<PAGE>
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED APRIL 13, 1995)
$200,000,000
CAROLINA POWER & LIGHT COMPANY
FIRST MORTGAGE BONDS, 6.80% SERIES DUE AUGUST 15, 2007
INTEREST PAYABLE FEBRUARY 15 AND AUGUST 15
INTEREST ON THE SERIES OF NEW BONDS OFFERED HEREBY (THE "OFFERED BONDS") IS
PAYABLE FEBRUARY 15 AND AUGUST 15 OF EACH YEAR, COMMENCING FEBRUARY 15, 1998.
THE OFFERED BONDS WILL BE REDEEMABLE, IN WHOLE OR IN PART, AT THE OPTION
OF CAROLINA POWER & LIGHT COMPANY ("CP&L") AT ANY TIME, 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 DATE FIXED FOR
REDEMPTION TO THE MATURITY DATE, COMPUTED BY DISCOUNTING SUCH
PAYMENTS, IN EACH CASE, TO THE DATE OF REDEMPTION ON A
SEMIANNUAL BASIS (ASSUMING A 360-DAY YEAR CONSISTING OF TWELVE
30-DAY MONTHS) AT THE TREASURY YIELD (AS DEFINED HEREIN)
PLUS 10 BASIS POINTS, PLUS IN EACH CASE ACCRUED INTEREST
ON THE PRINCIPAL AMOUNT THEREOF TO THE DATE OF
REDEMPTION. SEE "CERTAIN TERMS OF THE OFFERED
BONDS -- REDEMPTION OF BONDS" HEREIN AND
"DESCRIPTION OF NEW BONDS" IN THE ACCOMPANYING
PROSPECTUS. THE OFFERED BONDS WILL BE
REPRESENTED BY A GLOBAL SECURITY (AS DEFINED
IN THE PROSPECTUS) THAT WILL BE DEPOSITED
WITH, OR ON BEHALF OF, THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITARY") OR
ITS NOMINEE. BOOK-ENTRY INTERESTS
IN THE GLOBAL SECURITY WILL BE
SHOWN ON, AND TRANSFERS
THEREOF WILL BE EFFECTED
ONLY THROUGH, RECORDS
MAINTAINED BY THE
DEPOSITARY OR
ITS NOMINEE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THE PROSPECTUS OR THIS
PROSPECTUS SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
PRICE 99.961% AND ACCRUED INTEREST
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) CP&L(1)(3)
<S> <C> <C> <C>
PER OFFERED BOND..................................................... 99.961% .650% 99.311%
TOTAL................................................................ $199,922,000 $1,300,000 $198,622,000
</TABLE>
(1) PLUS ACCRUED INTEREST FROM AUGUST 15, 1997.
(2) CP&L HAS AGREED TO INDEMNIFY THE SEVERAL UNDERWRITERS AGAINST CERTAIN
LIABILITIES, INCLUDING LIABILITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. SEE "UNDERWRITERS".
(3) BEFORE DEDUCTING EXPENSES PAYABLE BY CP&L ESTIMATED TO BE $250,000.
THE OFFERED BONDS ARE OFFERED, SUBJECT TO PRIOR SALE, WHEN, AS AND IF
ACCEPTED BY THE SEVERAL UNDERWRITERS, AND SUBJECT TO APPROVAL OF CERTAIN LEGAL
MATTERS BY WINTHROP, STIMSON, PUTNAM & ROBERTS, COUNSEL FOR THE UNDERWRITERS. IT
IS EXPECTED THAT DELIVERY OF THE OFFERED BONDS WILL BE MADE ON OR ABOUT AUGUST
26, 1997 THROUGH THE BOOK-ENTRY FACILITIES OF THE DEPOSITARY, AGAINST PAYMENT
THEREFOR IN IMMEDIATELY AVAILABLE FUNDS.
MORGAN STANLEY DEAN WITTER
CHASE SECURITIES INC.
CITICORP SECURITIES, INC.
DEUTSCHE MORGAN GRENFELL
UBS SECURITIES
AUGUST 21, 1997
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE OFFERED BONDS.
SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING,
AND MAY BID FOR, AND PURCHASE, THE OFFERED BONDS IN THE OPEN MARKET. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITERS."
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY CP&L OR ANY OF THE UNDERWRITERS. THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION
OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE OFFERED BONDS OFFERED BY THIS
PROSPECTUS SUPPLEMENT, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY THE OFFERED BONDS BY ANYONE IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS NOR ANY SALE MADE HEREUNDER
OF THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE OF SUCH INFORMATION.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Supplement
Selected Information............................................................... S-3
Certain Terms of the Offered Bonds................................................. S-4
Application of Proceeds............................................................ S-6
Underwriters....................................................................... S-7
Legal Matters...................................................................... S-7
Prospectus
Available Information.............................................................. 2
Incorporation of Certain Documents By Reference.................................... 2
The Company........................................................................ 2
Ratio of Earnings to Fixed Charges................................................. 2
Application of Proceeds............................................................ 3
Description of New Bonds........................................................... 3
Description of Debt Securities..................................................... 6
Global Securities.................................................................. 13
Experts and Legality............................................................... 14
Plan of Distribution............................................................... 14
</TABLE>
S-2
<PAGE>
SELECTED INFORMATION
THE FOLLOWING MATERIAL, WHICH IS PRESENTED HEREIN SOLELY TO FURNISH LIMITED
INTRODUCTORY INFORMATION REGARDING CP&L AND THE OFFERING, HAS BEEN SELECTED FROM
OR IS BASED UPON THE DETAILED INFORMATION AND FINANCIAL STATEMENTS INCORPORATED
BY REFERENCE INTO THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS, IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE THERETO, AND, THEREFORE, SHOULD BE READ
TOGETHER THEREWITH.
THE OFFERING
<TABLE>
<S> <C>
Securities Offered.................................... $200,000,000 principal amount of First Mortgage Bonds, 6.80% Series
due August 15, 2007.
</TABLE>
CAROLINA POWER & LIGHT COMPANY
<TABLE>
<S> <C>
Business.............................................. Primarily generation, transmission, distribution and sale of
electricity.
Service Area.......................................... Portions of North Carolina and South Carolina comprising
approximately 30,000 square miles.
Customers billed as of June 30, 1997.................. Approximately 1.14 million.
Installed Generating Capacity as of June 30, 1997 (in
kilowatts).......................................... 9,733,000*
Sources of system energy supply for the twelve months
ended June 30, 1997*................................ Coal-46%, nuclear-42%, purchased power-10%, other-2%.
</TABLE>
*Includes 639,700 kilowatts of generating capacity owned by North Carolina
Eastern Municipal Power Agency in units jointly owned with CP&L.
FINANCIAL INFORMATION
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
JUNE 30,
1997 DECEMBER 31,
(UNAUDITED) 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
Income Statement Data;
Operating Revenues................................... $ 2,908.3 $2,995.7 $3,006.6 $2,876.6 $2,895.4 $2,766.8
Net Income........................................... $ 346.8 $ 391.3 $ 372.6 $ 313.2 $ 346.5 $ 379.6
Ratio of Earnings to Fixed Charges..................... 3.74x 4.12x 3.67x 3.31x 3.23x 3.34x
</TABLE>
CAPITALIZATION
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
AS OF JUNE 30, 1997 (UNAUDITED)
ACTUAL RATIO ADJUSTED(b) RATIO
<S> <C> <C> <C> <C>
Long-term Debt (a).............................................................. $2,525.8 47.8% $ 2,625.8 48.7%
Preferred Stock -- Redemption Not Required...................................... 59.4 1.1 59.4 1.1
Common Stock Equity (c)......................................................... 2,705.8 51.1 2,707.5 50.2
Total Capitalization.......................................................... $5,291.0 100.0% $ 5,392.7 100.0%
</TABLE>
(a) Excludes current portion of long-term debt of $43.4 million at June 30,
1997.
(b) As adjusted reflects the following adjustments:
(1) Issuance of the Offered Bonds;
(2) Reclassification of $100 million principal amount of First Mortgage
Bonds, 5 3/8% Series due July 1, 1998 to current
portion of long-term debt; and
(3) ESOP share releases in July 1997.
(c) Includes a reduction of $166.9 and $165.8 million representing unearned
ESOP common stock at June 30, 1997 and August 21, 1997, respectively.
S-3
<PAGE>
CERTAIN TERMS OF THE OFFERED BONDS
The Offered Bonds constitute an issue of a series of the New Bonds. The
following information concerning the Offered Bonds supplements and should be
read in conjunction with the statements under "Description of New Bonds" in the
accompanying Prospectus. Capitalized terms not defined herein are used as
defined in the accompanying Prospectus.
GENERAL
The Offered Bonds will be issued as a new series of CP&L's First Mortgage
Bonds under the Mortgage, as supplemented and amended by various supplemental
indentures, including the Sixty-fourth Supplemental Indenture dated as of August
15, 1997 relating to the Offered Bonds and will constitute the Sixty-eighth
series of Bonds under the Mortgage. The Offered Bonds will mature August 15,
2007.
INTEREST PAYMENTS
The Offered Bonds will bear interest from August 15, 1997 at the rate shown
in their title, the first interest payment to be made on February 15, 1998 with
subsequent payments to be made semi-annually on February 15 and August 15 of
each year. Principal and interest are payable at The Bank of New York (the
"Mortgage Trustee") in New York, New York. Pursuant to the Mortgage, the Company
will close its transfer books ten days prior to each interest payment date.
