<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(E)(1) OF THE
SECURITIES EXCHANGE ACT OF 1934)
DUKE ENERGY CORPORATION
(NAME OF ISSUER AND PERSON FILING STATEMENT)
----------------
PREFERRED STOCK ($100 PAR VALUE)
4.50% SERIES C 264399791
7.85% SERIES S 264399759
7.00% SERIES W 264399668
6.75% SERIES X 264399650
7.04% SERIES Y 264399643
PREFERRED STOCK A ($25 PAR VALUE)
6.375%, 1993 SERIES 264399635
(TITLE OF EACH CLASS OF SECURITIES) (CUSIP NUMBER OF EACH CLASS OF
SECURITIES)
----------------
RICHARD J. OSBORNE
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
422 SOUTH CHURCH STREET
CHARLOTTE, NORTH CAROLINA 28202
(704) 382-5159
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES
AND COMMUNICATIONS ON BEHALF OF THE PERSON FILING STATEMENT)
DECEMBER 18, 1997
(DATE TENDER OFFER FIRST PUBLISHED, SENT OR GIVEN TO SECURITY HOLDERS)
CALCULATION OF FILING FEE
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE
- -------------------------------------------------------------------------------
<S> <C>
$355,371,000 $71,075
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
* Solely for the purpose of calculating the filing fee and computed pursuant
to Section 13(e)(3) of the Securities Exchange Act of 1934, as amended, and
Rule 0-11(b)(1) thereunder, the transaction value equals the total amount of
funds, excluding fees and other expenses, required to purchase all
outstanding shares of each class of securities listed above pursuant to the
Offer described in the Offer to Purchase filed as an Exhibit hereto.
[_] Check box if any part of the fee is offset as provided by Rule 0-
11(a)(2) and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
Amount Previously Paid: _____________ Filing Party: _______________________
Form or Registration No.: ___________ Date Filed: _________________________
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
ITEM 1. SECURITY AND ISSUER.
(a) Incorporated herein by reference to the information appearing under the
caption "Certain Information Concerning Duke Energy" in the Offer to Purchase,
dated December 18, 1997, filed as Exhibit 9(a)(1) to this Issuer Tender Offer
Statement on Schedule 13E-4 (the "Offer to Purchase").
(b) Incorporated herein by reference to the information appearing on the
front cover of the Offer to Purchase, and to the information appearing under
the captions "Introduction," "Terms of the Offer--Number of Shares; Purchase
Price; Expiration Date; Receipt of Dividend" and "Transactions and Agreements
Concerning the Shares" in the Offer to Purchase.
(c) Incorporated herein by reference to the information appearing under the
caption "Price Range of Shares; Dividends" in the Offer to Purchase.
(d) Not applicable.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) Incorporated herein by reference to the information appearing under the
caption "Source and Amount of Funds" in the Offer to Purchase.
(b) Not applicable.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
Incorporated herein by reference to the information appearing under the
caption "Purpose of the Offer; Certain Effects of the Offer" in the Offer to
Purchase.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
Incorporated herein by reference to the information appearing under the
caption "Transactions and Agreements Concerning the Shares" in the Offer to
Purchase.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE ISSUER'S SECURITIES.
Incorporated herein by reference to the information appearing under the
captions "Transactions and Agreements Concerning the Shares" and "Fees and
Expenses" in the Offer to Purchase.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Incorporated herein by reference to the information appearing under the
caption "Fees and Expenses" in the Offer to Purchase.
ITEM 7. FINANCIAL INFORMATION.
(a) Incorporated herein by reference to the financial statements included in
the Annual Report on Form 10-K for the year ended December 31, 1996 of Duke
Energy Corporation ("Duke Energy"), the Annual Report on Form 10-K for the
year ended December 31, 1996 of PanEnergy Corp, the Current Report on Form 8-K
of Duke Energy filed on December 4, 1997 and the Quarterly Report on Form 10-Q
for the quarterly period ended September 30, 1997 of Duke Energy and to the
information appearing under the caption "Selected Consolidated Financial
Information" in the Offer to Purchase.
(b) Incorporated herein by reference to the information appearing under the
caption "Selected Consolidated Financial Information" in the Offer to
Purchase.
2
<PAGE>
ITEM 8. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) See Exhibits 9(a)(1) and 9(a)(2).
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
9(a)(1) Offer to Purchase, dated December 18, 1997.
9(a)(2) Form of Letter of Transmittal.
9(a)(3) Form of Notice of Guaranteed Delivery.
9(a)(4) Form of Letter to Brokers, Dealers, Banks, Trust Companies and
Other Nominees, dated December 18, 1997.
9(a)(5) Form of Letter to Clients of Brokers, Dealers, Banks, Trust
Companies and Other Nominees.
9(a)(6) Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
9(a)(7) Form of summary advertisement of Duke Energy, dated December 19,
1997.
9(a)(8) Form of letter to Shareholders, dated December 18, 1997.
9(a)(9) Press release, dated December 18, 1997.
9(b) Not applicable.
9(c) Not applicable.
9(d) Not applicable.
9(e) Not applicable.
9(f) Not applicable.
9(g)(1) Annual Report on Form 10-K for the year ended December 31, 1996,
filed by Duke Power Company, incorporated by reference to SEC
File No. 1-4928.
9(g)(2) Annual Report on Form 10-K for the year ended December 31, 1996,
filed by PanEnergy Corp, incorporated by reference to SEC File
No. 1-8157.
9(g)(3) Current Report on Form 8-K filed by Duke Energy Corporation on
December 4, 1997, incorporated by reference to SEC File No. 1-
4928.
9(g)(4) Quarterly Report on Form 10-Q filed by Duke Energy Corporation
on November 14, 1997, incorporated by reference to SEC File No.
1-4928.
