal amount of the Outstanding Debt Securities of that series
a direction inconsistent with such request, within 60 days after such notice,
request and offer. (Section 807). However, such limitations do not apply to a
suit instituted by a Holder of a Debt Security for the enforcement of payment of
the principal of or any premium or interest on such Debt Security on or after
the applicable due date specified in such Debt Security. (Section 808).
CP&L will be required to furnish to the Trustee annually a statement by an
appropriate officer as to such officer's knowledge of CP&L's compliance with all
conditions and covenants under the Indenture, such compliance to be determined
without regard to any period of grace or requirement of notice under the
Indenture. (Section 606).
MODIFICATION AND WAIVER
Without the consent of any Holder of Debt Securities, CP&L and the Trustee
may enter into one or more supplemental indentures for any of the following
purposes: (a) to evidence the assumption by any permitted successor to CP&L of
the
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covenants of CP&L in the Indenture and the Debt Securities; or (b) to add one or
more covenants of CP&L or other provisions for the benefit of the Holders of all
or any series of Outstanding Debt Securities or to surrender any right or power
conferred upon CP&L by the Indenture; or (c) to add any additional Events of
Default with respect to all or any series of Outstanding Debt Securities; or (d)
to change or eliminate any provision of the Indenture or to add any new
provision to the Indenture, provided that if such change, elimination or
addition will adversely affect the interests of the Holders of Debt Securities
of any series in any material respect, such change, elimination or addition will
become effective with respect to such series only when there is no Debt Security
of such series remaining Outstanding under the Indenture; or (e) to provide
collateral security for the Debt Securities; or (f) to establish the form or
terms of Debt Securities of any series as permitted by the Indenture; or (g) to
evidence and provide for the acceptance of appointment of a successor Trustee
under the Indenture with respect to the Debt Securities of one or more series
and to add to or change any of the provisions of the Indenture as shall be
necessary to provide for or to facilitate the administration of the trusts under
the Indenture by more than one trustee; or (h) to provide for the procedures
required to permit the utilization of a noncertificated system of registration
for any series of Debt Securities; or (i) to change any place where (1) the
principal of and premium, if any, and interest, if any, on any Debt Securities
shall be payable, (2) any Debt Securities may be surrendered for registration of
transfer or exchange and (3) notices and demands to or upon CP&L in respect of
Debt Securities and the Indenture may be served; or (j) to cure any ambiguity or
inconsistency or to make or change any other provisions with respect to matters
and questions arising under the Indenture, provided such changes or additions
shall not adversely affect the interests of the Holders of Debt Securities of
any series in any material respect. (Section 1201).
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Debt Securities of any series may waive compliance by CP&L with
certain restrictive provisions of the Indenture. (Section 607). The Holders of a
majority in principal amount of the Outstanding Debt Securities of any series
may waive any past default under the Indenture, except a default in the payment
of principal, premium, 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 such series affected. (Section 813).
Without limiting the generality of the foregoing, if the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), is amended after the date
of the Indenture in such a way as to require changes to the Indenture or the
incorporation therein of additional provisions or so as to permit changes to, or
the elimination of, provisions which, at the date of the Indenture or at any
time thereafter, were required by the Trust Indenture Act to be contained in the
Indenture, the Indenture will be deemed to have been amended so as to conform to
such amendment or to effect such changes or elimination, and CP&L and the
Trustee may, without the consent of any Holders, enter into one or more
supplemental indentures to evidence or effect such amendment. (Section 1201.)
Except as provided above, the consent of the Holders of not less than a
majority in aggregate principal amount of the Debt Securities of all series then
Outstanding, considered as one class, is required for the purpose of adding any
provisions to, or changing in any manner, or eliminating any of the provisions
of, the Indenture pursuant to one or more supplemental indentures; provided,
however, that 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 Outstanding Debt
Securities of all series so directly affected, considered as one class, will be
required; and provided, further, that if the Debt Securities of any series have
been issued in more than one Tranche and if the proposed supplemental indenture
directly affects the rights of the Holders of one or more, but less than all,
such Tranches, then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Debt Securities of all Tranches so directly
affected, considered as one class, will be required; and provided further, that
no such amendment or modification may (a) 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 thereof or the rate of interest thereon
(or the amount of any installment of interest thereon) or change the method of
calculating such rate or reduce any premium payable upon the redemption thereof,
or reduce the amount of the principal of any Discount Security that would be due
and payable upon a declaration of acceleration of Maturity or change the coin or
currency (or other property) in which any Debt Security or any premium or the
interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity of any Debt
Security (or, in the case of redemption, on or after the redemption date)
without, in any such case, the consent of the Holder of such Debt Security, (b)
reduce the percentage in principal amount of the Outstanding Debt Securities of
any series, or any Tranche thereof, the consent of the Holders of which is
required for any such supplemental indenture, or the consent of the Holders of
which is required for any waiver of compliance with any provision of the
Indenture or any default thereunder and its consequences, or reduce the
requirements for quorum or voting, without, in any such case, the consent of the
Holder of each Outstanding Debt
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Security of such series or Tranche, or (c) modify certain of the provisions of
the Indenture relating to supplemental indentures, waivers of certain covenants
and waivers of past defaults with respect to the Debt Securities of any series,
or any Tranche thereof, without the consent of the Holder of each Outstanding
Debt Security affected thereby. A supplemental indenture which changes or
eliminates any covenant or other provision of the Indenture which has expressly
been included solely for the benefit of one or more particular series of Debt
Securities or one or more Tranches thereof, or modifies the rights of the
Holders of Debt Securities of such series or Tranches with respect to such
covenant or other provision, will be deemed not to affect the rights under the
Indenture of the Holders of the Debt Securities of any other series or Tranche.
