<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 2, 1994
REGISTRATION STATEMENT NO. 33-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-3
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
------------------
DUKE POWER COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NORTH CAROLINA
(STATE OF INCORPORATION)
56-0205520
(I.R.S. EMPLOYER IDENTIFICATION NO.)
422 SOUTH CHURCH STREET
CHARLOTTE, NORTH CAROLINA 28242-0001
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)(ZIP CODE)
704-594-0887
(REGISTRANT'S TELEPHONE NUMBER)
------------------
RICHARD J. OSBORNE
Vice President and Chief Financial Officer
422 South Church Street
Charlotte, North Carolina 28242-0001
Telephone No. 704-382-5159
JOHN SPUCHES
Dewey Ballantine
1301 Avenue of the Americas
New York, New York 10019-6092
Telephone No. 212-259-7700
(NAMES, ADDRESSES AND TELEPHONE NUMBERS OF AGENTS FOR SERVICE)
------------------
Copy to:
PETER H. JAKES
Willkie Farr & Gallagher
153 East 53rd Street
New York, New York 10022
Telephone No. 212-821-8230
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /
------------------
CALCULATION OF REGISTRATION FEE
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<TABLE>
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT OFFERING AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE
- ------------------------------------------------------------------------------------------------
Common Stock, without par value 16,000,000 shares $38.69 $619,040,000 $213,463
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</TABLE>
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(1) Includes 2,000,000 shares which may be sold if the over-allotment options
granted to the Underwriters are exercised. See "Underwriting."
(2) Calculated pursuant to Rule 457(c) based on the average of the high and low
sale prices per share as reported on the New York Stock Exchange Composite
Tape on March 1, 1994, solely for the purpose of calculating the
registration fee.
------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE> 2
EXPLANATORY NOTE
This Registration Statement contains two forms of prospectus: one to be
used in connection with a United States offering (the "U.S. Prospectus") and one
to be used in connection with a concurrent international offering (the
"International Prospectus"). The U.S. Prospectus and the International
Prospectus will be identical in all respects except that they will contain
different front and back cover pages and different descriptions of the plan of
distribution under the caption "Underwriting" and the International Prospectus
will contain an additional section under the caption "Certain United States Tax
Consequences to Non-United States Holders." The U.S. Prospectus is included
herein and is followed by those pages to be used in the International Prospectus
which differ from, or are in addition to, those in the U.S. Prospectus. Each of
the pages for the International Prospectus included herein has been labeled
"Alternate Page for International Prospectus."
<PAGE> 3
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.
SUBJECT TO COMPLETION, DATED MARCH 2, 1994
14,000,000 SHARES
DUKE POWER COMPANY
COMMON STOCK
(WITHOUT PAR VALUE)
------------------------
Of the 14,000,000 shares of Common Stock offered, 11,200,000 shares are
being offered hereby in the United States and 2,800,000 shares are being offered
in a concurrent international offering outside the United States. The initial
public offering price and the aggregate underwriting discount per share are
identical for both offerings. See "Underwriting."
All of the shares of Common Stock offered hereby are being sold by the
Selling Shareholder. See "Selling Shareholder." The Company will not receive any
of the proceeds from the sale of the shares offered hereby.
The Common Stock is listed on the New York Stock Exchange under the symbol
"DUK." The last sale price of the Common Stock on March 1, 1994 as reported on
the New York Stock Exchange Composite Tape was $38.50 per share. See "Common
Stock Price Range and Dividends."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO SELLING
OFFERING PRICE DISCOUNT(1) SHAREHOLDER(2)
-------------- ------------ -------------------
<S> <C> <C> <C>
Per Share............................. $ $ $
Total(3).............................. $ $ $
</TABLE>
- ---------------
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933. See
"Underwriting."
(2) Before deducting estimated expenses of $440,000 payable by the Selling
Shareholder. Expenses payable by the Company are estimated to be $20,000.
(3) The Selling Shareholder has granted the Underwriters an option for 30 days
to purchase up to an additional 2,000,000 shares at the initial public
offering price per share, less the underwriting discount, solely to cover
over-allotments. If such option is exercised in full, the total initial
public offering price, underwriting discount and proceeds to the Selling
Shareholder will be $ , $ and $ , respectively. See
"Underwriting."
------------------------
The shares offered hereby are offered severally by the U.S. Underwriters,
as specified herein, subject to receipt and acceptance by them and subject to
their right to reject any order in whole or in part. It is expected that
certificates for the shares will be ready for delivery in New York, New York, on
or about March , 1994.
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
MORGAN STANLEY & CO.
INCORPORATED
------------------------
The date of this Prospectus is March , 1994
<PAGE> 4
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Information, as of particular dates, concerning
directors and officers, their remuneration, the principal holders of securities
of the Company and any material interest of such persons in transactions with
the Company is disclosed in proxy statements distributed to shareholders of the
Company and filed with the Commission. Reports, proxy statements and other
information filed with the Commission by the Company can be inspected and copied
at the public reference facilities maintained by the Commission at Room 1024,
450 Fifth Street, N.W., Washington, D.C., Suite 1400, Northwestern Atrium
Center, 500 West Madison Street, Chicago, Ill. and Seven World Trade Center,
13th Floor, New York, N.Y. Copies of such material can also be obtained at
prescribed rates from the Public Reference Section of the Commission at its
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The Common
Stock and certain other securities of the Company are listed on the New York
Stock Exchange. Reports, proxy statements and other information concerning the
Company can be inspected and copied at the library of the New York Stock
Exchange at 20 Broad Street, New York, N.Y.
------------------------
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated by reference in this Prospectus:
(1) Annual report on Form 10-K for the year ended December 31, 1992.
(2) Amendment to Form 10-K on Form 8 dated March 12, 1993.
(3) Quarterly reports on Form 10-Q for the quarters ended March 31,
1993, June 30, 1993 and September 30, 1993.
(4) Current report on Form 8-K dated February 18, 1994.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of the offering made by this Prospectus shall be deemed
to be incorporated by reference in this Prospectus and to be made a part hereof
from the date of filing of such documents; provided, however, that documents
enumerated above or subsequently filed by the Company pursuant to Section 13 of
the Exchange Act prior to the filing with the Commission of the Company's most
recent annual report on Form 10-K shall not be incorporated by reference in this
Prospectus or be a part hereof from and after the filing of such annual report
on Form 10-K.
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 also is or 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.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY OF
THIS PROSPECTUS HAS BEEN DELIVERED, UPON ORAL OR WRITTEN 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
THEREIN. REQUESTS FOR COPIES OF SUCH DOCUMENTS SHOULD BE ADDRESSED TO INVESTOR
RELATIONS DEPARTMENT, DUKE POWER COMPANY, P.O. BOX 1005, CHARLOTTE, NC
28201-1005 (TELEPHONE NO. 704-382-3853 OR 800-488-3853 (TOLL-FREE)).
------------------------
IN CONNECTION WITH THE OFFERINGS, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
2
<PAGE> 5
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and consolidated financial data incorporated by reference herein.
THE OFFERINGS
The 11,200,000 shares of Common Stock being offered in the United States
(the "United States Offering") and the 2,800,000 shares of Common Stock being
offered outside the United States (the "International Offering") are referred to
herein together as the "Offerings."
<TABLE>
<CAPTION>
<S> <C>
Common Stock offered by the Selling Shareholder(1)
United States Offering.................. 11,200,000 shares
International Offering.................. 2,800,000 shares
Over-allotment options.................. 2,000,000 shares
Total.............................. 16,000,000 shares
Common Stock outstanding before and after the
Offerings.................................. 204,859,339 shares(2)
Use of proceeds.............................. All of the shares of Common Stock offered
hereby are being sold by the Selling
Shareholder. The Company will not receive any
of the proceeds from the Offerings.
New York Stock Exchange symbol............... DUK
</TABLE>
- ---------------
(1) Assumes that the Underwriters' over-allotment options are exercised in full.
See "Underwriting."
(2) Based upon the number of shares of Common Stock outstanding as of February
28, 1994.
THE COMPANY
Business......Generation, transmission, distribution and sale of electric energy
Service Area.........Approximately 20,000 square miles in central North Carolina
and western South Carolina (Piedmont Carolinas)
Service Area Population..................................Approximately 4,800,000
Customers................................................Approximately 1,700,000
Sales during 1993 (kilowatt hours)...............76 billion (6th largest of U.S.
investor-owned utilities)
Customer Mix (kilowatt hours).........Residential (26%), General Services (22%),
Industrial (37%) and Other Energy and Wholesale (15%)
Generating Capability (kilowatts)........17,845,000 (Coal (42%), Nuclear (40>%),
Hydro and Other (18%))
Sources of Generation during 1993.....Nuclear (57%), Coal (41%), Hydro and Other
(2%)
Utility Subsidiary.............................Nantahala Power and Light Company
Non-Utility Subsidiaries...Other subsidiaries include Church Street Capital Corp
(funds management and parent company of non-regulated
subsidiaries), Crescent Resources, Inc. (real estate
development and forest management), Duke Engineering
& Services, Inc. (marketing of technical, engineering
and construction services), Duke/Fluor Daniel, a
joint venture with Fluor Daniel, Inc. (design,
construction, operation and maintenance support
primarily for coal-fired generating plants) and Duke
Energy Group, Inc. (structuring, financing and
managing of investments in electric generation and
transmission facilities).
3
<PAGE> 6
SUMMARY FINANCIAL DATA
(Amounts In Thousands Except Per Share Data)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
--------------------------
1993 1992
----------- -----------
<S> <C> <C>
Electric Revenues.................................................. $ 4,281,876 $ 3,961,484
Earnings for Common Stock.......................................... $573,986 $451,676
Average Common Shares Outstanding.................................. 204,859 204,819
Earnings per Share................................................. $2.80 $2.21
Dividends per Share
(most recent quarter-$0.47)...................................... $1.84 $1.76
Plant Construction Costs
(including nuclear fuel)......................................... $669,460 $591,826
Electric Plant, Net (at end of year)............................... $ 8,924,109 $ 8,780,123
AS OF DECEMBER 31, 1993
--------------------------
Long-Term Debt..................................................... $ 3,285,397 39%
Preferred Stocks................................................... 781,000 9
Common Stock Equity................................................ 4,337,734 52
Total Capitalization.......................................... $ 8,404,131 100%
Short-Term Notes Payable........................................... $18,000
</TABLE>
4
<PAGE> 7
THE COMPANY
The Company is engaged in the generation, transmission, distribution and
sale of electric energy in the central portion of North Carolina and the western
portion of South Carolina, comprising the area in both States known as the
Piedmont Carolinas. Its service area, approximately two-thirds of which lies in
North Carolina, covers about 20,000 square miles with an estimated population of
4,800,000 and includes a number of cities, of which the largest are Charlotte,
Greensboro, Winston-Salem and Durham in North Carolina and Greenville and
Spartanburg in South Carolina. During 1993, the Company's electric revenues
amounted to approximately $4.3 billion, of which about 70% was derived from
North Carolina and about 30% from South Carolina. The Company ranks sixth in the
United States among investor-owned utilities in kilowatt-hour sales. Its
executive offices are located in the Power Building, 422 South Church Street,
Charlotte, North Carolina 28242-0001 (Telephone No. 704-594-0887).
SERVICE AREA
The Company supplies electric service directly to approximately 1,700,000
residential, commercial and industrial customers in more than 200 cities, towns
and unincorporated communities in North Carolina and South Carolina. Electricity
is sold at wholesale to nine incorporated municipalities and to several private
utilities. In addition, in 1993 approximately 9% of total sales were made
through contractual arrangements to former wholesale municipal or cooperative
customers of the Company who had purchased portions of the Catawba Nuclear
Station (collectively, the "Other Catawba Joint Owners").
The Company's service area is undergoing increasingly diversified
industrial development. The textile, manufacture of machinery and equipment,
chemical and chemical-related industries are of major significance to the
economy of the area. Other industrial activity includes the paper and allied
products, rubber and plastic products and various other light and heavy
manufacturing and service businesses. The largest industry served by the Company
is the textile industry, which accounted for approximately $488,000,000 of the
Company's revenues for 1993, representing 11% of electric revenues and 40% of
electric industrial revenues.
RATE MATTERS
The North Carolina Utilities Commission ("NCUC") and The Public Service
Commission of South Carolina ("PSCSC") must approve the Company's rates for
retail sales within the respective states. The Federal Energy Regulatory
Commission must approve the Company's rates for sales to wholesale customers,
including the contractual arrangements between the Company and the Other Catawba
Joint Owners.
In its most recent general rate case, the NCUC authorized a jurisdictional
rate of return on common equity of 12.50% and the PSCSC authorized a
jurisdictional rate of return on common equity of 12.25%.
CONSTRUCTION PROGRAM
The Company's construction program and the estimated construction costs set
forth below are subject to continuing review and are revised from time to time
in light of changes in load forecasts, the Company's financial condition
(including cash flow, earnings and levels of rates), changing regulatory and
environmental standards, and other factors.
5
<PAGE> 8
Projected construction and nuclear fuel costs, excluding costs related to
portions of the Catawba Nuclear Station owned by the Other Catawba Joint Owners,
for each of 1994, 1995 and 1996 and for the three-year period 1994-1996, as now
scheduled, are as follows (in millions of dollars):
<TABLE>
<CAPTION>
TYPE OF FACILITIES 1994 1995 1996 TOTAL
-------------------------------------------------- ---- ---- ---- ------
<S> <C> <C> <C> <C>
Generation........................................ $475 $436 $243 $1,154
Transmission...................................... 44 49 55 148
Distribution...................................... 200 211 233 644
Other............................................. 120 120 82 322
---- ---- ---- ------
Total............................................. $839 $816 $613 $2,268
---- ---- ---- ------
---- ---- ---- ------
Nuclear Fuel...................................... $143 $123 $128 $ 394
---- ---- ---- ------
---- ---- ---- ------
</TABLE>
The Company's procedures for estimating construction costs (which include
allowance for funds used during construction) utilize, among other things, past
construction experience, current construction costs and allowances for
inflation.
The Company anticipates that approximately 86% of the projected
construction and nuclear fuel costs for the three-year period 1994-1996 will be
financed through internally generated funds.
The Company is building a combustion turbine facility in Lincoln County,
North Carolina to provide capacity at periods of peak demand. The Lincoln
Combustion Turbine Station will consist of 16 combustion turbines with a total
generating capacity of 1,184,000 KW. The estimated total cost of the facility is
approximately $500,000,000. Current plans are for ten units to begin commercial
operation by the end of 1995 and the remaining six units to begin commercial
operation before the end of 1996. The issuance in 1991 of a final air permit for
the facility by the North Carolina Division of Environmental Management has been
appealed. Legal proceedings in respect of the appeal are ongoing. The Company
believes the permit will be upheld.
RECENT DEVELOPMENTS
Earnings per share of Common Stock of the Company increased 27% from $2.21
in 1992 to $2.80 in 1993. The increase was primarily due to higher kilowatt-hour
sales and a one-time charge taken in 1992 related to a refund to North Carolina
retail customers of 32c per share.
Total electric sales for 1993 increased by 7.1%. Residential sales,
primarily driven by unusual weather conditions, increased by 9.4% and general
service sales increased by 6.9%. Industrial sales increased by 4.3% reflecting
continuing growth in the economy of the Company's service area, with textile
sales up 2.3% and other industrial sales up 5.8%.
On January 25, 1994, William H. Grigg was elected chairman, president and
chief executive officer of the Company, effective April 28, 1994. Currently vice
chairman of the Board of Directors with responsibility for developing corporate
policy and strategy, he will succeed William S. Lee, who has served as chairman
and chief executive officer of the Company since 1982. Mr. Grigg joined the
Company in 1963 and during his career has served in a number of capacities,
including executive vice president, vice president, finance, and general counsel
of the Company.