</TABLE>
3
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Dated: December 18, 1997
DUKE ENERGY CORPORATION
/s/ Richard J. Osborne
By: _________________________________
Richard J. Osborne
Executive Vice President and
Chief Financial Officer
4
<PAGE>
EXHIBIT 9(a)(1)
DUKE ENERGY CORPORATION
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES OF THE FOLLOWING
SERIES OF ITS PREFERRED STOCK AND PREFERRED STOCK A
<TABLE>
<CAPTION>
CUSIP OUTSTANDING PURCHASE PRICE
TITLE OF SERIES NUMBER SHARES PER SHARE
- --------------- --------- ----------- --------------
<S> <C> <C> <C>
Preferred Stock ($100 par value)
4.50% Series C.......................... 264399791 350,000 $ 90.28
7.85% Series S.......................... 264399759 600,000 $118.46
7.00% Series W.......................... 264399668 500,000 $115.22
6.75% Series X.......................... 264399650 500,000 $115.35
7.04% Series Y.......................... 264399643 600,000 $115.90
Preferred Stock A ($25 par value)
6.375%, 1993 Series..................... 264399635 2,400,000 $ 28.28
</TABLE>
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON JANUARY 20, 1998, UNLESS THE OFFER IS EXTENDED.
Duke Energy Corporation, a North Carolina corporation ("Duke Energy"),
invites the holders of shares of each series of Duke Energy Preferred Stock
and Preferred Stock A listed above (a "Series of Preferred" and a "Series of
Preferred A", respectively; the Series of Preferred A being sometimes referred
to herein as the "6.375% Preferred A") to tender any and all of their shares
of such Series of Preferred or such Series of Preferred A ("Shares") for
purchase at the purchase price per Share listed above for the Shares tendered,
net to the seller in cash, upon the terms and subject to the conditions set
forth in this Offer to Purchase and in the Letter of Transmittal for the
Series of Preferred or Series of Preferred A tendered. As to each Series of
Preferred and Series of Preferred A, this Offer to Purchase, together with the
applicable Letter of Transmittal, constitutes the "Offer". Duke Energy will
purchase all Shares validly tendered and not withdrawn, upon the terms and
subject to the conditions of the Offer. See "Terms of the Offer--Extension;
Termination; Amendments" and "Terms of the Offer--Certain Conditions of the
Offer."
THE OFFER FOR A SERIES OF PREFERRED OR A SERIES OF PREFERRED A IS
INDEPENDENT OF THE OFFER FOR ANY OTHER SERIES OF PREFERRED OR SERIES OF
PREFERRED A. THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES OF
THE APPLICABLE SERIES OF PREFERRED OR SERIES OF PREFERRED A BEING TENDERED.
THE OFFER, HOWEVER, IS SUBJECT TO CERTAIN CONDITIONS. SEE "TERMS OF THE
OFFER--CERTAIN CONDITIONS OF THE OFFER."
IMPORTANT
Any shareholder desiring to tender all or any portion of such shareholder's
Shares should either (1) complete and sign the applicable Letter of
Transmittal or a facsimile thereof in accordance with the instructions in the
Letter of Transmittal, mail or deliver it and any other required documents to
the Depositary specified herein, and either deliver the certificates for
Shares to the Depositary along with the Letter of Transmittal or deliver such
Shares pursuant to the procedure for book-entry transfer set forth in "Terms
of the Offer--Procedure for Tendering Shares" herein or (2) request such
shareholder's broker, dealer, bank, trust company or other nominee to effect
the transaction. A shareholder whose Shares are registered in the name of a
broker, dealer, bank, trust company or other nominee must contact such broker,
dealer, bank, trust company or other nominee if such shareholder desires to
tender such Shares. Any shareholder who desires to tender Shares and whose
certificates for such Shares are not immediately available, or who cannot
comply in a timely manner with the procedure for book-entry transfer, should
tender such Shares by following the procedures for guaranteed delivery set
forth in "Terms of the Offer--Procedure for Tendering Shares--Guaranteed
Delivery Procedure" herein.
EACH SERIES OF PREFERRED AND SERIES OF PREFERRED A HAS ITS OWN LETTER OF
TRANSMITTAL, AND ONLY THE APPLICABLE LETTER OF TRANSMITTAL FOR A PARTICULAR
SERIES OR A NOTICE OF GUARANTEED DELIVERY FOR SUCH SERIES MAY BE USED TO
TENDER SHARES OF SUCH SERIES.
Duke Energy will, as provided in Instruction 10 of the Letter of
Transmittal, pay to any Soliciting Dealer a solicitation fee of 1.50% of the
par value per Share (except that for transactions for beneficial owners equal
to or exceeding 2,500 Shares of a particular Series of Preferred or Series of
Preferred A, Duke Energy will pay a solicitation fee of 1.00% of the par value
per Share) for any Shares tendered, accepted for payment and paid pursuant to
the Offer.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF THIS
TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN
THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
NEITHER DUKE ENERGY, ITS BOARD OF DIRECTORS NOR ANY OF ITS EXECUTIVE
OFFICERS MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER
ANY OR ALL SHARES. SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS AS TO WHETHER TO
TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER.
There is no established trading market for any of the Series of Preferred.
The 6.375% Preferred A is listed and traded on the New York Stock Exchange. As
of the close of business on December 17, 1997 (the last trading day prior to
the commencement of the Offer), the last reported sale price on the New York
Stock Exchange was $27 3/16 for the 6.375% Preferred A. Shareholders are urged
to obtain a current market quotation, if available, for their Shares.
Questions or requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal for a Series of Preferred or a Series
of Preferred A or other tender offer materials may be directed to the
Information Agent or the Dealer Managers at their respective addresses and
telephone numbers set forth on the back cover of this Offer to Purchase.
---------------
THE DEALER MANAGERS FOR THE OFFER ARE:
GOLDMAN, SACHS & CO. MERRILL LYNCH & CO.
---------------
The date of this Offer to Purchase is December 18, 1997.