GLOBAL SECURITIES
The Offered Bonds will be represented by a Global Security that will be
deposited with, or on behalf of, the Depositary, and will be available for
purchase in denominations of $1,000 and any integral multiple thereof.
The description which follows of the procedures and recordkeeping with
respect to beneficial ownership interests in the Offered Bonds, payments of
principal of, and premium, if any, and interest on, the Offered Bonds to the
Depositary and its Participants or Beneficial Owners, in each case as defined
below, confirmation and transfer of beneficial ownership interests in the
Offered Bonds and other related transactions by and among the Depositary, the
Depositary Participants and Beneficial Owners has been obtained from sources
that CP&L believes to be reliable (including the Depositary), but CP&L takes no
responsibility for the accuracy thereof.
The Depositary is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934. The Depositary holds securities that its participants
("Participants") deposit with the Depositary. The Depositary also facilitates
the settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants ("Direct Participants")
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. The Depositary is owned by a
number of its Direct Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc. Access to the Depositary system is also available to others such
as securities brokers and dealers, banks and trust companies that clear through
or maintain a custodial relationship with a Direct Participant, either directly
or indirectly ("Indirect Participants"). The rules applicable to the Depositary
and its Participants are on file with the Securities and Exchange Commission.
Purchases of Offered Bonds under the Depositary's system must be made by or
through Direct Participants, which will receive a credit for the Offered Bonds
on the Depositary's records. The ownership interest of each actual purchaser of
Offered Bonds ("Beneficial Owner") is in turn to be recorded on the Direct and
Indirect Participants' records. Beneficial Owners will not receive written
confirmation from the Depositary of their purchase, but Beneficial Owners are
expected to receive written confirmation providing details of the transaction as
well as periodic statements of their holdings from the Direct or Indirect
Participant through which the Beneficial Owner entered into the transaction.
Transfers of ownership interests in the Offered Bonds are to be accomplished by
entries made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interests in the Offered Bonds, except in the event that use of the book-entry
system for the Offered Bonds is discontinued.
S-4
<PAGE>
To facilitate subsequent transfers, all Offered Bonds deposited by
Participants with the Depositary are registered in the name of the Depositary's
partnership nominee, Cede & Co. The deposit of Offered Bonds with the Depositary
and their registration in the name of Cede & Co. effect no change in beneficial
ownership. The Depositary has no knowledge of the actual Beneficial Owners of
the Offered Bonds; the Depositary's records reflect only the identity of the
Direct Participants to whose accounts such Offered Bonds are credited, which may
or may not be the Beneficial Owners. The Participants will remain responsible
for keeping account of their holdings on behalf of their customers.
SO LONG AS CEDE & CO., AS NOMINEE FOR THE DEPOSITARY, IS THE SOLE HOLDER OF
THE OFFERED BONDS, THE MORTGAGE TRUSTEE SHALL TREAT CEDE & CO. AS THE ONLY
HOLDER OF THE OFFERED BONDS FOR ALL PURPOSES UNDER THE MORTGAGE, INCLUDING
RECEIPT OF ALL PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST ON SUCH OFFERED
BONDS, RECEIPT OF NOTICES, AND VOTING AND REQUESTING OR DIRECTING THE MORTGAGE
TRUSTEE TO TAKE OR NOT TO TAKE, OR CONSENTING TO, CERTAIN ACTIONS UNDER THE
MORTGAGE.
Conveyance of notices and other communications by the Depositary to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices, if any, shall be sent to the Depositary. If less than
all of the Offered Bonds within an issue are being redeemed, the Depositary's
practice is to determine by lot the amount of the interest of each Direct
Participant in such issue to be redeemed.
Neither the Depositary nor Cede & Co. will consent or vote with respect to
the Offered Bonds. Under its usual procedures, the Depositary mails an Omnibus
Proxy to CP&L as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants to
whose accounts the Offered Bonds are credited on the record date (identified in
a listing attached to the Omnibus Proxy).
Principal of, and premium, if any, and interest payments on the Offered
Bonds will be made to the Depositary. The Depositary's practice is to credit
Direct Participants' accounts on the applicable payment date in accordance with
their respective holdings shown on the Depositary's records unless the
Depositary has reason to believe that it will not receive payment on such date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for
the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of such Participant and not of the Depositary, the
Mortgage Trustee or CP&L, subject to any statutory or regulatory requirements as
may be in effect from time to time. Payment of principal, and premium, if any,
and interest to the Depositary is the responsibility of CP&L or the Mortgage
Trustee (with funds provided by CP&L), disbursement of such payments to Direct
Participants shall be the responsibility of the Depositary, and disbursement of
such payments to the Beneficial Owners shall be the responsibility of Direct and
Indirect Participants.
The Depositary may discontinue providing its services as securities
depository with respect to the Offered Bonds at any time by giving reasonable
notice to CP&L or the Mortgage Trustee. Under such circumstances, in the event
that a successor securities depository is not obtained, individual bond
certificates are required to be printed and delivered.
CP&L may decide to discontinue use of the system of book-entry transfers
through the Depositary (or a successor securities depository). In that event,
individual bond certificates will be printed and delivered.
CP&L, THE UNDERWRITERS AND THE MORTGAGE TRUSTEE HAVE NO RESPONSIBILITY OR
OBLIGATION TO THE DEPOSITARY'S PARTICIPANTS OR THE BENEFICIAL OWNERS WITH
RESPECT TO (A) THE ACCURACY OF ANY RECORDS MAINTAINED BY THE DEPOSITARY OR ANY
DEPOSITARY PARTICIPANT, (B) THE PAYMENT BY ANY DEPOSITARY PARTICIPANT OF ANY
AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OF, PREMIUM, IF
ANY, AND INTEREST ON, THE OFFERED BONDS, (C) THE DELIVERY OR TIMELINESS OF
DELIVERY BY THE DEPOSITARY TO ANY DEPOSITARY PARTICIPANT OR BY ANY DEPOSITARY
PARTICIPANT TO ANY BENEFICIAL OWNER OF ANY NOTICE WHICH IS REQUIRED OR PERMITTED
UNDER THE TERMS OF THE MORTGAGE TO BE GIVEN TO HOLDERS OF THE OFFERED BONDS, OR
(D) ANY OTHER ACTION TAKEN BY THE DEPOSITARY OR ITS NOMINEE, CEDE & CO., AS
HOLDER OF THE OFFERED BONDS.
A further description of the Depositary's procedures with respect to the
Offered Bonds is set forth under "Global Securities" in the accompanying
Prospectus.
S-5
<PAGE>
REDEMPTION OF BONDS
The Offered Bonds will be redeemable in whole or in part, at the option of
CP&L at any time, 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 from the date fixed for redemption
(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 Offered Bonds 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 Offered Bonds.
"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 CP&L
and appointed by the Mortgage 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 Mortgage 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 Mortgage Trustee by such Reference Treasury Dealer at 5:00 p.m.
on the third business day preceding such Redemption Date.
"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"),
CP&L shall substitute therefor another Primary Treasury Dealer.
Holders of Offered Bonds to be redeemed will receive notice thereof sent by
first-class mail at least 30 and not more than 90 days prior to the date fixed
for redemption (which notice may state that it is subject to the receipt of
redemption moneys by the Mortgage Trustee on or before the date fixed for
redemption and which notice shall be of no effect unless such moneys are so
received on or before such date).
APPLICATION OF PROCEEDS
The net proceeds to be received from the sale of the Offered Bonds will be
used to reduce the outstanding balance of CP&L's commercial paper and other
short-term debt and for other general corporate purposes. Outstanding commercial
paper and other short-term debt is anticipated to approximate $450,000,000
immediately prior to the delivery of the Offered Bonds.
S-6
<PAGE>
UNDERWRITERS
Subject to the terms of and conditions set forth in the Underwriting
Agreement, the underwriters named below (the "Underwriters") have severally
agreed to purchase, and CP&L has agreed to sell to them, severally, the
respective principal amounts of the Offered Bonds set forth opposite their names
below.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
OFFERED
UNDERWRITER BONDS
<S> <C>
Morgan Stanley & Co. Incorporated......................................... $ 40,000,000
Chase Securities Inc...................................................... $ 40,000,000
Citicorp Securities, Inc.................................................. $ 40,000,000
Deutsche Morgan Grenfell Inc.............................................. $ 40,000,000
UBS Securities LLC........................................................ $ 40,000,000
Total.............................................................. $200,000,000
</TABLE>
The nature of the Underwriters' obligations is such that they are committed
to purchase all of the Offered Bonds if any are purchased; provided, that, under
certain circumstances relating to a default of one or more Underwriters, less
than all of the Offered Bonds may be purchased.
The several Underwriters have advised CP&L that they are offering the
Offered Bonds to the public initially at the public offering price set forth on
the cover page of this Prospectus Supplement; that the Underwriters may allow to
selected dealers a concession from the public offering price of .40% of the
principal amount of the Offered Bonds; and that the Underwriters may allow, and
such dealers may reallow, a concession of .25% of the principal amount of the
Offered Bonds to certain other dealers. After the initial public offering, the
public offering price and the concession may be changed.
CP&L has agreed to indemnify the Underwriters against certain civil
liabilities, including liabilities under the Securities Act of 1933, as amended.
CP&L does not intend to apply for listing of the Offered Bonds on any
national securities exchange, but has been advised by the Underwriters that they
intend to make a market in the Offered Bonds, as permitted by applicable laws
and regulations. The Underwriters are not obligated, however, to make a market
in the Offered Bonds, and any such market making may be discontinued at any time
at the sole discretion of the Underwriters. Accordingly, no assurance can be
given as to the liquidity of, or the existence of trading markets for, the
Offered Bonds.