The Company experienced a new all-time peak load of 16,070,000 KW on
January 19, 1994 during extremely cold weather. The Company's previous all-time
peak load of 15,720,000 KW occurred on July 29, 1993 during unusually hot
weather. The 1992-1993 winter peak load of 13,314,000 KW occurred on February
19, 1993.
6
<PAGE> 9
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
1993 1992 1991 1990 1989
----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME (thousands)
Electric revenues(a).................. $ 4,281,876 $ 3,961,484 $ 3,816,960 $ 3,705,131 $3,692,955
Electric expenses(a).................. 3,467,811 3,236,789 3,110,137 3,062,348 2,988,355
----------- ----------- ----------- ----------- ----------
Electric operating income........... 814,065 724,695 706,823 642,783 704,600
Other income.......................... 71,269 85,007 150,905 146,740 101,826
----------- ----------- ----------- ----------- ----------
Income before interest deductions... 885,334 809,702 857,728 789,523 806,426
Interest deductions................... 258,919 301,619 274,105 251,335 234,815
----------- ----------- ----------- ----------- ----------
Net income............................ 626,415 508,083 583,623 538,188 571,611
Dividends on preferred and
preference stock.................. 52,429 56,407 54,683 52,616 52,477
----------- ----------- ----------- ----------- ----------
Earnings for common stock............. $ 573,986 $ 451,676 $ 528,940 $ 485,572 $ 519,134
----------- ----------- ----------- ----------- ----------
----------- ----------- ----------- ----------- ----------
COMMON STOCK DATA(B)
Shares of common stock
-- year-end (thousands)............. 204,859 204,859 204,699 202,584 202,563
-- average (thousands).............. 204,859 204,819 203,431 202,570 202,554
Per share of common stock
Earnings.............................. $2.80 $2.21 $2.60 $2.40 $2.56
Dividends............................. $1.84 $1.76 $1.68 $1.60 $1.52
Book value -- year-end................ $21.17 $20.26 $19.86 $18.84 $18.05
Market price -- high-low.............. $44 7/8-35 3/8 $37 1/2-31 3/8 $35-26 3/4 $32 3/8-25 1/2 $28 1/4-21 3/8
-- year-end............. $42 3/8 $36 1/8 $35 $30 5/8 $28 1/16
BALANCE SHEET DATA (thousands)
Total assets.......................... $12,193,107 $10,950,387 $10,470,615 $10,083,507 $9,542,398
Long-term debt........................ $ 3,285,397 $ 3,288,111 $ 3,159,575 $ 3,102,746 $2,822,442
Preferred stock with sinking fund
requirements........................ $ 281,000 $ 279,519 $ 228,650 $ 239,800 $ 247,825
Preferred stock without sinking fund
requirements........................ $ 500,000 $ 500,000 $ 502,016 $ 502,201 $ 427,457
</TABLE>
- ---------------
(a) Electric revenues, Electric expenses, Kilowatt-hour sales and Net
interchange and purchased power for the years 1989 and 1990 include a
reclassification for certain power transactions previously classified as Net
interchange and purchased power prior to a 1990 order of the Federal Energy
Regulatory Commission.
(b) All common stock data reflects the two-for-one split of common stock on
September 28, 1990.
NON-UTILITY SUBSIDIARY DATA
The principal non-utility subsidiaries of the Company are Church Street
Capital Corp., Crescent Resources, Inc., Duke Engineering & Services, Inc.,
Duke/Fluor Daniel (a joint venture with Fluor Daniel, Inc.) and Duke Energy
Group, Inc.
<TABLE>
<CAPTION>
1993 1992 1991
-------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Assets net of liabilities.................................. $416,613 $320,983 $221,829
Net income(a).............................................. $ 19,915 $ 22,050 $ 17,570
Number of employees........................................ 595 568 433
</TABLE>
- ---------------
(a) 1991 excludes the cumulative effect of an accounting change of $6,727,000
after tax.
7
<PAGE> 10
SELECTED OPERATING STATISTICS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Sources of Electric Energy
Millions of kilowatt-hours:
Generated -- net output:
Coal............................... 34,097 28,999 26,455 27,262 26,175
Nuclear(a)......................... 48,211 48,238 49,328 44,649 47,773
Hydro(b)........................... 1,582 1,834 1,545 1,879 1,520
Oil and Gas........................ 43 5 7 53 27
---------- ---------- ---------- ---------- ----------
Total generation................ 83,933 79,076 77,335 73,843 75,495
Purchased power and net
interchange(c)..................... 1,750 1,403 587 1,531 1,158
---------- ---------- ---------- ---------- ----------
Total output.................... 85,683 80,479 77,922 75,374 76,653
Less: Other Catawba Joint Owners'
share.............................. 13,821 14,313 12,280 11,735 12,566
Plus: Purchases from Other Catawba
Joint Owners....................... 8,810 9,466 8,525 8,658 9,809
---------- ---------- ---------- ---------- ----------
Total sources of energy......... 80,672 75,632 74,167 72,297 73,896
Line loss and Company usage.......... (4,614) (4,590) (4,280) (4,222) (4,522)
---------- ---------- ---------- ---------- ----------
Total kilowatt-hour sales(d).... 76,058 71,042 69,887 68,075 69,374
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Average Cost Per Ton of Coal Burned...... $42.21 $43.47 $45.21 $45.49 $45.13
Electric Revenues
Thousands of dollars:
Residential........................ $1,424,173 $1,312,227 $1,272,322 $1,216,945 $1,198,705
General service.................... 1,014,124 964,853 921,337 886,480 851,422
Industrial
Textile......................... 487,576 482,172 475,191 476,493 493,933
Other........................... 726,399 696,413 668,765 654,551 653,830
Other energy and wholesale(c)(e)... 476,862 460,849 441,777 391,803 449,545
Other electric revenues............ 152,742 44,970 37,568 78,859 45,520
---------- ---------- ---------- ---------- ----------
Total electric revenues(d)...... $4,281,876 $3,961,484 $3,816,960 $3,705,131 $3,692,955
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Number of Customers -- End of Year
Residential............................ 1,460,876 1,439,845 1,415,605 1,391,336 1,362,118
General service(f)..................... 232,272 227,675 222,917 224,642 216,960
Industrial
Textile.............................. 1,396 1,390 1,385 1,398 1,408
Other................................ 7,338 7,314 7,255 7,325 7,310
Other energy and wholesale(c).......... 7,957 7,773 7,605 7,405 7,249
---------- ---------- ---------- ---------- ----------
Total customers................. 1,709,839 1,683,997 1,654,767 1,632,106 1,595,045
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Average Annual Billed Revenue Per KWH
Residential............................ 7.32c 7.38c 7.10c 7.07c 7.09c
General service........................ 6.00 6.10 5.91 5.90 5.99
Industrial............................. 4.31 4.36 4.35 4.37 4.43
Other energy and wholesale(c)(e)....... 4.21 4.45 4.36 3.74 3.76
System Average Heat Rate................. 9,921 9,974 9,996 10,007 10,013
System Load Factor....................... 60.2% 60.0% 59.4% 59.9% 61.8%
</TABLE>
- ---------------
(a) Includes 100% of generation from the Catawba Nuclear Station.
(b) 1991 includes KWH of the Bad Creek Hydroelectric Station prior to commercial
operation.
(c) Kilowatt-hour sales, Electric revenues and Net interchange and purchased
power for the years 1989 and 1990 include a reclassification for certain
power transactions previously classified as Net interchange and purchased
power prior to a 1990 order of the Federal Energy Regulatory Commission.
(d) Does not reflect operating statistics, kilowatt-hour sales and revenues of
Nantahala Power and Light Company.
(e) Includes sales to Nantahala Power and Light Company.
(f) 1991 restated to eliminate certain duplicate customers.
8
<PAGE> 11
COMMON STOCK PRICE RANGE AND DIVIDENDS
The Common Stock of the Company is listed on the New York Stock Exchange
("NYSE") under the symbol "DUK." The following table sets forth the high and low
sale prices per share for the Common Stock as reported on the NYSE Composite
Tape and the cash dividends paid per share of Common Stock for the periods
indicated.
<TABLE>
<CAPTION>
CASH
DIVIDENDS
HIGH LOW PER SHARE
---- --- ---------
<S> <C> <C> <C>
1991:
First Quarter................................................ 30 3/4 26 3/4 $ 0.41
Second Quarter............................................... 29 3/8 27 1/4 0.41
Third Quarter................................................ 32 1/2 27 3/8 0.43
Fourth Quarter............................................... 35 30 1/8 0.43
1992:
First Quarter................................................ 35 31 3/8 0.43
Second Quarter............................................... 34 5/8 32 0.43
Third Quarter................................................ 36 1/2 34 1/8 0.45
Fourth Quarter............................................... 37 1/2 34 5/8 0.45
1993:
First Quarter................................................ 39 7/8 35 3/8 0.45
Second Quarter............................................... 41 3/8 37 1/8 0.45
Third Quarter................................................ 44 7/8 39 7/8 0.47
Fourth Quarter............................................... 44 39 0.47
1994:
First Quarter (through March 1).............................. 43 37 3/8
</TABLE>
For a recent reported price for the Common Stock, see the cover page of
this Prospectus.
The Company has paid cash dividends on its Common Stock in each year since
1926, and the Common Stock dividend has been increased in each of the last 18
years. A quarterly dividend of $0.47 per share was declared on January 25, 1994,
payable on March 16, 1994 to shareholders of record on February 11, 1994. The
purchasers of the shares of Common Stock offered hereby will not be entitled to
such March dividend. Future dividends will depend upon future earnings, the
financial condition of the Company and other factors affecting dividend policy
that are not presently determinable.
The Company has a Stock Purchase and Dividend Reinvestment Plan pursuant to
which holders of its Common Stock may automatically reinvest their Common Stock
dividends in shares of the Company's Common Stock. Holders who become
participants in the Plan may also make optional cash payments (not more than
$20,000 per calendar quarter) to be invested in shares of the Company's Common
Stock.
9
<PAGE> 12
USE OF PROCEEDS
All of the shares of Common Stock offered hereby are being sold by the
Selling Shareholder. The Company will not receive any of the proceeds of the
Offerings.
SELLING SHAREHOLDER
All of the shares of Common Stock offered hereby are being sold by The Duke
Endowment (the "Selling Shareholder"). The Selling Shareholder owns, as of the
date of this Prospectus, 26,070,200 shares of Common Stock, constituting
approximately 13% of the outstanding shares of Common Stock. Upon completion of
the Offerings and assuming that the Underwriters' over-allotment options are
exercised in full, the Selling Shareholder will own 10,070,200 shares of Common
Stock, constituting approximately 5% of the outstanding shares of Common Stock.
The Selling Shareholder has no present intention to dispose of any additional
shares of Common Stock.
The Selling Shareholder is a common law trust established in 1924 by the
late James B. Duke, the founder of the Company, for educational, hospital,
religious and other charitable purposes. The Selling Shareholder has advised the
Company that its Common Stock holdings constituted approximately 77% of its
investment portfolio as of December 31, 1993 and provided almost 80% of its
income for the year then ended and that it is selling the shares of Common Stock
offered hereby to diversify its investment portfolio.
The Selling Shareholder has 15 trustees, none of whom has been a director,
officer or employee of the Company or has had a material relationship with the
Company within the past three years, except for James C. Self, a trustee of the
Selling Shareholder, who served as a director of the Company from April 30, 1982
until April 23, 1992.
The trustees of the Selling Shareholder are also the trustees of The Doris
Duke Trust, another common law trust established by James B. Duke, which, as of
the date of this Prospectus, owns of record 3,906,396 shares of Common Stock,
constituting approximately 2% of the outstanding shares of Common Stock. The
Selling Shareholder believes it became entitled as remainderman to a
distribution of 2,604,264 shares of such shares of Common Stock from The Doris
Duke Trust as of the date of death of its principal income beneficiary. The
Doris Duke Trust has commenced a proceeding seeking a determination as to the
entitlement to such distribution and the matter is currently in litigation.
The foregoing statements with respect to the Selling Shareholder are based
upon information furnished to the Company by the Selling Shareholder.
10
<PAGE> 13
DESCRIPTION OF CAPITAL STOCK
GENERAL
The authorized capital stock of the Company is divided into four classes:
Common Stock, without par value, Preferred Stock of the par value of $100 per
share ("Preferred Stock"), Preferred Stock A of the par value of $25 per share
("Preferred Stock A") and Preference Stock of the par value of $100 per share
("Preference Stock"). The number of authorized shares of Common Stock, Preferred
Stock, Preferred Stock A and Preference Stock are 300,000,000, 12,500,000,
10,000,000 and 1,500,000, respectively. As of the date hereof, there are
currently outstanding 14 series of Preferred Stock, 5 series of Preferred Stock
A and no series of Preference Stock. The Preferred Stock, Preferred Stock A and
Preference Stock together are hereinafter sometimes called the "Preferred
Stocks."
The following statements are summaries of certain provisions with respect
to the Common Stock and the Preferred Stocks that are contained in the Company's
Restated Articles of Incorporation (the "Articles"). Reference is made to the
pertinent exhibits to the Registration Statement, which are incorporated herein
by reference, for a full and complete statement of such provisions, and the
following statements are qualified in their entirety by such reference.
COMMON STOCK
Dividends may be paid on the Common Stock as determined by the Board of
Directors out of funds legally available therefor but only if full dividends on
all outstanding series of the Preferred Stocks for the then current and all
prior dividend periods and any required sinking fund payments with respect to
any outstanding series of such securities have been paid or provided for.
The holders of the Common Stock have exclusive voting rights, except as
otherwise provided by law, on the basis of one vote per share.
Whenever dividends on any part of the Preferred Stock or of the Preferred
Stock A are in arrears in an amount equivalent to the aggregate dividends
required to be paid on such Preferred Stock or such Preferred Stock A in any
period of 12 calendar months, the holders of the Preferred Stock as a class have
the exclusive right to elect a majority of the authorized number of directors of
the Company and the holders of the Preferred Stock A as a class have the
exclusive right to elect two directors, which rights cease whenever all accrued
and unpaid dividends have been paid in full. Whenever six quarterly dividends on
any outstanding series of the Preference Stock are in arrears or any required
sinking fund payments are in default, the holders of the Preference Stock as a
class have the exclusive right to elect two directors of the Company which right
ceases whenever all dividends and required sinking fund obligations in default
have been paid in full or provided for. In addition, the consent of the holders
of specified percentages of the Preferred Stock, Preferred Stock A or of the
Preference Stock, or some or all of the holders of such classes, is required in
connection with certain increases in authorized amounts or changes in stock
senior to the Common Stock or in connection with any sale of substantially all
of the Company's assets or certain mergers.
The holders of the Common Stock are entitled in liquidation to share
ratably in the assets of the Company after required preferential payments to the
holders of the Preferred Stocks.
The holders of the Common Stock have no cumulative voting rights, no
preemptive rights and no conversion rights. The Common Stock is not subject to
redemption or to any further calls or assessments and is not entitled to the
benefit of any sinking fund provisions.
The Company serves as transfer agent and First Union National Bank of North
Carolina, Charlotte, N.C. serves as registrar for the Common Stock.
PREFERRED STOCKS
The Preferred Stock, Preferred Stock A and Preference Stock may be issued
in one or more series from time to time upon such consideration (not less than
the par value thereof), upon such terms, and in such manner, and with such
variations as to dividend rates (or method of calculation
11
<PAGE> 14
thereof), dividend payment dates, terms of redemption (at prices not less than
the par value thereof), sinking fund provisions and conversion rights as may be
determined by the Board of Directors without the approval of the shareholders.