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF DUKE
ENERGY AS TO WHETHER SHAREHOLDERS SHOULD TENDER SHARES PURSUANT TO THE OFFER.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN
OR IN THE APPLICABLE LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH
RECOMMENDATION AND SUCH INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY DUKE ENERGY.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SUMMARY.................................................................... 3
INTRODUCTION............................................................... 5
TERMS OF THE OFFER......................................................... 6
Number of Shares; Purchase Price; Expiration Date; Receipt of Dividend... 6
Procedure for Tendering Shares........................................... 6
Withdrawal Rights........................................................ 8
Acceptance for Payment of Shares and Payment of Purchase Price........... 9
Certain Conditions of the Offer.......................................... 10
Extension; Termination; Amendments....................................... 11
SELECTED CONSOLIDATED FINANCIAL INFORMATION................................ 13
FINANCIAL RATIOS........................................................... 13
RECENT DEVELOPMENTS........................................................ 14
PRICE RANGE OF SHARES; DIVIDENDS........................................... 15
PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER......................... 16
SOURCE AND AMOUNT OF FUNDS................................................. 17
TRANSACTIONS AND AGREEMENTS CONCERNING THE SHARES ......................... 18
CERTAIN FEDERAL INCOME TAX CONSEQUENCES.................................... 18
FEES AND EXPENSES.......................................................... 20
CERTAIN INFORMATION CONCERNING DUKE ENERGY................................. 21
ADDITIONAL INFORMATION..................................................... 23
MISCELLANEOUS.............................................................. 23
</TABLE>
2
<PAGE>
SUMMARY
This general summary is provided solely for the convenience of holders of
Shares and is qualified in its entirety by reference to the full text and more
specific details contained in this Offer to Purchase and the applicable Letter
of Transmittal and any amendments hereto and thereto.
Duke Energy............... Duke Energy Corporation.
The Shares................ Shares of the Series of Preferred and the Series of
Preferred A listed on the front cover of this Offer
to Purchase.
Number of Shares Sought... Any and all of each Series of Preferred and Series
of Preferred A.
Purchase Price............ The purchase price per Share listed on the front
cover of this Offer to Purchase which is applicable
to the Shares tendered, net to the seller in cash.
See "Price Range of Shares; Dividends."
Independent Offer......... The Offer for a Series of Preferred or a Series of
Preferred A is independent of the Offer for any
other Series of Preferred or Series of Preferred A.
The Offer is not conditioned upon any minimum num-
ber of Shares of the applicable Series of Preferred
or Series of Preferred A being tendered. The Offer,
however, is subject to certain conditions. See
"Terms of the Offer--Certain Conditions of the Of-
fer."
Expiration Date........... January 20, 1998 at 12:00 Midnight, New York City
time, unless extended.
How to Tender Shares...... See "Terms of the Offer--Procedure for Tendering
Shares." For further information, call the Informa-
tion Agent or the Dealer Managers or consult your
broker, dealer, bank, trust company or other nomi-
nee for assistance.
Withdrawal Rights......... Tendered Shares of any Series of Preferred or Se-
ries of Preferred A may be withdrawn at any time
prior to the Expiration Date of the Offer with re-
spect to such Series of Preferred or Series of Pre-
ferred A and, unless accepted for payment prior
thereto, may be withdrawn after February 18, 1998.
See "Terms of the Offer--Withdrawal Rights."
Purpose of Offer.......... Duke Energy is making the Offer because it believes
that the purchase of the Shares would be economi-
cally attractive to Duke Energy. In addition, the
Offer provides shareholders an opportunity to sell
their Shares at a price that Duke Energy believes
to be a premium over the market price and without
the usual transaction costs associated with a mar-
ket sale. See "Purpose of the Offer; Certain Ef-
fects of the Offer."
Market Price of Shares.... There is no established trading market for any of
the Series of Preferred. The 6.375% Preferred A is
listed and traded on the New York Stock Exchange.
The last reported sale price on the New York Stock
Exchange for the 6.375% Preferred A is shown on the
front cover of this Offer to Purchase. See "Price
Range of Shares; Dividends."
3
<PAGE>
Dividends................. Duke Energy paid a regular quarterly dividend for
each Series of Preferred and Series of Preferred A
on December 16, 1997 to holders of record as of the
close of business on November 14, 1997. Holders of
Shares tendered and purchased pursuant to the Offer
will not be entitled to any dividends in respect of
any later dividend periods (or any portion there-
of). Duke Energy expects to pay the next regular
quarterly dividend for each Series of Preferred and
Series of Preferred A on March 16, 1998 to holders
of record as of the close of business on a date to
be determined by its Board of Directors. See "Price
Range of Shares; Dividends."
Brokerage Commissions..... Not payable by shareholders. Duke Energy will pay
the solicitation fee described on the front cover
of this Offer to Purchase to the broker, dealer,
bank or trust company, if any, designated by the
holder tendering Shares.
Stock Transfer Tax........ None, except as provided in Instruction 6 of the
Letter of Transmittal.
Payment Date.............. As soon as practicable after the Expiration Date,
which is expected to be three business days after
the Expiration Date. See "Terms of the Offer--Ex-
tension; Termination; Amendments" and "Terms of the
Offer--Certain Conditions of the Offer."
Further Information....... Additional copies of this Offer to Purchase, the
applicable Letter of Transmittal and the applicable
Notice of Guaranteed Delivery may be obtained by
contacting Georgeson & Company Inc., Wall Street
Plaza, New York, New York 10005, telephone
(800) 223-2064 (toll-free). Banks and brokers may
call collect (212) 440-9800. Questions about the
Offer should be directed to Goldman, Sachs & Co. at
(800) 828-3182 or to Merrill Lynch & Co. at (888)
ML4-TNDR (toll-free) or (888) 654-8637.
4
<PAGE>
INTRODUCTION
Duke Energy invites the holders of the Series of Preferred and the Series of
Preferred A listed on the front cover of this Offer to Purchase to tender any
and all of their Shares for purchase at the purchase price per Share listed on
the front cover of this Offer to Purchase which is applicable to the Shares
tendered, net to the seller in cash, upon the terms and subject to the
conditions set forth herein and in the applicable Letter of Transmittal for
the Series of Preferred and the Series of Preferred A tendered. As to each
Series of Preferred and Series of Preferred A, this Offer to Purchase,
together with the applicable Letter of Transmittal, constitutes the "Offer".
