FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported) August 26, 1997
CAROLINA POWER & LIGHT COMPANY
(Exact name of registrant as specified in its charter)
North Carolina 1-3382 56-0165465
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
411 Fayetteville Street, Raleigh, North Carolina 27601
(Address of principal executive offices)
Registrant's telephone number, including area code (919) 546-6111
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Item 7. Financial Statements, Pro Forma, Financial Information and Exhibits
(a) No financial statements are filed herewith.
(b) No pro forma financial information is filed herewith.
(c) Exhibits
- Underwriting Agreement dated as of August 21, 1997
- Sixty-fourth Supplemental Indenture dated as of August 15, 1997
- Computation of Ratio of Earnings to Fixed Charges
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CAROLINA POWER & LIGHT COMPANY
Registrant
By: /s/ Glenn E. Harder
------------------------
Glenn E. Harder
Executive Vice President
Date: August 26, 1997
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CAROLINA POWER & LIGHT COMPANY
First Mortgage Bonds
UNDERWRITING AGREEMENT
August 21, 1997
To the Representative named in Schedule I hereto
of the Underwriters named in Schedule II hereto
Dear Sirs:
The undersigned Carolina Power & Light Company (the "Company") hereby
confirms its agreement with each of the several Underwriters hereinafter named
as follows:
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1. Underwriters and Representative. The term "Underwriters" as used
herein shall be deemed to mean the firm or corporation or the several firms or
corporations named in Schedule II hereto and any underwriter substituted as
provided in paragraph 6 and the term "Underwriter" shall be deemed to mean one
of such Underwriters. If the firm or firms listed in Schedule I hereto (the
"Representative") are the same as the firm or firms listed in Schedule II
hereto, then the terms "Underwriters" and "Representative", as used herein,
shall each be deemed to refer to such firm or firms. The Representative
represents that it has been authorized by the Underwriters to execute this
Agreement on their behalf and to act for them in the manner herein provided. All
obligations of the Underwriters hereunder are several and not joint. If more
than one firm is named in Schedule I hereto, any action under or in respect of
this Agreement may be taken by such firms jointly as the Representative or by
one of the firms acting on behalf of the Representative and such action will be
binding upon all the Underwriters.
2. Description of Securities. The Company proposes to issue and sell
its First Mortgage Bonds of the designation, with the terms and in the amount
specified in Schedule I hereto (the "Securities"), under its Mortgage and Deed
of Trust, dated as of May 1, 1940, with The Bank of New York (formerly Irving
Trust Company) and Frederick G. Herbst (W. T. Cunningham, successor), as
Trustees, as supplemented and as it will be further supplemented by a
Supplemental Indenture relating to the Securities (the "Supplemental
Indenture"), in substantially the form heretofore delivered to the
Representative, said Mortgage and Deed of Trust as supplemented and to be
supplemented by the
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Supplemental Indenture being hereinafter referred to as the "Mortgage".
3. Representations and Warranties of the Company. The Company
represents and warrants to each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
33-50597) ("Registration Statement No. 33-50597"), for the registration
of $500,000,000 principal amount of First Mortgage Bonds under the
Securities Act of 1933, as amended (the "Securities Act") and the
qualification of the Mortgage under the Trust Indenture Act of 1939, as
amended (the "1939 Act"). An aggregate of $50,000,000 principal amount
of the Company's First Mortgage Bonds registered under Registration
Statement No. 33-50597 has been previously issued. Registration
Statement Number 33-50597 has been declared effective by the
Commission, and the Mortgage has been qualified under the 1939 Act. The
Company has also filed with the Commission a registration statement on
Form S-3 (No. 33-57835)("Registration Statement No. 33-57835") for the
registration of $250,000,000 principal amount of the Company's First
Mortgage Bonds and Debt Securities under the Securities Act and the
qualification of the Mortgage under the 1939 Act. An aggregate of
$125,000,000 principal amount of the securities registered under
Registration Statement No. 33-57835 has been previously issued.
Registration Statement No. 33-57835 has been declared effective by the
Commission, and the Mortgage has been qualified under the 1939 Act.
Registration Statement No. 33-57835 contained a combined prospectus for
the sale of $700,000,000 of the Company's First Mortgage Bonds and Debt
Securities. Registration statement No. 33-57835, as amended to the date
hereof, together with Registration Statement No. 33-50597, as amended
to the date hereof, including, in each case, the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act (the "Incorporated Documents"), are hereinafter referred
to as the "Registration Statements". The combined prospectus forming a
part of Registration Statement No. 33-57835, as it is to be
supplemented by a prospectus supplement, dated on or about the date
hereof, relating to the Securities (the "Prospectus Supplement"), and
all prior amendments or supplements thereto (other than amendments or
supplements relating to securities of the Company other than the
Securities), including the Incorporated Documents, is hereinafter
referred to as the "Prospectus". Any reference herein to the terms
"amend", "amendment" or "supplement" with respect to the Registration
Statement or the Prospectus shall be deemed to refer to and include the
filing of any document under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), deemed to be incorporated therein after
the date hereof and prior to the termination of the offering of the
Securities by the Underwriters and
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any references herein to the terms "Registration Statement" or
"Prospectus" at a date after the filing of the Prospectus Supplement
shall be deemed to refer to the Registration Statement or the
Prospectus, as the case may be, as each may be amended or supplemented
to such date.
(b) Prior to the termination of the offering of the
Securities, the Company will not file any amendment to the Registration
Statement or supplement to the Prospectus which shall not have
previously been furnished to the Representative or of which the
Representative shall not previously have been advised or to which the
Representative shall reasonably object in writing and which has not
been approved by Winthrop, Stimson, Putnam & Roberts, who are acting as
counsel on behalf of the Underwriters.
(c) Each Registration Statement, at the time and date it was
declared effective by the Commission, complied and each Registration
Statement, the Prospectus and the Mortgage, at the date the Prospectus
is filed with, or transmitted for filing to, the Commission pursuant to
Rule 424 under the Securities Act ("Rule 424") and at the Closing Date,
will comply, in all material respects, with the applicable provisions
of the Securities Act and the 1939 Act and the applicable rules and
regulations of the Commission thereunder; each Registration Statement,
at the time and date it was declared effective by the Commission, did
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and the Prospectus, at the date it
is filed with, or transmitted for filing to, the Commission pursuant to
Rule 424 and at the Closing Date, did not and will not contain an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the foregoing representations and warranties in this
subparagraph (c) shall not apply to statements or omissions made in
reliance upon and in conformity with information furnished herein or in
writing to the Company by the Representative or by or on behalf of any
Underwriter through the Representative expressly for use in the
Prospectus or to any statements in or omissions from the Statements of
Eligibility (Forms T-1 and T-2) of the Trustees under the Mortgage and
the trustee under the Indenture dated as of March 1, 1995, from the
Company to Bankers Trust Company, relating to other Debt Securities of
the Company (the "Indenture"). The Incorporated Documents, when they
were filed with the Commission, complied in all material respects with
the applicable requirements of the Exchange Act and the rules and
regulations of the Commission thereunder, and any documents so filed
and incorporated by reference subsequent to the date hereof and prior
to the termination of the offering of the Securities by the
Underwriters will, when
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they are filed with the Commission, comply in all material respects
with the requirements of the Exchange Act and the rules and regulations
of the Commission thereunder; and, when read together with the
Registration Statement and the Prospectus, none of such documents
included or includes or will include any untrue statement of a material
fact or omitted or omits or will omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(d) The financial statements incorporated by reference in the
Registration Statement present fairly the financial condition and
operations of the Company at the respective dates or for the respective
periods to which they apply; such financial statements have been
prepared in each case in accordance with generally accepted accounting
principles consistently applied throughout the periods involved; and
Deloitte & Touche LLP, who have audited certain of the financial
statements, are independent public or independent certified public
accountants as required by the Securities Act or the Exchange Act and
the rules and regulations of the Commission thereunder.
(e) Except as reflected in, or contemplated by, the
Registration Statement and the Prospectus, since the respective dates
as of which information is given in the Registration Statement and
Prospectus, and prior to the Closing Date, there has not been any
material adverse change in the business, property or financial
condition of the Company and since such dates and prior to the Closing
Date, there has not been any material transaction entered into by the
Company other than transactions contemplated by the Registration
Statement and Prospectus and transactions in the ordinary course of
business. The Company has no material contingent obligation which is
not disclosed in the Registration Statement and Prospectus.
(f) The consummation of the transactions herein contemplated
and the fulfillment of the terms hereof on the part of the Company to
be fulfilled have been duly authorized by all necessary corporate
action of the Company in accordance with the provisions of its charter
(the "Charter"), by-laws and applicable law, and the Securities, when
issued and delivered as provided herein, will constitute legal, valid
and binding obligations of the Company in accordance with their terms
except as limited by bankruptcy, insolvency or other laws affecting
mortgagees' and other creditors' rights and general equitable
principles.
(g) The consummation of the transaction herein contemplated
and the fulfillment of the terms hereof will not result in a breach of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed
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of trust or other agreement or instrument to which the Company is now a
party.
(h) The summary of the terms of the Securities contained in
the Registration Statement and Prospectus fairly describes the
provisions thereof required to be described by the registration
statement form.
4. Purchase and Sale. On the basis of the representations, warranties
and covenants herein contained, but subject to the terms and conditions herein
set forth, the Company agrees to sell to each of the Underwriters, severally and
not jointly, and each such Underwriter agrees, severally and not jointly, to
purchase from the Company, the respective principal amount of Securities set
forth opposite the name of such Underwriter in Schedule II hereto at the
purchase price set forth in Schedule I hereto.
5. Reoffering by Underwriters. The Underwriters agree to make promptly
a bona fide public offering of the Securities to the public for sale as
set forth in the Prospectus, subject, however, to the terms and conditions of
this Agreement.
6. Time and Place of Closing; Default of Underwriters.
(a) Payment for the Securities shall be made at the place,
time and date specified in Schedule I hereto against delivery of the
Securities at the office of The Bank of New York, Corporate Trust
Department, 101 Barclay Street, New York, New York, or such other
place, time and date as the Representative and the Company may agree.
The hour and date of such delivery and payment are herein called the
"Closing Date". Payment for the Securities shall be by wire transfer of
immediately available funds against delivery to the Representative for
the respective accounts of the Underwriters of certificates for the
Securities to be purchased by them. Certificates for the Securities
shall be delivered to the Representative for the respective accounts of
the Underwriters in such names and denominations as the Representative
shall specify not later than the close of business on the third full
business day before the Closing Date. For the purpose of expediting the
checking of the certificates by the Representative, the Company agrees
to make the Securities available to the Representative not later than
10 A.M., on the last full business day prior to the Closing Date at
said office of The Bank of New York.
(b) If one or more of the Underwriters shall, for any reason
permitted hereunder, cancel its obligation to purchase hereunder and to
take up and pay for the principal amount of the Securities to be
purchased by such one or more Underwriters, the Company shall
immediately notify the Representative, and the remaining Underwriters
shall have the right, within 24 hours of receipt of such notice, either
to take up and pay for (in such proportion as may be agreed
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upon among them) or to substitute another Underwriter or Underwriters,
satisfactory to the Company, to take up and pay for the principal
amount of the Securities which such one or more Underwriters did not
purchase. If one or more Underwriters shall, for any reason other than
a reason permitted hereunder, fail to take up and pay for the principal
amount of the Securities to be purchased by such one or more
Underwriters, the Company shall immediately notify the Representative,
and the remaining Underwriters shall be obligated to take up and pay
for (in addition to the respective principal amount of the Securities
set forth opposite their respective names in Schedule II hereto) the
principal amount of the Securities which such defaulting Underwriter or
Underwriters failed to take up and pay for, up to a principal amount
thereof equal to, in the case of each such remaining Underwriter, ten
percent (10%) of the principal amount of the Securities set forth
opposite the name of such remaining Underwriter in said Schedule II,
and such remaining Underwriters shall have the right, within 24 hours
of receipt of such notice, either to take up and pay for (in such
proportion as may be agreed upon among them), or to substitute another
Underwriter or Underwriters, satisfactory to the Company, to take up
and pay for, the remaining principal amount of the Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase.