CHANGE OF CONTROL
The Articles provide for a classified Board of Directors consisting of
three classes. Each class consists, as nearly as may be possible, of one-third
of the total number of directors constituting the entire Board of Directors. At
each annual meeting of shareholders, successors to the class of directors whose
term expires at that annual meeting are elected for a three-year term and until
their respective successors are elected and qualified.
Certain provisions of the Articles require a greater than majority vote of
the Company's shareholders. Under the Articles the affirmative vote of at least
80% of the combined voting power of the then outstanding shares of stock of all
classes of the Company entitled to vote generally in the election of directors
of the Company voting together as a single class is required to alter, amend or
repeal any of the provisions, including the percentage vote requirement, of the
Article that classifies the Board of Directors into three classes, specifies the
minimum and maximum size of the Board, provides that directors may be removed
only for cause, provides that newly created directorships and vacancies on the
Board may be filled only by the remaining directors and provides that no
decrease in the number of directors constituting the Board of Directors may
shorten the term of any incumbent director.
The provisions authorizing the Board of Directors to issue the Preferred
Stocks without shareholder approval, the classified Board of Directors and the
provisions requiring a greater than majority vote of shareholders in certain
instances could have the effect of delaying, deferring or preventing a change in
control of the Company or the removal of existing management.
12
<PAGE> 15
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
Selling Shareholder has agreed to sell to each of the U.S. Underwriters named
below, and each of the U.S. Underwriters, for whom Goldman, Sachs & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. Incorporated
are acting as representatives, has severally agreed to purchase from the Selling
Shareholder, the respective number of shares of Common Stock set forth opposite
its name below:
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
U.S. UNDERWRITER COMMON STOCK
- ------------------------------------------------------------------------------ ------------
<S> <C>
Goldman, Sachs & Co. .........................................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.....................................................
Morgan Stanley & Co. Incorporated.............................................
------------
Total....................................................................... 11,200,000
------------
------------
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the U.S.
Underwriters are committed to take and pay for all of the shares offered hereby,
if any are taken.
The U.S. Underwriters propose to offer the shares of Common Stock in part
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus, and in part to certain securities dealers at such
price less a concession of $ per share. The U.S. Underwriters may allow,
and such dealers may reallow, a concession not in excess of $ per share to
certain brokers and dealers. After the shares of Common Stock are released for
sale to the public, the offering price and other selling terms may from time to
time be varied by the representatives.
The Company and the Selling Shareholder have entered into an underwriting
agreement (the "International Underwriting Agreement") with the underwriters of
the International Offering (the "International Underwriters") providing for the
concurrent offer and sale of 2,800,000 shares of Common Stock in an
international offering outside the United States. The offering price and
aggregate underwriting discount per share for the two offerings are identical.
The closing of the offering made hereby is a condition to the closing of the
international offering, and vice versa. The representatives of the International
Underwriters are Goldman Sachs International, Merrill Lynch International
Limited and Morgan Stanley International.
Pursuant to an agreement between the U.S. and International Underwriting
Syndicates (the "Agreement Between") relating to the Offerings, each of the U.S.
Underwriters named herein has agreed that, as a part of the distribution of the
shares offered hereby and subject to certain exceptions, it will offer, sell or
deliver the shares offered hereby and other shares of Common Stock, directly or
indirectly, only in the United States of America (including the States and the
District of Columbia), its territories, possessions and other areas subject to
its jurisdiction (as used in this
13
<PAGE> 16
paragraph, the "United States") and to U.S. persons, which term shall mean for
purposes of this paragraph (a) individuals resident in the United States and (b)
corporations, partnerships or other entities organized in or under the laws of
the United States or any political subdivision thereof and whose office most
directly involved with the purchase is located in the United States. Each of the
International Underwriters has agreed pursuant to the Agreement Between that, as
part of the distribution of the shares offered as part of the International
Offering and subject to certain exceptions, it (i) will not offer, sell or
deliver shares of Common Stock, directly or indirectly, (a) in the United States
or to any U.S. persons or (b) to any person whom it believes intends to reoffer,
resell or deliver the shares in the United States or to any U.S. persons and
(ii) will cause any dealer to whom it may sell such shares at any concession to
agree to observe a similar restriction.
Pursuant to the Agreement Between, sales may be made between the U.S.
Underwriters and the International Underwriters of such number of shares of
Common Stock as may be mutually agreed. The price of any shares so sold shall be
the initial public offering price, less an amount not greater than the selling
concession.
The Selling Shareholder has granted the U.S. Underwriters an option
exercisable for 30 days after the date of this Prospectus to purchase up to an
aggregate of 1,600,000 additional shares of Common Stock solely to cover
over-allotments, if any. If the U.S. Underwriters exercise their over-allotment
option, the U.S. Underwriters have severally agreed, subject to certain
conditions, to purchase approximately the same percentage thereof that the
number of shares to be purchased by each of them, as shown in the foregoing
table, bears to the 11,200,000 shares of Common Stock offered hereby. The
Selling Shareholder has granted the International Underwriters an option
exercisable for 30 days after the date of this Prospectus to purchase up to an
aggregate of 400,000 additional shares of Common Stock solely to cover
over-allotments, if any. Any shares of Common Stock purchased pursuant to such
over-allotment options will be purchased at the initial public offering price
per share less the underwriting discount, as set forth on the cover page of this
Prospectus.
The Selling Shareholder has agreed not to offer, sell or otherwise dispose
of any Common Stock, except for the shares of Common Stock offered in connection
with the Offerings, for a period of 180 days after the date of this Prospectus
without the prior written consent of the representatives of the Underwriters.
The Company has agreed with the Underwriters not to offer, sell, contract to
sell or otherwise dispose of any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, except
pursuant to employee benefit plans and the Stock Purchase and Dividend
Reinvestment Plan, for a period of 90 days after the date of this Prospectus
without the prior written consent of the representatives of the Underwriters.
The Underwriters and certain affiliates thereof engage in transactions with
and perform services for the Company and its affiliates in the ordinary course
of business.
The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933.
14
<PAGE> 17
EXPERTS
The financial statements included in the Company's current report on Form
8-K dated February 18, 1994, which are incorporated herein by reference, have
been audited by Deloitte & Touche, as stated in their report appearing therein,
and are incorporated herein in reliance upon such report given upon the
authority of that firm as experts in accounting and auditing.
LEGAL MATTERS
The validity of the Common Stock offered in the Offerings will be passed
upon for the Company by Steve C. Griffith, Jr., Esq., Charlotte, North Carolina,
and by Dewey Ballantine, New York, New York, and for the Underwriters by Willkie
Farr & Gallagher, New York, New York. In giving their opinions, Dewey Ballantine
and Willkie Farr & Gallagher may rely as to matters of local law upon the
opinion of Mr. Griffith, who is a Director and Executive Vice President and the
General Counsel of the Company. Mr. Griffith owns 36,904 shares of Common Stock
of the Company, including 36,854 shares held under the Stock Purchase-Savings
Program for Employees and the Employees' Stock Ownership Plan. Certain legal
matters in connection with the Offerings will be passed upon for the Selling
Shareholder by Dewey Ballantine.
15
<PAGE> 18
- ------------------------------------------------------
- ------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN
THE SECURITIES TO WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT
THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Available Information.................. 2
Documents Incorporated by Reference.... 2
Prospectus Summary..................... 3
The Company............................ 5
Recent Developments.................... 6
Selected Financial Data................ 7
Non-Utility Subsidiary Data............ 7
Selected Operating Statistics.......... 8
Common Stock Price Range
and Dividends........................ 9
Use of Proceeds........................ 10
Selling Shareholder.................... 10
Description of Capital Stock........... 11
Underwriting........................... 13
Experts................................ 15
Legal Matters.......................... 15
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
14,000,000 SHARES
DUKE POWER COMPANY
COMMON STOCK
(WITHOUT PAR VALUE)
---------------------------
[LOGO]
---------------------------
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
MORGAN STANLEY & CO.
INCORPORATED
REPRESENTATIVES OF THE UNDERWRITERS
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 19
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
SUBJECT TO COMPLETION, DATED MARCH 2, 1994
14,000,000 SHARES
DUKE POWER COMPANY
COMMON STOCK
(WITHOUT PAR VALUE)
------------------------
Of the 14,000,000 shares of Common Stock offered, 2,800,000 shares are
being offered hereby in an international offering outside the United States and
11,200,000 shares are being offered in a concurrent offering in the United
States. The initial public offering price and the aggregate underwriting
discount per share are identical for both offerings. See "Underwriting."
All of the shares of Common Stock offered hereby are being sold by the
Selling Shareholder. See "Selling Shareholder." The Company will not receive any
of the proceeds from the sale of the shares offered hereby.
The Common Stock is listed on the New York Stock Exchange under the symbol
"DUK." The last sale price of the Common Stock on March 1, 1994 as reported on
the New York Stock Exchange Composite Tape was $38.50 per share. See "Common
Stock Price Range and Dividends."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO SELLING
OFFERING PRICE DISCOUNT(1) SHAREHOLDER(2)
-------------- ------------ -------------------
<S> <C> <C> <C>
Per Share............................. $ $ $
Total(3).............................. $ $ $
</TABLE>
- ---------------
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933. See
"Underwriting."
(2) Before deducting estimated expenses of $440,000 payable by the Selling
Shareholder. Expenses payable by the Company are estimated to be $20,000.
(3) The Selling Shareholder has granted the Underwriters an option for 30 days
to purchase up to an additional 2,000,000 shares at the initial public
offering price per share, less the underwriting discount, solely to cover
over-allotments. If such option is exercised in full, the total initial
public offering price, underwriting discount and proceeds to the Selling
Shareholder will be $ , $ and $ , respectively. See
"Underwriting."
------------------------
The shares offered hereby are offered severally by the International
Underwriters, as specified herein, subject to receipt and acceptance by them and
subject to their right to reject any order in whole or in part. It is expected
that certificates for the shares will be ready for delivery in New York, New
York, on or about March , 1994.
GOLDMAN SACHS INTERNATIONAL
MERRILL LYNCH INTERNATIONAL LIMITED
MORGAN STANLEY INTERNATIONAL
------------------------
The date of this Prospectus is March , 1994
<PAGE> 20
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
CERTAIN UNITED STATES TAX CONSEQUENCES
TO NON-UNITED STATES HOLDERS
The following is a general discussion of certain United States federal
income and estate tax consequences to a holder of Common Stock who is not a
United States person (a "Foreign Holder") of the acquisition, ownership and
disposition of the Common Stock. For these purposes, "United States person"
means a citizen or resident (as specifically defined for United States federal
income and estate tax purposes) of the United States, a corporation, partnership
or other entity created or organized in or under the laws of the United States
or any political subdivision thereof or an estate or trust the income of which
is subject to United States federal income taxation regardless of its source.
The discussion does not address the particular facts and circumstances of each
Foreign Holder's situation. Foreign Holders are urged to consult their own tax
advisors with respect to the United States federal income and estate tax
consequences of acquiring, holding and disposing of the Common Stock, as well as
any tax consequences arising under the laws of any state, municipality or other
taxing jurisdiction.
DIVIDENDS
In general, dividends paid to a Foreign Holder will be subject to United
States withholding tax at a 30% rate, or a lower rate prescribed by an
applicable tax treaty, unless the dividends are effectively connected with a
trade or business carried on by the Foreign Holder within the United States. To
determine the applicability of a tax treaty providing for a lower rate of
withholding, dividends paid to an address in a foreign country are presumed
under current Treasury regulations to be paid to a resident of that country.
Treasury regulations proposed in 1984 would, if adopted in final form, require
Foreign Holders to file certain forms to obtain the benefit of any applicable
tax treaty providing for a lower rate of withholding tax on dividends. Such
forms would have to contain the name and address of the holder and an official
statement by the competent authority of the holder's country of residence
attesting to the holder's status as a resident thereof. Dividends effectively
connected with a trade or business carried on by the Foreign Holder within the
United States generally will not be subject to withholding if the Foreign Holder
files Internal Revenue Service Form 4224 with the payor of the dividend and will
generally be subject to United States federal income tax at regular rates. In
the case of a Foreign Holder that is a corporation, such effectively connected
income may be subject to the branch profits tax which is generally imposed on a
foreign corporation on the repatriation from the United States of effectively
connected earnings and profits. The branch profits tax may not apply if the
recipient is a qualified resident of one of certain countries with which the
United States has an income tax treaty.
GAIN ON DISPOSITION
Generally, a Foreign Holder will not be subject to United States federal
income tax on any gain realized upon the disposition of shares of Common Stock
unless (i) the Company is or has been during certain periods a "U.S. real
property holding corporation" for federal income tax purposes and, assuming that
the Common Stock is "regularly traded on an established securities market" for
tax purposes, the Foreign Holder held, directly or indirectly at any time during
the five-year period ending on the date of disposition (or such shorter period
that such shares were held), more than 5% of the Common Stock of the Company;
(ii) the gain is effectively connected with a trade or business carried on by
the Foreign Holder within the United States; (iii) the Foreign Holder is an
individual who has a tax home (as specifically defined for United States federal
income tax purposes) in the United States, holds the Common Stock as a capital
asset and is present in the United States for 183 days or more in the taxable
year of the disposition; or (iv) the Foreign Holder is subject to tax pursuant
to the provisions of United States tax law applicable to certain United States
expatriates.
2
<PAGE> 21
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
FEDERAL ESTATE TAX
Shares of Common Stock owned or treated as owned by an individual who is
not a citizen or resident of the United Sates at the time of death will be
includable in the individual's gross estate for United States federal estate tax
purposes, unless an applicable tax treaty provides otherwise, and may be subject
to United States federal estate tax.
DIVIDEND REPORTING AND BACKUP WITHHOLDING REQUIREMENTS
The Company must report annually to the Internal Revenue Service and to
each Foreign Holder the amount of dividends paid to, and the tax withheld with
respect to, each Foreign Holder. These reporting requirements apply regardless
of whether withholding was reduced by an applicable tax treaty. Under the
provisions of a specific treaty or agreement, copies of these information
returns may also be made available to the tax authorities in the country in
which the Foreign Holder resides. United States backup withholding tax (which
generally is a withholding tax imposed at the rate of 31% on certain payments to
persons that fail to furnish the information required under the United States
information reporting requirements) will generally not apply to dividends paid
on the Common Stock to a Foreign Holder at an address outside the United States.
The payment of the proceeds from the disposition of shares of Common Stock
to or through a United States office of a broker will be subject to information
reporting and backup withholding unless the owner certifies under penalties of
perjury its status as a Foreign Holder, or otherwise establishes an exemption.
The payment of the proceeds from the disposition of shares of Common Stock to or
through a non-U.S. office of a non-U.S. broker will generally not be subject to
backup withholding and information reporting. However, in the case of the
payment of proceeds from the disposition of shares of Common Stock through a
non-U.S. office of a broker that is a United States person or a "U.S. related
person," existing regulations require information reporting on the payment
unless the broker has documentary evidence in its files that the owner is a
Foreign Holder and the broker has no actual knowledge to the contrary. For this
purpose, a "U.S. related person" is (i) a "controlled foreign corporation" for
United States federal income tax purposes, or (ii) a foreign person 50% or more
of whose gross income from all sources for the three-year period ending with the
close of its taxable year preceding the payment is derived from activities that
are effectively connected with the conduct of a United States trade or business.