In order to facilitate the offering of the Offered Bonds, the Underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
price of the Offered Bonds. Specifically, the Underwriters may overallot in
connection with the offering, creating a short position in the Offered Bonds for
their own account. In addition, to cover overallotments or to stabilize the
price of the Offered Bonds, the Underwriters may bid for, and purchase, the
Offered Bonds in the open market. Finally, the underwriting syndicate may
reclaim selling concessions allowed to an Underwriter or a dealer for
distributing the Offered Bonds in the offering, if the syndicate repurchases
previously distributed Offered Bonds in transactions to cover syndicate short
positions, in stabilization transactions or otherwise. Any of these activities
may stabilize or maintain the market price of the Offered Bonds above
independent market levels. The Underwriters are not required to engage in these
activities and may end any of these activities at any time.
Affiliates of Chase Securities Inc., Citicorp Securities, Inc., Deutsche
Morgan Grenfell Inc. and UBS Securities LLC are lenders under revolving credit
agreements providing liquidity support for CP&L's outstanding commercial paper.
Affiliates of Chase Securities Inc. provide other banking services to CP&L in
the ordinary course of business. An affiliate of Citicorp Securities, Inc. is
the lender under a revolving credit agreement with the trustee of CP&L's Stock
Purchase-Savings Plan as borrower. Morgan Stanley & Co. Incorporated provides
the Company from time to time certain investment advisory and strategic planning
services.
LEGAL MATTERS
The statements made as to matters of law and legal conclusions in the
documents incorporated by reference herein have been reviewed by William D.
Johnson, Esq., Vice President and Corporate Secretary for CP&L, and are set
forth in reliance upon his opinion as an expert.
S-7
<PAGE>
Certain legal matters relating to the Offered Bonds will be passed upon for
CP&L by William D. Johnson, Esq., Vice President and Corporate Secretary of
CP&L, Raleigh, North Carolina, by Hunton & Williams, Raleigh, North Carolina,
and by Paulling & James, Darlington, South Carolina, and for the Underwriters by
Winthrop, Stimson, Putnam & Roberts, New York, New York. As of June 30, 1997,
William D. Johnson, Esq., owned 1,248 shares of CP&L's Common Stock. Mr. Johnson
is acquiring additional shares of Common Stock at regular intervals as a
participant in CP&L's Stock Purchase-Savings Plan.
S-8
<PAGE>
PROSPECTUS
$700,000,000
CAROLINA POWER & LIGHT COMPANY
FIRST MORTGAGE BONDS
DEBT SECURITIES
Carolina Power & Light Company ("CP&L") intends to offer from time to time
up to $700,000,000 aggregate principal amount of its securities, at least
$450,000,000 of which will consist of First Mortgage Bonds of CP&L (the "New
Bonds") and the remaining $250,000,000 of which will consist of either New Bonds
or other debt securities of CP&L (such other debt securities, the "Debt
Securities", and, together with the New Bonds, the "Securities"), or any
combination thereof, in one or more series at prices and on terms to be
determined at the time of sale.
For each issue of Securities for which this Prospectus is being delivered
(the "Offered Bonds" or the "Offered Debt Securities", as the case may be, and,
together, the "Offered Securities") there will be an accompanying Prospectus
Supplement (the "Prospectus Supplement") that sets forth, without limitation and
to the extent applicable, the specific designation, aggregate principal amount,
denomination, maturity, premium, if any, rate of interest (which may be fixed or
variable) or method of calculation thereof, time of payment of interest, any
terms for redemption, any sinking fund provisions, any subordination provisions
(in the case of the Debt Securities only), the initial public offering price,
the names of any underwriters or agents, the principal amounts, if any, to be
purchased by underwriters, the compensation of such underwriters or agents and
any other special terms of the Offered Securities. The Prospectus Supplement
relating to the Offered Securities will also contain information concerning
certain U.S. federal income tax considerations, if applicable to the Offered
Securities.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------------
The Securities may be sold directly by CP&L or through agents designated
from time to time or through dealers or underwriters. If any agents of CP&L or
any underwriters are involved in the sales of the Offered Securities, the names
of such agents or such underwriters and any applicable commissions or discounts
will be set forth in the Prospectus Supplement.
---------------------------
The date of this Prospectus is April 13, 1995
<PAGE>
AVAILABLE INFORMATION
CP&L IS SUBJECT TO THE INFORMATIONAL REQUIREMENTS OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"), AND IN ACCORDANCE
THEREWITH FILES REPORTS AND OTHER INFORMATION WITH THE SECURITIES AND EXCHANGE
COMMISSION (THE "COMMISSION"). REPORTS, PROXY STATEMENTS AND OTHER INFORMATION
FILED BY CP&L WITH THE COMMISSION CAN BE INSPECTED AND COPIED AT THE PUBLIC
REFERENCE FACILITIES MAINTAINED BY THE COMMISSION AT ROOM 1024, JUDICIARY PLAZA,
450 FIFTH STREET, N.W., WASHINGTON, D.C. 20549 AND AT THE FOLLOWING REGIONAL
OFFICES OF THE COMMISSION: NEW YORK REGIONAL OFFICE, 7 WORLD TRADE CENTER, 13TH
FLOOR, NEW YORK, NEW YORK 10048 AND CHICAGO REGIONAL OFFICE, 500 WEST MADISON
STREET, 14TH FLOOR, CHICAGO, ILLINOIS 60661-2511. COPIES OF SUCH MATERIAL CAN
ALSO BE OBTAINED AT PRESCRIBED RATES FROM THE PUBLIC REFERENCE SECTION OF THE
COMMISSION, 450 FIFTH STREET, N.W., WASHINGTON, D.C. 20549. SUCH REPORTS, PROXY
STATEMENTS AND OTHER INFORMATION CAN ALSO BE INSPECTED AT THE OFFICES OF THE NEW
YORK STOCK EXCHANGE, INC., 20 BROAD STREET, NEW YORK, NEW YORK 10005, AND THE
PACIFIC STOCK EXCHANGE INCORPORATED, 301 PINE STREET, SAN FRANCISCO, CALIFORNIA
94104, ON WHICH CP&L'S COMMON STOCK IS LISTED.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which are on file with the Commission (File No.
1-3382) under the Exchange Act, are incorporated by reference in this Prospectus
and made a part hereof:
(a) CP&L's most recently filed Annual Report on Form 10-K;
(b) CP&L's Quarterly Reports on Form 10-Q filed since the end of CP&L's
fiscal year covered by its most recent Annual Report on Form 10-K; and
(c) CP&L's Current Reports on Form 8-K filed since the end of CP&L's fiscal
year covered by its most recent Annual Report on Form 10-K.
All other documents subsequently filed by CP&L pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering
of the Securities hereunder shall be deemed to be incorporated herein by
reference. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
CP&L will provide without charge to each person, including any beneficial
owner, to whom a copy of this Prospectus has been delivered, on the written or
oral request of any such person, a copy of any or all of the documents referred
to above which have been or may be incorporated in this Prospectus by reference,
other than exhibits to such documents (unless such exhibits are specifically
incorporated by reference into such documents). Requests for copies of such
documents should be directed to Robert F. Drennan, Jr., Manager -- Financial
Planning and Analysis, Treasury Department, Carolina Power & Light Company, 411
Fayetteville Street, Raleigh, North Carolina 27601-1748, telephone 919-546-7474.
THE COMPANY
CP&L is a public service corporation formed under the laws of North
Carolina in 1926 and is engaged in the generation, transmission, distribution
and sale of electricity in portions of North Carolina and South Carolina. The
principal executive offices of CP&L are located at 411 Fayetteville Street,
Raleigh, North Carolina 27601-1748, telephone 919-546-6111.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth CP&L's historical ratio of earnings to fixed
charges for each of the indicated periods.
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED DECEMBER 31,
- ----------------------------------------------
1994 1993 1992 1991 1990
- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C>
3.31x 3.23x 3.34x 3.08x 2.65x
</TABLE>
2
<PAGE>
APPLICATION OF PROCEEDS
Except as otherwise described in the Prospectus Supplement, the net
proceeds from the sale of the Offered Securities will be used primarily for
CP&L's ongoing construction and maintenance program, for the redemption,
repurchase, repayment, or retirement of outstanding indebtedness or for other
general corporate purposes. Any proceeds not immediately so applied when
received may be invested temporarily, pending such application, in U.S.
government or agency obligations, commercial paper, bank certificates of
deposit, or repurchase agreements collateralized by U.S. government or agency
obligations, or will be deposited with banks.
DESCRIPTION OF NEW BONDS
GENERAL
The New Bonds are to be issued under a Mortgage and Deed of Trust, dated as
of May 1, 1940, with The Bank of New York (formerly Irving Trust Company) (the
"Mortgage Trustee") and Frederick G. Herbst (W.T. Cunningham, successor), as
Trustees, as supplemented by indentures supplemental thereto, all of which are
collectively referred to as the "Mortgage." All First Mortgage Bonds of CP&L
(including the New Bonds) issued and to be issued under the Mortgage are
hereinafter sometimes referred to as "Bonds." The statements herein concerning
the New Bonds and the Mortgage are merely an outline and do not purport to be
complete. Such statements make use of the terms defined in the Mortgage and are
qualified in their entirety by express reference to the sections and articles of
the Mortgage cited herein.