If any unpurchased Securities still remain, then the Company or the
Representative shall be entitled to an additional period of 24 hours
within which to procure another party or parties, members of the
National Association of Securities Dealers, Inc. (or if not members of
such Association, who are not eligible for membership in said
Association and who agree (i) to make no sales within the United
States, its territories or its possessions or to persons who are
citizens thereof or residents therein and (ii) in making sales to
comply with said Association's Rules of Fair Practice) and satisfactory
to the Company, to purchase or agree to purchase such unpurchased
Securities on the terms herein set forth. In any such case either the
Representative or the Company shall have the right to postpone the
Closing Date for a period not to exceed three full business days from
the date agreed upon in accordance with this paragraph 6, in order that
the necessary changes in the Registration Statement and Prospectus and
any other documents and arrangements may be effected. If the
Representative and the Company shall fail to procure a satisfactory
party or parties as above provided to purchase or agree to purchase
such unpurchased Securities, then the Company may either (i) require
the remaining Underwriters to purchase the principal amount of
Securities which they are obligated to purchase hereunder or (ii)
terminate this Agreement by giving prompt notice to the Representative.
In the event that neither the non-defaulting Underwriters nor the
Company has arranged for the purchase of such unpurchased Securities by
another party or parties as above provided and the Company has not
elected to require the
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non-defaulting Underwriters to purchase the principal amount of
Securities which they are obligated to purchase hereunder, then this
Agreement shall terminate without any liability on the part of the
Company or any Underwriter (other than an Underwriter which shall have
failed or refused, in accordance with the terms hereof, to purchase and
pay for the principal amount of the Securities which such Underwriter
has agreed to purchase as provided in paragraph 4 hereof), except as
otherwise provided in paragraph 7 and paragraph 8 hereof.
7. Covenants of the Company. The Company covenants with each
Underwriter that:
(a) As soon as possible after the execution and delivery of
this Agreement, the Company will file the Prospectus with the
Commission pursuant to Rule 424, setting forth, among other things, the
necessary information with respect to the terms of offering of the
Securities. The Company will promptly deliver to the Representative and
to counsel for the Underwriters, to the extent not previously
delivered, one fully executed copy or one conformed copy, certified by
an officer of the Company, of registration statement No. 33-57835 and
one fully executed copy or one conformed copy certified by an officer
of the Company, of registration statement No. 33-50597, each as
originally filed and of all amendments thereto, heretofore or hereafter
made, (other than those relating solely to securities other than the
Securities), including any post-effective amendment (in each case
including all exhibits filed therewith and all documents incorporated
therein not previously furnished to the Representative), including
signed copies of each consent and certificate included therein or filed
as an exhibit thereto, and will deliver to the Representative for
distribution to the Underwriters as many conformed copies of the
foregoing (excluding the exhibits, but including all documents
incorporated therein) as the Representative may reasonably request. The
Company will also send to the Underwriters as soon as practicable after
the date of this Agreement and thereafter from time to time as many
copies of the Prospectus as the Representative may reasonably request
for the purposes required by the Securities Act.
(b) During such period (not exceeding nine months) after the
commencement of the offering of the Securities as the Underwriters may
be required by law to deliver a Prospectus, if any event relating to or
affecting the Company, or of which the Company shall be advised in
writing by the Representative shall occur, which in the Company's
opinion should be set forth in a supplement to or an amendment of the
Prospectus in order to make the Prospectus not misleading in the light
of the circumstances when it is delivered to a purchaser, or if it is
necessary to amend the Prospectus to comply with the Securities Act,
the Company will forthwith at its expense prepare and furnish to the
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Underwriters and dealers named by the Representative a reasonable
number of copies of a supplement or supplements or an amendment or
amendments to the Prospectus which will supplement or amend the
Prospectus so that as supplemented or amended it will comply with the
Securities Act and will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading. In case any
Underwriter is required to deliver a Prospectus after the expiration of
nine months after the commencement of the offering of the Securities,
the Company, upon the request of the Representative, will furnish to
the Representative, at the expense of such Underwriter, a reasonable
quantity of a supplemented or amended prospectus, or supplements or
amendments to the Prospectus, complying with Section 10(a) of the
Securities Act.
(c) The Company will make generally available to its security
holders, as soon as reasonably practicable, but in any event not later
than 16 months after the end of the fiscal quarter in which the filing
of the Prospectus pursuant to Rule 424 occurs, an earnings statement
(in form complying with the provisions of Section 11(a) of the
Securities Act, which need not be certified by independent public
accountants) covering a period of twelve months beginning not later
than the first day of the Company's fiscal quarter next following the
filing of the Prospectus pursuant to Rule 424.
(d) The Company will use its best efforts promptly to do and
perform all things to be done and performed by it hereunder prior to
the Closing Date and to satisfy all conditions precedent to the
delivery by it of the Securities.
(e) The Company will advise the Representative promptly of the
filing of the Prospectus pursuant to Rule 424 and of any amendment or
supplement to the Prospectus or Registration Statement or of official
notice of institution of proceedings for, or the entry of, a stop order
suspending the effectiveness of the Registration Statement and, if such
a stop order should be entered, use its best efforts to obtain the
prompt removal thereof.
(f) The Company will use its best efforts to qualify the
Securities, for offer and sale under the Blue Sky or legal investment
laws of such jurisdictions as the Representative may designate, and
will file and make in each year such statements or reports as are or
may be reasonably required by the laws of such jurisdictions; provided,
however, that the Company shall not be required to qualify as a foreign
corporation or dealer in securities, or to file any general consents to
service of process under the laws of any jurisdiction. The fees and
disbursements of Winthrop,
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Stimson, Putnam & Roberts, who are acting as counsel for the
Underwriters, shall be paid by the Underwriters (subject, however, to
the provisions of paragraph 8 requiring payment by the Company of fees
and expenses not to exceed $5,000); provided, however, that if this
Agreement is terminated in accordance with the provisions of paragraph
9, 10 or 12, the Company shall reimburse the Representative for the
account of the Underwriters for the amount of such counsel fees and
disbursements. The Company shall not be required to pay any amount for
any expenses of the Representative or of any other of the Underwriters
except as provided in this paragraph 7 and in paragraph 8. The Company
shall not in any event be liable to any of the Underwriters for damages
on account of the loss of anticipated profit.
8. Payment of Expenses. The Company will pay all expenses incident to
the performance of its obligations under this Agreement, including (i) the
printing and filing of the Registration Statement and the printing of this
Agreement, (ii) the delivery of the Securities to the Underwriters, (iii) the
fees and disbursements of the Company's counsel and accountants, (iv) the
expenses in connection with the qualification of the Securities under securities
laws in accordance with the provisions of paragraph 7(f), including filing fees
and the fees and disbursements of counsel for the Underwriters in connection
therewith, and in connection with the preparation of the Blue Sky Survey and any
Legality Memorandum, such fees and disbursements not to exceed $5,000, (v) the
printing and delivery to the Underwriters of copies of the Registration
Statement and all amendments thereto, of the preliminary prospectuses, and of
the Prospectus and any amendments or supplements thereto, (vi) the printing and
delivery to the Underwriters of copies of the Blue Sky Survey and Legality
Memorandum, and (vii) the preparation, execution, filing and recording by the
Company of the Supplemental Indenture (such filing and recordation to be
promptly made, after execution and delivery of the Supplemental Indenture to the
Trustees under the Mortgage, in the counties in which the mortgaged property of
the Company is located); and the Company will pay all taxes, if any (but not
including any transfer taxes), on the issue of the Securities and the filing and
recordation of the Supplemental Indenture.
9. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase and pay for the Securities shall be subject to the
accuracy of the representations and warranties on the part of the Company, to
the performance by the Company of its obligations to be performed hereunder
prior to the Closing Date, and to the following further conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall be in effect on the Closing Date and no
proceedings for that purpose shall be pending before, or threatened by,
the Commission on the Closing Date, and the Representative shall have
received, prior to
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payment for the Securities, a certificate dated the Closing Date and
signed by the Chairman, President or a Vice President of the Company to
the effect that no such stop order is in effect and that no proceedings
for such purpose are pending before or, to the knowledge of the
Company, threatened by the Commission.
(b) At the time of execution of this Agreement, or such later
date as shall have been consented to by the Representative, there shall
have been issued and on the Closing Date there shall be in full force
and effect orders of the North Carolina Utilities Commission and the
South Carolina Public Service Commission authorizing the issuance and
sale of the Securities, none of which shall contain any provision
unacceptable to the Representative by reason of its being materially
adverse to the Company (it being understood that no such order in
effect on the date of this Agreement and heretofore furnished to the
Representative or to Winthrop, Stimson, Putnam & Roberts, Counsel for
the Underwriters, contains any such unacceptable provision).
(c) At the Closing Date, the Representative shall receive
favorable opinions from: (1) Hunton & Williams, of counsel to the
Company, which opinion shall be satisfactory in form and substance to
Winthrop, Stimson, Putnam & Roberts, Counsel for the Underwriters, and
(2) Winthrop, Stimson, Putnam & Roberts, in each of which opinions said
counsel (except Hunton & Williams as to North Carolina law) may rely as
to all matters of North Carolina and South Carolina law upon the
opinions of William D. Johnson, Esq., Vice President and Secretary for
the Company, and Messrs. Paulling & James, respectively, to the effect
that:
(i) The Mortgage has been duly and validly authorized
by all necessary corporate action , has been duly and validly
executed and delivered , and is a valid and binding mortgage
of the Company enforceable in accordance with its terms,
except as limited by bankruptcy, insolvency or other laws
affecting mortgagees' and other creditors' rights and general
equitable principles (with this opinion only required in the
Hunton & Williams opinion as to the Sixty-Fourth Supplemental
Indenture);
(ii) The Mortgage has been duly qualified under the
1939 Act;
(iii) The Securities are legal, valid and binding
obligations of the Company enforceable in accordance with
their terms, except as limited by bankruptcy, insolvency or
other laws affecting mortgagees' and other creditors' rights
and general equitable principles, are entitled to the benefit
of the security afforded by the Mortgage, and are secured
equally and ratably with all other bonds outstanding under the
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Mortgage except insofar as any sinking or other fund may
afford additional security for the bonds of any particular
series;
(iv) The statements made in the Prospectus under the
captions "Description of the New Bonds" and "Certain Terms of
the Offered Bonds", insofar as they purport to constitute
summaries of the documents referred to therein, are correct in
all material respects;
(v) This Agreement has been duly and validly
authorized, executed and delivered by the Company;
(vi) Each Registration Statement, at the time and
date it was declared effective by the Commission, and the
Prospectus, at the time it was filed with, or transmitted for
filing to, the Commission pursuant to Rule 424, (except as to
the financial statements and other financial and statistical
data constituting a part thereof or incorporated by reference
therein, upon which such opinions need not pass), complied as
to form in all material respects with the requirements of the
Securities Act and the 1939 Act and the applicable
instructions, rules and regulations of the Commission
thereunder; the documents or portions thereof filed with the
Commission pursuant to the Exchange Act and deemed to be
incorporated by reference in each Registration Statement and
the Prospectus pursuant to Item 12 of Form S-3 (except as to
financial statements and other financial and statistical data
constituting a part thereof or incorporated by reference
therein, upon which such opinions need not pass), at the time
they were filed with the Commission, complied as to form in
all material respects with the requirements of the Exchange
Act and the applicable instructions, rules and regulations of
the Commission thereunder; each Registration Statement has
become effective under the Securities Act and, to the best of
the knowledge of said counsel, no proceedings for a stop order
with respect thereto are threatened or pending under Section 8
of the Securities Act;
(vii) Nothing has come to the attention of said
counsel that would lead them to believe that either
Registration Statement, at the time and date it was declared
effective by the Commission, contained an untrue statement of
a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, at the time it
was filed with, or transmitted for filing to, the Commission
pursuant to Rule 424 or at the Closing Date, included or
includes an untrue statement of a material fact or omitted or
omits to state a material fact necessary in
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order to make the statements therein, in the light of the
circumstances under which they were made, not misleading
(except as to financial statements and other financial and
statistical data constituting a part of either Registration
Statement or the Prospectus or incorporated by reference
therein, upon which such opinions need not pass);
(viii) Orders have been entered by the North Carolina
Utilities Commission and the South Carolina Public Service
Commission authorizing the issuance and sale of the
Securities, and to the best of the knowledge of said counsel,
said orders are still in force and effect; and no further
approval, authorization, consent or other order of any public
board or body (except such as have been obtained under the
Securities Act and as may be required under the state
securities or Blue Sky laws of any jurisdiction) is legally
required for the consummation of the transactions contemplated
in this Agreement.