See "Terms of the Offer--Extension; Termination; Amendments" and "Terms of the
Offer--Certain Conditions of the Offer."
THE OFFER FOR SHARES OF A SERIES OF PREFERRED OR A SERIES OF PREFERRED A IS
INDEPENDENT OF THE OFFER FOR SHARES OF ANY OTHER SERIES OF PREFERRED OR SERIES
OF PREFERRED A. THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES
OF THE APPLICABLE SERIES OF PREFERRED OR SERIES OF PREFERRED A BEING TENDERED.
THE OFFER, HOWEVER, IS SUBJECT TO CERTAIN CONDITIONS. SEE "TERMS OF THE
OFFER--CERTAIN CONDITIONS OF THE OFFER."
NEITHER DUKE ENERGY, ITS BOARD OF DIRECTORS NOR ANY OF ITS EXECUTIVE
OFFICERS MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER
ANY OR ALL SHARES. SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS AS TO WHETHER TO
TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER.
EACH SERIES OF PREFERRED AND SERIES OF PREFERRED A HAS ITS OWN LETTER OF
TRANSMITTAL, AND ONLY THE APPLICABLE LETTER OF TRANSMITTAL FOR A PARTICULAR
SERIES OR A NOTICE OF GUARANTEED DELIVERY MAY BE USED TO TENDER SHARES OF SUCH
SERIES.
There is no established trading market for any of the Series of Preferred.
The 6.375% Preferred A is listed and traded on the New York Stock Exchange
under the symbol "DUKA". The last reported sale price on the New York Stock
Exchange, as of the close of business on December 17, 1997, for the 6.375%
Preferred A is shown on the front cover of this Offer to Purchase.
Shareholders are urged to obtain a current market quotation, if available, for
their Shares.
A regular quarterly dividend for each Series of Preferred and Series of
Preferred A was paid on December 16, 1997 to holders of record as of the close
of business on November 14, 1997. Holders of Shares tendered into and
purchased pursuant to the Offer will not be entitled to any dividends in
respect of any later dividend periods (or any portion thereof). See "Price
Range of Shares; Dividends."
Tendering shareholders will not be obligated to pay brokerage commissions,
solicitation fees or, subject to the Instructions to the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by Duke Energy
pursuant to the Offer. Duke Energy will pay all charges and expenses of
Goldman, Sachs & Co. and Merrill Lynch & Co. (the "Dealer Managers"),
ChaseMellon Shareholder Services, L.L.C. (the "Depositary") and Georgeson &
Company Inc. (the "Information Agent") incurred in connection with the Offer.
In addition, Duke Energy will pay to the Soliciting Dealer, if any, designated
by the holder tendering Shares, the solicitation fee described on the front
cover of this Offer to Purchase. See "Fees and Expenses." ANY TENDERING
SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE AND SIGN THE SUBSTITUTE FORM
W-9 THAT IS INCLUDED IN THE LETTER OF TRANSMITTAL MAY BE SUBJECT TO A REQUIRED
FEDERAL INCOME TAX BACKUP WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAYABLE TO
SUCH SHAREHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. See "Terms of the
Offer--Procedure for Tendering Shares" and "Certain Federal Income Tax
Consequences."
5
<PAGE>
Shareholders are not under any obligation to tender Shares pursuant to the
Offer. The Offer does not constitute notice of redemption of any Series of
Preferred or Series of Preferred A pursuant to Duke Energy's Restated Articles
of Incorporation, nor does Duke Energy intend to effect any such redemption by
making the Offer. The Offer does not constitute a waiver by Duke Energy of any
option it has to redeem Shares. See "Purpose of the Offer; Certain Effects of
the Offer."
Copies of this Offer to Purchase and an applicable Letter of Transmittal are
being mailed to record holders of Shares and will be furnished to brokers,
dealers, banks, trust companies and other nominees whose names, or the names
of whose nominees, appear on Duke Energy's shareholder list or, if applicable,
who are listed as participants in a clearing agency's security position
listing for subsequent transmittal to beneficial owners of the Shares.
TERMS OF THE OFFER
NUMBER OF SHARES; PURCHASE PRICE; EXPIRATION DATE; RECEIPT OF DIVIDEND
Upon the terms and subject to the conditions described herein and in the
applicable Letter of Transmittal, Duke Energy will purchase any and all Shares
that are validly tendered on or prior to the Expiration Date (as defined
below) (and not properly withdrawn in accordance with "--Withdrawal Rights")
at the purchase price per Share listed on the front cover of this Offer to
Purchase which is applicable to the Shares tendered, net to the seller in
cash. See "--Extension; Termination; Amendments" and "--Certain Conditions of
the Offer."
The later of 12:00 Midnight, New York City time, on January 20, 1998, or the
latest time and date to which the Offer is extended with respect to any Series
of Preferred or Series of Preferred A is referred to herein as the "Expiration
Date". There can be no assurance that Duke Energy will exercise its right to
extend the Offer with respect to any Series of Preferred or Series of
Preferred A.
The Offer for a Series of Preferred or a Series of Preferred A is
independent of the Offer for any other Series of Preferred or Series of
Preferred A.
A regular quarterly dividend for each Series of Preferred and Series of
Preferred A was paid on December 16, 1997, to holders of record as of the
close of business on November 14, 1997. Holders of Shares tendered into and
purchased pursuant to the Offer will not be entitled to any dividends in
respect of any later dividend periods (or any portion thereof).
No alternative, conditional or contingent tenders will be accepted.
PROCEDURE FOR TENDERING SHARES
To tender Shares validly pursuant to the Offer, the tendering holder of
Shares must either:
(a) send to the Depositary (at one of its addresses set forth on the back
cover of this Offer to Purchase) a properly completed and duly executed
Letter of Transmittal for the Series of Preferred or the Series of
Preferred A tendered or facsimile thereof, together with any required
signature guarantees and any other documents required by the Letter of
Transmittal, and either (i) cause certificates for the Shares to be
tendered to be received by the Depositary, at one of its addresses or (ii)
cause such Shares to be delivered pursuant to the procedures for book-entry
transfer described below (and a confirmation of such delivery must be
received by the Depositary), in each case on or prior to the Expiration
Date; or
(b) comply with the guaranteed delivery procedure described under "--
Guaranteed Delivery Procedure" below.