(See Section 1202.)
The Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities have given or
taken any direction, notice, consent, waiver, or other action under the
Indenture as of any date, (i) Debt Securities owned by CP&L or any other obligor
upon the Securities or any Affiliate of CP&L or of such other obligor (unless
CP&L, such Affiliate or such obligor owns all Securities Outstanding under this
Indenture, or all Outstanding Securities of each such series and each such
Tranche, as the case may be, determined without regard to this clause (i)) shall
be disregarded and deemed not to be Outstanding; (ii) the principal amount of a
Discount Security that shall be deemed to be Outstanding for such purposes shall
be the amount of the principal thereof that would be due and payable as of the
date of such determination upon a declaration of acceleration of the Maturity
thereof as provided in the Indenture; and (iii) the principal amount of a Debt
Security denominated in one or more foreign currencies or a composite currency
that will be deemed to be Outstanding will be the Dollar equivalent, determined
as of such date in the manner prescribed for such Debt Security, of the
principal amount of such Debt Security (or, in the case of a Debt Security
described in clause (ii) above, of the amount described in such clause).
(Section 101).
If CP&L shall solicit from Holders any request, demand, authorization,
direction, notice, consent, election, waiver or other Act, CP&L may, at its
option, by Board Resolution, fix in advance a record date for the determination
of Holders entitled to give such request, demand, authorization, direction,
notice, consent, election, waiver or other Act, but CP&L shall have no
obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, election, waiver or other Act may be
given before or after such record date, but only the Holders of record at the
close of business on the record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of the
Outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Securities shall be computed as of the record date.
Any request, demand, authorization, direction, notice, consent, election, waiver
or other Act of a Holder shall bind every future Holder of the same Security and
the Holder of every Security issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustee or the Company in reliance thereon, whether
or not notation of such action is made upon such Security. (Section 104).
DEFEASANCE
Unless otherwise indicated in the applicable Prospectus Supplement, any
Debt Security, or any portion of the principal amount thereof, will be deemed to
have been paid for purposes of the Indenture, and, at CP&L's election, the
entire indebtedness of CP&L in respect thereof will be deemed to have been
satisfied and discharged, if there has been irrevocably deposited with the
Trustee or any Paying Agent (other than CP&L), in trust: (a) money in an amount
which will be sufficient, or (b) Eligible Obligations (as described below),
which do not contain provisions permitting the redemption or other prepayment
thereof at the option of the issuer thereof, the principal of and the interest
on which when due, without any regard to reinvestment thereof, will provide
monies which, together with money, if any, deposited with or held by the Trustee
or such Paying Agent, will be sufficient, or (c) a combination of (a) and (b)
which will be sufficient, to pay when due the principal of and premium, if any,
and interest, if any, due and to become due on such Debt Security or Securities
or portions thereof. (Section 701). For this purpose, unless otherwise indicated
in the applicable Prospectus Supplement, Eligible Obligations include direct
obligations of, or obligations unconditionally guaranteed by, the United States,
entitled to the benefit of the full faith and credit thereof, and certificates,
depositary receipts or other instruments which evidence a direct ownership
interest in such obligations or in any specific interest or principal payments
due in respect thereof.