(d) At the Closing Date, the Representative shall receive from
William D. Johnson, Esq., Vice President and Secretary for the Company,
a favorable opinion in form and substance satisfactory to Winthrop,
Stimson, Putnam & Roberts, Counsel for the Underwriters, to the same
effect with respect to the matters enumerated in subdivisions (i)
through (v) and subdivisions (vii) and (viii) of subparagraph (c) of
this paragraph 9 as the opinions required by said subparagraph (c), and
to the further effect that:
(i) The Company is a validly organized and existing
corporation and is in good standing under the laws of the
State of North Carolina and is duly qualified to do business
and is doing business in that State and in the State of South
Carolina;
(ii) The Company is duly authorized by its Charter to
conduct the business which it is now conducting as set forth
in the Prospectus;
(iii) The Company has valid and subsisting
franchises, licenses and permits free from burdensome
restrictions and adequate for the conduct of its business;
(iv) The information contained in the Prospectus,
which is stated therein to have been made in reliance upon the
opinion of said counsel and of Richard E. Jones, Esq. has been
reviewed by said counsel and is correct;
(v) The Company has good and marketable title, with
minor exceptions, restrictions and reservations in
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conveyances, and defects, which are of the nature ordinarily
found in properties of similar character and magnitude, and
which, in his opinion, cannot in any substantial way impair
the security afforded by the Mortgage, to all the properties
described in the granting clauses of the Mortgage and upon
which the Mortgage purports to create a lien, except certain
rights-of-way over private property on which are located
transmission and distribution lines formerly owned by the Tide
Water Power Company (merged into the Company on February 29,
1952), title to which can be perfected by condemnation
proceedings. The description in the Mortgage of the
above-mentioned properties (including those formerly owned by
Tide Water Power Company) is legally sufficient to constitute
the Mortgage a lien thereon. Said properties constitute
substantially all the permanent physical properties and
franchises of the Company and are held by the Company free and
clear of all liens and encumbrances except the lien of the
Mortgage and Excepted Encumbrances, as defined in the
Mortgage. The Company has followed the practice generally of
purchasing rights-of-way and easements and certain small
parcels of fee property appurtenant thereto and for use in
conjunction therewith, and certain other properties of small
or inconsequential value, without an examination of title and,
as to the title to lands affected by rights-of-way and
easements, of not examining the title of the lessor or grantor
whenever the lands affected by such rights-of-way and
easements are not of such substantial value as in the opinion
of the Company to justify the expense attendant upon
examination of titles in connection therewith. In his opinion
such practice of the Company is consistent with good practice
and with the method followed by other companies engaged in the
same business and is reasonably adequate to assure the Company
of good and marketable title to all such property acquired by
it. It is his opinion that any such conditions or defects as
may be covered by the above recited exceptions are not, except
as to certain rights-of-way on which are located transmission
lines acquired from Tide Water Power Company, substantial and
would not interfere with the Company's business operations.
The Company has the right of eminent domain in the States of
North Carolina and South Carolina under which it may, if
necessary, perfect or obtain title to privately owned land or
acquire easements or rights-of-way required for use or used by
the Company in its public utility operations;
(vi) The Company's Mortgage and Deed of Trust dated as of
May 1, 1940 and the First through the Sixty-third Supplemental
Indentures thereto have been filed for record both as a real
estate mortgage and as a chattel mortgage or security interest
in all counties
13
<PAGE>
in the States of North Carolina and South Carolina in which
any of the property described in the Mortgage as subject
thereunder to the lien thereof is located; and the
Supplemental Indenture relating to the Securities is in proper
form for filing for record both as a real estate mortgage and
as a security interest in all counties in the States of North
Carolina and South Carolina in which any of the property
described therein or in the Mortgage as subject to the lien of
the Mortgage is located;
(vii) The Mortgage constitutes a valid first mortgage lien
of record upon all the franchises and properties now owned by
the Company (other than those expressly excepted therefrom)
situated in the States of North Carolina and South Carolina,
as described or referred to in the granting clauses of the
Mortgage, subject to the exceptions as to bankruptcy,
insolvency and other laws stated in subdivision (i) of
subparagraph (c) above; and
(viii) The issuance and sale of the Securities have been
duly authorized by all necessary corporate action on the part
of the Company.
In said opinion such counsel may rely as to all matters of South
Carolina law on the opinion of Messrs. Paulling & James.
(e) At the Closing Date, the Representative shall receive from
Messrs. Paulling & James, Darlington, South Carolina, a favorable
opinion in form and substance satisfactory to Winthrop, Stimson, Putnam
& Roberts, Counsel for the Underwriters, to the effect that:
(i) The Company is duly qualified to engage in the
business in which it is engaged in the State of South
Carolina;
(ii) The Company has good and marketable title to all
the properties in South Carolina described in and which
purport to be subject to the lien of the Mortgage (except
possibly certain transmission line rights-of-way, titles to
which may be subject to defects and irregularities which can
be cured, if necessary, under the eminent domain laws of South
Carolina), subject only to Excepted Encumbrances, as defined
in the Mortgage, and to minor defects and irregularities
customarily found in properties of like size and character and
which, in their opinion, do not materially impair the use of
the property affected thereby in the operation of the business
of the Company; the description of said properties set forth
in the Mortgage is legally sufficient to constitute the
Mortgage a lien thereon; the Mortgage constitutes a valid,
direct first mortgage lien upon said properties,
14
<PAGE>
which include substantially all the permanent physical
properties and franchises of the Company in South Carolina
(other than those expressly excepted), subject only to the
exceptions enumerated above; the Mortgage is a valid and
binding mortgage of the Company enforceable in accordance with
its terms, except as limited by bankruptcy, insolvency or
other laws affecting mortgagees' and other creditors rights
and general equitable principles; provided, however, that
certain remedies, waivers and other provisions of the Mortgage
may not be enforceable, but such unenforceability will not
render the Mortgage invalid as a whole or affect the judicial
enforcement of the obligation of the Company to repay the
principal, together with the interest thereon as provided in
the Securities or of the right of the Trustees to exercise
their right to foreclose under the Mortgage;
(iii) The Company holds valid and subsisting
franchises, licenses and permits in South Carolina authorizing
it to carry on the utility business in which it is engaged in
South Carolina; and
(iv) They have reviewed the opinion letter of even
date therewith addressed to you by William D. Johnson, Esq.,
Vice President and Secretary for the Company, and they concur
in the opinions which he has expressed therein insofar as they
relate to the laws of the State of South Carolina.
(f) At the time of execution of this Agreement and at the
Closing Date, the Representative shall have received from Deloitte &
Touche LLP letters, dated respectively the date of this Agreement and
the Closing Date, confirming that they are independent certified public
accountants within the meaning of the Securities Act and the Exchange
Act, and of the applicable published rules and regulations thereunder,
and stating in effect that: (i) in their opinion, the audited financial
statements incorporated by reference in the Registration Statement
comply as to form in all material respects with the applicable
accounting requirements of the Securities Act or the Exchange Act, as
applicable, and of the published rules and regulations thereunder; (ii)
based on the performance of the procedures specified by the American
Institute of Certified Public Accountants for review of interim
financial information as described in Statement on Auditing Standards
("SAS") No. 71, Interim Financial Information, on the unaudited
financial statements incorporated by reference in the Registration
Statement, inquiries of officials of the Company responsible for
financial and accounting matters and reading the minutes of meetings of
the Board of Directors, of the Executive Committee of the Board of
Directors and of the shareholders, nothing came to their attention that
caused them to believe that (A) the unaudited financial statements
incorporated by reference in the Registration Statement do not comply
as to form in all material respects with the applicable accounting
requirements of the Securities Act or the Exchange Act, as applicable,
and the published rules and regulations thereunder or any material
modifications should be made for them to be in conformity with
generally accepted principles applied on a basis substantially
consistent with that of the most recent audited financial statements
incorporated by reference in the Registration Statement; or (B) at the
date of the latest available interim balance sheet read by them and at
a subsequent date not more than five days prior to the date of each
such letter, there was any change in the capital stock or long-term
debt of the Company, or at the date of the latest available interim
balance sheet read by them, there was any decrease in net assets as
compared with the amount shown on the most recent balance sheet
incorporated by
15
<PAGE>
reference in the Registration Statement, except for changes or
decreases that the Registration Statement discloses have occurred or
may occur, for declarations of dividends, for common stock sales under
the Automatic Dividend Reinvestment and Customer Stock Ownership Plan
and Stock Purchase-Savings Plan, or for changes or decreases that are
described in such letter; and (iii) covering such other matters as the
Representative shall reasonably request.
(g) At the Closing Date, the Representative shall receive a
certificate of the Chairman, President or a Vice President of the
Company, dated the Closing Date, to the effect that the representations
and warranties of the Company in this Agreement are true and correct as
of the Closing Date.
(h) All legal proceedings taken in connection with the sale
and delivery of the Securities shall have been satisfactory in form and
substance to Winthrop, Stimson, Putnam & Roberts, Counsel for the
Underwriters.
In case any of the conditions specified above in this paragraph 9 shall
not have been fulfilled at the Closing Date, this Agreement may be terminated by
the Representative by mailing or delivering written notice thereof to the
Company. Any such termination shall be without liability of any party to any
other party except as otherwise provided in paragraphs 7 and 8.
10. Conditions of the Company's Obligations. The obligations of the
Company to deliver the Securities shall be subject to the following conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall be in effect on the Closing Date, and no
proceedings for that purpose shall be pending before or threatened by
the Commission on the Closing Date.
(b) Prior to 12 Noon, New York Time, on the day following the
date of this Agreement, or such later date as shall have been consented
to by the Company, there shall have been issued and on the Closing Date
there shall be in full force and effect orders of the North Carolina
Utilities Commission and the South Carolina Public Service Commission
authorizing the issuance and sale by the Company of the Securities,
none of which shall contain any provision unacceptable to the Company
by reason of its being
16
<PAGE>
materially adverse to the Company (it being understood that no such
order in effect as of the date of this Agreement contains any such
unacceptable provision).
In case any of the conditions specified in this paragraph 10 shall not
have been fulfilled at the Closing Date, this Agreement may be terminated by the
Company by mailing or delivering written notice thereof to the Representative.
Any such termination shall be without liability of any party to any other party
except as otherwise provided in paragraphs 7 and 8.
11. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person who controls any Underwriter within the
meaning of Section 15 of the Securities Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Securities Act or under any other
statute or common law and to reimburse each such Underwriter and
controlling person for any legal or other expenses (including to the
extent hereinafter provided, reasonable counsel fees) incurred by them
in connection with investigating any such losses, claims, damages or
liabilities or in connection with defending any actions, insofar as
such losses, claims, damages, liabilities, expenses or actions arise
out of or are based upon any untrue statement, or alleged untrue
statement, of a material fact contained in the Registration Statement,
any preliminary prospectus or the Prospectus, or in the Registration
Statement or Prospectus as amended or supplemented (if any amendments
or supplements thereto shall have been furnished), or the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that the indemnity agreement contained in this
paragraph 11 shall not apply to any such losses, claims, damages,
liabilities, expenses or actions arising out of, or based upon any such
untrue statement or alleged untrue statement, or any such omission or
alleged omission, if such statement or omission was made in reliance
upon information furnished herein or in writing to the Company by any
Underwriter or through the Representative on behalf of such Underwriter
for use in the Registration Statement or Prospectus, or any amendment
or supplement to either thereof, or arising out of, or based upon,
statements in or omissions from that part of the Registration Statement
which shall constitute the Statements of Eligibility under the 1939 Act
(Forms T-1 and T-2) of the Trustees under the Mortgage and the trustee
under the Indenture, and provided, further, that the indemnity
agreement contained in this paragraph 11 shall not inure to the benefit
of any Underwriter (or of any person controlling such Underwriter) on
account of any such losses, claims, damages, liabilities, expenses or
actions arising from the sale of the Securities
17
<PAGE>
to any person if a copy of the Prospectus (excluding documents
incorporated by reference therein) shall not have been given or sent to
such person by or on behalf of such Underwriter with or prior to the
written confirmation of the sale involved. The indemnity agreement of
the Company contained in this paragraph 11 and the representations and
warranties of the Company contained in paragraph 3 hereof shall remain
operative and in full force and effect regardless of any investigation
made by or on behalf of any Underwriter or any such controlling person
and shall survive the delivery of the Securities. The Underwriters
agree to notify promptly the Company, and each other Underwriter, of
the commencement of any litigation or proceedings against them or any
of them, or any such controlling person, in connection with the sale of
the Securities.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its officers and directors, and each person who
controls the Company within the meaning of Section 15 of the Securities
Act, against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the
Securities Act or under any other statute or common law, and to
reimburse each of them for any legal or other expenses (including, to
the extent hereinafter provided, reasonable counsel fees) incurred by
them in connection with investigating any such losses, claims, damages,
or liabilities, or in connection with defending any actions, insofar as
such losses, claims, damages, liabilities, expenses or actions arise
out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or
Prospectus as amended or supplemented (if any amendments or supplements
thereto shall have been furnished), or the omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if such
statement or omission was made in reliance upon information furnished
herein or in writing to the Company by such Underwriter or through the
Representative on behalf of such Underwriter for use in the
Registration Statement or the Prospectus or any amendment or supplement
to either thereof. The indemnity agreement of all the respective
Underwriters contained in this paragraph 11 shall remain operative and
in full force and effect regardless of any investigation made by or on
behalf of the Company or any other Underwriter, or any such controlling
person, and shall survive the delivery of the Securities. The Company
agrees promptly to notify the Representative of the commencement of any
litigation or proceedings against the Company or any of its officers or
directors, or any such controlling person, in connection with the sale
of the Securities.