Proposed regulations contain a similar rule with respect to information
reporting by a non-U.S. office of a broker that is a United States person or a
U.S. related person. However, under the proposed regulations, such a person may
rely on documentary evidence to avoid information reporting only if the foreign
office "effects" the sale at such foreign office. The existing regulations
reserve on the question of whether reportable payments made through foreign
offices of a broker that is a United States person or a U.S. related person will
be subject to backup withholding, but proposed regulations state that backup
withholding will not apply to such payments (absent actual knowledge that the
payee is a United States person) where the foreign office "effects" the sale at
such foreign office. Any amounts withheld under the backup withholding rules
from a payment to a Foreign Holder will be refunded (or credited against that
Foreign Holder's United States federal income tax liability, if any) provided
that the required information is furnished to the Internal Revenue Service.
3
<PAGE> 22
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
Selling Shareholder has agreed to sell to each of the International Underwriters
named below, and each of the International Underwriters, for whom Goldman Sachs
International, Merrill Lynch International Limited and Morgan Stanley
International are acting as representatives, has severally agreed to purchase
from the Selling Shareholder, the respective number of shares of Common Stock
set forth opposite its name below:
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
INTERNATIONAL UNDERWRITER COMMON STOCK
- ------------------------------------------------------------------------------ ------------
<S> <C>
Goldman Sachs International...................................................
Merrill Lynch International Limited...........................................
Morgan Stanley International..................................................
------------
Total....................................................................... 2,800,000
------------
------------
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
International Underwriters are committed to take and pay for all of the shares
offered hereby, if any are taken.
The International Underwriters propose to offer the shares of Common Stock
in part directly to the public at the initial public offering price set forth on
the cover page of this Prospectus, and in part to certain securities dealers at
such price less a concession of $ per share. The International Underwriters
may allow, and such dealers may reallow, a concession not in excess of $ per
share to certain brokers and dealers. After the shares of Common Stock are
released for sale to the public, the offering price and other selling terms may
from time to time be varied by the representatives.
The Company and the Selling Shareholder have entered into an underwriting
agreement (the "U.S. Underwriting Agreement") with the underwriters of the
United States Offering (the "U.S. Underwriters") providing for the concurrent
offer and sale of 11,200,000 shares of Common Stock in the United States. The
offering price and aggregate underwriting discount per share for the two
offerings are identical. The closing of the offering made hereby is a condition
to the closing of the United States offering, and vice versa. The
representatives of the U.S. Underwriters are Goldman, Sachs & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co.
Incorporated.
Pursuant to an Agreement between the U.S. and International Underwriting
Syndicates (the "Agreement Between") relating to the Offerings, each of the
International Underwriters named herein has agreed that, as a part of the
distribution of the shares offered hereby and subject to certain exceptions, it
(i) will not, directly or indirectly, offer, sell or deliver the shares offered
hereby and other shares of Common Stock (a) in the United States (including the
States and the District of
4
<PAGE> 23
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
Columbia), its territories, its possessions and other areas subject to its
jurisdiction (as used in this paragraph, the "United States") or to any U.S.
Persons (which term shall mean, for purposes of this paragraph: (I) any
individual who is a resident of the United States or (II) any corporation,
partnership or other entity organized in or under the laws of the United States
or any political subdivision thereof and whose office most directly involved
with the purchase is located in the United States) or (b) to any person who it
believes intends to reoffer, resell or deliver the shares in the United States
or to any U.S. Persons, and (ii) cause any dealer to whom it may sell such
shares at any concession to agree to observe a similar restriction. Each of the
U.S. Underwriters has agreed pursuant to the Agreement Between that, as a part
of the distribution of the shares offered as a part of the United States
offering, and subject to certain exceptions, it will offer, sell and deliver
shares of Common Stock, directly or indirectly, only in the United States and to
U.S. Persons.
Pursuant to the Agreement Between, sales may be made between the
International Underwriters and the U.S. Underwriters of such number of shares of
Common Stock as may be mutually agreed. The price of any shares so sold will be
the initial public offering price, less an amount not greater than the selling
concession.
The Selling Shareholder has granted the International Underwriters an
option exercisable for 30 days after the date of this Prospectus to purchase up
to an aggregate of 400,000 additional shares of Common Stock solely to cover
over-allotments, if any. If the International Underwriters exercise their
over-allotment option, the International Underwriters have severally agreed,
subject to certain conditions, to purchase approximately the same percentage
thereof that the number of shares to be purchased by each of them, as shown in
the foregoing table, bears to the 2,800,000 shares of Common Stock offered
hereby. The Selling Shareholder has granted the U.S. Underwriters an option
exercisable for 30 days after the date of this Prospectus to purchase up to an
aggregate of 1,600,000 additional shares of Common Stock solely to cover
over-allotments, if any. Any shares of Common Stock purchased pursuant to such
over-allotment options will be purchased at the initial public offering price
per share less the underwriting discount, as set forth on the cover page of this
Prospectus.
The Selling Shareholder has agreed not to offer, sell or otherwise dispose
of any Common Stock, except for the shares of Common Stock offered in connection
with the Offerings, for a period of 180 days after the date of this Prospectus
without the prior written consent of the representatives of the Underwriters.
The Company has agreed with the Underwriters not to offer, sell, contract to
sell or otherwise dispose of any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, except
pursuant to employee benefit plans and the Stock Purchase and Dividend
Reinvestment Plan, for a period of 90 days after the date of this Prospectus
without the prior written consent of the representatives of the Underwriters.
Each International Underwriter has agreed that (i) it has not offered or
sold, and it will not offer or sell, in the United Kingdom by means of any
document any shares of Common Stock other than to persons whose ordinary
business it is to buy or sell shares or debentures, whether as principal or
agent, or in circumstances which do not constitute an offer to the public within
the meaning of the Companies Act of 1985 of Great Britain, (ii) it has complied,
and will comply, with all applicable provisions of the Financial Services Act of
1986 of Great Britain with respect to anything done by it in relation to the
Common Stock in, from or otherwise involving the United Kingdom and (iii) it has
only issued or passed on and will only issue or pass on in the United Kingdom
any document received by it in connection with the issuance of the shares of
Common Stock to a person who is of a kind described in Article 9(3) of the
Financial Services Act of 1986 (Investment Advertisements) (Exemptions) Order
1989 of Great Britain or is a person to whom the document may otherwise lawfully
be issued or passed on.
5
<PAGE> 24
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
Purchasers of the shares offered hereby may be required to pay stamp taxes
and other charges in accordance with the laws and practices of the country of
purchase in addition to the offering price set forth on the cover page hereof.
The Underwriters and certain affiliates thereof engage in transactions with
and perform services for the Company and its affiliates in the ordinary course
of business.
The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933.
EXPERTS
The financial statements included in the Company's current report on Form
8-K dated February 18, 1994, which are incorporated herein by reference, have
been audited by Deloitte & Touche, as stated in their report appearing therein,
and are incorporated herein in reliance upon such report given upon the
authority of that firm as experts in accounting and auditing.
LEGAL MATTERS
The validity of the Common Stock offered in the Offerings will be passed
upon for the Company by Steve C. Griffith, Jr., Esq., Charlotte, North Carolina,
and by Dewey Ballantine, New York, New York, and for the Underwriters by Willkie
Farr & Gallagher, New York, New York. In giving their opinions, Dewey Ballantine
and Willkie Farr & Gallagher may rely as to matters of local law upon the
opinion of Mr. Griffith, who is a Director and Executive Vice President and the
General Counsel of the Company. Mr. Griffith owns 36,904 shares of Common Stock
of the Company, including 36,854 shares held under the Stock Purchase-Savings
Program for Employees and the Employees' Stock Ownership Plan. Certain legal
matters in connection with the Offerings will be passed upon for the Selling
Shareholder by Dewey Ballantine.
6
<PAGE> 25
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
- ------------------------------------------------------
- ------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Available Information.................. 2
Documents Incorporated by Reference.... 2
Prospectus Summary..................... 3
The Company............................ 5
Recent Developments.................... 6
Selected Financial Data................ 7
Non-Utility Subsidiary Data............ 7
Selected Operating Statistics.......... 8
Common Stock Price Range
and Dividends........................ 9
Use of Proceeds........................ 10
Selling Shareholder.................... 10
Description of Capital Stock........... 11
Certain United States Tax Consequences
to Non-United States Holders......... 13
Underwriting........................... 15
Experts................................ 17
Legal Matters.......................... 17
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
14,000,000 SHARES
DUKE POWER COMPANY
COMMON STOCK
(WITHOUT PAR VALUE)
---------------------------
[LOGO]
---------------------------
GOLDMAN SACHS INTERNATIONAL
MERRILL LYNCH INTERNATIONAL
LIMITED
MORGAN STANLEY INTERNATIONAL
REPRESENTATIVES OF THE UNDERWRITERS
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 26
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION (ESTIMATED):
<TABLE>
<CAPTION>
TO BE PAID BY
-------------------------
SELLING
SHAREHOLDER COMPANY TOTAL
----------- ---------- -----------
<S> <C> <C> <C>
SEC Filing Fee*....................... $ 213,463 $ - $ 213,463
Registrar Fees........................ - 6,000 6,000
Printing Costs........................ 90,000 - 90,000
Engraving Costs....................... - 14,000 14,000
Legal Fees and Expenses............... 100,000 - 100,000
Accounting Fees....................... 12,000 - 12,000
Blue Sky Fees and Expenses............ 10,000 - 10,000
Miscellaneous......................... 14,537 - 14,537
----------- ---------- -----------
Total....................... $ 440,000 $ 20,000 $ 460,000
----------- ---------- -----------
----------- ---------- -----------
</TABLE>
- ---------------
* Actual
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 55-8-50 through 55-8-58 of the North Carolina Business Corporation
Act and the By-Laws of the registrant permit indemnification of the registrant's
directors and officers in a variety of circumstances, which may include
liabilities under the Securities Act of 1933 (Securities Act). In addition, the
registrant has purchased insurance permitted by the law of North Carolina on
behalf of directors, officers, employees or agents which may cover liabilities
under the Securities Act.
ITEM 16. EXHIBITS.
Exhibits filed herewith:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
-------
<S> <C>
1(A) -- Form of U.S. Underwriting Agreement.
1(B) -- Form of International Underwriting Agreement.
4(B) -- Articles of Amendment of registrant dated November 1, 1993 relating to the
6.375% Cumulative Preferred Stock A, 1993 Series.
5 -- Opinion of Steve C. Griffith, Jr., Esq.
23(A) -- Independent Auditors' Consent.
23(B) -- Consent of Steve C. Griffith, Jr., Esq. (included in Exhibit 5).
23(C) -- Consent of Dewey Ballantine.
24(A) -- Copy of power of attorney authorizing Ellen T. Ruff and others to sign the
registration statement on behalf of the registrant and certain of its
directors and officers.
24(B) -- Certified copy of resolution of the Board of Directors of the registrant
authorizing power of attorney.
</TABLE>
II-1
<PAGE> 27
Exhibits incorporated herein by reference:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
------
<S> <C>
4(A) -- Restated Articles of Incorporation of registrant (filed with Form S-3, No.
33-50617, effective October 20, 1993, as Exhibit 4(A)).
4(C) -- By-Laws of registrant, as amended (filed with Form S-3, File No. 33-50584,
effective August 11, 1992, as Exhibit 3(g)).
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the indemnification provisions described in Item 15 above
or in contractual arrangements pursuant thereto, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE> 28
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT OR AMENDMENT THERETO TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK, STATE OF NEW YORK, ON THE
2ND DAY OF MARCH, 1994.
DUKE POWER COMPANY
Registrant
By: W. S. LEE
Chairman and President
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT OR AMENDMENT THERETO HAS BEEN SIGNED BY THE FOLLOWING
PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------
<S> <C> <C>
W. S. LEE Chairman and President March 2, 1994
(Principal Executive Officer)
RICHARD J. OSBORNE Vice President and March 2, 1994
Chief Financial Officer
(Principal Financial Officer)
DAVID L. HAUSER Controller (Principal March 2, 1994
Accounting Officer)
ROBERT L. ALBRIGHT A majority of the Directors March 2, 1994
G. ALEX BERNHARDT (all below)
C. C. BOWLES
W. A. COLEY
JOE T. FORD
STEVE C. GRIFFITH, JR.
W. H. GRIGG
P. H. HENSON
GEORGE R. HERBERT
JAMES V. JOHNSON
W. W. JOHNSON
W. S. LEE
MAX LENNON
BUCK MICKEL
REECE A. OVERCASH, JR.
R. B. PRIORY
</TABLE>
ELLEN T. RUFF, by signing her name hereto, does hereby sign this document
on behalf of the registrant and on behalf of each of the above-named persons
pursuant to a power of attorney duly executed by the registrant and such
persons, filed with the Securities and Exchange Commission as an exhibit hereto.
ELLEN T. RUFF
ELLEN T. RUFF
Attorney-in-fact
II-3
<PAGE> 29
EXHIBIT 23(A)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
on Form S-3 of Duke Power Company of our report dated February 11, 1994
appearing in the current report on Form 8-K of Duke Power Company dated February
18, 1994 and our report dated February 15, 1993 appearing in the Annual Report
on Form 10-K of Duke Power Company for the year ended December 31, 1992 and to
the reference to us under the heading "Experts" in the Prospectus which is a
part of this Registration Statement.
DELOITTE & TOUCHE
- ------------------------------
DELOITTE & TOUCHE
Charlotte, North Carolina
March 2, 1994
II-4
<PAGE> 30
EXHIBIT 23(B)
CONSENT OF COUNSEL
The consent of Steve C. Griffith, Jr., Esq. is contained in his opinion
filed as Exhibit 5 to this Registration Statement.
II-5
<PAGE> 31
EXHIBIT 23(C)
We hereby consent to the reference to our firm under the heading "Legal
Opinions" in the Prospectus forming a part of this Registration Statement. In
giving such consent we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933
and the rules and regulations of the Securities and Exchange Commission
thereunder.
DEWEY BALLANTINE
- ------------------------------
DEWEY BALLANTINE
New York, New York
March 2, 1994
II-6
<PAGE> 32
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
------- ---------------------------------------------------------------------------
<S> <C>
1(A) -- Form of U.S. Underwriting Agreement.
1(B) -- Form of International Underwriting Agreement.
4(B) -- Articles of Amendment of registrant dated November 1, 1993 relating to the
6.375% Cumulative Preferred Stock A, 1993 Series.
5 -- Opinion of Steve C. Griffith, Jr., Esq.
23(A) -- Independent Auditors' Consent (see page II-4 of registration statement).
23(B) -- Consent of Steve C. Griffith, Jr., Esq. (included in Exhibit 5 -- see page
II-5 of registration statement).
23(C) -- Consent of Dewey Ballantine (see page II-6 of registration statement).
24(A) -- Copy of power of attorney authorizing Ellen T. Ruff and others to sign the
registration statement on behalf of the registrant and certain of its
directors and officers.
24(B) -- Certified copy of resolution of the Board of Directors of the registrant
authorizing power of attorney.
</TABLE>
<PAGE> 1
EXHIBIT 1(A)
DUKE POWER COMPANY
COMMON STOCK (WITHOUT PAR VALUE)
UNDERWRITING AGREEMENT
(U.S. VERSION)
March __, 1994
GOLDMAN, SACHS & CO.,
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED,
MORGAN STANLEY & CO. INCORPORATED
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004
Dear Sirs:
The stockholder named in Schedule II hereto (the "Selling
Stockholder") of Duke Power Company, a North Carolina corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
sell to the Underwriters named in Schedule I hereto (the "Underwriters") an
aggregate of 11,200,000 shares (the "Firm Shares") and, at the election of the
Underwriters, up to 1,600,000 additional shares (the "Optional Shares") of
Common Stock (without par value) ("Stock") of the Company (the Firm Shares and
the Optional Shares which the Underwriters elect to purchase pursuant to
Section 2 hereof are herein collectively called the "Shares").