Reference is made to the Prospectus Supplement for the following terms of
the Offered Bonds (among others): (i) the designation, series and aggregate
principal amount of the Offered Bonds; (ii) the percentage or percentages of
their principal amount at which such Offered Bonds will be issued; (iii) the
date or dates on which the Offered Bonds will mature; (iv) the rate or rates
(which may be either fixed or variable), and/or the method of determination of
such rate or rates, per annum at which the Offered Bonds will bear interest; (v)
the date or dates on which such interest will be payable; (vi) the denominations
in which the Offered Bonds are authorized to be issued; (vii) whether such
Offered Bonds are to be issued in whole or in part in the form of one or more
global Bonds and, if so, the identity of the depositary for such global Bonds;
(viii) redemption terms, if any; and (ix) any other specific terms.
FORM AND EXCHANGES
The New Bonds will be issuable in the form of registered bonds without
coupons. They will be exchangeable without charge for other New Bonds of
different authorized denominations, in each case for a like aggregate principal
amount, and may be transferred without charge, other than for applicable stamp
taxes or other governmental charges.
INTEREST AND PAYMENT
Reference is made to the Prospectus Supplement for the interest rate or
rates (which may be either fixed or variable), and/or the method of
determination of such rate or rates, of the Offered Bonds and the date or dates
on which such interest is payable. Except as otherwise provided in the
Prospectus Supplement relating to the Offered Bonds, principal and interest are
payable at The Bank of New York in New York City.
CP&L has covenanted to pay interest on any overdue principal and (to the
extent that payment of such interest is enforceable under applicable law) on any
overdue installment of interest on the Bonds of all series at the rate of 6% per
annum. (Mortgage, Sec. 78.)
REDEMPTION AND PURCHASE OF BONDS
The New Bonds may be redeemable, in whole or in part, on at least 30 days'
notice at the general redemption prices set forth in the Prospectus Supplement
for all redemptions including redemptions (i) for the basic improvement fund,
(ii) for the maintenance and replacement fund, (iii) for the sinking fund, if
any, which may be established for a New Bond of a designated interest rate and
maturity, (iv) with certain deposited cash, (v) with the proceeds of released
property or (vi) at the option of CP&L. Reference is made to the Prospectus
Supplement for the redemption terms, if any, of the Offered Bonds.
If at the time notice of redemption is given the redemption moneys are not
on deposit with the Mortgage Trustee, the redemption may be subject to their
deposit with the Mortgage Trustee on or before the date fixed for redemption and
such notice shall be of no effect unless such moneys are so received.
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<PAGE>
Cash deposited under any provisions of the Mortgage (with certain
exceptions) may be applied to the purchase of Bonds of any series.
(Mortgage, Art. X.)
IMPROVEMENT FUND
As to each outstanding series of Bonds, basic improvement fund payments are
required in an amount equal to 1/2 of 1% per year of the greatest amount of
Bonds of such series outstanding prior to the year in which such payment is due.
Payments may be made in cash or principal amount of Bonds of the particular
series, or credit may be taken for property additions at 100% (70% in the case
of all outstanding series of Bonds issued prior to the Bonds of the Eleventh
Series) of cost or fair value, or credit may be taken for Bonds of any series or
prior lien bonds retired. The requirement may be anticipated at any time.
Additional improvement fund payments in an amount equal to 1/2 of 1% per year
are required by the terms of each outstanding series of Bonds issued prior to
the Bonds of the Eleventh Series, making a total of 1% as to each of those
series. CP&L has reserved the right to amend the Mortgage, without any consent
or other action by the holders of the Bonds of the Eleventh Series or any
subsequently created series (including each series of the New Bonds), to
eliminate the basic improvement fund payments of 1/2 of 1% with respect to each
series (including each series of the New Bonds). (Mortgage, Sec. 39; First
through Ninth Supplementals, Sec. 3; Tenth Supplemental, Sec. 5.)
MAINTENANCE AND REPLACEMENT FUND
There shall be expended for each year 15% of the adjusted gross operating
revenues for maintenance and replacements in respect of the mortgaged property
and certain automotive equipment of CP&L. Excess expenditures for such purposes
in any year may be credited against the requirements in any subsequent year. If
CP&L is not permitted by regulatory authority to include 15% of such revenues
for such purposes in operating expenses, the requirements are correspondingly
reduced. Such requirements may be met by depositing cash with the Mortgage
Trustee, certifying expenditures for maintenance and repairs, certifying gross
property additions, certifying gross expenditures for certain automotive
equipment, or by taking credit for Bonds and prior lien bonds retired. Such cash
may be withdrawn on expenditures for gross property additions or on waiver of
the right to issue Bonds or be applied to the purchase or redemption of Bonds of
such series as may be designated by CP&L. See "Redemption and Purchase of
Bonds."
CP&L has reserved the right to amend the Mortgage, without any consent or
other action by holders of the Bonds of the Twenty-third Series or any
subsequently created series (including each series of the New Bonds), to
eliminate the maintenance and replacement fund payments with respect to the
Bonds of the Twenty-third Series and any subsequently created series (including
each series of the New Bonds). (Mortgage, Sec. 38; Twenty-second Supplemental,
Sec. 7.)
SPECIAL PROVISIONS FOR RETIREMENT OF BONDS
If, during any twelve month period, property is disposed of by order of or
to any governmental authority, resulting in the receipt of $10,000,000 or more
as proceeds therefor, CP&L (subject to certain conditions) must apply such
proceeds, less certain deductions, to the retirement of Bonds. The Bonds are
redeemable at the general redemption prices for this purpose, but only a
pro-rata portion of each series of Bonds then outstanding (including each series
of the New Bonds) is redeemable for this purpose. CP&L has reserved the right to
amend the Mortgage to eliminate the foregoing special provisions for retirement
of Bonds. (Mortgage, Sec. 64; Ninth Supplemental, Sec. 6.)
SECURITY
The New Bonds and any other Bonds will be secured by the Mortgage, which
constitutes, in the opinion of General Counsel for CP&L, a first mortgage lien
on all of the present properties of CP&L (except as stated below), subject to
(a) leases of minor portions of CP&L's property to others for uses which, in the
opinion of such counsel, do not interfere with CP&L's business, (b) leases of
certain property of CP&L not used in its electric utility business, and (c)
excepted encumbrances, minor defects and irregularities. There are excepted from
the lien: all merchandise, equipment, materials or supplies held for sale and
fuel, oil and similar consumable materials and supplies; vehicles and
automobiles; cash, securities, receivables and all contracts, leases and
operating agreements not pledged or required so to be; and electric energy and
other products.
The Mortgage contains provisions for subjecting to the lien thereof
(subject to limitations in the case of consolidation, merger or sale of
substantially all of CP&L's assets) property, other than property of the kind
excepted above, acquired after the date of delivery of the Mortgage. (Mortgage,
Art. XV.)
4
<PAGE>
The Mortgage provides that the Trustees shall have a lien upon the
mortgaged property, prior to the Bonds, for the payment of their reasonable
compensation and expenses and for indemnity against certain liabilities.
(Mortgage, Sec. 96.)
ISSUANCE OF ADDITIONAL BONDS
The maximum principal amount of Bonds which may be issued under the
Mortgage is unlimited. Bonds of any series may be issued from time to time on
the basis of (1) 70% of property additions after adjustments to offset
retirements; (2) retirement of Bonds or prior lien bonds; or (3) deposit of
cash. With certain exceptions in the case of (2) above, the issuance of Bonds is
subject to adjusted net earnings for 12 out of the preceding 15 months before
interest and income taxes being (a) at least twice the annual interest
requirements on, or (b) at least 10% of the principal amount of, all Bonds at
the time outstanding, including the additional issue, and all indebtedness of
prior or equal rank. Such adjusted net earnings are computed after provision for
repairs, maintenance and retirement of property equal to the maintenance and
replacement fund requirements for such period. Cash so deposited may be
withdrawn upon the basis stated in clauses (1) and (2) above. See "Modification
of the Mortgage."
Property additions must consist of electric property, or property used or
useful in connection therewith, acquired after December 31, 1939, but may not
include securities, vehicles or automobiles. CP&L has reserved the right to
amend the Mortgage, without any consent or other action of the holders of the
Twenty-fourth Series or any subsequently created series (including each series
of the New Bonds), to make available as property additions any form of space
satellites (including solar power satellites), space stations and other
analogous facilities. CP&L estimates that, as of December 31, 1994, there were
approximately $2.2 billion of net property additions available for the issuance
of Bonds, which, using the test specified in clause (1) of the previous
paragraph, would provide a basis for the issuance of approximately $1.5 billion
of additional Bonds as of such date.
The Mortgage contains restrictions upon the issuance of Bonds against
property subject to liens and upon the increase of the amount of such liens.
(Mortgage, Secs. 4-7, 20-30 and 46; Twenty-third Supplemental, Sec. 5.)
DIVIDEND RESTRICTIONS
So long as any Bonds remain outstanding, and unless otherwise specified in
the Prospectus Supplement with respect to the New Bonds, cash dividends and
distributions on common stock are restricted to aggregate net income available
therefor (after preferred dividends) since December 31, 1948, plus $3,000,000.
No portion of retained earnings at December 31, 1994 is restricted by this
provision. See "Modification of the Mortgage."