(c) The Company and each of the Underwriters agree that, upon
the receipt of notice of the commencement of any
18
<PAGE>
action against it, its officers and directors, or any person
controlling it as aforesaid, in respect of which indemnity may be
sought on account of any indemnity agreement contained herein, it will
promptly give written notice of the commencement thereof to the party
or parties against whom indemnity shall be sought hereunder. The
omission so to notify such indemnifying party or parties of any such
action shall relieve such indemnifying party or parties from any
liability which it or they may have to the indemnified party on account
of any indemnity agreement contained herein but shall not relieve such
indemnifying party or parties from any liability which it or they may
have to the indemnified party otherwise than on account of such
indemnity agreement. In case such notice of any such action shall be so
given, such indemnifying party shall be entitled to participate at its
own expense in the defense or, if it so elects, to assume (in
conjunction with any other indemnifying parties) the defense of such
action, in which event such defense shall be conducted by counsel
chosen by such indemnifying party (or parties) and satisfactory to the
indemnified party or parties who shall be defendant or defendants in
such action, and such defendant or defendants shall bear the fees and
expenses of any additional counsel retained by them; but if the
indemnifying party shall elect not to assume the defense of such
action, such indemnifying parties will reimburse such indemnified party
or parties for the reasonable fees and expenses of any counsel retained
by them, as such expenses are incurred; provided, however, if the
defendants in any such action include both the indemnified party and
the indemnifying party and counsel for the indemnifying party shall
have reasonably concluded that there may be a conflict of interest
involved in the representation by such counsel of both the indemnifying
party and the indemnified party, the indemnified party or parties shall
have the right to select separate counsel, satisfactory to the
indemnifying party, to participate in the defense of such action on
behalf of such indemnified party or parties (it being understood,
however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel representing the indemnified
parties who are parties to such action).
(d) If the indemnification provided for in subparagraphs (a)
or (b) above shall be unenforceable under applicable law by an
indemnified party, each indemnifying party agrees to contribute to such
indemnified party with respect to any and all losses, claims, damages,
liabilities and expenses for which each indemnification provided for in
such subparagraphs (a) or (b) shall be unenforceable, in such
proportion as shall be appropriate to reflect the relative fault of
each indemnifying party on the one hand and the indemnified party on
the other in connection with the statements or omissions which have
resulted in such losses, claims, damages, liabilities, and expenses, as
well
19
<PAGE>
as any other relevant equitable considerations; provided, however, that
no indemnified party guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act), shall be entitled to
contribution from any indemnifying party not guilty of such fraudulent
misrepresentation. Relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by such indemnifying party or the
indemnified party and each such party's relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The Company and each of the Underwriters agree
that it would not be just and equitable if contributions pursuant to
this subparagraph 11(d) were to be determined by pro rata allocation or
by any other method of allocation which does not take account of the
equitable considerations referred to above. The Underwriters'
respective obligations to contribute pursuant to this subparagraph (d)
are several and not joint.
(e) For purposes of this paragraph 11, it is understood and agreed that
the first paragraph on page S-2 and the information set forth under the
heading "Underwriters" in the Prospectus Supplement constitute the only
information provided by the Underwriters for inclusion in the
Registration Statement and the Prospectus.
12. Termination Date of this Agreement. This Agreement may be
terminated by the Representative at any time prior to the Closing Date by
mailing or delivering written notice thereof to the Company, if prior to such
time (a) there shall have occurred any general suspension of trading in
securities on the New York or Pacific Stock Exchange, or there shall have been
established by the New York or Pacific Stock Exchange or by the Commission or by
any federal or state agency or by the decision of any court any limitation on
prices for such trading or any restrictions on the distribution of securities,
or (b) there shall have occurred any new outbreak of hostilities, including, but
not limited to, an escalation of hostilities which existed prior to the date of
this Agreement, or other national or international calamity or crisis, the
effect of which on the financial markets of the United States shall be such as
to make it impracticable, in the reasonable judgment of the Representative, for
the Underwriters to enforce contracts for the sale of the Securities, or (c) the
Company shall have sustained a substantial loss by fire, flood, accident or
other calamity which renders it impracticable, in the reasonable judgment of the
Representative, to consummate the sale of the Securities and the delivery of the
Securities by the several Underwriters at the initial public offering price or
(d) there shall have been any downgrading or any notice of any intended or
potential downgrading in the rating accorded the Company's securities by any
"nationally recognized statistical rating organization" as that term is defined
by the Commission for the purposes of Securities Act Rule 436(g)(2), that, in
the
20
<PAGE>
reasonable judgment of the Representative, makes it impracticable or
inadvisable to consummate the sale of the Securities and the delivery of the
Securities by the several Underwriters at the initial public offering price.
This Agreement may also be terminated at any time prior to the Closing Date if
in the reasonable judgment of the Representative the subject matter of any
amendment or supplement to the Registration Statement or Prospectus (other than
an amendment or supplement relating solely to the activity of any Underwriter or
Underwriters) filed after the execution of this Agreement shall have materially
impaired the marketability of the Securities. Any termination hereof pursuant to
this paragraph 12 shall be without liability of any party to any other party
except as otherwise provided in paragraphs 7 and 8.
13. Miscellaneous. The validity and interpretation of this Agreement
shall be governed by the laws of the State of New York. Unless otherwise
specified, time of day refers to New York City time. This Agreement shall inure
to the benefit of, and be binding upon, the Company, the several Underwriters,
and with respect to the provisions of paragraph 11, the officers and directors
and each controlling person referred to in paragraph 11, and their respective
successors. Nothing in this Agreement is intended or shall be construed to give
to any other person, firm or corporation any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein contained.
The term "successors" as used in this Agreement shall not include any purchaser,
as such purchaser, of any of the Securities from any of the several
Underwriters.
14. Notices. All communications hereunder shall be in writing or by
telegram and, if to the Underwriters, shall be mailed, transmitted by any
standard form of telecommunication or delivered to the Representative at the
address set forth in Schedule I hereto and if to the Company, shall be mailed or
delivered to it at 411 Fayetteville Street, Raleigh, North Carolina 27601-1748,
attention of Mark F. Mulhern, Treasurer.
15. Counterparts. This Agreement may be simultaneously executed in
counterparts, each of which when so executed shall be deemed to be an original.
Such counterparts shall together constitute one and the same instrument.
21
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed duplicate hereof
whereupon it will become a binding agreement between the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
CAROLINA POWER & LIGHT COMPANY
By __________________________
Authorized Representative
Accepted as of the date first
above written, as Underwriter
named in, and as the Representative
of the other Underwriters named in, Schedule II.
MORGAN STANLEY & CO. INCORPORATED
By__________________________________
22
<PAGE>
SCHEDULE I
Underwriting Agreement dated August 21, 1997
Registration Statements No. 33-57835 and No. 33-50597
Representative and Address:
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Securities: First Mortgage Bonds
Designation: First Mortgage Bonds,
6.80% Series due August 15, 2007
Principal Amount: $200,000,000
Supplemental Indenture dated as of August 15, 1997
Date of Maturity: August 15, 2007
Interest Rate: 6.80% per annum, payable February 15 and August 15 of
each year, commencing February 15, 1998.
Purchase Price: 99.311% of the principal amount thereof, plus accrued
interest from August 15, 1997 to the date of payment and delivery.
Public Offering Price: 99.961% of the principal amount thereof, plus
accrued interest from August 15, 1997 to the date of payment and delivery.
Redemption Terms: Redeemable prior to maturity at the option of the Company at
the greater of (i) the outstanding principal amount or (ii) the present value of
the remaining payments, computed by discounting at the Treasury Yield plus 10
basis points (as defined, and described in further detail, in the Prospectus
Supplement).
Closing Date and Location:
August 26, 1997
Hunton & Williams
200 Park Avenue, 43rd Floor
New York, New York 10166-0136
<PAGE>
SCHEDULE II
Underwriters Principal Amount
Morgan Stanley & Co. Incorporated $40,000,000.00
Chase Securities Inc. $40,000,000.00
Citicorp Securities, Inc. $40,000,000.00
Deutsche Morgan Grenfell Inc. $40,000,000.00
UBS Securities LLC $40,000,000.00
---------------
TOTAL $200,000,000.00
===============
<PAGE>
Counterpart 4 of 110 Counterparts
CAROLINA POWER & LIGHT COMPANY
TO
THE BANK OF NEW YORK
(formerly Irving Trust Company)
AND
W.T. CUNNINGHAM
(successor to Frederick G. Herbst, Richard H. West, J.A. Austin, E.J. McCabe,
G. White, D.W. May, J.A. Vaughan, Joseph J. Arney and Wafaa Orfy)
as Trustees under Carolina
Power & Light Company's
Mortgage and Deed of Trust,
dated as of May 1, 1940
----------------
Sixty-fourth Supplemental Indenture
Providing among other things for First
Mortgage Bonds, 6.80% Series due August 15, 2007
(Sixty-eighth Series)
Dated as of August 15, 1997
<PAGE>
SIXTY-FOURTH SUPPLEMENTAL INDENTURE
INDENTURE, dated as of August 15, 1997, by and between CAROLINA POWER &
LIGHT COMPANY, a corporation of the State of North Carolina, whose post office
address is 411 Fayetteville Street, Raleigh, North Carolina 27601-1768
(hereinafter sometimes called the Company), and THE BANK OF NEW YORK (formerly
Irving Trust Company), a corporation of the State of New York, whose post office
address is 101 Barclay Street, New York, New York 10286 (hereinafter sometimes
called the Corporate Trustee), and W.T. CUNNINGHAM (successor to Frederick G.
Herbst, Richard H. West, J.A. Austin, E.J. McCabe, G. White, D.W. May, J.A.
Vaughan, Joseph J. Arney and Wafaa Orfy), whose post office address is 3
Arlington Drive, Denville, New Jersey 07834 (the Corporate Trustee and the
Individual Trustee being hereinafter together sometimes called the Trustees), as
Trustees under the Mortgage and Deed of Trust, dated as of May 1, 1940
(hereinafter called the Mortgage), which Mortgage was executed and delivered by
the Company to Irving Trust Company (now The Bank of New York) and Frederick G.
Herbst to secure the payment of bonds issued or to be issued under and in
accordance with the provisions of the Mortgage, reference to which Mortgage is
hereby made, this Indenture (hereinafter sometimes called the Sixty-fourth
Supplemental Indenture) being supplemental thereto:
WHEREAS, the Mortgage was recorded in various Counties in the States of
North Carolina and South Carolina; and
WHEREAS, the Mortgage was indexed and cross-indexed in the real and
chattel mortgage records in various Counties in the States of North Carolina and
South Carolina; and
WHEREAS, an instrument, dated as of June 25, 1945, was executed by the
Company appointing Richard H. West as Individual Trustee in succession to said
Frederick G. Herbst (deceased) under the Mortgage, and by Richard H. West
accepting said appointment, which instrument was recorded in various Counties in
the States of North Carolina and South Carolina; and
WHEREAS, an instrument, dated as of December 12, 1957, was executed by
the Company appointing J.A. Austin as Individual Trustee in succession to said
Richard H. West (resigned) under the Mortgage, and by J.A. Austin accepting said
appointment, which instrument was recorded in various Counties in the States of
North Carolina and South Carolina; and
WHEREAS, an instrument, dated as of April 15, 1966, was executed by the
Company appointing E.J. McCabe as Individual Trustee in succession to said J.A.