6
<PAGE>
The Depositary will establish an account with respect to each Series of
Preferred and Series of Preferred A at The Depository Trust Company (the
"Book-Entry Transfer Facility") for purposes of the Offer within two business
days after the date of this Offer to Purchase, and any financial institution
that is a participant in the system of any Book-Entry Transfer Facility may
make delivery of Shares by causing such Book-Entry Transfer Facility to
transfer such Shares into the Depositary's account in accordance with the
procedures of such Book-Entry Transfer Facility. ALTHOUGH DELIVERY OF SHARES
MAY BE EFFECTED THROUGH BOOK-ENTRY TRANSFER, A PROPERLY COMPLETED AND DULY
EXECUTED LETTER OF TRANSMITTAL FOR THE SERIES OF PREFERRED OR THE SERIES OF
PREFERRED A TENDERED OR FACSIMILE THEREOF, TOGETHER WITH ANY REQUIRED
SIGNATURE GUARANTEES AND ANY OTHER REQUIRED DOCUMENTS, MUST, IN ANY CASE, BE
RECEIVED BY THE DEPOSITARY AT ONE OF ITS ADDRESSES SET FORTH ON THE BACK COVER
OF THIS OFFER TO PURCHASE ON OR PRIOR TO THE EXPIRATION DATE, OR THE TENDERING
HOLDER OF SHARES MUST COMPLY WITH THE GUARANTEED DELIVERY PROCEDURE DESCRIBED
BELOW.
DELIVERY OF THE APPLICABLE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED
DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
Except as otherwise provided below, all signatures on a Letter of
Transmittal must be guaranteed by a firm that is a member of a registered
national securities exchange or the National Association of Securities
Dealers, Inc. (the "NASD"), or by a bank or trust company having an office or
correspondent in the United States which is a participant in an approved
Signature Guarantee Medallion Program (each of the foregoing being referred to
as an "Eligible Institution"). Signatures on a Letter of Transmittal need not
be guaranteed if (a) the Letter of Transmittal is signed by the registered
holder of the Shares tendered therewith and such holder has not completed the
box entitled "Special Payment Instructions" or the box entitled "Special
Delivery Instructions" on the Letter of Transmittal or (b) such Shares are
tendered for the account of an Eligible Institution. See Instructions 1 and 5
of the Letter of Transmittal.
Guaranteed Delivery Procedure. If a shareholder desires to tender Shares
pursuant to the Offer and cannot deliver certificates for such Shares and all
other required documents to the Depositary on or prior to the Expiration Date,
or the procedure for book-entry transfer cannot be complied with in a timely
manner, such Shares may nevertheless be tendered if all of the following
conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed Delivery
in the form provided by Duke Energy (with any required signature
guarantees) is received by the Depositary as provided below on or
prior to the Expiration Date; and
(iii) the certificates for such Shares (or a confirmation of a book-entry
transfer of such Shares into the Depositary's account at the Book-
Entry Transfer Facility), together with a properly completed and
duly executed Letter of Transmittal for the Series of Preferred or
the Series of Preferred A to be tendered (or facsimile thereof) and
any other documents required by the Letter of Transmittal, are
received by the Depositary no later than 5:00 P.M., New York City
time, on the third New York Stock Exchange trading day after the
date of execution of the Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile transmittal or mailed to the Depositary and must include a guarantee
by an Eligible Institution in the form set forth in such Notice of Guaranteed
Delivery.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
OPTION AND RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY
DELIVERY.
7
<PAGE>
TO AVOID FEDERAL INCOME TAX BACKUP WITHHOLDING EQUAL TO 31% OF THE GROSS
PAYMENTS MADE PURSUANT TO THE OFFER, EACH SHAREHOLDER MUST NOTIFY THE
DEPOSITARY OF SUCH SHAREHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER AND
PROVIDE CERTAIN OTHER INFORMATION BY PROPERLY COMPLETING THE SUBSTITUTE FORM
W-9 INCLUDED IN THE LETTER OF TRANSMITTAL. FOREIGN SHAREHOLDERS MUST SUBMIT A
PROPERLY COMPLETED FORM W-8 IN ORDER TO AVOID THE APPLICABLE BACKUP
WITHHOLDING, PROVIDED, HOWEVER, THAT BACKUP WITHHOLDING WILL NOT APPLY TO
FOREIGN SHAREHOLDERS SUBJECT TO 30% (OR LOWER TREATY RATE) WITHHOLDING ON
GROSS PAYMENTS RECEIVED PURSUANT TO THE OFFER (AS DISCUSSED UNDER "CERTAIN
FEDERAL INCOME TAX CONSEQUENCES").
SHAREHOLDERS ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE
TAX CONSEQUENCES OF THE OFFER.
All questions as to the form of documents and the validity, eligibility
(including time of receipt) and acceptance for payment of any tender of Shares
will be determined by Duke Energy, in its sole discretion, and its
determination shall be final and binding. Duke Energy reserves the absolute
right to reject any or all tenders of Shares that (i) it determines are not in
proper form or (ii) the acceptance for payments of or payment for which may,
in the opinion of Duke Energy's counsel, be unlawful. Duke Energy also
reserves the absolute right to waive any defect or irregularity in any tender
of Shares. None of Duke Energy, the Dealer Managers, the Depositary, the
Information Agent or any other person will be under any duty to give notice of
any defect or irregularity in tenders, nor shall any of them incur any
liability for failure to give any such notice.