RESIGNATION OF TRUSTEE
The Trustee may resign at any time by giving written notice thereof to CP&L
or may be removed at any time by Act of the Holders of a majority in principal
amount of Debt Securities then Outstanding delivered to the Trustee and CP&L. No
resignation or removal of the Trustee and no appointment of a successor trustee
will become effective until the acceptance of appointment by a successor trustee
in accordance with the requirements of the Indenture. So long as no Event of
Default or
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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 CP&L has delivered to the Trustee a
resolution of its Board of Directors appointing a successor trustee and such
successor has accepted such appointment in accordance with the terms of the
Indenture, the Trustee will be deemed to have resigned and the successor will be
deemed to have been appointed as trustee in accordance with the Indenture.
(Section 910).
NOTICES
Notices to Holders of Debt Securities will be given by mail to the
addresses of such Holders as they may appear in the Security Register. (Section
106).
TITLE
CP&L, the Trustee, and any agent of CP&L or the Trustee may treat the
Person in whose name a Debt Security is registered as the absolute owner thereof
(whether or not such Debt Security may be overdue) for the purpose of making
payment and for all other purposes. (Section 308).
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the law of the State of New York. (Section 112).
REGARDING THE TRUSTEE
The Trustee under the Indenture is Bankers Trust Company. Bankers Trust
Company is the indenture trustee under a certain indenture of trust entered into
in connection with a lease financing in which CP&L is the lessee of eleven
turbine generator units and related property.
GLOBAL SECURITIES
Some or all of the New Bonds or Debt Securities of any series may be
represented, in whole or in part, by one or more global securities (each, a
"Global Security") which will have an aggregate principal amount equal to that
of the New Bonds or Debt Securities represented thereby. Each Global Security
will be registered in the name of a depositary (the "Depositary") or a nominee
thereof identified in the applicable Prospectus Supplement, will be deposited
with such Depositary or nominee or a custodian therefor and will bear a legend
regarding the restrictions on exchanges and registration of transfer thereof
referred to below and any such other matters as may be provided for pursuant to
the Mortgage or Indenture.
As long as the Depositary, or its nominee, is the registered holder of a
Global Security, the Depositary or such nominee, as the case may be, will be
considered the sole owner and holder of such Global Security and the Securities
represented thereby for all purposes under the Securities and the Mortgage and
Indenture. Except in limited circumstances, owners of beneficial interests in a
Global Security will not be entitled to have such Global Security or any
Securities represented thereby registered in their names, will not receive or be
entitled to receive physical delivery of certificated Securities in exchange
therefor and will not be considered to be the owners or holders of such Global
Security or any Securities represented thereby for any purpose under the
Securities or the Mortgage or Indenture. All payments of principal of and any
premium and interest on a Global Security will be made to the Depositary or its
nominee, as the case may be, as the Holder thereof. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of such securities in definitive form. These laws may impair the
ability to transfer beneficial interests in a Global Security.
Ownership of beneficial interests in a Global Security will be limited to
institutions that have accounts with the Depositary or its nominee
("participants") and to persons that may hold beneficial interests through
participants. In connection with the issuance of any Global Security, the
Depositary will credit, on its book-entry registration and transfer system, the
respective principal amounts of Securities represented by the Global Security to
the accounts of its participants. Ownership of beneficial interests in a Global
Security will be shown only on, and the transfer of those ownership interests
will be effected only through, records maintained by the Depositary (with
respect to participants' interests) or any such participant (with respect to
interests of persons held by such participants on their behalf). Payments,
transfers, exchanges, and others matters relating to beneficial interests in a
Global Security may be subject to various policies and procedures adopted by the
Depositary from time to time. None of CP&L, the Trustees under the Mortgage or
the Trustee under the Indenture, or any agents of each of the foregoing, will
have any responsibility or liability for any aspect of the Depositary's or any
participant's records
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relating to, or for payments made on account of, beneficial interests in a
Global Security, or for maintaining, supervising, or reviewing any records
relating to such beneficial interests.
EXPERTS AND LEGALITY
The financial statements and the related financial statement schedules
incorporated in this Prospectus by reference from CP&L's 1994 Annual Report on
Form 10-K have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report, which is incorporated herein by reference, and have been
so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
The statements made as to matters of law and legal conclusions in the
documents incorporated by reference herein and as set forth under "Description
of New Bonds" and "Description of Debt Securities" herein have been reviewed by
Richard E. Jones, Esq., Senior Vice President, General Counsel and Secretary for
CP&L, and are set forth in reliance upon his opinion as an expert.
The legality of the securities offered hereby will be passed upon for CP&L
by Richard E. Jones, Esq., Senior Vice President, General Counsel and Secretary
of CP&L, Raleigh, North Carolina, and by Reid & Priest LLP, 40 West 57th Street,
New York, New York, counsel to CP&L, and for any underwriter, dealer or agent by
Winthrop, Stimson, Putnam & Roberts, One Battery Park Plaza, New York, New York.