Austin (resigned) under the Mortgage, and by E.J. McCabe accepting said
appointment, which instrument was recorded in various Counties in the States of
North Carolina and South Carolina; and
WHEREAS, by the Seventeenth Supplemental Indenture mentioned below, the
Company, among other things, appointed G. White as Individual Trustee in
succession to said E.J. McCabe (resigned), and G. White accepted said
appointment; and
WHEREAS, by the Nineteenth Supplemental Indenture mentioned below, the
Company, among other things, appointed D.W. May as Individual Trustee in
succession to said G. White (resigned), and D.W. May accepted said appointment;
and
WHEREAS, by the Thirty-fifth Supplemental Indenture mentioned below,
the Company, among other things, appointed J.A. Vaughan as Individual Trustee in
succession to said D.W. May (resigned), and J.A. Vaughan accepted said
appointment; and
<PAGE>
2
WHEREAS, an instrument, dated as of June 27, 1988, was executed by the
Company appointing Joseph J. Arney as Individual Trustee in succession to said
J.A. Vaughan (resigned) under the Mortgage, and by Joseph J. Arney accepting
said appointment, which instrument was recorded in various Counties in the
States of North Carolina and South Carolina; and
WHEREAS, by the Forty-fifth Supplemental Indenture mentioned below, the
Company, among other things, appointed Wafaa Orfy as Individual Trustee in
succession to said Joseph J. Arney (resigned), and Wafaa Orfy accepted said
appointment; and
WHEREAS, by the Forty-ninth Supplemental Indenture mentioned below, the
Company, among other things, appointed W.T. Cunningham as Individual Trustee in
succession to said Wafaa Orfy (resigned), and W.T. Cunningham accepted said
appointment; and
WHEREAS, such instruments were indexed and cross-indexed in the real
and chattel mortgage records in various Counties in the States of North Carolina
and South Carolina; and
WHEREAS, by the Mortgage, the Company covenanted that it would execute
and deliver such supplemental indenture or indentures and such further
instruments and do such further acts as might be necessary or proper to carry
out more effectually the purposes of the Mortgage and to make subject to the
lien of the Mortgage any property thereafter acquired intended to be subject to
the lien thereof; and
WHEREAS, for said purposes, among others, the Company executed and
delivered to the Trustees the following supplemental indentures:
Designation Dated as of
First Supplemental Indenture...................... January 1, 1949
Second Supplemental Indenture..................... December 1, 1949
Third Supplemental Indenture...................... February 1, 1951
Fourth Supplemental Indenture..................... October 1, 1952
Fifth Supplemental Indenture...................... March 1, 1958
Sixth Supplemental Indenture...................... April 1, 1960
Seventh Supplemental Indenture.................... November 1, 1961
Eighth Supplemental Indenture..................... July 1, 1964
Ninth Supplemental Indenture...................... April 1, 1966
Tenth Supplemental Indenture...................... October 1, 1967
Eleventh Supplemental Indenture................... October 1, 1968
Twelfth Supplemental Indenture.................... January 1, 1970
Thirteenth Supplemental Indenture................. August 1, 1970
Fourteenth Supplemental Indenture................. January 1, 1971
Fifteenth Supplemental Indenture.................. October 1, 1971
Sixteenth Supplemental Indenture.................. May 1, 1972
Seventeenth Supplemental Indenture................ May 1, 1973
Eighteenth Supplemental Indenture................ November 1, 1973
Nineteenth Supplemental Indenture................ May 1, 1974
Twentieth Supplemental Indenture................. December 1, 1974
Twenty-first Supplemental Indenture.............. April 15, 1975
Twenty-second Supplemental Indenture............. October 1, 1977
<PAGE>
3
Designation Dated as of
Twenty-third Supplemental Indenture.............. June 1, 1978
Twenty-fourth Supplemental Indenture............. May 15, 1979
Twenty-fifth Supplemental Indenture.............. November 1, 1979
Twenty-sixth Supplemental Indenture.............. November 1, 1979
Twenty-seventh Supplemental Indenture............ April 1, 1980
Twenty-eighth Supplemental Indenture............. October 1, 1980
Twenty-ninth Supplemental Indenture.............. October 1, 1980
Thirtieth Supplemental Indenture................. December 1, 1982
Thirty-first Supplemental Indenture.............. March 15, 1983
Thirty-second Supplemental Indenture............. March 15, 1983
Thirty-third Supplemental Indenture.............. December 1, 1983
Thirty-fourth Supplemental Indenture............. December 15, 1983
Thirty-fifth Supplemental Indenture.............. April 1, 1984
Thirty-sixth Supplemental Indenture.............. June 1, 1984
Thirty-seventh Supplemental Indenture............ June 1, 1984
Thirty-eighth Supplemental Indenture............. June 1, 1984
Thirty-ninth Supplemental Indenture.............. April 1, 1985
Fortieth Supplemental Indenture.................. October 1, 1985
Forty-first Supplemental Indenture............... March 1, 1986
Forty-second Supplemental Indenture.............. July 1, 1986
Forty-third Supplemental Indenture............... January 1, 1987
Forty-fourth Supplemental Indenture.............. December 1, 1987
Forty-fifth Supplemental Indenture............... September 1, 1988
Forty-sixth Supplemental Indenture............... April 1, 1989
Forty-seventh Supplemental Indenture............. August 1, 1989
Forty-eighth Supplemental Indenture.............. November 15, 1990
Forty-ninth Supplemental Indenture............... November 15, 1990
Fiftieth Supplemental Indenture.................. February 15, 1991
Fifty-first Supplemental Indenture............... April 1, 1991
Fifty-second Supplemental Indenture.............. September 15, 1991
Fifty-third Supplemental Indenture............... January 1, 1992
Fifty-fourth Supplemental Indenture.............. April 15, 1992
Fifty-fifth Supplemental Indenture............... July 1, 1992
Fifty-sixth Supplemental Indenture............... October 1, 1992
Fifty-seventh Supplemental Indenture............. February 1, 1993
Fifty-eighth Supplemental Indenture.............. March 1, 1993
Fifty-ninth Supplemental Indenture............... July 1, 1993
Sixtieth Supplemental Indenture.................. July 1, 1993
Sixty-first Supplemental Indenture............... August 15, 1993
Sixty-second Supplemental Indenture.............. January 15, 1994
Sixty-third Supplemental Indenture............... May 1, 1994
which supplemental indentures were recorded in various Counties in the States of
North Carolina and South Carolina, and were indexed and cross-indexed in the
real and chattel mortgage or security interest records in various Counties in
the States of North Carolina and South Carolina; and
WHEREAS, the Mortgage and said First through Sixty-Third Supplemental
Indentures were recorded in all Counties in the States of North Carolina and
South Carolina in which this Sixty-fourth Supplemental Indenture is to be
recorded; and
<PAGE>
4
WHEREAS, in addition to the property described in the Mortgage, as
heretofore supplemented, the Company has acquired certain other property, rights
and interests in property; and
WHEREAS, the Company has heretofore issued, in accordance with the
provisions of the Mortgage, as supplemented, the following series of First
Mortgage Bonds:
Principal Principal
Amount Amount
Series Issued Outstanding
3-3/4% Series due 1965.......................... $ 46,000,000 None
3-1/8% Series due 1979.......................... 20,100,000 None
3-1/4% Series due 1979.......................... 43,930,000 None
2-7/8% Series due 1981.......................... 15,000,000 None
3-1/2% Series due 1982.......................... 20,000,000 None
4-1/8% Series due 1988.......................... 20,000,000 None
4-7/8% Series due 1990.......................... 25,000,000 None
4-1/2% Series due 1991.......................... 25,000,000 None
4-1/2% Series due 1994.......................... 30,000,000 None
5-1/8% Series due 1996.......................... 30,000,000 None
6-3/8% Series due 1997.......................... 40,000,000 40,000,000
6-7/8% Series due 1998.......................... 40,000,000 40,000,000
8-3/4% Series due 2000.......................... 40,000,000 None
8-3/4% Series due August 1, 2000................ 50,000,000 None
7-3/8% Series due 2001.......................... 65,000,000 None
7-3/4% Series due October 1, 2001............... 70,000,000 None
7-3/4% Series due 2002.......................... 100,000,000 None
7-3/4% Series due 2003.......................... 100,000,000 None
8-1/8% Series due November 1, 2003.............. 100,000,000 None
9-3/4% Series due 2004.......................... 125,000,000 None
11-1/8% Series due 1994......................... 50,000,000 None
11% Series due April 15, 1984................... 100,000,000 None
8-1/2% Series due October 1, 2007............... 100,000,000 None
9-1/4% Series due June 1, 2008.................. 100,000,000 None
10-1/2% Series due May 15, 2009................. 125,000,000 None
12-1/4% Series due November 1, 2009............. 100,000,000 None
Pollution Control Series A...................... 63,000,000 None
14-1/8% Series due April 1, 1987................ 125,000,000 None
Pollution Control Series B...................... 50,000,000 None
Pollution Control Series C...................... 6,000,000 None
11-5/8% Series due December 1, 1992............. 100,000,000 None
Pollution Control Series D...................... 48,485,000 48,485,000
Pollution Control Series E...................... 5,970,000 5,970,000
12-7/8% Series due December 1, 2013............. 100,000,000 None
Pollution Control Series F...................... 34,700,000 34,700,000
13-3/8% Series due April 1, 1994................ 100,000,000 None
Pollution Control Series G...................... 122,615,000 None
Pollution Control Series H...................... 70,000,000 None
Pollution Control Series I...................... 70,000,000 None
<PAGE>
5
Principal Principal
Amount Amount
Series Issued Outstanding
Pollution Control Series J...................... 6,385,000 $1,795,000
Pollution Control Series K...................... $2,580,000 $2,580,000
Extendible Series due April 1, 1995............. 125,000,000 None
11-3/4% Series due October 1, 2015.............. 100,000,000 None
8-7/8% Series due March 1, 2016................. 100,000,000 None
8-1/8% Series due July 1, 1996.................. 125,000,000 None
8-1/2% Series due January 1, 2017............... 100,000,000 None
9.174% Series due December 1, 1992.............. 100,000,000 None
9% Series due September 1, 1993................. 100,000,000 None
9.60% Series due April 1, 1991.................. 100,000,000 None
Secured Medium-Term Notes, Series A............. 200,000,000 None
8-1/8% Series due November 15, 1993............. 100,000,000 None
Secured Medium-Term Notes, Series B............. 100,000,000 50,000,000
8-7/8% Series due February 15, 2021............. 125,000,000 None
9% Series due April 1, 2022..................... 100,000,000 None
8-5/8% Series due September 15, 2021............ 100,000,000 100,000,000
5.20% Series due January 1, 1995................ 125,000,000 None
7-7/8% Series due April 15, 2004................ 150,000,000 150,000,000
8.20% Series due July 1, 2022................... 150,000,000 150,000,000
6-3/4% Series due October 1, 2002............... 100,000,000 100,000,000
6-1/8% Series due February 1, 2000.............. 150,000,000 150,000,000
7-1/2% Series due March 1, 2023................. 150,000,000 150,000,000
5-3/8% Series due July 1, 1998.................. 100,000,000 100,000,000
Secured Medium-Term Notes, Series C............. 200,000,000 65,000,000
6-7/8% Series due August 15, 2023............... 100,000,000 100,000,000
5-7/8% Series due January 15, 2004.............. 150,000,000 150,000,000
Pollution Control Series L...................... 72,600,000 72,600,000
Pollution Control Series M...................... 50,000,000 50,000,000
which bonds are also hereinafter sometimes called bonds of the First
through Sixty-Seventh Series, respectively; and
WHEREAS, Section 8 of the Mortgage provides that the form of each
series of bonds (other than the First Series) issued thereunder and of the
coupons to be attached to coupon bonds of such series shall be established by
Resolution of the Board of Directors of the Company and that the form of such
series, as established by said Board of Directors, shall specify the descriptive
title of the bonds and various other terms thereof, and may also contain such
provisions not inconsistent with the provisions of the Mortgage as said Board of
Directors may, in its discretion, cause to be inserted therein expressing or
referring to the terms and conditions upon which such bonds are to be issued
and/or secured under the Mortgage; and
WHEREAS, Section 120 of the Mortgage provides, among other things, that
any power, privilege or right expressly or impliedly reserved to or in any way
conferred upon the Company by any provision of the Mortgage, whether such power,
privilege or right is in any way restricted or is unrestricted, may be in whole
or in part waived or surrendered or subjected to any restriction if at the time
unrestricted or to additional restriction if already restricted, and the Company
may enter into any
<PAGE>
6
further covenants, limitations or restrictions for the benefit of any one or
more series of bonds issued thereunder, or the Company may cure any
ambiguity contained therein, or in any supplemental indenture, or may establish
the terms and provisions of any series of bonds other than said First Series, by
an instrument in writing executed and acknowledged by the Company in such manner
as would be necessary to entitle a conveyance of real estate to record in all of
the states in which any property at the time subject to the lien of the Mortgage
shall be situated; and
WHEREAS, the Company now desires to create a new series of bonds and to