It is understood and agreed to by all parties that the Company and the
Selling Stockholder are concurrently entering into an agreement (the
"International Underwriting Agreement") providing for the sale by the Selling
Stockholder of up to a total of 3,200,000 shares of Stock (the "International
Shares"), including the overallotment option thereunder, through arrangements
with certain underwriters outside the United States (the "International
Underwriters"), for whom Goldman Sachs International, Merrill Lynch
International Limited and Morgan Stanley International are acting as lead
managers. Anything herein or therein to the contrary notwithstanding, the
respective closings under this Agreement and the International Underwriting
Agreement are hereby expressly made conditional on one another. The
Underwriters hereunder and the International Underwriters are simultaneously
entering into an Agreement between U.S. and International Underwriting
Syndicates (the "Agreement between Syndicates") which provides, among other
things, for the transfer of shares of Stock between the two syndicates. Two
forms of prospectus are to be used in connection with the offering and sale of
shares of Stock contemplated by the
<PAGE> 2
foregoing, one relating to the Shares hereunder and the other relating to the
International Shares. The latter form of prospectus will be identical to the
former except for certain substitute pages as included in the registration
statement and amendments thereto as mentioned below. Except as used in Sections
2, 3, 4, 9 and 11 herein, and except as the context may otherwise require,
references hereinafter to the Shares shall include all the shares of Stock
which may be sold pursuant to either this Agreement or the International
Underwriting Agreement, and references herein to any prospectus whether in
preliminary or final form, and whether as amended or supplemented, shall
include both the U.S. and the international versions thereof.
1. (a) The Company represents and warrants to, and agrees with, each
of the Underwriters that:
(i) A registration statement in respect of the Firm Shares
and the Optional Shares has been filed with the Securities and
Exchange Commission (the "Commission"); such registration statement
and any post-effective amendment thereto, each in the form heretofore
delivered to you, and, excluding exhibits thereto but including all
documents incorporated by reference in the prospectus contained
therein, to you for each of the other Underwriters, have been declared
effective by the Commission in such form; no other document with
respect to such registration statement or document incorporated by
reference therein has heretofore been filed with the Commission which
has not been delivered to you; and no stop order suspending the
effectiveness of such registration statement has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in such registration
statement or filed with the Commission pursuant to Rule 424(a) of the
rules and regulations of the Commission under the Securities Act of
1933, as amended (the "Act"), being hereinafter called a "Preliminary
Prospectus"; the various parts of such registration statement,
including all exhibits thereto and including (i) the information
contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
hereof and deemed by virtue of Rule 430A under the Act to be part of
the registration statement at the time it was declared effective and
(ii) the documents incorporated by reference in the prospectus
contained in the registration statement at the time such part of the
registration statement became effective, each as amended at the time
such part of the registration statement became effective, being
hereinafter called the "Registration Statement"; and such final
prospectus, in the form first filed pursuant to Rule 424(b) under the
Act, being hereinafter called the "Prospectus"; and any reference
herein to any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include the
2
<PAGE> 3
documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Act, as of the date of such Preliminary Prospectus
or Prospectus, as the case may be; any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after the date of
such Preliminary Prospectus or Prospectus, as the case may be, under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; and any reference to any amendment to
the Registration Statement shall be deemed to refer to and include any
annual report of the Company filed pursuant to Section 13(a) or 15(d)
of the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration
Statement.)
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in
all material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter through you expressly for use therein
or by the Selling Stockholder expressly for use in the preparation of
the answers therein to Item 7 of Form S-3.
(iii) The documents incorporated by reference in the
Prospectus pursuant to Item 12 of Form S-3 under the Act, at the time
they were filed with the Commission, conformed in all material
respects to the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder (the "Exchange Act
Regulations"), and, when read together with the other information in
the Prospectus, do not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and any
documents deemed to be incorporated by reference in the Prospectus
will, when they are filed with the Commission, conform in all material
respects to the requirements of the Exchange Act and the Exchange Act
Regulations, and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading; provided,
however, that
3
<PAGE> 4
this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through you
expressly for use therein.
(iv) The Registration Statement conforms and the Prospectus
will conform in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder, and the
Registration Statement does not and the Prospectus will not include
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading, except that the foregoing does not apply to
statements or omissions in any such document based upon written
information furnished to the Company by an Underwriter through you
expressly for use therein or by the Selling Stockholder expressly for
use in the preparation of the answers therein to Item 7 of Form S-3.
(v) The compliance by the Company with all of the provisions
of this Agreement and the International Underwriting Agreement and the
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company is
bound or to which any of the property or assets of the Company, nor
will such action result in any violation of the provisions of the
Restated Articles of Incorporation or By-Laws of the Company or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the consummation by the
Company of the transactions contemplated by this Agreement and the
International Underwriting Agreement, except the registration under
the Act of the Shares and such consents, approvals, authorizations,
registrations or qualifications as may be required under state or
foreign securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the Underwriters.
(vi) Deloitte & Touche, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of
the Commission thereunder.
(vii) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or
4
<PAGE> 5
affiliate located in Cuba within the meaning of Section 517.075 of
Florida Statutes (Chapter 92-198, Laws of Florida).
(b) The Selling Stockholder represents and warrants to, and agrees
with, each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders
necessary for the execution and delivery by the Selling Stockholder of
this Agreement and the International Underwriting Agreement, and for
the sale and delivery of the Shares to be sold by the Selling
Stockholder hereunder, have been obtained; and the Selling Stockholder
has full right, power and authority to enter into this Agreement and
the International Underwriting Agreement and to sell, assign, transfer
and deliver the Shares to be sold by the Selling Stockholder
hereunder.
(ii) The sale of the Shares to be sold by the Selling
Stockholder hereunder and the compliance by the Selling Stockholder
with all of the provisions of this Agreement and the International
Underwriting Agreement and the consummation of the transactions herein
and therein contemplated will not conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a
default under, any statute, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Selling
Stockholder is a party or by which the Selling Stockholder is bound,
or to which any of the property or assets of the Selling Stockholder
is subject, nor will such action result in any violation of the
provisions of the Indenture and Deed of Trust of Personalty, dated
December 11, 1924 (the "Indenture of Trust"), establishing the Selling
Stockholder or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Selling Stockholder or the property of the Selling Stockholder.
(iii) The Selling Stockholder has, and immediately prior to
each Time of Delivery (as defined in Section 4 hereof) the Selling
Stockholder will have, good and valid title to the Shares to be sold
by the Selling Stockholder hereunder, free and clear of all liens,
encumbrances, equities or claims; and, upon delivery of such Shares
and payment therefor pursuant hereto, good and valid title to such
Shares, free and clear of all liens, encumbrances, equities or claims,
will pass to the several Underwriters.
(iv) No offering, sale or other disposition of any Stock will
be made within 180 days after the date of the Prospectus, directly or
indirectly, by the Selling Stockholder, otherwise than hereunder or
with your written consent.
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<PAGE> 6
(v) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result
in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares.
(vi) To the extent that any statements or omissions made in
the Registration Statement, any Preliminary Prospectus, the Prospectus
or any amendment or supplement thereto are made in reliance upon and
in conformity with written information furnished to the Company by the
Selling Stockholder expressly for use therein, such Preliminary
Prospectus and the Registration Statement did, and the Prospectus and
any further amendments or supplements to the Registration Statement
and the Prospectus will, when they become effective or are filed with
the Commission, as the case may be, conform in all material respects
to the requirements of the Act and the rules and regulations of the
Commission thereunder and not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
In order to document the Underwriters' compliance with the reporting
and withholding provisions of the Tax Equity and Fiscal Responsibility Act of
1982 with respect to the transactions herein contemplated, the Selling
Stockholder agrees to deliver to you prior to or at the First Time of Delivery
(as hereinafter defined) a properly completed and executed United States
Treasury Department Form W-9 (or other applicable form or statement specified
by Treasury Department regulations in lieu thereof).
2. Subject to the terms and conditions herein set forth, (a) the
Selling Stockholder agrees to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Selling
Stockholder at a purchase price per share of $.... the number of Firm Shares
to be purchased by such Underwriter as set forth opposite the name of such
Underwriter in Schedule I hereto and (b) in the event and to the extent that
the Underwriters shall exercise the election to purchase Optional Shares as
provided below, the Selling Stockholder agrees to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly,
to purchase from the Selling Stockholder, at the purchase price per share set
forth in clause (a) of this Section 2, that portion of the number of Optional
Shares as to which such election shall have been exercised (to be adjusted by
you so as to eliminate fractional shares) determined by multiplying such number
of Optional Shares by a fraction the numerator of which is the maximum number
of Optional Shares which such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
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<PAGE> 7
of which is the maximum number of the Optional Shares which all of the
Underwriters are entitled to purchase hereunder.
The Selling Stockholder hereby grants to the Underwriters the right to
purchase at their election up to 1,600,000 Optional Shares, at the purchase
price per share set forth in the paragraph above, for the sole purpose of
covering over-allotments in the sale of the Firm Shares. Any such election to
purchase Optional Shares may be exercised by written notice from you to the
Selling Stockholder, given within a period of 30 calendar days after the date
of this Agreement and setting forth the aggregate number of Optional Shares to
be purchased and the date on which such Optional Shares are to be delivered, as
determined by you but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless you and the Selling Stockholder
otherwise agree in writing, earlier than two or later than ten business days
after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares,
the several Underwriters propose to offer the Firm Shares for sale upon the
terms and conditions set forth in the Prospectus.
4. Certificates in definitive form for the Shares to be purchased by
each Underwriter hereunder, and in such denominations and registered in such
names as Goldman, Sachs & Co. may request upon at least forty-eight hours'
prior notice to the Selling Stockholder, shall be delivered by or on behalf of
the Selling Stockholder to you for the account of such Underwriter, against
payment by such Underwriter or on its behalf of the purchase price therefor by
certified or official bank check or checks, payable to the order of the Selling
Stockholder in New York Clearing House funds, all at the office of Goldman,
Sachs & Co., 85 Broad Street, New York, New York 10004 or at such other place
as you and the Selling Stockholder may determine. The time and date of such
delivery and payment shall be, with respect to the Firm Shares, 9:30 a.m., New
York City time, on . . . . . . , 1994 or such other time and date as you
and the Selling Stockholder may agree upon in writing, and, with respect to the
Optional Shares, 9:30 a.m., New York City time, on the date specified by you in
the written notice given by you of the Underwriters' election to purchase such
Optional Shares, or such other time and date as you and the Selling Stockholder
may agree upon in writing. Such time and date for delivery of the Firm Shares
is herein called the "First Time of Delivery," such time and date for delivery
of the Optional Shares, if not the First Time of Delivery, is herein called the
"Second Time of Delivery," and each such time and date of delivery is herein
called a "Time of Delivery." Such certificates will be made available for
checking and packaging at least twenty-four hours prior to each Time of
Delivery at such office of Goldman, Sachs & Co.
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<PAGE> 8
5. The Company covenants and agrees with the several Underwriters
that:
(a) The Company will advise you promptly of any amendment
or supplementation of the Registration Statement or the Prospectus and
of the institution by the Commission of any stop order proceedings in
respect of the Registration Statement, and will use its best efforts
to prevent the issuance of any such stop order and to obtain as soon
as possible its lifting, if issued.
(b) If at any time when a prospectus relating to the
Shares is required to be delivered under the Act any event occurs as a
result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact, or omit to state any
material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or if
it is necessary at any time to amend the Prospectus to comply with the
Act, the Company promptly will prepare and file with the Commission an
amendment, supplement or an appropriate document pursuant to Section
13 or 14 of the Exchange Act which will correct such statement or
omission or which will effect such compliance.
(c) The Company, during the period when a prospectus
relating to the Shares is required to be delivered under the Act, will
file promptly all documents required to be filed with the Commission
pursuant to Section 13 or 14 of the Exchange Act.
(d) The Company will make generally available to its
security holders, in each case as soon as practicable but not later
than 60 days after the close of the period covered thereby, earnings
statements (in form complying with the provisions of Section 11(a) of
the Act, which need not be certified by independent certified public
accountants unless required by the Act) covering (i) a twelve-month
period beginning not later than the first day of the Company's fiscal
quarter next following the effective date of the Registration
statement and (ii) a twelve-month period beginning not later than the
first day of the Company's fiscal quarter next following the date of
this Agreement.
(e) The Company will furnish to you copies of the
Registration Statement (four of which will be signed and will include
all exhibits other than those incorporated by reference), the
Prospectus, and all amendments and supplements to such documents, in
each case as soon as available and in such quantities as you
reasonably request.
(f) The Company will arrange or cooperate in arrangements
for the qualification of the Shares for sale
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<PAGE> 9
under the laws of such jurisdictions as you designate and will
continue such qualifications in effect so long as required for the
distribution; provided, however, that the Company shall not be
required to qualify as a foreign corporation or to file any general
consents to service of process under the laws of any state where it is
not now so subject.
(g) The Company will not, during the period beginning
from the date hereof and continuing to and including the date 90 days
after the date of the Prospectus, offer, sell, contract to sell or
otherwise dispose of any securities of the Company that are
substantially similar to the Shares, including but not limited to any
securities that are convertible into or exchangeable for or that
represent the right to receive the Shares or any such substantially
similar securities (other than pursuant to the Company's Stock
Purchase-Savings Program for Employees, Employees' Stock Ownership
Plan or Stock Purchase and Dividend Reinvestment Plan) without your
prior written consent.
6. The Company and the Selling Stockholder covenant and agree with
one another and with the several Underwriters that (a) the Selling Stockholder
will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the
registration of the Shares under the Act and all other expenses in connection
with the preparation, printing and filing of the Registration Statement, any
Preliminary Prospectus and the Prospectus and amendments and supplements
thereto and the mailing and delivering of copies thereof to the Underwriters
and dealers; (ii) the cost of printing or producing any Agreement among
Underwriters, this Agreement, the International Underwriting Agreement, the
Agreement between Syndicates, the Selling Agreements, the Blue Sky Memorandum
and any other documents in connection with the offering, purchase, sale and
delivery of the Shares; (iii) all expenses in connection with the qualification
of the Shares for offering and sale under state securities laws as provided in
Section 5(f) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky survey; (iv) the filing fees incident to securing any required review
by the National Association of Securities Dealers, Inc. of the terms of the
sale of the Shares; and (v) all other costs and expenses (other than as
provided for in Section 8) incident to the performance of the Company's
obligations hereunder which are not otherwise specifically provided for in this
Section; and (b) the Company will pay or cause to be paid: (i) the cost of
preparing stock certificates and (ii) the cost and charges of any transfer
agent or registrar; and (c) the Selling Stockholder will pay or cause to be
paid all costs and expenses incident to the performance of the Selling
Stockholder's obligations hereunder which are not otherwise specifically
provided for in this Section, including (i) any fees and expenses of counsel
for the Selling Stockholder and (ii) all
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<PAGE> 10
expenses and taxes incident to the sale and delivery of the Shares to be sold
by the Selling Stockholder to the Underwriters hereunder. In connection with
Clause (c) (ii) of the preceding sentence, Goldman, Sachs & Co. agrees to pay
New York State stock transfer tax, and the Selling Stockholder agrees to
reimburse Goldman, Sachs & Co. for associated carrying costs if such tax
payment is not rebated on the day of payment and for any portion of such tax
payment not rebated. It is understood that, except as provided in this
Section, Section 8 and Section 11 hereof, the Underwriters will pay all of
their own costs and expenses, including the fees of their counsel, stock
transfer taxes on resale of any of the Shares by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares to
be delivered at each Time of Delivery, shall be subject, in their discretion,
to the condition that all representations and warranties of the Company and of
the Selling Stockholder herein are, at and as of such Time of Delivery, true
and correct, the condition that each of the Company and the Selling Stockholder
shall have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall
have been issued and no proceeding for that purpose shall have been
initiated or, to the knowledge of the Company, threatened by the
Commission; and all requests for additional information on the part of
the Commission shall have been complied with to your reasonable
satisfaction.