MODIFICATION OF THE MORTGAGE
The rights of the Bondholders may be modified with the consent of 70% of
the Bonds and, if less than all series of Bonds are affected, the consent also
of 70% of the Bonds of each series affected. CP&L has reserved the right to
amend the Mortgage, without any consent or other action by holders of the Bonds
of the Fourteenth Series or any subsequently created series (including each
series of the New Bonds), to substitute for the foregoing provision a provision
to the effect that the rights of the Bondholders may be modified with the
consent of holders of 66 2/3% of the Bonds, and, if less than all series of
Bonds are affected, the consent also of holders of 66 2/3% of the Bonds of each
series affected. In general, no modification of the terms of payment of
principal or interest, and no modification affecting the lien or reducing the
percentage required for modification, is effective against any Bondholder
without such Bondholder's consent. (Mortgage, Art. XVIII; Thirteenth
Supplemental, Sec. 5.)
CP&L may reserve the right to amend the Mortgage, without the consent of
the holders of one or more series of New Bonds or of any subsequently created
series, as follows: (i) to reduce the percentage of the holders of the Bonds who
must consent to certain modifications of the Mortgage to a majority of the
holders of all Bonds adversely affected; (ii) to except from the lien of the
Mortgage all property not funded or eligible to be funded under the Mortgage for
the issuance of Bonds, the release of property or any other purpose under the
Mortgage; (iii) to increase the period during which the net earnings test may be
calculated from 15 months to 18 months; (iv) to allow the release of property
from the lien of the Mortgage at cost or at the value of such property at the
time it became funded property; (v) to simplify the release of unfunded property
from the lien of the Mortgage, if after the release CP&L will have at least one
dollar ($1) in unfunded property remaining; (vi) to increase the amount of
funded property that may be released or retired on the basis of the retirement
of Bonds from 100% to 143%; and (vii) to eliminate the annual certificate from
CP&L to the Mortgage Trustee regarding the amounts accrued, expended or
appropriated for maintenance or property retirements. In addition, CP&L may
elect to modify the dividend covenant applicable to a particular series of New
Bonds to provide that CP&L may declare and pay dividends in cash or
5
<PAGE>
property on its common stock only out of Surplus, as defined, or out of net
profits for the fiscal year or the preceding fiscal year. However, dividends may
not be paid out of net profits if the Capital of CP&L, as defined, has been
diminished to a specified extent.
DEFAULTS AND NOTICE THEREOF
An event of default is defined as being: default in payment of principal of
Bonds; default for 30 days in payment of interest on Bonds; default in payment
of interest on or principal of prior lien bonds continued beyond grace periods;
default for 60 days in payment of installments of funds for retirement of Bonds
(including the improvement and maintenance and replacement funds); certain
events in bankruptcy, insolvency or reorganization; and default for 90 days
after notice in performance of other covenants. (Mortgage, Sec. 65.) The
Trustees may withhold notice of default (except in payment of principal,
interest or funds for retirement of Bonds) if they think it in the interest of
the Bondholders. (Mortgage, Sec. 66; Third Supplemental, Sec. 15.)
In case of a default, holders of 25% of the Bonds may declare the principal
and interest due and payable, but the holders of a majority may annul such
declaration and destroy its effect if such default has been cured. (Mortgage,
Sec. 67.) No holder of Bonds may enforce the lien of the Mortgage unless such
holder has given the Trustees written notice of a default and unless the holders
of 25% of the Bonds have requested the Trustees in writing to act and have
offered the Trustees reasonable opportunity to act. (Mortgage, Sec. 80.) The
Trustees are not required to risk their funds or incur personal liability if
there is a reasonable ground for believing that repayment to the Trustees is not
reasonably assured. (Mortgage, Sec. 94.) Holders of a majority of the Bonds may
direct the time, method and place of conducting any proceedings for any remedy
available to the Trustees, or exercising any trust or power conferred upon the
Trustees. (Mortgage, Sec. 71.)
EVIDENCE TO BE FURNISHED TO THE MORTGAGE TRUSTEE UNDER THE MORTGAGE
Compliance with Mortgage provisions is evidenced by written statements of
CP&L's officers or persons selected or paid by CP&L (such as an engineer with
respect to the value of property being certified or released, an accountant with
respect to a net earnings certificate and counsel with respect to property
titles and compliance with the Mortgage generally). In certain major matters (as
required by Section 314(d) of the Trust Indenture Act of 1939, as amended) the
accountant or engineer must be independent. Various certificates and other
papers are required to be filed annually and upon the happening of various
events. General periodic evidence is required to be furnished as to compliance
with the conditions and covenants under the Mortgage.
CONCERNING THE MORTGAGE TRUSTEE
In the regular course of business, CP&L obtains short-term funds from
several banks including, in certain instances, The Bank of New York.
DESCRIPTION OF DEBT SECURITIES
GENERAL
The Debt Securities may be issued in one or more new series under an
Indenture or Indentures (the "Indenture") between CP&L and Bankers Trust
Company, or other trustee to be named, as Trustee (each, a "Trustee"). The
statements herein concerning (i) the Indenture, (ii) one or more supplemental
indentures, board resolutions or officer's certificates establishing the Debt
Securities and (iii) the Debt Securities (the forms of each of which are filed,
or will be filed, as exhibits to the Registration Statement of which this
Prospectus forms a part, or as an exhibit to a Current Report on Form 8-K to be
incorporated by reference in this Prospectus) are merely an outline and do not
purport to be complete. Such statements make use of the terms defined in the
Indenture and are qualified in their entirety by express reference to the
sections of the Indenture cited herein.
The Debt Securities will be unsecured obligations of CP&L and, if so
provided in the Prospectus Supplement relating to a particular series of Debt
Securities, will be subordinated obligations of CP&L (the "Subordinated Debt
Securities"). Except as may otherwise be described in the Prospectus Supplement,
separate Indentures will be used for Subordinated Debt Securities (the
"Subordinated Indenture") and for Debt Securities that are not Subordinated Debt
Securities.
Reference is made to the Prospectus Supplement relating to any particular
issue of Offered Debt Securities for the following terms: (1) the title of such
Debt Securities; (2) any limit on the aggregate principal amount of such Debt
Securities or the series of which they are a part; (3) the date or dates on
which the principal of any of such Debt Securities will be
6
<PAGE>
payable; (4) the rate or rates (which may be fixed or variable) and/or the
method of determination of such rate or rates at which any of such Debt
Securities will bear interest, if any, the date or dates from which any such
interest will accrue, the Interest Payment Dates on which any such interest will
be payable and the Regular Record Date for any such interest payable on any
Interest Payment Date; (5) the place or places where (i) the principal of,
premium, if any, and interest on any of such Debt Securities will be payable,
(ii) registration of transfer of such Debt Securities may be effected, (iii)
exchanges of such Debt Securities may be effected and (iv) notices and demands
to or upon CP&L in respect of such Debt Securities may be served; the Security
Registrar for such Debt Securities and, if such is the case, that the principal
of such Debt Securities shall be payable without presentment or surrender
thereof; (6) the period or periods within which, or the date or dates on which,
the price or prices at which and the terms and conditions upon which any of such
Debt Securities may be redeemed, in whole or in part, at the option of CP&L; (7)
the obligation or obligations, if any, of CP&L to redeem or purchase any of such
Debt Securities pursuant to any sinking fund or other mandatory redemption
provisions or at the option of the Holder thereof, and the period or periods
within which, or the date or dates on which, the price or prices at which and
the terms and conditions upon which any of such Debt Securities shall be
redeemed or purchased, in whole or in part, pursuant to such obligation, and
applicable exceptions to the requirements of a notice of redemption in the case
of mandatory redemption or redemption at the option of the Holder; (8) the
denominations in which any of such Debt Securities will be issuable, if other
than denominations of $1,000 and any integral multiple thereof; (9) if the
amount payable in respect of principal of or any premium or interest on any of
such Debt Securities may be determined with reference to an index or other fact
or event ascertainable outside the Indenture, the manner in which such amounts
will be determined; (10) if other than the currency of the United States, the
currency or currencies, including composite currencies in which the principal of
or any premium or interest on any of such Debt Securities will be payable; (11)
if the principal of or any premium or interest on any of such Debt Securities is
to be payable, at the election of CP&L or the Holder thereof, in a coin or
currency other than in which such Debt Securities are stated to be payable, the
period or periods within which and the terms and conditions upon which, such
election is to be made; (12) if other than the principal amount thereof, the
portion of the principal amount of any of such Debt Securities which shall be
payable upon declaration of acceleration of the Maturity thereof; (13) if the
principal of or premium or interest on such Debt Securities are to be payable,
or are to be payable at the election of CP&L or a Holder thereof, in securities
or other property, the type and amount of such securities or other property, or
the formulary or other method or other means by which such amount shall be
determined, and the period or periods within which, and the terms and conditions
upon which, any such election may be made; (14) the terms, if any, pursuant to
which such Debt Securities may be converted into or exchanged for shares of
capital stock or other securities of CP&L or any other Person; (15) the
obligations or instruments, if any, which shall be considered to be Eligible
Obligations in respect of such Debt Securities denominated in a currency other
than Dollars or in a composite currency, and any additional or alternative
provisions for the reinstatement of CP&L's indebtedness in respect of such Debt
Securities after the satisfaction and discharge thereof; (16) if such Debt
Securities are to be issued in global form, (i) any limitations on the rights of
the Holder or Holders of such Debt Securities to transfer or exchange the same
or to obtain the registration of transfer thereof, (ii) any limitations on the
rights of the Holder or Holders thereof to obtain certificates therefor in
definitive form in lieu of temporary form and (iii) any and all other matters
incidental to such Debt Securities; (17) if such Debt Securities are to be
issuable as bearer securities; (18) any limitations on the rights of the Holders
of such Debt Securities to transfer or exchange such Debt Securities or to
obtain the registration of transfer thereof, and if a service charge will be
made for the registration of transfer or exchange of such Debt Securities, the
amount or terms thereof; (19) any exceptions to the provisions governing
payments due on legal holidays or any variations in the definition of Business
Day with respect to such Debt Securities; (20) any addition to the Events of
Default applicable to any of such Debt Securities and any addition to the
covenants of CP&L for the benefit of the Holders of such Debt Securities; and
(21) any other terms of such Debt Securities of such series, or any Tranche
thereof, not inconsistent with the provisions of the Indenture. (Section 301).