add to its covenants and agreements contained in the Mortgage, as heretofore
supplemented, certain other covenants and agreements to be observed by it and to
alter and amend in certain respects the covenants and provisions contained in
the Mortgage, as heretofore supplemented; and
WHEREAS, the execution and delivery by the Company of this Sixty-fourth
Supplemental Indenture, and the terms of the bonds of the Sixty-eighth Series,
hereinafter referred to, have been duly authorized by the Board of Directors of
the Company by appropriate resolutions of said Board of Directors;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That the Company, in consideration of the premises and of One Dollar to
it duly paid by the Trustees at or before the ensealing and delivery of these
presents, the receipt whereof is hereby acknowledged, and in further evidence of
assurance of the estate, title and rights of the Trustees and in order further
to secure the payment of both the principal of and interest and premium, if any,
on the bonds from time to time issued under the Mortgage, according to their
tenor and effect and the performance of all the provisions of the Mortgage
(including any instruments supplemental thereto and any modification made as in
the Mortgage provided) and of said bonds, hereby grants, bargains, sells,
releases, conveys, assigns, transfers, mortgages, pledges, sets over and
confirms (subject, however, to Excepted Encumbrances as defined in Section 6 of
the Mortgage) unto The Bank of New York and W.T. Cunningham, as Trustees under
the Mortgage, and to their successor or successors in said trust, and to said
Trustees and their successors and assigns forever, all the following described
properties of the Company:
All electric generating plants, stations, transmission lines,
and electric distribution systems, including permanent improvements,
extensions or additions to or about such electrical plants, stations,
transmission lines and distribution systems of the Company; all dams,
power houses, power sites, buildings, generators, reservoirs, pipe
lines, flumes, structures and works; all substations, transformers,
switchboards, towers, poles, wires, insulators, and other appliances
and equipment, and the Company's rights or interests in the land upon
which the same are situated, and all other property, real or personal,
forming a part of or appertaining to, or used, occupied or enjoyed in
connection with said generating plants, stations, transmission lines,
and distribution systems; together with all rights of way, easements,
permits, privileges, franchises and rights for or related to the
construction, maintenance, or operation thereof, through, over, under
or upon any public streets or highways, or the public lands of the
United States, or of any State or other lands; and all water
appropriations and water rights, permits and privileges; including all
property, real, personal, and mixed, acquired by the Company after the
date of the execution and delivery of the Mortgage, in addition to
property covered by the above-mentioned supplemental indentures (except
any herein or in the Mortgage, as heretofore supplemented, expressly
excepted), now owned or, subject to the provisions of Section 87 of the
Mortgage, hereafter acquired by the Company and wheresoever situated,
including (without in anywise limiting
<PAGE>
7
or impairing by the enumeration of the same the scope and intent of the
foregoing or of any general description contained in this Sixty-fourth
Supplemental Indenture) all lands, power sites, flowage rights, water
rights, flumes, raceways, dams, rights of way and roads; all steam and
power houses, gas plants, street lighting systems, standards and other
equipment incidental thereto, telephone, radio and television systems,
air-conditioning systems and equipment incidental thereto, water works,
steam heat and hot water plants, lines, service and supply systems,
bridges, culverts, tracts, ice or refrigeration plants and equipment,
street and interurban railway systems, offices, buildings and other
structures and the equipment thereof; all machinery, engines, boilers,
dynamos, electric and gas machines, regulators, meters, transformers,
generators, motors, electrical, gas and mechanical appliances,
conduits, cables, water, steam heat, gas or other pipes, gas mains and
pipes, service pipes, fittings, valves and connections, pole and
transmission lines, wires, cables, tools, implements, apparatus,
furniture, chattels and choses in action; all municipal and other
franchises, consents or permits; all lines for the transmission and
distribution of electric current, gas, steam heat or water for any
purpose including poles, wires, cables, pipes, conduits, ducts and all
apparatus for use in connection therewith; all real estate, lands,
easements, servitudes, licenses, permits, franchises, privileges,
rights of way and other rights in or relating to real estate or the
occupancy of the same and (except as herein or in the Mortgage, as
heretofore supplemented, expressly excepted) all the right, title and
interest of the Company in and to all other property of any kind or
nature appertaining to and/or used and/or occupied and/or enjoyed in
connection with any property hereinbefore or in the Mortgage, as
heretofore supplemented, described.
TOGETHER WITH all and singular the tenements, hereditaments and
appurtenances belonging or in anywise appertaining to the aforesaid property or
any part thereof, with the reversion and reversions, remainder and remainders
and (subject to the provisions of Section 57 of the Mortgage) the tolls, rents,
revenues, issues, earnings, income, product and profits thereof, and all the
estate, right, title and interest and claim whatsoever, at law as well as in
equity, which the Company now has or may hereafter acquire in and to the
aforesaid property and franchises and every part and parcel thereof.
IT IS HEREBY AGREED by the Company that, subject to the provisions of
Section 87 of the Mortgage, all the property, rights and franchises acquired by
the Company after the date hereof (except any herein or in the Mortgage, as
heretofore supplemented, expressly excepted) shall be and are as fully granted
and conveyed hereby and as fully embraced within the lien hereof and the lien of
the Mortgage as if such property, rights and franchises were now owned by the
Company and were specifically described herein and conveyed hereby.
PROVIDED THAT the following are not and are not intended to be now or
hereafter granted, bargained, sold, released, conveyed, assigned, transferred,
mortgaged, pledged, set over or confirmed hereunder and are hereby expressly
excepted from the lien and operation of this Sixty-fourth Supplemental Indenture
and from the lien and operation of the Mortgage, namely: (1) cash, shares of
stock and obligations (including bonds, notes and other securities) not
hereafter specifically pledged, paid, deposited or delivered under the Mortgage
or covenanted so to be; (2) merchandise, equipment, materials or supplies held
for the purpose of sale in the usual course of business and fuel, oil and
similar materials and supplies consumable in the operation of any properties of
the Company; rolling stock, buses, motor coaches, vehicles and automobiles; (3)
bills, notes and accounts receivable, and all contracts, leases and operating
agreements not specifically pledged under the Mortgage, as heretofore
supplemented, or this Sixty-fourth Supplemental Indenture or covenanted so to
be; (4) electric energy and other materials or products generated, manufactured,
produced or
<PAGE>
8
purchased by the Company for sale, distribution or use in the ordinary course of
its business; and (5) any property and rights heretofore released from the lien
of the Mortgage; provided, however, that the property and rights expressly
excepted from the lien and operation of the Mortgage and this Sixty-fourth
Supplemental Indenture in the above subdivisions (2) and (3) shall (to the
extent permitted by law) cease to be so excepted in the event and as of the date
that either or both of the Trustees or a receiver or trustee shall enter upon
and take possession of the Mortgaged and Pledged Property in the manner provided
in Article XII of the Mortgage by reason of the occurrence of a Default as
defined in said Article XII.
TO HAVE AND TO HOLD all such properties, real, personal and mixed,
granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged,
pledged, set over or confirmed by the Company as aforesaid, or intended so to
be, unto the Trustees, their successors and assigns forever.
IN TRUST NEVERTHELESS, for the same purposes and upon the same terms,
trusts and conditions and subject to and with the same provisos and covenants as
are set forth in the Mortgage, as heretofore supplemented, this Sixty-fourth
Supplemental Indenture being supplemental to the Mortgage.
AND IT IS HEREBY COVENANTED by the Company that all the terms,
conditions, provisos, covenants and provisions contained in the Mortgage, as
heretofore supplemented, shall affect and apply to the property hereinbefore
described and conveyed and to the estate, rights, obligations and duties of the
Company and the Trustees and the beneficiaries of the trust with respect to said
property, and to the Trustees and their successors as Trustees of said property
in the same manner and with the same effect as if the said property had been
owned by the Company at the time of the execution of the Mortgage and had been
specifically and at length described in and conveyed to the Trustees by the
Mortgage as a part of the property therein stated to be conveyed.
The Company further covenants and agrees to and with the Trustees and
their successor or successors in such trust under the Mortgage as follows:
ARTICLE I
Sixty-Eighth Series Of Bonds
SECTION 1. There shall be a series of bonds designated "6.80% Series
due August 15, 2007" (herein sometimes referred to as the "Sixty-eighth
Series"), each of which shall also bear the descriptive title "First Mortgage
Bond", and the form thereof, which shall be established by Resolution of the
Board of Directors of the Company, shall contain suitable provisions with
respect to the matters hereinafter in this Section specified. Bonds of the
Sixty-eighth Series shall be initially issued in the aggregate principal amount
of $200,000,000, mature on August 15, 2007, bear interest at the rate of 6.80%
per annum, payable from August 15, 1997, if the date of said bonds is prior to
February 15, 1998, or, if the date of said bonds is after February 15, 1998,
from the February 15 or August 15 next preceding the date of said bonds, and
thereafter semi-annually on February 15 and August 15 of each year, be issued as
fully registered bonds in the denominations of One Thousand Dollars and, at the
option of the Company, in any multiple or multiples of One Thousand Dollars (the
exercise of such option to be evidenced by the execution and delivery thereof)
and be dated as in Section 10 of the Mortgage provided, the principal of and
interest on each said bond to be payable at the office or agency of the Company
in the Borough of Manhattan, The City of New York, in such
<PAGE>
9
coin or currency of the United States of America as at the time of payment is
legal tender for public and private debts.
(1) The bonds of the Sixty-eighth Series shall be redeemable at the
option of the Company or by the application (either at the option of the Company
or pursuant to the requirements of the Mortgage) of cash deposited with the
Corporate Trustee pursuant to any of the provisions of Sections 38, 39 or 64 of
the Mortgage or with the Proceeds of Released Property in whole at any time, or
in part from time to time, prior to maturity, upon notice as provided in
Sections 52 and 54 of the Mortgage (given by mail at least 30 days and not more
than 90 days prior to the date fixed for redemption (the "Redemption Date")), at
a redemption price equal to the greater of (i) 100% of their principal amount or
(ii) the sum of the present values of the remaining scheduled payments of
principal and interest thereon from the Redemption Date to the maturity date,
computed by discounting such payments, in each case, to the Redemption Date on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at
the Treasury Yield plus 10 basis points, plus in each case accrued interest on
the principal amount thereof to the Redemption Date.
"Treasury Yield" means, with respect to any Redemption Date, the rate
per annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker having a maturity comparable to the
remaining term of the bonds of the Sixty-eighth Series that would be utilized,
at the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the bonds of the Sixty-eighth Series. "Independent Investment
Banker" means Morgan Stanley & Co. Incorporated or, if such firm is unwilling or
unable to select the Comparable Treasury Issue, an independent investment
banking institution of national standing selected by the Company and appointed
by the Corporate Trustee.
"Comparable Treasury Price" means, with respect to any Redemption Date,
(i) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such Redemption Date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A) the average
of the Reference Treasury Dealer Quotations for such Redemption Date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Company obtains fewer than four Reference Treasury Dealer Quotations,
the average of all such Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Corporate Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Corporate Trustee by such Reference Treasury Dealer at 5:00 p.m.
on the third business day preceding such Redemption Date. The Company shall
furnish the Corporate Trustee a notice in writing at least five business days
and not more than ten business days prior to such Redemption Date of (a) the
name of each Reference Treasury Dealer, (b) the Redemption Date, and (c) the
third business day preceding the Redemption Date.