(b) Willkie Farr & Gallagher, counsel for the Underwriters,
shall have furnished to you such opinion or opinions, dated such Time
of Delivery, with respect to the matters covered in paragraphs (i) and
(iii) through (vii) of subsection (c) below, in paragraphs (i) and
(ii) of subsection (d) below, and to the further effect that
the statements in the Prospectus under the caption "Underwriting",
insofar as they describe the provisions of the documents therein
described, are fair summaries and are accurate in all material
respects, as well as any other related matters as you may reasonably
request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon
such matters.
In giving their opinion Willkie Farr & Gallagher may rely on
the opinion of Steve C. Griffith, Jr., Esq., as to matters of the laws
of North Carolina and South Carolina.
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<PAGE> 11
(c) Steve C. Griffith, Jr., Esq., General Counsel to the
Company, shall have furnished to you his written opinion, dated such
Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of North Carolina, with power and authority
(corporate and other) to own its properties and conduct its
business as described in the Prospectus.
(ii) The Company is duly qualified to do business as
a foreign corporation in good standing in all other
jurisdictions in which it owns or leases substantial
properties or in which the conduct of its business requires
such qualification.
(iii) The outstanding shares of Stock of the Company
have been duly authorized and issued and are fully paid and
nonassessable.
(iv) The Registration Statement has become effective
under the Act, and, to the best of the knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or are pending or threatened
under the Act.
(v) This Agreement and the International Underwriting
Agreement have been duly authorized, executed and delivered by
the Company.
(vi) The performance by the Company of this Agreement
and the International Underwriting Agreement will not
contravene any of the provisions of the Restated Articles of
Incorporation or By-Laws of the Company.
(vii) No authorization, approval or consent of any
governmental body is legally required for the consummation by
the Company of the transactions contemplated by this Agreement
and the International Underwriting Agreement, except the
registration under the Act of the Shares, and such consents,
approvals, authorizations, registrations and qualifications as
may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by
the Underwriters.
(viii) The descriptions in the Registration
Statement and Prospectus of legal or governmental proceedings
are accurate and fairly present the information required to be
shown and such counsel does
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<PAGE> 12
not know of any other legal or governmental proceedings
required to be described in the Registration Statement or
Prospectus which are not described as required.
In rendering such opinion, such counsel may state that he
expresses no opinion as to the laws of any jurisdiction other than
North Carolina and South Carolina and the federal securities laws of
the United States.
(d) Dewey Ballantine, counsel for the Company, shall have
furnished to you such opinion or opinions, dated such Time of
Delivery, with respect to the matters covered in paragraphs (i) and
(iii) through (vii) of subsection (c) above, and to the further effect
that:
(i) The Registration Statement as of the date of
effectiveness under the Act and the Prospectus as of the date
it was filed with, or transmitted for filing to, the
Commission (in each case, other than the financial statements
and other financial information included therein, as to which
no opinion need be rendered) complied as to form in all
material respects with the requirements of the Act and the
rules and regulations thereunder, and nothing has come to
their attention that would lead them to believe that the
Registration Statement as of the date of effectiveness under
the Act (or if an amendment to such Registration Statement or
an annual report on Form 10-K has been filed by the Company
with the Commission subsequent to the effectiveness of the
Registration Statement, then at the time of the most recent
such filing) contained an untrue statement of a material fact
or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading or that the Prospectus as of the date it was filed
with, or transmitted for filing to, the Commission and at such
Time of Delivery contained or contains an untrue statement of
a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
(ii) The statements made in the Prospectus under
the caption "Description of Capital Stock", insofar as they
purport to constitute summaries of the terms of the Stock, and
under the caption "Certain United States Tax Consequences to
Non-United States Holders", insofar as they purport to
constitute summaries of the principal United States federal
income consequences to foreign holders of the Stock, are fair
summaries and are accurate in all material respects.
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In giving their opinion Dewey Ballantine may rely on the
opinion of Steve C. Griffith, Jr., Esq., as to matters of the laws of
North Carolina and South Carolina.
(e) Dewey Ballantine, as counsel to the Selling Stockholder,
shall have furnished to you their written opinion with respect to the
Selling Stockholder, dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) This Agreement and the International
Underwriting Agreement have been duly authorized, executed and
delivered by or on behalf of the Selling Stockholder and
constitute valid and binding agreements of the Selling
Stockholder in accordance with their terms; and the sale of
the Shares by the Selling Stockholder hereunder and thereunder
and the compliance by the Selling Stockholder with all of the
provisions of this Agreement and the International
Underwriting Agreement and the consummation of the
transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any terms or
provisions of, or constitute a default under, any statute, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the
Selling Stockholder is a party or by which the Selling
Stockholder is bound, to which any of the property or assets
of the Selling Stockholder is subject, nor will such action
result in any violation of the provisions of the Indenture of
Trust or any order, rule or regulation known to such counsel
of any court or governmental agency or body having
jurisdiction over the Selling Stockholder or the property of
the Selling Stockholder.
(ii) No consent, approval, authorization or order of any
court or governmental agency or body is required by or on
behalf of the Selling Stockholder for the consummation of the
transactions contemplated by this Agreement and the
International Underwriting Agreement in connection with the
sale of the Shares by the Selling Stockholder hereunder and
thereunder, except the registration under the Act of the
Shares and such as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution
of the Shares by the Underwriters.
(iii) To such counsel's knowledge, immediately prior to
such Time of Delivery the Selling Stockholder held the Shares
to be sold at such Time of Delivery under this Agreement and
the International Underwriting Agreement,
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<PAGE> 14
free and clear of all liens, encumbrances, equities or claims.
(iv) The Selling Stockholder has full right, power and
authority to sell, assign, transfer and deliver the Shares to
be sold hereunder and under the International Underwriting
Agreement.
(v) Good and valid title to the Shares, free and clear of
all liens, encumbrances, equities or claims, has been
transferred to each of the several Underwriters who have
purchased the Shares in good faith and without notice of any
such lien, encumbrance, equity or claim or any other adverse
claim within the meaning of the Uniform Commercial Code.
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction outside the
United States and in rendering the opinion in subparagraph (iii) such
counsel may rely upon a certificate of the Selling Stockholder in
respect of matters of fact as to ownership of and liens, encumbrances,
equities or claims on the Shares, provided that such counsel shall
state that they believe that both you and they are justified in
relying upon such certificate.
(f) At 10:00 a.m., New York City time, on the effective date
of the Registration Statement and the effective date of the most
recently filed post-effective amendment to the Registration Statement
and also at each Time of Delivery, Deloitte & Touche shall have
furnished to you a letter or letters, dated the respective date of
delivery thereof, in form and substance satisfactory to you, to the
effect set forth in Annex I hereto.
(g) Since the respective dates as of which information is
given in the Prospectus, there shall not have been any change in the
capital stock or long-term debt of the Company or any change in or
affecting the management, financial position, stockholders' equity or
results of operations of the Company, otherwise than as set forth or
contemplated in the Prospectus, the effect of which is in your
judgment so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Shares being delivered at such Time of Delivery on the terms and in
the manner contemplated in the Prospectus.
(h) Prior to such Time of Delivery, the rating assigned by
Moody's Investors Service, Inc. or Standard & Poor's Corporation to
any debt securities or preferred stock of the
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<PAGE> 15
Company as of the date of this Agreement shall not have been lowered.
(i) On or after the date hereof there shall not have occurred
any of the following: (i) a suspension or material limitation in
trading in securities generally or of the Company's securities on the
New York Stock Exchange or; (ii) a general moratorium on commercial
banking activities in New York declared by either Federal or New York
State authorities; or (iii) the outbreak or material escalation of
hostilities involving the United States or the declaration by the
United States of a national emergency or war if the effect of any such
event specified in this Clause (iii) in your judgment makes it
impracticable or inadvisable to proceed with the public offering or
the delivery of the Shares being delivered at such Time of Delivery on
the terms and in the manner contemplated in the Prospectus.
(j) The Company and the Selling Stockholder shall have
furnished or caused to be furnished to you at such Time of Delivery
certificates of officers of the Company and of the Selling
Stockholder, respectively, satisfactory to you as to the accuracy of
the representations and warranties of the Company and the Selling
Stockholder, respectively, herein at and as of such Time of Delivery,
as to the performance by the Company and the Selling Stockholder of
all of their respective obligations hereunder to be performed at or
prior to such Time of Delivery, and as to such other matters relating
to the transactions contemplated herein or in the International
Underwriting Agreement as you may reasonably request, and the Company
shall have furnished or caused to be furnished certificates as to the
matters set forth in subsections (a) and (g) of this Section, and as
to such other matters relating to the transactions contemplated herein
or in the International Underwriting Agreement as you may reasonably
request.
8. (a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act, as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever arising out of any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment
thereto), or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the prospectus
constituting a part of the Registration Statement in the form
in which it became
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<PAGE> 16
effective or the Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading, unless such statement or omission
or such alleged statement or omission was made in reliance
upon and in conformity with written information furnished to
the Company by an Underwriter through you expressly for use in
the Registration Statement (or any amendment thereto) or such
Preliminary Prospectus, such prospectus, or the Prospectus (or
any amendment or supplement thereto).
(ii) against any and all loss, liability, claim, damage
and expense whatsoever to the extent of the aggregate amount
paid in settlement of any litigation, commenced or threatened,
or of any claim whatsoever based upon any such untrue
statement or omission or any such alleged untrue statement or
omission, if such settlement is effected with the written
consent of the Company.
(iii) against any and all expense whatsoever reasonably
incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any
such expense is not paid under (i) or (ii) above.
In no case shall the Company be liable under this indemnity agreement
with respect to any claim made against any Underwriter or any such controlling
person unless the Company shall be notified in writing of the nature of the
claim within a reasonable time after the assertion thereof, but failure so to
notify the Company shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. The Company shall be
entitled to participate at its own expense in the defense, or, if it so elects,
within a reasonable time after receipt of such notice, to assume the defense of
any suit brought to enforce any such claim, but if it so elects to assume the
defense, such defense shall be conducted by counsel chosen by it and approved
by the Underwriter or Underwriters or controlling person or persons, defendant
or defendants in any suit so brought, which approval shall not be unreasonably
withheld. In any such suit, any Underwriter or any such controlling person
shall have the right to employ its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Underwriter or such controlling
person unless (i) the Company and such Underwriter shall have mutually agreed
to the employment of such counsel, or (ii) the named parties to any such action
(including any impleaded parties) include both such Underwriter or such
controlling person and the Company and such Underwriter or such controlling
person shall have
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<PAGE> 17
been advised by such counsel that a conflict of interest between the Company
and such Underwriter or such controlling person may arise and for this reason
it is not desirable for the same counsel to represent both the indemnifying
party and also the indemnified party (it being understood, however, that the
Company shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys for all such
Underwriters and all such controlling persons, which firm shall be designated
in writing by you). The Company agrees to notify you within a reasonable time
of the assertion of any claim against it, any of its officers or directors or
any person who controls the Company within the meaning of Section 15 of the
Act, in connection with the sale of the Shares.
(b) Each Underwriter severally agrees that it will indemnify and
hold harmless the Company, its directors, and each of its officers who signed
the Registration Statement and each person, if any, who controls the Company
within the meaning of Section 15 of the Act, and the Selling Stockholder and
officers and its trustees, to the same extent as the indemnity contained in
subsection (a) of this Section, but only with respect to statements or
omissions made in the Registration Statement (or any amendment thereto) or any
Preliminary Prospectus, such prospectus or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through you expressly for use in
the Registration Statement (or any amendment thereto), such Preliminary
Prospectus, such prospectus or the Prospectus (or any amendment or supplement
thereto). In case any action shall be brought against the Company or any
person so indemnified based on the Registration Statement (or any amendment
thereto) or such Preliminary Prospectus, such prospectus or the Prospectus (or
any amendment or supplement thereto) and in respect of which indemnity may be
sought against any Underwriter, such Underwriter shall have the rights and
duties given to the Company, and the Company and each person so indemnified
shall have the rights and duties given to the Underwriters, by the provisions
of subsection (a) of this Section.
9. (a) If any Underwriter shall default in its obligation to
purchase the Shares which it has agreed to purchase hereunder at a Time of
Delivery, you may in your discretion arrange for you or another party or other
parties to purchase such Shares on the terms contained herein. If within
thirty-six hours after such default by any Underwriter you do not arrange for
the purchase of such Shares, then the Selling Stockholder shall be entitled to
a further period of thirty-six hours within which to procure another party or
other parties satisfactory to you to purchase such Shares on such terms. In
the event that, within the respective prescribed periods, you notify the
Selling Stockholder that you have so arranged for the purchase of such Shares,
or the Selling Stockholder notifies you
17
<PAGE> 18
that it has so arranged for the purchase of such Shares, you or the Selling
Stockholder shall have the right to postpone such Time of Delivery for a period
of not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which may be
required. The term "Underwriter" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Selling
Stockholder as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased does not exceed one-eleventh of the aggregate
number of all the Shares to be purchased at such Time of Delivery, then the
Selling Stockholder shall have the right to require each non-defaulting
Underwriter to purchase the number of Shares which such Underwriter agreed to
purchase hereunder at such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Shares which such Underwriter agreed to purchase hereunder) of the Shares of
such defaulting Underwriter or Underwriters for which such arrangements have
not been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Selling
Stockholder as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased exceeds one-eleventh of the aggregate number
of all the Shares to be purchased at such Time of Delivery, or if the Selling
Stockholder shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Shares of a defaulting
Underwriter or Underwriters, then this Agreement (or, with respect to the
Second Time of Delivery, the obligations of the Underwriters to purchase and of
the Selling Stockholder to sell the Optional Shares) shall thereupon terminate,
without liability on the part of any non-defaulting Underwriter or the Company
or the Selling Stockholder, except for the expenses to be borne by the Company
and the Selling Stockholder and the Underwriters as provided in Section 6
hereof and the indemnity agreement in Section 8 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations and
warranties of the Company, the Selling Stockholder and the
several Underwriters, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force and
effect,
18
<PAGE> 19
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Company, or the Selling Stockholder, or any officer or
director or controlling person of the Company, or any trustee of the Selling
Stockholder and shall survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, neither the Company nor the Selling Stockholder shall then be under any
liability to any Underwriter except as provided in Section 6 and Section 8
hereof; but, if for any other reason any Shares are not delivered by or on
behalf of the Selling Stockholder as provided herein, the Selling Stockholder
will reimburse the Underwriters through you for all out-of-pocket expenses
approved in writing by you, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares not so delivered, but the Company and
the Selling Stockholder shall then be under no further liability to any
Underwriter in respect of the Shares not so delivered except as provided in
Section 6 and, as to the Company, in Section 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail to you
as the representatives in care of Goldman, Sachs & Co., at 85 Broad Street, New
York, N.Y. 10004, Attention: Registration Department; if to the Selling
Stockholder shall be delivered or sent by mail or facsimile transmission
to counsel for the Selling Stockholder at its address or facsimile number set
forth in Schedule II hereto; and if to the Company shall be delivered or sent
by mail or facsimile transmission to the address of the Company set forth
in the Registration Statement, (facsimile number (704) 382-8137) Attention:
Secretary; provided, however, that any notice to an Underwriter pursuant to
Section 8(a) hereof shall be delivered or sent by mail or facsimile
transmission to such Underwriter at its address or facsimile number set forth
in its Underwriters' Questionnaire or telex constituting such Questionnaire,
which address or facsimile number will be supplied to the Company or the
Selling Stockholder by you upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and the Selling Stockholder and, to
the extent provided in Sections 8 and 10 hereof, the officers and directors of
the Company, the trustees of the Selling Stockholder, and each person who
controls the Company or any Underwriter, and their respective heirs, executors,
19
<PAGE> 20
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of
the Shares from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
14. As used herein, the term "business day" shall mean any day when
the Commission's office in Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
20
<PAGE> 21
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us eight counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters, the
Company and the Selling Stockholder. It is understood that your acceptance of
this letter on behalf of each of the Underwriters is pursuant to the authority
set forth in a form of Agreement among Underwriters (U.S. Version) the form of
which shall be submitted to the Company and the Selling Stockholder for
examination, upon request, but without warranty on your part as to the
authority of the signers thereof.