Debt Securities may be sold at a substantial discount below their principal
amount. Certain special United States federal income tax considerations (if any)
applicable to Debt Securities sold at an original issue discount may be
described in the applicable Prospectus Supplement. In addition, certain special
United States federal income tax or other considerations (if any) applicable to
any Debt Securities which are denominated in a currency or currency unit other
than Dollars may be described in the applicable Prospectus Supplement.
Except as may otherwise be described in the Prospectus Supplement, the
covenants contained in the Indenture would not afford Holders of Debt Securities
protection in the event of a highly-leveraged transaction involving CP&L.
7
<PAGE>
SUBORDINATION
If so provided in the applicable Prospectus Supplement, the Subordinated
Debt Securities will be subordinate and junior in right of payment to all Senior
Indebtedness of CP&L.
No payment of principal of (including redemption and sinking fund
payments), premium, if any, or interest on, the Subordinated Debt Securities may
be made (i) upon certain events of bankruptcy, insolvency or reorganization,
(ii) if any Senior Indebtedness is not paid when due, (iii) if any other default
has occurred permitting the holders of Senior Indebtedness to accelerate the
maturity thereof and, in such case, any applicable grace period with respect to
such default has ended and, with respect to (ii) and (iii), such default has not
been cured or waived, or (iv) if the maturity of any Senior Indebtedness has
been accelerated because of an Event of Default. Upon any distribution of assets
of CP&L to creditors upon any dissolution, winding-up, liquidation or
reorganization, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all principal of, and premium, if any, and
interest due or to become due on, all Senior Indebtedness must be paid in full
before the Holders of the Subordinated Debt Securities are entitled to receive
or retain any payment. (Section 1502). The rights of the Holders of the
Subordinated Debt Securities will be subrogated to the rights of the Holders of
Senior Indebtedness to receive payments or distributions applicable to Senior
Indebtedness until all amounts owing on the Subordinated Debt Securities are
paid in full. (Section 1504).
The term "Senior Indebtedness" is defined in the Subordinated Indenture to
mean obligations (other than non-recourse obligations and the indebtedness
issued under the Subordinated Indenture) of, or guaranteed or assumed by, CP&L
for borrowed money (including both senior and subordinated indebtedness for
borrowed money (other than the subordinated Debt Securities)) or for the payment
of money relating to any lease which is capitalized on the consolidated balance
sheet of CP&L and its subsidiaries in accordance with generally accepted
accounting principles as in effect from time to time, or indebtedness evidenced
by bonds, debentures, notes or other similar instruments, and in each case,
amendments, renewals, extensions, modifications and refundings of any such
indebtedness or obligations, whether existing as of the date of the Subordinated
Indenture or subsequently incurred by CP&L.
The Subordinated Indenture does not limit the aggregate amount of Senior
Indebtedness that CP&L may issue. As of March 31, 1995, outstanding Senior
Indebtedness of CP&L aggregated approximately $3.1 billion.
FORM, EXCHANGE, AND TRANSFER
Unless otherwise specified in the applicable Prospectus Supplement, the
Debt Securities of each series will be issuable only in fully registered form
without coupons and in denominations of $1,000 and any integral multiple
thereof. (Sections 201 and 302).
At the option of the Holder, subject to the terms of the Indenture and the
limitations applicable to global securities, Debt Securities of any series will
be exchangeable for other Debt Securities of the same series, of any authorized
denomination and of like tenor and aggregate principal amount. (Section 305).
Subject to the terms of the Indenture and the limitations applicable to
global securities, Debt Securities may be presented for exchange as provided
above or for registration of transfer (duly endorsed or accompanied by a duly
executed instrument of transfer) at the office of the Security Registrar or at
the office of any transfer agent designated by CP&L for such purpose. CP&L may
designate itself the Security Registrar. No service charge will be made for any
registration of transfer or exchange of Debt Securities, but CP&L may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. Such transfer or exchange will be effected upon
the Security Registrar or such transfer agent, as the case may be, being
satisfied with the documents of title and identity of the person making the
request. (Section 305). Any transfer agent (in addition to the Security
Registrar) initially designated by CP&L for any Debt Securities will be named in
the applicable Prospectus Supplement. CP&L may at any time designate additional
transfer agents or rescind the designation of any transfer agent or approve a
change in the office through which any transfer agent acts, except that CP&L
will be required to maintain a transfer agent in each Place of Payment for the
Debt Securities of each series. (Section 602).
CP&L will not be required to (i) issue, register the transfer of, or
exchange any Debt Security or any Tranche thereof during a period beginning at
the opening of business 15 days before the day of mailing of a notice of
redemption of any such Debt Security called for redemption and ending at the
close of business on the day of such mailing or (ii) register the transfer of or
exchange any Debt Security so selected for redemption, in whole or in part,
except the unredeemed portion of any such Debt Security being redeemed in part.
(Section 305).
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PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of interest on a Debt Security on any Interest Payment Date will be made to the
person in whose name such Debt Security (or one or more Predecessor Securities)
is registered at the close of business on the Regular Record Date for such
interest. (Section 307).
Unless otherwise indicated in the applicable Prospectus Supplement,
principal of and any premium and interest on the Debt Securities of a particular
series will be payable at the office of such Paying Agent or Paying Agents as
CP&L may designate for such purpose from time to time. Unless otherwise
indicated in the applicable Prospectus Supplement, the corporate trust office of
the Trustee in New York City will be designated as CP&L's sole Paying Agent for
payments with respect to Debt Securities of each series. Any other Paying Agents
initially designated by CP&L for the Debt Securities of a particular series will
be named in the applicable Prospectus Supplement. CP&L may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent or
approve a change in the office through which any Paying Agent acts, except that
CP&L will be required to maintain a Paying Agent in each Place of Payment for
the Debt Securities of a particular series. (Section 602).
All moneys paid by CP&L to a Paying Agent for the payment of the principal
of or any premium or interest on any Debt Security which remain unclaimed at the
end of two years after such principal, premium or interest has become due and
payable will be repaid to CP&L, and the Holder of such Debt Security thereafter
may look only to CP&L for payment thereof. (Section 603).
REDEMPTION
Any terms for the optional or mandatory redemption of Debt Securities will
be set forth in the applicable Prospectus Supplement or a supplement thereto.
Except as shall otherwise be provided in the applicable Prospectus Supplement
with respect to Debt Securities that are redeemable at the option of the Holder,
Debt Securities will be redeemable only upon notice by mail not less than 30 nor
more than 60 days prior to the date fixed for redemption, and, if less than all
the Debt Securities of a series, or any Tranche thereof, are to be redeemed, the
particular Debt Securities to be redeemed will be selected by such method as
shall be provided for any particular series, or in the absence of any such
provision, by such method of random selection as the Security Registrar deems
fair and appropriate. (Section 403 and 404).
Any notice of redemption at the option of CP&L may state that such
redemption will be conditional upon receipt by the Paying Agent or Agents, on or
prior to the dated fixed for such redemption, of money sufficient to pay the
principal of and premium, if any, and interest, if any, on such Debt Securities
and that if such money has not been so received, such notice will be of no force
and effect and CP&L will not be required to redeem such Debt Securities.
(Section 404).
CONSOLIDATION, MERGER, AND SALE OF ASSETS
CP&L may not consolidate with or merge into any other person or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, unless (i) the corporation formed by such consolidation or into which
CP&L is merged or the Person which acquires by conveyance or transfer, or which
leases, the property and assets of CP&L substantially as an entirety shall be a
Person organized and validly existing under the laws of any domestic
jurisdiction and such Person expressly assumes CP&L's obligations on the Debt
Securities and under the Indenture, (ii) immediately after giving effect to the
transaction, no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall have occurred and be
continuing, and (iii) CP&L will have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel as provided in the Indenture. (Section
1101).
EVENTS OF DEFAULT
Each of the following will constitute an Event of Default under the
Indenture with respect to Debt Securities of any series: (a) failure to pay any
interest on any Debt Securities of such series within 60 days after the same
becomes due and payable; (b) failure to pay principal or premium, if any, on any
Debt Security of such series within three Business Days after the same becomes
due and payable; (c) failure to perform or breach of any other covenant or
warranty of CP&L in the Indenture (other than a covenant or warranty of CP&L in
the Indenture solely for the benefit of one or more series of Debt Securities
other than such series) for 60 days after written notice to CP&L by the Trustee,
or to CP&L and the Trustee by the Holders of at least 33% in principal amount of
the Debt Securities of such series outstanding under the Indenture as provided
in the Indenture; (d) certain events of bankruptcy, insolvency or
reorganization; and (e) any other Event of Default specified in the applicable
Prospectus Supplement with respect to Debt Securities of particular series.
(Section 801).
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No Event of Default with respect to the Debt Securities necessarily
constitutes an Event of Default with respect to the Debt Securities of any other
series issued under the Indenture.