<PAGE>
10
"Reference Treasury Dealer" means each of Morgan Stanley & Co.
Incorporated, Chase Securities Inc., Citicorp Securities, Inc., Deutsche Morgan
Grenfell Inc., and UBS Securities LLC, and their respective successors;
provided, however, that if any of the foregoing shall cease to be a primary U.S.
Government Securities dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute therefor another Primary Treasury Dealer.
The Company shall deliver to the Corporate Trustee before any
Redemption Date for the bonds of the Sixty-eighth Series its calculation of the
redemption price applicable to such redemption. Except with respect to the
obligations of the Corporate Trustee expressly set forth in the foregoing
definitions of "Comparable Treasury Issue" and "Reference Treasury Dealer
Quotations," the Corporate Trustee shall be under no duty to inquire into, may
presume the correctness of, and shall be fully protected in acting upon the
Company's calculation of any redemption price of the bonds of the Sixty-eighth
Series.
In lieu of stating the redemption price, notices of redemption of the
bonds of the Sixty-eighth Series shall state substantially the following: "The
redemption price of the bonds to be redeemed shall equal the greater of (i) 100%
of the principal amount of such bonds or (ii) the sum of the present values of
the remaining scheduled payments of principal and interest thereon from the
Redemption Date to the maturity date, computed by discounting such payments, in
each case, to the Redemption Date on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Yield (as defined in the
Sixty-fourth Supplemental Indenture) plus 10 basis points, plus in each case
accrued interest on the principal amount thereof to the Redemption Date.
Except as provided herein, Article X of the Mortgage, as heretofore
supplemented, shall apply to redemptions of bonds of the Sixty-eighth Series.
SECTION 2. Except as otherwise provided in this Section, the registered
owner of all bonds of the Sixty-eighth Series shall be Cede & Co., as nominee of
The Depository Trust Company ("DTC"). Payment of interest for any bonds of the
Sixty-eighth Series registered in the name of Cede & Co. shall be made by wire
transfer to the account of Cede & Co. on the interest payment date for such
bonds of the Sixty-eighth Series at the address indicated for Cede & Co. in the
registration books of the Company kept by the registrar, anything in the bonds
of the Sixty-eighth Series to the contrary notwithstanding.
The bonds of the Sixty-eighth Series shall initially be issued in the
form of one or more fully registered global bonds ("Global Bonds") which will
have an aggregate principal amount equal to the bonds of the Sixty-eighth Series
represented thereby. Upon initial issuance, the ownership of the bonds of the
Sixty-eighth Series shall be registered in the registration books of the Company
kept by the registrar in the name of Cede & Co., as nominee of DTC. The
Corporate Trustee and the Company may treat DTC (or its nominee) as the sole and
exclusive owner of the bonds of the Sixty-eighth Series registered in its name
for the purposes of payment of the principal of, premium, if any, or interest on
such bonds of the Sixty-eighth Series, giving any notice permitted or required
to be given to holders herein, registering the transfer of such bonds of the
Sixty-eighth Series, obtaining any consent or other action to be taken by
holders and for all other purposes whatsoever; and neither the Trustees nor the
Company shall be affected by any notice to the contrary. Neither the Trustees
nor the Company shall have any responsibility or obligation to any DTC
participant, any person claiming a beneficial ownership interest in bonds of the
Sixty-eighth Series registered in the name of Cede & Co. under or through DTC or
any DTC participant, or any other person not shown on the registration books of
the Company kept by the registrar as being a holder with respect to the accuracy
of any records maintained by DTC, Cede & Co., or any DTC participant; the
payment by DTC or any DTC participant to any beneficial
<PAGE>
11
owner of any amount in respect of the principal of, premium, if any, or interest
on the bonds of the Sixty-eighth Series registered in the name of Cede & Co.;
the delivery to any DTC participant or any beneficial owner of any notice which
is permitted or required to be given to holders herein; the selection by DTC or
any DTC participant of any person to receive payment in the event of a partial
payment of any bonds of the Sixty-eighth Series registered in the name of Cede &
Co.; or any consent given or other action taken by DTC as holder. All principal
of, premium, if any, and interest on any bonds of the Sixty-eighth Series
registered in the name of Cede & Co., shall be paid only to or upon the order of
Cede & Co., as nominee of DTC, and all such payments shall be valid and
effective to fully satisfy and discharge the Company's obligations with respect
to the principal of, premium, if any, and interest on such bonds of the
Sixty-eighth Series to the extent of the sum or sums so paid. Upon delivery by
DTC to the Corporate Trustee of written notice to the effect that DTC had
determined to substitute a nominee in place of Cede & Co., as registered owner
of any bonds of the Sixty-eighth Series, and subject to the provisions herein
with respect to record dates, the words "Cede & Co." herein shall refer to such
new nominee of DTC with respect to such bonds.
A Global Bond shall be exchangeable for definitive certificates
registered in the names of persons other than DTC or its nominee only if (i) DTC
notifies the Company that it is unwilling or unable to continue as a depository
for such Global Bond and no successor depository shall have been appointed, or
if at any time DTC ceases to be a clearing agency registered to act as such
depository or (ii) the Company in its sole discretion determines that such
Global Bond shall be so exchangeable. In any such event, the Company shall
issue, register the transfer of and exchange definitive certificates as
requested by DTC in appropriate amounts and the Company shall be obligated to
prepare and deliver, and the Corporate Trustee shall be obligated to
authenticate, definitive certificates.
So long as any bonds of the Sixty-eighth Series are registered in the
name of Cede & Co., as nominee of DTC, the Company and the Corporate Trustee are
hereby authorized to enter in any arrangements determined necessary or desirable
with DTC in order to effectuate this Section 2 and both of them shall act in
accordance with the Mortgage, as heretofore supplemented, and any such
arrangements. Without limiting the generality of the foregoing, any such
arrangements may alter the manner of effecting delivery of bonds of the
Sixty-eighth Series, the transfer of funds for the payment of the bonds of the
Sixty-eighth Series, and the delivery of notices to DTC.
In connection with any notice or other communication to be provided to
holders by the Company or the Corporate Trustee with respect to any consent or
other action to be taken by holders, so long as any bonds of the Sixty-eighth
Series are registered in the name of Cede & Co., as nominee of DTC, the Company
shall establish a record date for such consent or other action and give DTC
notice of such record date not less than 15 calendar days in advance of such
record date. If a record date is fixed, those persons who were holders at such
record date (or their duly designated proxies), and only those persons, shall be
entitled in consent to such amendment, supplement or waiver or to revoke any
consent previously given, whether or not such persons continue to be holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date.
SECTION 3. At the option of the registered owner, any bonds of the
Sixty-eighth Series, upon surrender thereof for cancellation at the office or
agency of the Company in the Borough of Manhattan, The City of New York, shall
be exchangeable for a like aggregate principal amount of bonds of the same
series of other authorized denominations. The bonds of the Sixty-eighth Series
may bear such legends as may be necessary to comply with any law or with any
rules or regulations
<PAGE>
12
made pursuant thereto or with the rules or regulations of any stock exchange or
to conform to usage or agreement with respect thereto.
Bonds of the Sixty-eighth Series shall be transferable upon the
surrender thereof for cancellation, together with a written instrument of
transfer in form approved by the registrar duly executed by the registered owner
or by his duly authorized attorney, at the office or agency of the Company in
the Borough of Manhattan, The City of New York.
Upon any exchange or transfer of bonds of the Sixty-eighth Series, the
Company may make a charge therefor sufficient to reimburse it for any tax or
taxes or other governmental charge required to be paid by the Company, as
provided in Section 12 of the Mortgage, but the Company hereby waives any right
to make a charge in addition thereto for any exchange or transfer of bonds of
said Series.
ARTICLE II
DIVIDEND COVENANT
SECTION 4. The Company covenants and agrees that, so long as any of the
bonds of the Sixty-eighth Series remain Outstanding, the Company will not
declare or pay any dividends upon its common stock (other than dividends in
common stock) or make any other distributions on its common stock or purchase or
otherwise retire any shares of its common stock, unless immediately after such
declaration, payment, purchase, retirement or distribution (hereinafter in this
Section referred to as "Restricted Payments"), and giving effect thereto, the
amount arrived at by adding
(a) the aggregate amount of all such Restricted Payments
(other than the dividend of fifty cents ($.50) per share declared on
December 8, 1948 and paid on February 1, 1949 to holders of Common
Stock) made by the Company during the period from December 31, 1948, to
and including the effective date of the Restricted Payment in respect
of which the determination is being made, plus
(b) an amount equal to the aggregate amount of cumulative
dividends for such period (whether or not paid) on all preferred stock
of the Company from time to time outstanding during such period, at the
rate or rates borne by such preferred stock, plus
(c) an amount equal to the amount, if any, by which fifteen
per centum (15%) of the Gross Operating Revenues of the Company for
such period shall exceed the aggregate amount during such period
expended and/or accrued on its books for maintenance and/or
appropriated on its books out of income for property retirement, in
each case in respect of the Mortgaged and Pledged Property and/or
automotive equipment used primarily in the electric utility business of
the Company (but excluding any provisions for amortization of any
amounts included in utility plant acquisition adjustment accounts or
utility plant adjustment accounts),
will not exceed the amount of the aggregate net income of the Company for said
period available for dividends (computed and ascertained in accordance with
sound accounting practice, on a cumulative basis, including the making of proper
deductions for any deficits occurring during any part of such period), plus
$3,000,000.
<PAGE>
13
The Company further covenants and agrees that not later than May 1 of
each year beginning with the year 1998 it will furnish to the Corporate Trustee
a Treasurer's Certificate stating whether or not the Company has fully observed
the restrictions imposed upon it by the covenant contained in this Section 4.
ARTICLE III
CERTAIN PROVISIONS WITH RESPECT TO FUTURE ADVANCES
SECTION 5. Upon the filing of this Sixty-fourth Supplemental Indenture
for record in all counties in which the Mortgaged and Pledged Property is
located, and until a further indenture or indentures supplemental to the
Mortgage shall be executed and delivered by the Company to the Trustees pursuant
to authorization by the Board of Directors of the Company and filed for record
in all counties in which the Mortgaged and Pledged Property is located further
increasing or decreasing the amount of future advances which may be secured by
the Mortgage, as supplemented, the Mortgage, as supplemented, may secure future
advances and other indebtedness and sums not to exceed in the aggregate
$750,000,000, in addition to $1,761,130,000 in aggregate principal amount of
bonds to be Outstanding at the time of such filing, and all such advances and
other indebtedness and sums shall be secured by the Mortgage, as supplemented,
equally, to the same extent and with the same priority, as the amount originally
advanced on the security of the Mortgage, namely, $46,000,000, and such advances
and other indebtedness and sums may be made or become owing and may be repaid
and again made or become owing and the amount so stated shall be considered only
as the total amount of such advances and other indebtedness and sums as may be
outstanding at one time.
ARTICLE IV
MISCELLANEOUS PROVISIONS
SECTION 6. Subject to the amendments provided for in this Sixty-fourth
Supplemental Indenture, the terms defined in the Mortgage, as heretofore
supplemented, shall, for all purposes of this Sixty-fourth Supplemental
Indenture, have the meanings specified in the Mortgage, as heretofore
supplemented.
SECTION 7. The provisions of the third and fourth paragraphs of Section
64 of the Mortgage with reference to the bonds of the First Series (therein
called "1965 Series") shall also be deemed to apply separately to the bonds of
the Sixty-eighth Series to the same extent as if such paragraphs had been
repeated in said Section 64 with the words "Sixty-eighth Series" substituted
therein wherever the figure and word "1965 Series" occur.
SECTION 8. The Trustees hereby accept the trusts herein declared,
provided, created or supplemented and agree to perform the same upon the terms
and conditions herein and in the Mortgage, as heretofore supplemented, set forth
and upon the following terms and conditions:
The Trustees shall not be responsible in any manner whatsoever for or
in respect of the validity or sufficiency of this Sixty-fourth
Supplemental Indenture or for or in respect of the recitals contained
herein, all of which recitals are made by the Company solely. In
general each and every term and condition contained in Article XVI of
the Mortgage shall apply to and form part of this Sixty-fourth
Supplemental Indenture with the same force and effect as if the same
were herein set forth in full with such omissions, variations and
insertions, if any,
<PAGE>
14
as may be appropriate to make the same conform to the provisions of
this Sixty-fourth Supplemental Indenture.