Very truly yours,
DUKE POWER COMPANY
By:
-----------------------------
Ellen T. Ruff
Secretary
THE DUKE ENDOWMENT
By:
-----------------------------
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above
written.
GOLDMAN, SACHS & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
By: GOLDMAN, SACHS & CO.
By:
-----------------------------
On behalf of each of the Underwriters
21
<PAGE> 22
<TABLE>
<CAPTION>
SCHEDULE I
NUMBER OF
OPTIONAL
SHARES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM SHARES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
----------- --------------- ---------
<S> <C> <C>
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
Morgan Stanley & Co.
Incorporated
[Names of other Underwriters]
---------- ---------
Total 11,200,000 1,600,000
==== ========== =========
</TABLE>
22
<PAGE> 23
<TABLE>
<CAPTION>
SCHEDULE II
NUMBER OF
OPTIONAL
SHARES TO BE
TOTAL NUMBER OF SOLD IF
FIRM SHARES MAXIMUM OPTION
SELLING STOCKHOLDER TO BE SOLD EXERCISED
- ------------------- ---------- ---------
<S> <C> <C>
The Duke Endowment (a) 11,200,000 1,600,000
================= =========
</TABLE>
(a) The Selling Stockholder is represented by Dewey Ballantine,
1301 Avenue of the Americas, Suite 2600, New York, New York 10019 (facsimile
number (212) 259-6333).
23
<PAGE> 24
ANNEX I
Pursuant to Section 7(f) of the Underwriting Agreement, Deloitte &
Touche shall furnish letters to the Underwriters to the effect that:
(i) they are independent certified public accountants with respect to
the Company within the meaning of the Act and the applicable published rules
and regulations thereunder.
(ii) in their opinion, the financial statements and supplemental
schedules incorporated by reference in the Registration Statement from the
Company's Current Report on Form 8-K dated February 18, 1994 comply as to form
in all material respects with the applicable accounting requirements of the
Exchange Act and the applicable published rules and regulations thereunder.
(iii) on the basis of a reading of the latest available unaudited
financial statements of the Company, the minutes of the meetings of
stockholders, the Board of Directors and the Management Committee of the Board
of Directors of the Company as set forth in the minute books at a specified
date not more than five days prior to the date of such letter and inquiries of
officers of the Company who have responsibility for financial and accounting
matters (it being understood that the foregoing procedures do not constitute an
examination made in accordance with generally accepted auditing standards and
that they would not necessarily reveal matters of significance with respect to
the comments made in such letter, and, accordingly, that Deloitte & Touche make
no representation as to the sufficiency of such procedures for the
Underwriters' purposes), nothing has come to their attention which caused them
to believe that at a specified date not more than five days prior to the date
of such letter there was any change in the capital stock (except for the
issuance of Stock under the Company's Stock Purchase-Savings Program for
Employees, Employees' Stock Ownership Plan or Stock Purchase and Dividend
Reinvestment Plan) or long-term debt of the Company (except for increases
resulting from issuances of debt pursuant to the Company's Medium-Term Notes
program or reductions resulting from redemptions, purchases, payments or
sinking fund obligations or scheduled maturities) or any decrease in its net
assets, in each case as compared with amounts shown in the most recent balance
sheet of the Company incorporated by reference in the Prospectus except for
changes or decreases which the Prospectus discloses have occurred or may occur.
(iv) they have carried out certain procedures, and made certain
findings confirming certain other financial information contained or
incorporated by reference in the Registration Statement and Prospectus.
24
<PAGE> 1
EXHIBIT 1(B)
DUKE POWER COMPANY
COMMON STOCK (WITHOUT PAR VALUE)
UNDERWRITING AGREEMENT
(INTERNATIONAL VERSION)
March __, 1994
GOLDMAN SACHS INTERNATIONAL,
MERRILL LYNCH INTERNATIONAL LIMITED,
MORGAN STANLEY INTERNATIONAL
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman Sachs International,
Peterborough Court,
133 Fleet Street,
London EC4A 2BB England
Dear Sirs:
The stockholder named in Schedule II hereto (the "Selling
Stockholder") of Duke Power Company, a North Carolina corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
sell to the Underwriters named in Schedule I hereto (the "Underwriters") an
aggregate of 2,800,000 shares (the "Firm Shares") and, at the election of the
Underwriters, up to 400,000 additional shares (the "Optional Shares") of Common
Stock (without par value) ("Stock") of the Company (the Firm Shares and the
Optional Shares which the Underwriters elect to purchase pursuant to Section 2
hereof are herein collectively called the "Shares").
It is understood and agreed to by all parties that the Company and the
Selling Stockholder are concurrently entering into an agreement, a copy of
which is attached hereto (the "U.S. Underwriting Agreement"), providing for the
sale by the Selling Stockholder of up to a total of 12,800,000 shares of Stock
(the "U.S. Shares"), including the overallotment option thereunder, through
arrangements with certain underwriters in the United States (the "U.S.
Underwriters"), for whom Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated and Morgan Stanley & Co. Incorporated are acting as
representatives. Anything herein or therein to the contrary notwithstanding,
the respective closings under this Agreement and the U.S. Underwriting
Agreement are hereby expressly made conditional on one another. The
Underwriters hereunder and the U.S. Underwriters are simultaneously entering
into an Agreement between U.S. and International Underwriting Syndicates (the
"Agreement between the Syndicates") which provides, among other things, for the
transfer of shares of Stock between the two syndicates and for consultation by
the Lead Managers hereunder with Goldman, Sachs & Co. prior to exercising the
rights of the Underwriters under Section 7 hereof. Two forms of prospectus are
<PAGE> 2
to be used in connection with the offering and sale of shares of Stock
contemplated by the foregoing, one relating to the Shares hereunder and the
other relating to the U.S. Shares. The latter form of prospectus will be
identical to the former except for certain substitute pages as included in the
Registration Statement and amendments thereto as mentioned below. Except as
used in Sections 2, 3, 4, 9 and 11 herein, and except as context may otherwise
require, references hereinafter to the Shares shall include all the shares of
Stock which may be sold pursuant to either this Agreement or the U.S.
Underwriting Agreement, and references herein to any prospectus whether in
preliminary or final form, and whether as amended or supplemented, shall
include both the U.S. and the international versions thereof.
In addition, this Agreement incorporates by reference certain
provisions from the U.S. Underwriting Agreement (including the related
definitions of terms, which are also used elsewhere herein) and, for purposes
of applying the same, references (whether in these precise words or their
equivalent) in the incorporated provisions to the "Underwriters" shall be to
the Underwriters hereunder, to the "Shares" shall be to the Shares hereunder as
just defined, to "this Agreement" (meaning therein the U.S. Underwriting
Agreement) shall be to this Agreement (except where this Agreement is already
referred to or as the context may otherwise require) and to the representatives
of the Underwriters or to Goldman, Sachs & Co. shall be to the addressees of
this Agreement and to Goldman Sachs International ("GSI"), and, in general, all
such provisions and defined terms shall be applied mutatis mutandis as if the
incorporated provisions were set forth in full herein having regard to their
context in this Agreement as opposed to the U.S. Underwriting Agreement.
1. The Company and the Selling Stockholder hereby make to the
Underwriters the same respective representations, warranties and agreements as
are set forth in Section 1 of the U.S. Underwriting Agreement, which Section is
incorporated herein by this reference.
2. Subject to the terms and conditions herein set forth, (a) the
Selling Stockholder agrees to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Selling
Stockholder at a purchase price per share of $. . . . the number of
Firm Shares to be purchased by such Underwriter as set forth opposite the
name of such Underwriter in Schedule I hereto and (b) in the event and to the
extent that the Underwriters shall exercise the election to purchase Optional
Shares as provided below, the Selling Stockholder agrees to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly,
to purchase from the Selling Stockholder, at the purchase price per share set
forth in clause (a) of this Section 2, that portion of the number of Optional
Shares as to which such election shall have been exercised (to be adjusted by
you so as to eliminate fractional shares)
2
<PAGE> 3
determined by multiplying such number of Optional Shares by a fraction the
numerator of which is the maximum number of Optional Shares which such
Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the maximum
number of the Optional Shares which all of the Underwriters are entitled to
purchase hereunder.
The Selling Stockholder hereby grants to the Underwriters the right to
purchase at their election up to 400,000 Optional Shares, at the purchase price
per share set forth in the paragraph above, for the sole purpose of covering
overallotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the Selling
Stockholder, given within a period of 30 calendar days after the date of this
Agreement and setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares are to be delivered, as
determined by you but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless you and the Selling Stockholder
otherwise agree in writing, earlier than two or later than ten business days
after the date of such notice.
3. Upon the authorization by GSI of the release of the Firm Shares,
the several Underwriters propose to offer the Firm Shares for sale upon the
terms and conditions set forth in the Prospectus and in the forms of Agreement
among Underwriters (International Version) and Selling Agreements, which have
been previously submitted to the Company by you. Each Underwriter hereby makes
to and with the Company and the Selling Stockholder the representations and
agreements of such Underwriter as a member of the selling group contained in
Sections 3(d) and 3(e) of the form of Selling Agreements.
4. Certificates in definitive form for the Shares to be purchased by
each Underwriter hereunder, and in such denominations and registered in such
names as GSI may request upon at least forty-eight hours' prior notice to the
Selling Stockholder, shall be delivered by or on behalf of the Selling
Stockholder to you for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by certified or
official bank check or checks, payable to the order of the Selling Stockholder
in New York Clearing House funds, all at the office of Goldman, Sachs & Co., 85
Broad Street, New York, New York 10004 or at such other place as you and the
Selling Stockholder may determine. The time and date of such delivery and
payment shall be, with respect to the Firm Shares, 9:30 a.m., New York City
time, on . . . . . . , 1994 or at such other time and date as you and the
Selling Stockholder may agree upon in writing, and, with respect to the
Optional Shares, 9:30 a.m., New York City time, on the date specified by you in
the written notice given by you of the Underwriters' election to purchase such
Optional Shares, or at such other time and date as you and the
3
<PAGE> 4
Selling Stockholder may agree upon in writing. Such time and date for delivery
of the Firm Shares is herein called the "First Time of Delivery," such time and
date for delivery of the Optional Shares, if not the First Time of Delivery, is
herein called the "Second Time of Delivery," and each such time and date for
delivery is herein called a "Time of Delivery." Such certificates will be made
available for checking and packaging at least twenty-four hours prior to each
Time of Delivery at such office of Goldman, Sachs & Co.
5. The Company hereby makes with the Underwriters the same agreements
as are set forth in Section 5 of the U.S. Underwriting Agreement which Section
is incorporated herein by this reference.
6. The Company, the Selling Stockholder, and the Underwriters hereby
agree with respect to certain expenses on the same terms as are set forth in
Section 6 of the U.S. Underwriting Agreement, which Section is incorporated
herein by this reference.
7. Subject to the provisions of the Agreement between the Syndicates,
the obligations of the Underwriters hereunder shall be subject, in their
discretion, at each Time of Delivery to the condition that all representations
and warranties of the Company and the Selling Stockholder herein are, at and as
of such Time of Delivery, true and correct, the condition that the Company and
the Selling Stockholder shall have performed all of their respective
obligations hereunder theretofore to be performed, and additional conditions
identical to those set forth in Section 7 of the U.S. Underwriting Agreement,
which Section is incorporated herein by this reference.
8. (a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act, as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever arising out of any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment
thereto), or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the prospectus
constituting a part of the Registration Statement in the form
in which it became effective or the Prospectus (or any
amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading, unless such
statement or omission or such alleged statement or
4
<PAGE> 5
omission was made in reliance upon and in conformity with
written information furnished to the Company by an Underwriter
through you expressly for use in the Registration Statement
(or any amendment thereto) or such Preliminary Prospectus,
such prospectus, or the Prospectus (or any amendment or
supplement thereto).
(ii) against any and all loss, liability, claim, damage
and expense whatsoever to the extent of the aggregate amount
paid in settlement of any litigation, commenced or threatened,
or of any claim whatsoever based upon any such untrue
statement or omission or any such alleged untrue statement or
omission, if such settlement is effected with the written
consent of the Company.
(iii) against any and all expense whatsoever reasonably
incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any
such expense is not paid under (i) or (ii) above.
In no case shall the Company be liable under this indemnity agreement
with respect to any claim made against any Underwriter or any such controlling
person unless the Company shall be notified in writing of the nature of the
claim within a reasonable time after the assertion thereof, but failure so to
notify the Company shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. The Company shall be
entitled to participate at its own expense in the defense, or, if it so elects,
within a reasonable time after receipt of such notice, to assume the defense of
any suit brought to enforce any such claim, but if it so elects to assume the
defense, such defense shall be conducted by counsel chosen by it and approved
by the Underwriter or Underwriters or controlling person or persons, defendant
or defendants in any suit so brought, which approval shall not be unreasonably
withheld. In any such suit, any Underwriter or any such controlling person
shall have the right to employ its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Underwriter or such controlling
person unless (i) the Company and such Underwriter shall have mutually agreed
to the employment of such counsel, or (ii) the named parties to any such action
(including any impleaded parties) include both such Underwriter or such
controlling person and the Company and such Underwriter or such controlling
person shall have been advised by such counsel that a conflict of interest
between the Company and such Underwriter or such controlling person may arise
and for this reason it is not desirable for the same counsel to represent both
the indemnifying party and also the indemnified party (it being understood,
however, that the Company shall not, in connection with any one such action or
separate but substantially
5
<PAGE> 6
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys for all such Underwriters
and all such controlling persons, which firm shall be designated in writing by
you). The Company agrees to notify you within a reasonable time of the
assertion of any claim against it, any of its officers or directors or any
person who controls the Company within the meaning of Section 15 of the Act, in
connection with the sale of the Shares.
(b) Each Underwriter severally agrees that it will indemnify and
hold harmless the Company, its directors, and each of its officers who signed
the Registration Statement and each person, if any, who controls the Company
within the meaning of Section 15 of the Act, and the Selling Stockholder and
its officers and trustees, to the same extent as the indemnity contained in
subsection (a) of this Section, but only with respect to statements or
omissions made in the Registration Statement (or any amendment thereto) or any
Preliminary Prospectus, such prospectus or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through you expressly for use in
the Registration Statement (or any amendment thereto), such Preliminary
Prospectus, such prospectus or the Prospectus (or any amendment or supplement
thereto). In case any action shall be brought against the Company or any
person so indemnified based on the Registration Statement (or any amendment
thereto) or such Preliminary Prospectus, such prospectus or the Prospectus (or
any amendment or supplement thereto) and in respect of which indemnity may be
sought against any Underwriter, such Underwriter shall have the rights and
duties given to the Company, and the Company and each person so indemnified
shall have the rights and duties given to the Underwriters, by the provisions
of subsection (a) of this Section.