Duke Energy will, as provided in Instruction 10 of the Letter of
Transmittal, pay the solicitation fee described on the front cover of this
Offer to Purchase for any Shares tendered and accepted for payment and paid
for pursuant to the Offer, covered by a Letter of Transmittal which
designates, as having solicited and obtained the tender, the name of (i) any
broker or dealer in securities, including the Dealer Managers in their
capacity as a broker or dealer, who is a member of any national securities
exchange or of the NASD, (ii) any foreign broker or dealer not eligible for
membership in the NASD which agrees to conform to the NASD's Rules of Fair
Practice in soliciting tenders outside the United States to the same extent as
though it were an NASD member or (iii) any bank or trust company (each of
which is referred to herein as a "Soliciting Dealer"). No such fee shall be
payable to a Soliciting Dealer if such Soliciting Dealer is required for any
reason to transfer the amount of such fee to a depositing holder (other than
itself). No such fee shall be paid to a Soliciting Dealer with respect to
Shares tendered for such Soliciting Dealer's own account. No broker, dealer,
bank, trust company or other nominee shall be deemed to be an agent of Duke
Energy, the Depositary, the Information Agent or the Dealer Managers for the
purposes of the Offer.
WITHDRAWAL RIGHTS
Tenders of Shares of a Series of Preferred or Series of Preferred A made
pursuant to the Offer may be withdrawn at any time prior to the Expiration
Date with respect to such Series of Preferred or Series of Preferred A.
Thereafter, such tenders are irrevocable, except that they may be withdrawn
after February 18, 1998, unless theretofore accepted for payment as provided
in this Offer to Purchase. If, with respect to any Series of Preferred or
Series of Preferred A, Duke Energy extends the period of time during which the
Offer is open, is delayed in accepting for payment or paying for Shares of
that Series of Preferred or Series of Preferred A or is unable to accept for
payment or pay for Shares of that Series of Preferred or Series of Preferred A
pursuant to the Offer for any reason, then, without prejudice to Duke Energy's
rights under the Offer, the Depositary may, on behalf of Duke Energy, retain
all Shares of that Series of Preferred or Series of Preferred A tendered, and
such Shares may not be withdrawn except as otherwise provided in this "Terms
of the Offer--Withdrawal Rights," subject to Rule 13e-4(f)(5) under the
Securities Exchange Act of 1934 (the "Exchange Act"), which provides that the
issuer "making the tender offer shall either pay the consideration offered, or
return the tendered securities, promptly after the termination or withdrawal
of the tender offer."
8
<PAGE>
To be effective, a written or facsimile transmission notice of withdrawal
must be timely received by the Depositary at one of its addresses or facsimile
numbers set forth on the back cover of this Offer to Purchase and must specify
the name of the person who tendered the Shares to be withdrawn and the number
of Shares of each Series of Preferred or Series of Preferred A to be
withdrawn. If the Shares to be withdrawn have been delivered to the
Depositary, a signed notice of withdrawal with signatures guaranteed by an
Eligible Institution (except in the case of Shares tendered by an Eligible
Institution) must be submitted prior to the release of such Shares. In
addition, such notice must specify, in the case of Shares tendered by delivery
of certificates, the name of the registered holder (if different from that of
the tendering shareholder) and the serial numbers shown on the particular
certificates evidencing the Shares to be withdrawn or, in the case of Shares
tendered by book-entry transfer, the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares and the
name of the registered holder (if different from the name of such account).
Withdrawals may not be rescinded, and Shares withdrawn will thereafter be
deemed not validly tendered for purposes of the Offer. However, withdrawn
Shares may be retendered by again following one of the procedures described in
"Terms of the Offer--Procedure for Tendering Shares" at any time prior to the
Expiration Date.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by Duke Energy in its sole discretion,
and its determination shall be final and binding. None of Duke Energy, the
Dealer Managers, the Depositary, the Information Agent or any other person
will be under any duty to give notification of any defect or irregularity in
any notice of withdrawal or incur any liability for failure to give any such
notification.
ACCEPTANCE FOR PAYMENT OF SHARES AND PAYMENT OF PURCHASE PRICE
Upon the terms and subject to the conditions of the Offer and as promptly as
practicable after the Expiration Date with respect to a Series of Preferred or
a Series of Preferred A (which is expected to be three business days after the
Expiration Date), Duke Energy will accept for payment and pay for Shares of
that Series of Preferred or Series of Preferred A validly tendered. See "--
Number of Shares; Purchase Price; Expiration Date; Receipt of Dividend"; "--
Extension; Termination; Amendments"; "--Certain Conditions of the Offer" and
"Source and Amount of Funds." Thereafter, payment for all Shares of that
Series of Preferred or Series of Preferred A validly tendered on or prior to
the Expiration Date and accepted for payment pursuant to the Offer will be
made by the Depositary by check as promptly as practicable. In all cases,
payment for Shares accepted for payment pursuant to the Offer will be made
only after timely receipt by the Depositary of certificates for Shares (or of
a confirmation of a book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility), a properly completed and duly
executed Letter of Transmittal for the Series of Preferred or the Series of
Preferred A tendered or facsimile thereof, and any other required documents.
For purposes of the Offer, Duke Energy will be deemed to have accepted for
payment (and thereby purchased) Shares that are validly tendered prior to the
Expiration Date and not withdrawn as, if and when it gives oral or written
notice to the Depositary of its acceptance for payment of such Shares. Duke
Energy will pay for Shares that it has purchased pursuant to the Offer by
depositing the purchase price therefor with the Depositary. The Depositary
will act as agent for tendering shareholders for the purpose of receiving
payment from Duke Energy and transmitting payment to tendering shareholders.
Under no circumstances will interest be paid on amounts to be paid to
tendering shareholders, regardless of any delay in making such payment.
Certificates for all Shares not purchased will be returned (or, in the case
of Shares tendered by book-entry transfer, such Shares will be credited to an
account maintained with the Book-Entry Transfer Facility) as promptly as
practicable, without expense to the tendering shareholder.
9
<PAGE>
Payment for Shares may be delayed in the event of difficulty in determining
the number of Shares properly tendered. In addition, if certain events occur,
Duke Energy may not be obligated to purchase Shares pursuant to the Offer. See
"--Certain Conditions of the Offer."