SECTION 9. Subject to the provisions of Article XV and Article XVI of
the Mortgage, whenever in this Sixty-fourth Supplemental Indenture either of the
parties hereto is named or referred to, this shall be deemed to include the
successors or assigns of such party, and all the covenants and agreements in
this Sixty-fourth Supplemental Indenture contained by or on behalf of the
Company or by or on behalf of the Trustees shall bind and inure to the benefit
of the respective successors and assigns of such parties whether so expressed or
not.
SECTION 10. Nothing in this Sixty-fourth Supplemental Indenture,
expressed or implied, is intended, or shall be construed, to confer upon, or to
give to, any person, firm or corporation, other than the parties hereto and the
holders of the Outstanding bonds and coupons, any right, remedy or claim under
or by reason of this Sixty-fourth Supplemental Indenture or any covenant,
condition, stipulation, promise or agreement hereof, and all the covenants,
conditions, stipulations, promises and agreements in this Sixty-fourth
Supplemental Indenture contained by or on behalf of the Company shall be for the
sole and exclusive benefit of the parties hereto, and of the holders of the
Outstanding bonds and coupons.
SECTION 11. This Sixty-fourth Supplemental Indenture shall be executed
in several counterparts, each of which shall be an original and all of which
shall constitute but one and the same instrument.
<PAGE>
15
IN WITNESS WHEREOF, Carolina Power & Light Company has caused its
corporate name to be hereunto affixed, and this instrument to be signed and
sealed by its President or one of its Vice Presidents or its Treasurer and its
corporate seal to be attested by its Secretary or one of its Assistant
Secretaries, and The Bank of New York has caused its corporate name to be
hereunto affixed, and this instrument to be signed and sealed by one of its Vice
Presidents or Assistant Vice Presidents, and its corporate seal to be attested
by one of its Assistant Vice Presidents or Assistant Secretaries and W.T.
Cunningham has hereunto set his hand and affixed his seal, all as of the day and
year first above written.
CAROLINA POWER & LIGHT COMPANY
By /s/ MARK F. MULHERN
----------------------------------
Mark F. Mulhern,
Vice President and Treasurer
Attest:
/s/ PATRICIA KORNEGAY-TIMMONS
- ---------------------------------
Patricia Kornegay-Timmons,
Assistant Secretary
Executed, sealed and delivered by
CAROLINA POWER & LIGHT COMPANY
in the presence of:
/s/ INDIRA S. MOSES
- -------------------------
Indira S. Moses
/s/ EDIE S. MCCREA
- ----------------------------.
Edie S. McCrea
<PAGE>
16
THE BANK OF NEW YORK, as Trustee
By /s/ MARY JANE MORRISSEY
---------------------------------------
Mary Jane Morrissey, Vice President
ATTEST:
/s/ LOUIS J. HACK
- -----------------------------------
Louis J. Hack, Assistant Secretary
/s/ W.T. CUNNINGHAM
------------------------------. (L.S.)
W.T. Cunningham
Executed, sealed and delivered
by THE BANK OF NEW YORK and
W.T. CUNNINGHAM in the presence of:
/s/ MICHELE RUSSO
- --------------------------
Michele Russo
/s/ STACEY POINDEXTER
- --------------------------
Stacey Poindexter
<PAGE>
17
STATE OF NORTH CAROLINA )
) SS.:
COUNTY OF WAKE )
This 22nd day of August, A.D. 1997, personally came before me, Donna M.
Cassada, a Notary Public in and for the County aforesaid, MARK F. MULHERN, who,
being by me duly sworn, says that he is the Vice President and Treasurer of
CAROLINA POWER & LIGHT COMPANY, and that the seal affixed to the foregoing
instrument in writing is the corporate seal of said company, and that said
writing was signed and sealed by him in behalf of said corporation by its
authority duly given. And the said MARK F. MULHERN acknowledged the said writing
to be the act and deed of said corporation.
On the 22nd day of August, in the year of 1997, before me personally
came MARK F. MULHERN, to me known, who, being by me duly sworn, did depose and
say that he resides at 109 Deer Valley Drive, Apex, North Carolina 27502, State
of North Carolina; that he is the Vice President and Treasurer of CAROLINA POWER
& LIGHT COMPANY, one of the corporations described in and which executed the
above instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation, and that he signed his name
thereto by like order.
/s/ DONNA M. CASSADA
[SEAL GOES HERE] ----------------------------
Donna M. Cassada
NOTARY PUBLIC, State of North Carolina
Wake County
My Commission Expires: November 16, 1997
STATE OF NORTH CAROLINA )
) SS.:
COUNTY OF WAKE )
Personally appeared before me Indira S. Moses, who being duly sworn,
says that she saw the corporate seal of CAROLINA POWER & LIGHT COMPANY affixed
to the above written instrument, and that she also saw MARK F. MULHERN, the
Treasurer, with PATRICIA KORNEGAY-TIMMONS, an Assistant Secretary, of said
CAROLINA POWER & LIGHT COMPANY, sign and attest the same, and that she,
deponent, with Edie S. McCrea, witnessed the execution and delivery thereof as
the act and deed of said CAROLINA POWER & LIGHT COMPANY.
/s/ INDIRA S. MOSES
-----------------------
Indira S. Moses
Sworn to before me this
22nd day of August, 1997
/s/ DONNA M. CASSADA
- ------------------------------------------
Donna M. Cassada
NOTARY PUBLIC, State of North Carolina [SEAL GOES HERE]
Wake County
My Commission Expires: November 16, 1997
<PAGE>
18
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
This 21st day of August, A.D. 1997, personally came before me, William
J. Cassels, a Notary Public in and for the County aforesaid, MARY JANE
MORRISSEY, who, being by me duly sworn, says that she is a Vice President of THE
BANK OF NEW YORK, and that the seal affixed to the foregoing instrument in
writing is the corporate seal of said company, and that said writing was signed
and sealed by her in behalf of said corporation by its authority duly given. And
the said MARY JANE MORRISSEY acknowledged the said writing to be the act and
deed of said corporation.
On the 21st day of August, in the year 1997, before me personally came
MARY JANE MORRISSEY, to me known, who, being by me duly sworn, did depose and
say that she resides in Shark River Hills, New Jersey, that she is a Vice
President of THE BANK OF NEW YORK, one of the corporations described in and
which executed the above instrument; that she knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by order of the Board of Directors of said corporation,
and that she signed her name thereto by like order.
I, William J. Cassels, a Notary Public in and for the County aforesaid,
do hereby certify that W.T. CUNNINGHAM personally appeared before me this day
and acknowledged the due execution by him as successor Individual Trustee of the
foregoing instrument.
On the 21st day of August, 1997, before me personally came W.T.
CUNNINGHAM, to me known to be the person described in and who executed the
foregoing instrument and acknowledged that he, as successor Individual Trustee,
executed the same.
WITNESS my hand and official seal this 21st day of August, 1997.
/s/ WILLIAM J. CASSELS
------------------------------
William J. Cassels
NOTARY PUBLIC, State of New York
No. 010A5027729
Qualified in Bronx County
Certificate filed in New York County
Commission Expires May 18, 1998
<PAGE>
19
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
Personally appeared before me MICHELE RUSSO, who, being duly sworn,
says that she saw the corporate seal of THE BANK OF NEW YORK affixed to the
above written instrument and that she also saw MARY JANE MORRISSEY, a Vice
President, with Louis J. Hack, an Assistant Secretary of said THE BANK OF NEW
YORK, sign and attest the same, and that she, deponent, with STACEY POINDEXTER,
witnessed the execution and delivery thereof as the act and deed of said THE
BANK OF NEW YORK.
Personally appeared before me MICHELE RUSSO, who, being duly sworn,
says that she saw the within named W.T. CUNNINGHAM, as successor Individual
Trustee, sign, seal and as his act and deed deliver the foregoing instrument for
the purposes therein mentioned, and that she, deponent, with STACEY POINDEXTER,
witnessed the execution thereof.
/S/ MICHELE RUSSO
----------------------------
Michele Russo
Sworn to before me this
21st day of August, 1997
/S/ WILLIAM J. CASSELS
- -----------------------------------------
William J. Cassels
NOTARY PUBLIC, State of New York
No. 010A5027729
Qualified in Bronx County
Certificate filed in New York County
Commission Expires May 18, 1998
<PAGE>
EXHIBIT 12
CAROLINA POWER & LIGHT COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND
PREFERRED DIVIDENDS COMBINED
AND RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Twelve Months Ended
-----------------------------------------------------------------------
June 30, December 31,
1997 1996 1995 1994 1993 1992
(Unaudited)
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C>
Earnings, as defined:
Net income ....................................... $ 346,826 $ 391,277 $ 372,604 $ 313,167 $ 346,496 $ 379,635
Fixed charges, as below .......................... 195,797 204,593 226,833 213,821 237,098 253,215
Income taxes, as below ........................... 189,758 247,405 232,046 180,518 181,653 211,717
--------- -------- -------- --------- --------- --------
Total earnings, as defined ..................... $ 732,381 $ 843,275 $ 831,483 $ 707,506 $ 765,247 $ 844,567
========= ========= ========= ========= ========= =========
Fixed Charges, as defined:
Interest on long-term debt ....................... $ 165,740 $ 172,622 $ 187,397 $ 183,891 $ 205,182 $ 223,158
Other interest ................................... 17,567 19,155 25,896 16,119 16,419 15,717
Imputed interest factor in rentals-charged
principally to operating expenses .............. 12,490 12,816 13,540 13,811 15,497 14,340
--------- --------- --------- --------- --------- ---------
Total fixed charges, as defined ................ $ 195,797 $ 204,593 $ 226,833 $ 213,821 $ 237,098 $ 253,215
========= ========= ========= ========= ========= =========
Earnings Before Income Taxes ....................... $ 536,584 $ 638,682 $ 604,650 $ 493,685 $ 528,149 $ 591,352
========= ========= ========= ========= ========= =========
Ratio of Earnings Before Income Taxes to Net
Income .......................................... 1.55 1.63 1.62 1.58 1.52 1.56
Income Taxes:
Included in operating expenses ................... $ 208,124 $ 269,477 $ 258,927 198,238 $ 189,535 $ 210,266
Included in other income:
Income tax expense (credit) .................... (10,141) (13,847) (18,541) (9,425) 392 5,885
Harris Plant carrying costs .................... -- -- -- -- -- 1,969
Other income, net .............................. -- -- -- -- -- 58
Included in AFUDC - borrowed funds ............... -- -- -- -- -- 2,060
Included in AFUDC - deferred taxes in nuclear
fuel amortization and book depreciation ........ (8,225) (8,225) (8,340) (8,295) (8,274) (8,521)
---------- --------- --------- --------- --------- ---------
Total income taxes ............................. $ 189,758 $ 247,405 $ 232,046 $ 180,518 $ 181,653 $ 211,717
========= ========= ========= ========= ========= =========
Fixed Charges and Preferred Dividends Combined:
Preferred dividend requirements .................. $ 7,948 $ 9,609 $ 9,609 $ 9,609 $ 9,609 $ 14,798
Portion deductible for income tax purposes ....... (312) (312) (312) (312) (312) (321)
--------- --------- --------- --------- --------- ---------
Preferred dividend requirements not deductible ... $ 7,636 $ 9,297 $9,29 $ 9,297 $ 9,297 $ 14,477
========= ========= ========= ========= ========= =========
Preferred dividend factor:
Preferred dividends not deductible times ratio of
earnings before income taxes to net income ... $ 11,836 $ 15,154 $ 15,061 $ 14,689 $ 14,131 $ 22,584
Preferred dividends deductible for income taxes 312 312 312 312 312 321
Fixed charges, as above ........................ 195,797 204,593 226,833 213,821 237,098 253,215
--------- --------- --------- --------- --------- ---------
Total fixed charges and preferred dividends
combined .................................... $ 207,945 $ 220,059 $ 242,206 $ 228,822 $.251,541 $ 276,120
========= ========= ========= ========= ========= =========
Ratio of Earnings to Fixed Charges and Preferred
Dividends Combined ............................... 3.52 3.83 3.43 3.09 3.04 3.06
Ratio of Earnings to Fixed Charges ................. 3.74 4.12 3.67 3.31 3.23 3.34
</TABLE>