However, all matters pertaining to the organization of CP&L, titles and local
law will be passed upon only by Richard E. Jones, Esq., who may rely as to all
matters of South Carolina law on the opinion of Paulling & James, Darlington,
South Carolina. As of January 31, 1995, Richard E. Jones, Esq., owned 10,074
shares of CP&L's Common Stock. Mr. Jones is acquiring additional shares of
CP&L's Common Stock at regular intervals as a participant in CP&L's Stock
Purchase-Savings Plan.
PLAN OF DISTRIBUTION
CP&L may sell the Securities in any of three ways: (i) through underwriters
or dealers; (ii) directly to a limited number of institutional purchasers or to
a single purchaser; or (iii) through agents. The Prospectus Supplement with
respect to the Offered Securities sets forth the terms of the offering of the
Offered Securities, including the name or names of any underwriters, dealers or
agents, the purchase price of the Offered Securities and the net proceeds to
CP&L from such sale, any underwriting discounts and other items constituting
underwriters' compensation, any initial public offering price and any discounts
or concessions allowed or reallowed or paid to dealers. Any initial public
offering price and any discounts or concessions allowed or reallowed or paid to
dealers may be changed from time to time.
If underwriters are used in the sale, such 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. The
Securities may be offered through dealers or underwriters. Unless otherwise set
forth in the Prospectus Supplement, the obligations of any underwriter or
underwriters to purchase the Offered Securities will be subject to certain
conditions precedent and such underwriter or underwriters will be obligated to
purchase all the Offered Securities if any are purchased, except that, in
certain cases involving a default by one or more underwriters, less than all of
the Offered Securities may be purchased.
Offered Securities may be sold directly by CP&L or through agents
designated by CP&L from time to time. Any agent involved in the offer or sale of
the Offered Securities in respect of which this Prospectus is delivered will be
named, and any commissions payable by CP&L to such agent will be set forth, in
the Prospectus Supplement. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a best efforts basis for the period
of its appointment.
If so indicated in the Prospectus Supplement, CP&L will authorize agents,
underwriters or dealers to solicit offers by certain specified institutions to
purchase Offered Securities from CP&L at the public offering price set forth in
the Prospectus Supplement pursuant to delayed delivery contracts providing for
payment and delivery on a specified date in the future. Such contracts will be
subject to those conditions set forth in the Prospectus Supplement, and the
Prospectus Supplement will set forth the commission payable for solicitation of
such contracts.
Agents and underwriters may be entitled under agreements entered into with
CP&L to indemnification by CP&L against certain civil liabilities, including
liabilities under the Securities Act of 1933, as amended.
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No dealer, salesperson or other individual has been authorized to give any
information or to make any representations other than those contained in the
Prospectus or this Prospectus Supplement in connection with the offer made by
the Prospectus and this Prospectus Supplement and, if given or made, such
information or representations must not be relied upon as having been authorized
by CP&L or the Underwriters. Neither the delivery of the Prospectus or this
Prospectus Supplement nor any sale made hereunder shall under any circumstances
create an implication that there has been no change in the affairs of CP&L since
the date hereof. The Prospectus and this Prospectus Supplement do not constitute
an offer or solicitation by anyone in any jurisdiction in which such offer or
solicitation is not authorized or in which the person making such offer or
solicitation is not qualified to do so or to anyone to whom it is unlawful to
make such offer or solicitation.
---------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PROSPECTUS SUPPLEMENT
Selected Information.................................. S-2
Investment Considerations............................. S-3
Application of Proceeds............................... S-3
Certain Terms of the Capital Securities............... S-3
U.S. Taxation......................................... S-5
Underwriting.......................................... S-7
Legal Matters......................................... S-7
<CAPTION>
PROSPECTUS
<S> <C>
Available Information................................. 1
Incorporation of Certain Documents by Reference....... 1
The Company........................................... 1
Ratios of Earnings to Fixed Charges................... 1
Application of Proceeds............................... 2
Description of New Bonds.............................. 2
Description of Debt Securities........................ 5
Global Securities..................................... 12
Experts and Legality.................................. 13
Plan of Distribution.................................. 13
</TABLE>
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$125,000,000
CAROLINA POWER
& LIGHT COMPANY
SERIES A QUICSsm
% QUARTERLY INCOME CAPITAL SECURITIES
(SERIES A SUBORDINATED DEFERRABLE
INTEREST DEBENTURES)
---------------------------
PROSPECTUS SUPPLEMENT
April , 1995
---------------------------
LEHMAN BROTHERS
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
MORGAN STANLEY & CO.
INCORPORATED
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
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