Duke Energy will pay or cause to be paid any stock transfer taxes with
respect to the sale and transfer of any Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price is to be made to, or
Shares not tendered or not purchased are to be registered in the name of, any
person other than the registered holder, or if tendered Shares are registered
in the name of any person other than the person signing the Letter of
Transmittal, the amount of any stock transfer taxes (whether imposed on the
registered holder, such other person or otherwise) payable on account of the
transfer to such person will be deducted from the purchase price unless
satisfactory evidence of the payment of such taxes, or exemption therefrom, is
submitted. See Instruction 6 of the Letter of Transmittal.
CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, Duke Energy will not be
required to accept for payment or pay for any Shares of a Series of Preferred
or a Series of Preferred A tendered, and may terminate or amend the Offer with
respect thereto, and may postpone (subject to the requirements of the Exchange
Act for prompt payment for or return of Shares) the acceptance for payment of
or payment for Shares of a Series of Preferred or a Series of Preferred A
tendered, if any of the following shall have occurred at any time after the
date of this Offer to Purchase and prior to the Expiration Date (whether or
not such occurrence shall be continuing at the time of such termination,
amendment or postponement):
(a) any action or proceeding shall have been threatened, instituted,
pending or taken, or approval shall have been withheld, withdrawn or
abrogated, or any statute, rule, regulation, judgment, order or injunction
shall have been threatened, proposed, sought, promulgated, enacted,
entered, amended, enforced or deemed to be applicable to the Offer or Duke
Energy, by any legislative body, court, authority, agency or tribunal or
any other person, including the Securities and Exchange Commission or the
State of North Carolina or South Carolina, that, in Duke Energy's sole
judgment, would or might directly or indirectly (i) make the acceptance for
payment of, or payment for, some or all of the Shares of that Series of
Preferred or Series of Preferred A illegal or challenge the acquisition of
such Shares or otherwise or in any manner relate to or affect the Offer,
(ii) materially impair the contemplated benefits of the Offer to Duke
Energy or (iii) materially affect the business, condition (financial or
other), income, operations or prospects of Duke Energy, or otherwise
materially impair in any way the contemplated future conduct of the
business of Duke Energy;
(b) it shall have been publicly disclosed or Duke Energy shall have
learned that any person or "group" (within the meaning of Section 13(d)(3)
of the Exchange Act) has acquired or proposes to acquire beneficial
ownership of more than 5% of the outstanding Common Stock of Duke Energy
whether through the acquisition of stock, the formation of a group, the
grant of any option or right or otherwise;
(c) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on any national securities exchange
or in the over-the-counter market, (ii) any significant decline in the
market price of the Shares of that Series of Preferred or Series of
Preferred A, (iii) any change in the general political, market, economic or
financial condition in the United States or abroad that could have a
material adverse effect on Duke Energy's business, operations, prospects or
ability to obtain financing generally or the trading in the Shares of that
Series of Preferred or Series of Preferred A or other equity securities of
Duke Energy, (iv) the declaration of a banking moratorium or any suspension
of payments in respect of banks in the United States or any limitation on,
or any event which, in Duke Energy's sole judgment, might
10
<PAGE>
affect, the extension of credit by lending institutions in the United
States, (v) the commencement of a war, armed hostilities or other
international or national calamity directly or indirectly involving the
United States or (vi) in the case of any of the foregoing existing at the
time of the commencement of the Offer, in Duke Energy's sole judgment, a
material acceleration or worsening thereof;
(d) a tender or exchange offer with respect to some or all of the Shares
of that Series of Preferred or Series of Preferred A or other equity
securities of Duke Energy, or a merger, acquisition or other business
combination proposal for Duke Energy shall have been proposed, announced or
made by another person;
(e) there shall have occurred any event or events that have resulted, or
may in the sole judgment of Duke Energy result, in an actual or threatened
change in the business, condition (financial or other), income, operations,
stock ownership or prospects of Duke Energy and its subsidiaries;
(f) Moody's Investors Service, Inc. or Standard & Poor's Corporation
shall have downgraded or withdrawn the rating accorded any securities of
Duke Energy or shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any
securities of Duke Energy; or
(g) there shall have occurred any decline in the Standard & Poor's
Composite 500 Stock Index by an amount in excess of 15% measured from the
close of business on December 17, 1997;
and, in the sole judgment of Duke Energy, such event or events make it
undesirable or inadvisable to proceed with the Offer with respect to such
Series of Preferred or Series of Preferred A or with such acceptance for
payment or payment. The Offer for a Series of Preferred or a Series of
Preferred A is independent of the Offer for any other Series of Preferred or
Series of Preferred A. The consummation of the Offer for any Series of
Preferred or Series of Preferred A is not conditioned on the consummation of
the Offer for all Series of Preferred or Series of Preferred A or for any
other Series of Preferred or Series of Preferred A.
In addition, Duke Energy will not be required to accept for payment or pay
for Shares of the 6.375% Preferred A if Duke Energy has determined that the
consummation of the Offer with respect to such Shares would have a reasonable
likelihood of causing the 6.375% Preferred A to cease to be listed on the NYSE
(the "Listing Condition").
The foregoing conditions are for the sole benefit of Duke Energy and may be
asserted by Duke Energy regardless of the circumstances (including any action
or inaction by Duke Energy) giving rise to any such condition, and any such
condition, except for the Listing Condition, may be waived by Duke Energy, in
whole or in part, at any time and from time to time in its sole discretion.
The failure by Duke Energy at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to
time. Any determination by Duke Energy concerning the events described above
will be final and binding on all parties.
EXTENSION; TERMINATION; AMENDMENTS
Prior to the Expiration Date, Duke Energy may, with respect to each Series
of Preferred or Series of Preferred A, extend the period of time during which
the Offer is open or otherwise amend or modify the Offer and may terminate the
Offer for any reason. There can be no assurance, however, that Duke Energy
will extend the Offer. During any such extension, all Shares of such Series of
Preferred or Series of Preferred A previously tendered will remain subject to
the Offer, except to the extent that such Shares may be withdrawn as set forth
in "--Withdrawal Rights."