If an Event of Default with respect to any series of Debt Securities occurs
and is continuing, then either the Trustee or the Holders of not less than 33%
in principal amount of the Outstanding Debt Securities of such series may
declare the principal amount (or if the Debt Securities of such series are
discount notes or similar Debt Securities, such portion of the principal amount
as may be specified in the applicable Prospectus Supplement) of all of the Debt
Securities of such series to be due and payable immediately; provided, however,
that if an Event of Default occurs and is continuing with respect to more than
one series of Debt Securities, the Trustee or the Holders of not less than 33%
in aggregate principal amount of the Outstanding Debt Securities of all such
series, considered as one class, may make such declaration of acceleration and
not the Holders of the Debt Securities of any one of such series.
At any time after the declaration of acceleration with respect to the Debt
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained, the Event or Events of Default
giving rise to such declaration of acceleration will, without further act, be
deemed to have been waived, and such declaration and its consequences will,
without further act, be deemed to have been rescinded and annulled, if
(a) CP&L has paid or deposited with the Trustee a sum sufficient to pay
(1) all overdue interest on all Debt Securities of such series;
(2) the principal of and premium, if any, on any Debt Securities of
such series which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates prescribed therefor
in such Debt Securities;
(3) interest upon overdue interest at the rate or rates prescribed
therefor in such Debt Securities, to the extent that payment of such
interest is lawful; and
(4) all amounts due to the Trustee under the Indenture;
(b) any other Event or Events of Default with respect to the Debt
Securities of such series, other than the nonpayment of the principal of the
Debt Securities of such series which has become due solely by such declaration
of acceleration, have been cured or waived as provided in the Indenture.
(Section 802).
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders, unless such Holders
shall have offered to the Trustee reasonable indemnity. (Section 903). Subject
to such provisions for the indemnification of the Trustee, the Holders of a
majority in principal amount of the Outstanding Debt Securities of any series
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee, with respect to the Debt Securities of that
series. (Section 812).
No Holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the Indenture, or for the appointment of a
receiver or a trustee, or for any other remedy thereunder, unless (i) such
Holder has previously given to the Trustee written notice of a continuing Event
of Default with respect to the Debt Securities of such series, (ii) the Holders
of not less than a majority in aggregate principal amount of the Outstanding
Debt Securities of such series have made written request to the Trustee, and
such Holder or Holders have offered reasonable indemnity to the Trustee to
institute such proceeding as trustee and (iii) the Trustee has failed to
institute such proceeding, and has not received from the Holders of a majority
in aggregate principal amount of the Outstanding Debt Securities of that series
a direction inconsistent with such request, within 60 days after such notice,
request and offer. (Section 807). However, such limitations do not apply to a
suit instituted by a Holder of a Debt Security for the enforcement of payment of
the principal of or any premium or interest on such Debt Security on or after
the applicable due date specified in such Debt Security. (Section 808).
CP&L will be required to furnish to the Trustee annually a statement by an
appropriate officer as to such officer's knowledge of CP&L's compliance with all
conditions and covenants under the Indenture, such compliance to be determined
without regard to any period of grace or requirement of notice under the
Indenture. (Section 606).
MODIFICATION AND WAIVER
Without the consent of any Holder of Debt Securities, CP&L and the Trustee
may enter into one or more supplemental indentures for any of the following
purposes: (a) to evidence the assumption by any permitted successor to CP&L of
the
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covenants of CP&L in the Indenture and the Debt Securities; or (b) to add one or
more covenants of CP&L or other provisions for the benefit of the Holders of all
or any series of Outstanding Debt Securities or to surrender any right or power
conferred upon CP&L by the Indenture; or (c) to add any additional Events of
Default with respect to all or any series of Outstanding Debt Securities; or (d)
to change or eliminate any provision of the Indenture or to add any new
provision to the Indenture, provided that if such change, elimination or
addition will adversely affect the interests of the Holders of Debt Securities
of any series in any material respect, such change, elimination or addition will
become effective with respect to such series only when there is no Debt Security
of such series remaining Outstanding under the Indenture; or (e) to provide
collateral security for the Debt Securities; or (f) to establish the form or
terms of Debt Securities of any series as permitted by the Indenture; or (g) to
evidence and provide for the acceptance of appointment of a successor Trustee
under the Indenture with respect to the Debt Securities of one or more series
and to add to or change any of the provisions of the Indenture as shall be
necessary to provide for or to facilitate the administration of the trusts under
the Indenture by more than one trustee; or (h) to provide for the procedures
required to permit the utilization of a noncertificated system of registration
for any series of Debt Securities; or (i) to change any place where (1) the
principal of and premium, if any, and interest, if any, on any Debt Securities
shall be payable, (2) any Debt Securities may be surrendered for registration of
transfer or exchange and (3) notices and demands to or upon CP&L in respect of
Debt Securities and the Indenture may be served; or (j) to cure any ambiguity or
inconsistency or to make or change any other provisions with respect to matters
and questions arising under the Indenture, provided such changes or additions
shall not adversely affect the interests of the Holders of Debt Securities of
any series in any material respect. (Section 1201).
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Debt Securities of any series may waive compliance by CP&L with
certain restrictive provisions of the Indenture. (Section 607). The Holders of a
majority in principal amount of the Outstanding Debt Securities of any series
may waive any past default under the Indenture, except a default in the payment
of principal, premium, or interest and certain covenants and provisions of the
Indenture that cannot be modified or be amended without the consent of the
Holder of each Outstanding Debt Security of such series affected. (Section 813).
Without limiting the generality of the foregoing, if the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), is amended after the date
of the Indenture in such a way as to require changes to the Indenture or the
incorporation therein of additional provisions or so as to permit changes to, or
the elimination of, provisions which, at the date of the Indenture or at any
time thereafter, were required by the Trust Indenture Act to be contained in the
Indenture, the Indenture will be deemed to have been amended so as to conform to
such amendment or to effect such changes or elimination, and CP&L and the
Trustee may, without the consent of any Holders, enter into one or more
supplemental indentures to evidence or effect such amendment. (Section 1201.)
Except as provided above, the consent of the Holders of not less than a
majority in aggregate principal amount of the Debt Securities of all series then
Outstanding, considered as one class, is required for the purpose of adding any
provisions to, or changing in any manner, or eliminating any of the provisions
of, the Indenture pursuant to one or more supplemental indentures; provided,
however, that if less than all of the series of Debt Securities Outstanding are
directly affected by a proposed supplemental indenture, then the consent only of
the Holders of a majority in aggregate principal amount of Outstanding Debt
Securities of all series so directly affected, considered as one class, will be
required; and provided, further, that if the Debt Securities of any series have
been issued in more than one Tranche and if the proposed supplemental indenture
directly affects the rights of the Holders of one or more, but less than all,
such Tranches, then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Debt Securities of all Tranches so directly
affected, considered as one class, will be required; and provided further, that
no such amendment or modification may (a) change the Stated Maturity of the
principal of, or any installment of principal of or interest on, any Debt
Security, or reduce the principal amount thereof or the rate of interest thereon
(or the amount of any installment of interest thereon) or change the method of
calculating such rate or reduce any premium payable upon the redemption thereof,
or reduce the amount of the principal of any Discount Security that would be due
and payable upon a declaration of acceleration of Maturity or change the coin or
currency (or other property) in which any Debt Security or any premium or the
interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity of any Debt
Security (or, in the case of redemption, on or after the redemption date)
without, in any such case, the consent of the Holder of such Debt Security, (b)
reduce the percentage in principal amount of the Outstanding Debt Securities of
any series, or any Tranche thereof, the consent of the Holders of which is
required for any such supplemental indenture, or the consent of the Holders of
which is required for any waiver of compliance with any provision of the
Indenture or any default thereunder and its consequences, or reduce the
requirements for quorum or voting, without, in any such case, the consent of the
Holder of each Outstanding Debt
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Security of such series or Tranche, or (c) modify certain of the provisions of
the Indenture relating to supplemental indentures, waivers of certain covenants
and waivers of past defaults with respect to the Debt Securities of any series,
or any Tranche thereof, without the consent of the Holder of each Outstanding
Debt Security affected thereby. A supplemental indenture which changes or
eliminates any covenant or other provision of the Indenture which has expressly
been included solely for the benefit of one or more particular series of Debt
Securities or one or more Tranches thereof, or modifies the rights of the
Holders of Debt Securities of such series or Tranches with respect to such
covenant or other provision, will be deemed not to affect the rights under the
Indenture of the Holders of the Debt Securities of any other series or Tranche.
(See Section 1202.)
The Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities have given or
taken any direction, notice, consent, waiver, or other action under the
Indenture as of any date, (i) Debt Securities owned by CP&L or any other obligor
upon the Securities or any Affiliate of CP&L or of such other obligor (unless
CP&L, such Affiliate or such obligor owns all Securities Outstanding under this
Indenture, or all Outstanding Securities of each such series and each such
Tranche, as the case may be, determined without regard to this clause (i)) shall
be disregarded and deemed not to be Outstanding; (ii) the principal amount of a
Discount Security that shall be deemed to be Outstanding for such purposes shall
be the amount of the principal thereof that would be due and payable as of the
date of such determination upon a declaration of acceleration of the Maturity
thereof as provided in the Indenture; and (iii) the principal amount of a Debt
Security denominated in one or more foreign currencies or a composite currency
that will be deemed to be Outstanding will be the Dollar equivalent, determined
as of such date in the manner prescribed for such Debt Security, of the
principal amount of such Debt Security (or, in the case of a Debt Security
described in clause (ii) above, of the amount described in such clause).
(Section 101).