9. (a) If any Underwriter shall default in its obligation to
purchase the Shares which it has agreed to purchase hereunder at a Time of
Delivery, you may in your discretion arrange for you or another party or other
parties to purchase such Shares on the terms contained herein. If within
thirty-six hours after such default by any Underwriter you do not arrange for
the purchase of such Shares, then the Selling Stockholder shall be entitled to
a further period of thirty-six hours within which to procure another party or
other parties satisfactory to you to purchase such Shares on such terms. In
the event that, within the respective prescribed periods, you notify the
Selling Stockholder that you have so arranged for the purchase of such Shares,
or the Selling Stockholder notifies you that it has so arranged for the
purchase of such Shares, you or the Selling Stockholder shall have the right to
postpone such Time of Delivery for a period of not more than seven days, in
order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any
6
<PAGE> 7
amendments to the Registration Statement or the Prospectus which may be
required. The term "Underwriter" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Selling
Stockholder as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased does not exceed one-eleventh of the aggregate
number of all the Shares to be purchased at such Time of Delivery, then the
Company and the Selling Stockholder shall have the right to require each
non-defaulting Underwriter to purchase the number of shares which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Selling
Stockholder as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased exceeds one-eleventh of the aggregate number
of all the Shares to be purchased at such Time of Delivery, or if the Selling
Stockholder shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Shares of a defaulting
Underwriter or Underwriters, then this Agreement (or, with respect to the
Second Time of Delivery, the obligation of the Underwriters to purchase and of
the Selling Stockholder to sell the Optional Shares) shall thereupon terminate,
without liability on the part of any non-defaulting Underwriter or the Company
or the Selling Stockholder, except for the expenses to be borne by the Company
and the Selling Stockholder and the Underwriters as provided in Section 6
hereof and the indemnity agreement in Section 8 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations and
warranties of the Company, the Selling Stockholder and the several Underwriters,
as set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless
of any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company or the Selling Stockholder, or any officer or director or controlling
person of the Company or any trustee of the Selling Stockholder, and shall
survive delivery of and payment for the Shares.
7
<PAGE> 8
11. If this Agreement shall be terminated pursuant to Section 9
hereof, neither the Company nor the Selling Stockholder shall then be under any
liability to any Underwriter except as provided in Section 6 and Section 8
hereof; but, if for any other reason, any Shares are not delivered by or on
behalf of the Selling Stockholder as provided herein, the Selling Stockholder
will reimburse the Underwriters through GSI for all out-of-pocket expenses
approved in writing by GSI, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares not so delivered, but the Company and
the Selling Stockholder shall then be under no further liability to any
Underwriter in respect of the Shares not so delivered except as provided in
Section 6 and Section 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by GSI on behalf of you as the representatives of the
Underwriters.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to the Underwriters in care of GSI, Peterborough
Court, 133 Fleet Street, London EC4A 2BB England, Attention: Syndicate
Department, Telex No. 94012165, facsimile transmission No. (071) 774-1550; if
to the Selling Stockholder shall be delivered or sent by mail or facsimile
transmission to counsel for the Selling Stockholder at its address set forth in
Schedule II hereto; and if to the Company shall be delivered or sent by mail or
facsimile transmission to the address of the Company set forth in the
Registration Statement, (facsimile number (704) 382-8137) Attention: Secretary;
provided, however, that any notice to an Underwriter pursuant to Section 8(a)
hereof shall be delivered or sent by mail or facsimile transmission to such
Underwriter at its address or facsimile number set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address or
facsimile number will be supplied to the Company or the Selling Stockholder by
GSI upon request. Any such statements, requests, notices or agreements shall
take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and the Selling Stockholder and, to
the extent provided in Section 8 and Section 10 hereof, the officers and
directors of the Company, the trustees of the Selling Stockholder, and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser
of any of the Shares from any Underwriter shall be deemed a successor or assign
by reason merely of such purchase.
8
<PAGE> 9
14. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, United States of America.
9
<PAGE> 10
15. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us eight counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters, the
Company and the Selling Stockholder. It is understood that your acceptance of
this letter on behalf of each of the Underwriters is pursuant to the authority
set forth in a form of Agreement among Underwriters (International Version),
the form of which shall be furnished to the Company and the Selling Stockholder
for examination upon request, but without warranty on your part as to the
authority of the signers thereof.
Very truly Yours,
DUKE POWER COMPANY
By:
--------------------------
Ellen T. Ruff
Secretary
THE DUKE ENDOWMENT
By:
--------------------------
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
first above written.
GOLDMAN SACHS INTERNATIONAL
MERRILL LYNCH INTERNATIONAL LIMITED
MORGAN STANLEY INTERNATIONAL
By: GOLDMAN SACHS INTERNATIONAL
By:
----------------------------
On behalf of each of the Underwriters
10
<PAGE> 11
SCHEDULE I
<TABLE>
<CAPTION>
NUMBER OF
OPTIONAL
SHARES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM SHARES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
----------- --------------- ---------
<S> <C> <C>
Goldman Sachs International
Merrill Lynch International
Limited
Morgan Stanley International
[Names of other International Underwriters]
--------- --------
Total 2,800,000 400,000
============ ===========
</TABLE>
11
<PAGE> 12
SCHEDULE II
<TABLE>
<CAPTION>
NUMBER OF
OPTIONAL
SHARES TO BE
TOTAL NUMBER OF SOLD IF
FIRM SHARES MAXIMUM OPTION
SELLING STOCKHOLDER TO BE SOLD EXERCISED
- ------------------- ---------- ---------
<S> <C> <C>
The Duke Endowment (a) 2,800,000 400,000
============ ========
</TABLE>
(a) The Selling Stockholder is represented by Dewey Ballantine, 1301
Avenue of the Americas, Suite 2600, New York, New York 10019, facsimile number
(212) 259-6333.
12
<PAGE> 1
EXHIBIT 4(B)
ARTICLES OF AMENDMENT
OF
DUKE POWER COMPANY
The undersigned corporation hereby executes these Articles of
Amendment for the purpose of fixing the preferences, limitations and
relative rights of a series of its Preferred Stock A:
1. The name of the corporation is Duke Power
Company.
2. The following resolution relating to the fixing
of the preferences, limitations and relative rights of the 6.375%
Cumulative Preferred Stock A, 1993 Series, $25 par value, of the
Company was duly adopted by the Management Committee of the Board
of Directors of the Company without shareholder approval, as
shareholder approval was not required, at a meeting held on the
1st day of November, 1993:
FURTHER RESOLVED, that, pursuant to authority
contained in Article IV(a) of the Restated Articles of
Incorporation of this Company,
(A) there be, and hereby is,
created a new series of this Company's Preferred
Stock A which shall be designated as "6.375%
Cumulative Preferred Stock A, 1993 Series,"
consisting of 2,400,000 shares of the par value
of $25 each (Preferred Stock A, 1993 Series);
(B) with respect to the variations
in the rights and preferences of the Preferred
Stock A, 1993 Series, which are permitted under
the provisions of such Article IV(a), such
rights and preferences be, and hereby are, fixed
as follows:
(1) The annual dividend rate for
the Preferred Stock A, 1993 Series,
shall be 6.375% per annum cumulative
from and after the date of issuance and
dividends at that rate, when, as and if
declared by the Board of Directors,
shall be payable quarterly on the 16th
day of March, June, September and
December of each year (or, if any such
day shall not be a business day, on the
next succeeding business day) with the
initial dividend payable March
<PAGE> 2
16, 1994 covering the full period from
the date of issuance through such date;
(2) The Preferred Stock A, 1993
Series, shall not be redeemable prior to
December 16, 2003. Thereafter, the
redemption price for the Preferred Stock
A, 1993 Series, shall be (i) $25.80 per
share if redeemed beginning December 16,
2003 and prior to December 16, 2004;
(ii) $25.72 per share if redeemed
beginning December 16, 2004 and prior to
December 16, 2005; (iii) $25.64 per
share if redeemed beginning December 16,
2005 and prior to December 16, 2006;
(iv) $25.56 per share if redeemed
beginning December 16, 2006 and prior to
December 16, 2007; (v) $25.48 per share
if redeemed December 16, 2007 and prior
to December 16, 2008; (vi) $25.40 per
share if redeemed beginning December 16,
2008 and prior to December 16, 2009;
(vii) $25.32 per share if redeemed
beginning December 16, 2009 and prior to
December 16, 2010; (viii) $25.24 per
share if redeemed beginning December 16,
2010 and prior to December 16, 2011;
(ix) $25.16 per share if redeemed
beginning December 16, 2011 and prior to
December 16, 2012; (x) $25.08 per share
if redeemed beginning December 16, 2012
and prior to December 16, 2013; and
(xi) $25.00 per share if redeemed on
and after December 16, 2013, plus, in
each case, all accrued and unpaid
dividends thereon to the redemption
date;
(3) There shall not be any
sinking fund provided for the purpose of
redemption of the Preferred Stock A,
1993 Series; and
(4) The Preferred Stock A, 1993
Series, shall not be convertible by the
holders thereof into stock of any other
class or classes or into one or more
series of the same class or of another
class or classes.
2
<PAGE> 3
IN WITNESS WHEREOF, DUKE POWER COMPANY has caused these Articles
of Amendment, which were duly adopted by the Management Committee of the
Board of Directors of the Company on November 1, 1993, to be signed by its
Vice President and Chief Financial Officer and its Secretary and has
caused its corporate seal to be hereunto affixed, on this 1st day of
November, 1993.
DUKE POWER COMPANY
By /s/ RICHARD J. OSBORNE
-------------------------------
RICHARD J. OSBORNE,
Vice President and
Chief Financial Officer
By /s/ ELLEN T. RUFF
-------------------------------
ELLEN T. RUFF,
Secretary
(CORPORATE SEAL)
3
<PAGE> 1
EXHIBIT 5
March 2, 1994
Duke Power Company
422 South Church Street
Charlotte, North Carolina 28242
Dear Sirs:
With reference to the filing by Duke Power Company (the Company)
of a Registration Statement on Form S-3 with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, relating to a
maximum of 19,000,000 shares of Common Stock, without par value, of the
Company (the Common Stock), to be offered for sale by The Duke Endowment,
I hereby advise you as follows:
As General Counsel for the Company, I am familiar with the
Restated Articles of Incorporation and the By-Laws of the Company, and
have made such examination of other corporate records and proceedings and
other documents and questions of law as I have considered necessary for
the purposes of this opinion.
Based upon the foregoing, I am of the opinion that the shares of
Common Stock to be sold by The Duke Endowment have been duly authorized
and validly issued and are fully paid and non-assessable.
I hereby consent to the filing of this opinion with the
Securities and Exchange Commission as an Exhibit to the Registration
Statement relating to the sale of the Common Stock by The Duke Endowment
and I also consent to the use of my name and reference made to me under
the caption "Legal Matters" in the Prospectus constituting a part of such
Registration Statement.
Very truly yours,
/s/ STEVE C. GRIFFITH, JR.
--------------------------
STEVE C. GRIFFITH, JR.
<PAGE> 1
EXHIBIT 24(A)
DUKE POWER COMPANY
Power of Attorney
A maximum of 19,000,000 shares of Common Stock
without par value
(Common Stock)
The undersigned, DUKE POWER COMPANY, a North Carolina
corporation, and certain of its officers and/or directors, do each hereby
constitute and appoint W. S. Lee, Richard J. Osborne, Ellen T. Ruff, and
each of them, to act as attorneys-in-fact for and in the respective names,
places and stead of the undersigned, to execute, seal, sign and file with
the Securities and Exchange Commission a Registration Statement of said
Duke Power Company on Form S-3 and any and all amendments thereto for the
purpose of registering under the Securities Act of 1933 the offering and
sale of the Common Stock, hereby granting to said attorneys-in-fact, and
each of them, full power and authority to do and perform all and every act
and thing whatsoever requisite, necessary or proper to be done in and
about the premises, as fully to all intents and purposes as the
undersigned, or any of them, might or could do if personally present,
hereby ratifying and approving the acts of said attorneys-in-fact.
Executed the 22nd day of February, 1994.
DUKE POWER COMPANY
By /s/ W. S. Lee
--------------------------
Chairman and President
(Corporate Seal)
ATTEST:
/s/ Carolyn R. Duncan
----------------------
Assistant Secretary
<PAGE> 2
-2-
Signature Title
--------- -----
/s/ W. S. Lee Chairman of the Board, President,
- ---------------------------- Chief Executive
W.S. Lee Officer and Director
(Principal Executive Officer)
/s/ Richard J. Osborne Vice President and Chief Financial
- ---------------------------- Officer (Principal Financial Officer)
Richard J. Osborne
/s/ David L. Hauser Controller (Principal Accounting
- ---------------------------- Officer)
David L. Hauser
/s/ Robert L. Albright Director
- ----------------------------
Robert L. Albright
/s/ G. Alex Bernhardt Director
- ----------------------------
G. Alex Bernhardt
/s/ C. C. Bowles Director
- ----------------------------
C. C. Bowles
/s/ W. A. Coley Director
- ----------------------------
W. A. Coley
/s/ Joe T. Ford
- ---------------------------- Director
Joe T. Ford
/s/ Steve C. Griffith, Jr. Director
- ----------------------------
Steve C. Griffith, Jr.
/s/ W. H. Grigg Director
- ----------------------------
W. H. Grigg
<PAGE> 3
-3-
/s/ P. H. Henson Director
- -----------------------------
P. H. Henson
/s/ George R. Herbert Director
- -----------------------------
George R. Herbert
/s/ James V. Johnson Director
- -----------------------------
James V. Johnson
/s/ W. W. Johnson Director
- -----------------------------
W. W. Johnson
/s/ Max Lennon Director
- -----------------------------
Max Lennon
/s/ Buck Mickel Director
- -----------------------------
Buck Mickel
/s/ Reece A. Overcash, Jr. Director
- -----------------------------
Reece A. Overcash, Jr.
/s/ R. B. Priory Director
- -----------------------------
R. B. Priory
<PAGE> 1
EXHIBIT 24(B)
DUKE POWER COMPANY
_____________
CERTIFICATE
A MAXIMUM OF 19,000,000 SHARES OF
COMMON STOCK (WITHOUT PAR VALUE)
(THE SECURITIES)
The undersigned officer of Duke Power Company, a North
Carolina corporation (the Company), does hereby certify that attached
hereto is a true and complete copy of an extract from the minutes of a
meeting of the Board of Directors of the Company containing a resolution
adopted with respect to the Securities, which resolution is presently in
full force and effect.
IN WITNESS WHEREOF, the undersigned has hereunto set her
hand and affixed the corporate seal of the Company this day of March,
1994.
ELLEN T. RUFF
-------------------------------
Secretary
[Corporate Seal]
<PAGE> 2
EXTRACT FROM THE MINUTES OF A MEETING
OF THE BOARD OF DIRECTORS OF DUKE POWER COMPANY
HELD ON FEBRUARY 22, 1994
FURTHER RESOLVED, that each officer and director who may be required to
execute such registration statement or any amendments thereto (whether on
behalf of the Company or as an officer or director thereof or by attesting the
seal of the Company or otherwise) be and hereby is authorized to execute a
power of attorney appointing Richard J. Osborne, Sue A. Becht and Ellen T.
Ruff, and each of them, as true and lawful attorneys and agents to execute in
his or her name, place and stead (in any such capacity) such registration
statement and any and all amendments thereto and all instruments necessary or
advisable in connection therewith, to attest the seal of the Company thereon
and to file the same with the Securities and Exchange Commission, each of said
attorneys and agents to have power to act with or without the others and to
have full power and authority to do and perform in the name and on behalf of
each of such officers and directors, or both, as the case may be, every act
whatsoever, necessary or advisable to be done in the premises as fully and to
all intents and purposes as any such officer or director might or could do in
person.
* * *