If CP&L shall solicit from Holders any request, demand, authorization,
direction, notice, consent, election, waiver or other Act, CP&L may, at its
option, by Board Resolution, fix in advance a record date for the determination
of Holders entitled to give such request, demand, authorization, direction,
notice, consent, election, waiver or other Act, but CP&L shall have no
obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, election, waiver or other Act may be
given before or after such record date, but only the Holders of record at the
close of business on the record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of the
Outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Securities shall be computed as of the record date.
Any request, demand, authorization, direction, notice, consent, election, waiver
or other Act of a Holder shall bind every future Holder of the same Security and
the Holder of every Security issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustee or the Company in reliance thereon, whether
or not notation of such action is made upon such Security. (Section 104).
DEFEASANCE
Unless otherwise indicated in the applicable Prospectus Supplement, any
Debt Security, or any portion of the principal amount thereof, will be deemed to
have been paid for purposes of the Indenture, and, at CP&L's election, the
entire indebtedness of CP&L in respect thereof will be deemed to have been
satisfied and discharged, if there has been irrevocably deposited with the
Trustee or any Paying Agent (other than CP&L), in trust: (a) money in an amount
which will be sufficient, or (b) Eligible Obligations (as described below),
which do not contain provisions permitting the redemption or other prepayment
thereof at the option of the issuer thereof, the principal of and the interest
on which when due, without any regard to reinvestment thereof, will provide
monies which, together with money, if any, deposited with or held by the Trustee
or such Paying Agent, will be sufficient, or (c) a combination of (a) and (b)
which will be sufficient, to pay when due the principal of and premium, if any,
and interest, if any, due and to become due on such Debt Security or Securities
or portions thereof. (Section 701). For this purpose, unless otherwise indicated
in the applicable Prospectus Supplement, Eligible Obligations include direct
obligations of, or obligations unconditionally guaranteed by, the United States,
entitled to the benefit of the full faith and credit thereof, and certificates,
depositary receipts or other instruments which evidence a direct ownership
interest in such obligations or in any specific interest or principal payments
due in respect thereof.
RESIGNATION OF TRUSTEE
The Trustee may resign at any time by giving written notice thereof to CP&L
or may be removed at any time by Act of the Holders of a majority in principal
amount of Debt Securities then Outstanding delivered to the Trustee and CP&L. No
resignation or removal of the Trustee and no appointment of a successor trustee
will become effective until the acceptance of appointment by a successor trustee
in accordance with the requirements of the Indenture. So long as no Event of
Default or
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event which, after notice or lapse of time, or both, would become an Event of
Default has occurred and is continuing and except with respect to a Trustee
appointed by Act of the Holders, if CP&L has delivered to the Trustee a
resolution of its Board of Directors appointing a successor trustee and such
successor has accepted such appointment in accordance with the terms of the
Indenture, the Trustee will be deemed to have resigned and the successor will be
deemed to have been appointed as trustee in accordance with the Indenture.
(Section 910).
NOTICES
Notices to Holders of Debt Securities will be given by mail to the
addresses of such Holders as they may appear in the Security Register. (Section
106).
TITLE
CP&L, the Trustee, and any agent of CP&L or the Trustee may treat the
Person in whose name a Debt Security is registered as the absolute owner thereof
(whether or not such Debt Security may be overdue) for the purpose of making
payment and for all other purposes. (Section 308).
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the law of the State of New York. (Section 112).
REGARDING THE TRUSTEE
The Trustee under the Indenture is Bankers Trust Company. Bankers Trust
Company is the indenture trustee under a certain indenture of trust entered into
in connection with a lease financing in which CP&L is the lessee of eleven
turbine generator units and related property.
GLOBAL SECURITIES
Some or all of the New Bonds or Debt Securities of any series may be
represented, in whole or in part, by one or more global securities (each, a
"Global Security") which will have an aggregate principal amount equal to that
of the New Bonds or Debt Securities represented thereby. Each Global Security
will be registered in the name of a depositary (the "Depositary") or a nominee
thereof identified in the applicable Prospectus Supplement, will be deposited
with such Depositary or nominee or a custodian therefor and will bear a legend
regarding the restrictions on exchanges and registration of transfer thereof
referred to below and any such other matters as may be provided for pursuant to
the Mortgage or Indenture.
As long as the Depositary, or its nominee, is the registered holder of a
Global Security, the Depositary or such nominee, as the case may be, will be
considered the sole owner and holder of such Global Security and the Securities
represented thereby for all purposes under the Securities and the Mortgage and
Indenture. Except in limited circumstances, owners of beneficial interests in a
Global Security will not be entitled to have such Global Security or any
Securities represented thereby registered in their names, will not receive or be
entitled to receive physical delivery of certificated Securities in exchange
therefor and will not be considered to be the owners or holders of such Global
Security or any Securities represented thereby for any purpose under the
Securities or the Mortgage or Indenture. All payments of principal of and any
premium and interest on a Global Security will be made to the Depositary or its
nominee, as the case may be, as the Holder thereof. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of such securities in definitive form. These laws may impair the
ability to transfer beneficial interests in a Global Security.
Ownership of beneficial interests in a Global Security will be limited to
institutions that have accounts with the Depositary or its nominee
("participants") and to persons that may hold beneficial interests through
participants. In connection with the issuance of any Global Security, the
Depositary will credit, on its book-entry registration and transfer system, the
respective principal amounts of Securities represented by the Global Security to
the accounts of its participants. Ownership of beneficial interests in a Global
Security will be shown only on, and the transfer of those ownership interests
will be effected only through, records maintained by the Depositary (with
respect to participants' interests) or any such participant (with respect to
interests of persons held by such participants on their behalf). Payments,
transfers, exchanges, and others matters relating to beneficial interests in a
Global Security may be subject to various policies and procedures adopted by the
Depositary from time to time. None of CP&L, the Trustees under the Mortgage or
the Trustee under the Indenture, or any agents of each of the foregoing, will
have any responsibility or liability for any aspect of the Depositary's or any
participant's records
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relating to, or for payments made on account of, beneficial interests in a
Global Security, or for maintaining, supervising, or reviewing any records
relating to such beneficial interests.
EXPERTS AND LEGALITY
The financial statements and the related financial statement schedules
incorporated in this Prospectus by reference from CP&L's 1994 Annual Report on
Form 10-K have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report, which is incorporated herein by reference, and have been
so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
The statements made as to matters of law and legal conclusions in the
documents incorporated by reference herein and as set forth under "Description
of New Bonds" and "Description of Debt Securities" herein have been reviewed by
Richard E. Jones, Esq., Senior Vice President, General Counsel and Secretary for
CP&L, and are set forth in reliance upon his opinion as an expert.
The legality of the securities offered hereby will be passed upon for CP&L
by Richard E. Jones, Esq., Senior Vice President, General Counsel and Secretary
of CP&L, Raleigh, North Carolina, and by Reid & Priest LLP, 40 West 57th Street,
New York, New York, counsel to CP&L, and for any underwriter, dealer or agent by
Winthrop, Stimson, Putnam & Roberts, One Battery Park Plaza, New York, New York.
However, all matters pertaining to the organization of CP&L, titles and local
law will be passed upon only by Richard E. Jones, Esq., who may rely as to all
matters of South Carolina law on the opinion of Paulling & James, Darlington,
South Carolina. As of January 31, 1995, Richard E. Jones, Esq., owned 10,074
shares of CP&L's Common Stock. Mr. Jones is acquiring additional shares of
CP&L's Common Stock at regular intervals as a participant in CP&L's Stock
Purchase-Savings Plan.
PLAN OF DISTRIBUTION
CP&L may sell the Securities in any of three ways: (i) through underwriters
or dealers; (ii) directly to a limited number of institutional purchasers or to
a single purchaser; or (iii) through agents. The Prospectus Supplement with
respect to the Offered Securities sets forth the terms of the offering of the
Offered Securities, including the name or names of any underwriters, dealers or
agents, the purchase price of the Offered Securities and the net proceeds to
CP&L from such sale, any underwriting discounts and other items constituting
underwriters' compensation, any initial public offering price and any discounts
or concessions allowed or reallowed or paid to dealers. Any initial public
offering price and any discounts or concessions allowed or reallowed or paid to
dealers may be changed from time to time.
If underwriters are used in the sale, such Securities will be acquired by
the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
Securities may be offered through dealers or underwriters. Unless otherwise set
forth in the Prospectus Supplement, the obligations of any underwriter or
underwriters to purchase the Offered Securities will be subject to certain
conditions precedent and such underwriter or underwriters will be obligated to
purchase all the Offered Securities if any are purchased, except that, in
certain cases involving a default by one or more underwriters, less than all of
the Offered Securities may be purchased.
Offered Securities may be sold directly by CP&L or through agents
designated by CP&L from time to time. Any agent involved in the offer or sale of
the Offered Securities in respect of which this Prospectus is delivered will be
named, and any commissions payable by CP&L to such agent will be set forth, in
the Prospectus Supplement. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a best efforts basis for the period
of its appointment.
If so indicated in the Prospectus Supplement, CP&L will authorize agents,
underwriters or dealers to solicit offers by certain specified institutions to
purchase Offered Securities from CP&L at the public offering price set forth in
the Prospectus Supplement pursuant to delayed delivery contracts providing for
payment and delivery on a specified date in the future. Such contracts will be
subject to those conditions set forth in the Prospectus Supplement, and the
Prospectus Supplement will set forth the commission payable for solicitation of
such contracts.
Agents and underwriters may be entitled under agreements entered into with
CP&L to indemnification by CP&L against certain civil liabilities, including
liabilities under the Securities Act of 1933, as amended.
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