11
<PAGE>
Prior to the Expiration Date, Duke Energy may, with respect to each Series
of Preferred or Series of Preferred A, upon the occurrence of any of the
conditions specified in "--Certain Conditions of the Offer" terminate the
Offer and not accept for payment or pay for any Shares tendered or, subject to
Rule 13e-4(f)(5) under the Exchange Act (which provides that the issuer
"making the tender offer shall either pay the consideration offered, or return
the tendered securities, promptly after the termination or withdrawal of the
tender offer"), postpone acceptance for payment of or payment for Shares.
To effect any such extension, amendment, modification, termination or
postponement, Duke Energy shall give oral or written notice to the Depositary
and make a public announcement thereof. Without limiting the manner in which
Duke Energy may choose to make such a public announcement, Duke Energy shall
have no obligation (except as otherwise required by applicable law) to
publish, advertise or otherwise communicate any such public announcement,
other than by making a release to the Dow Jones News Service, except in the
case of an announcement of an extension of the Offer with respect to any
Series of Preferred or Series of Preferred A, in which case Duke Energy shall
have no obligation to publish, advertise or otherwise communicate such
announcement other than by issuing a notice of such extension by press release
or other public announcement, which notice shall be issued no later than 9:00
A.M., New York City time, on the next business day after the previously
scheduled Expiration Date with respect to that Series of Preferred or Series
of Preferred A.
If Duke Energy materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer, Duke
Energy will extend the Offer to the extent required by Rules 13e-4(d)(2) and
13e-4(e)(2) under the Exchange Act. Under these rules, the minimum period
during which an offer must remain open following material changes in the terms
of the offer or information concerning the offer (other than a change in
price, change in dealer's soliciting fee or change in percentage of securities
sought) will depend on the facts and circumstances, including the relative
materiality of such terms or information. In a published release, the
Securities and Exchange Commission (the "Commission") has stated that, in its
view, an offer should remain open for a minimum of five business days from the
date that a notice of such a material change is first published, sent or
given. The Offer with respect to any Series of Preferred or Series of
Preferred A will be extended for at least ten business days from the time Duke
Energy publishes, sends or gives to holders of Shares of that Series of
Preferred or Series of Preferred A a notice that it will (a) increase or
decrease the price it will pay for Shares of that Series of Preferred or
Series of Preferred A or the amount of the dealer's soliciting fee or (b)
increase or decrease the percentage of Shares in that Series of Preferred or
Series of Preferred A it seeks (except that the acceptance for payment of
additional Shares of a Series of Preferred or a Series of Preferred A not to
exceed 2% of the outstanding Shares in that Series of Preferred or Series of
Preferred A shall not be deemed to be an increase).
12
<PAGE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------ ------------------------
1997 1996(1) 1996(1) 1995(1)
--------- -------- ------------ -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Operating Revenues................ $11,719.2 $8,551.8 $ 12,302.4 $ 9,694.7
Net Income........................ 789.8 881.4 1,074.3 1,018.1
Earnings for Common Stock ........ 756.6 848.2 1,030.1 969.2
Earnings per Share of Common
Stock............................ $ 2.10 $ 2.34 $ 2.85 $ 2.68
Earnings per Share of Common Stock
before extraordinary items....... -- -- 2.90 --
</TABLE>
- --------
(1) Data reflects accounting for the merger between Duke Power Company and
PanEnergy Corp as a pooling of interests. As a result, the data gives
effect to the merger as if it had occurred as of January 1, 1995.
<TABLE>
<CAPTION>
CAPITALIZATION AS OF
SEPTEMBER 30, 1997
-------------------------------
ACTUAL AS ADJUSTED(1)
----------- -------------------
(MILLIONS, EXCEPT PERCENTAGES)
<S> <C> <C> <C>
Common Stock Equity.......................... $ 7,597.7 $ 7,597.7 51.8%
Preferred Stocks With Sinking Fund
Requirements (including current portion).... 234.0 124.0 .9
Preferred Stocks Without Sinking Fund
Requirements................................ 450.0 207.5 1.4
Guaranteed Preferred Beneficial Interests in
Corporation's Subordinated Notes............ -- 350.0 2.4
Debt (including short-term debt)............. 6,380.9 6,380.9 43.5
----------- ----------- -------
Total...................................... $ 14,662.6 $ 14,660.1 100.0%
=========== =========== =======
</TABLE>
- --------
(1) Reflects the assumed purchase pursuant to the Offer of $136.5 million par
value of Duke Energy Preferred Stock and Preferred Stock A, the sale on
December 8, 1997 of $360.8 million of junior subordinated notes to a
subsidiary trust, the issuance on December 8, 1997 by such trust of $350
million of Duke Energy obligated trust preferred securities of such trust
and the redemption of $195 million par value of Duke Energy Preferred Stock
and Preferred Stock A on December 16, 1997.
FINANCIAL RATIOS
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
-------------- --------------
1997 1996 1996 1995
------ ------ ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges(1).......... 4.3 4.5 4.3 4.0
Ratio of Earnings to Fixed Charges and
Preferred Dividends Combined(1)............... 3.8 4.0 3.8 3.5
</TABLE>
- --------
(1) For purposes of computing these ratios, earnings consist of income from
continuing operations before income taxes and fixed charges. Fixed charges
consist of all interest deductions and the interest component of rentals.
For the ratio of earnings to fixed charges and preferred dividends
combined, preferred dividends represent an amount equal to the earnings
which, on a pre-tax basis, would be required to meet the dividends on
preferred stocks.
13
<PAGE>
RECENT DEVELOPMENTS
On November 18, 1997, Duke Energy Power Services Inc., a subsidiary of Duke
Energy ("DEPS"), entered into an agreement with Pacific Gas and Electric
Company ("PG&E") for the purchase of three electric generating plants in
California for $501 million. The agreement followed acceptance by PG&E of
DEPS's winning bid in connection with the auction held by PG&E as part of its
electric generating divestiture program. The sale of the plants to DEPS is
subject to approval of the California Public Utilities Commission. If
approved, the sale is expected to close by March 31, 1998. Pursuant to
California's electric restructuring law, DEPS must contract with PG&E to
operate and maintain the facilities for two years following the sale. The
transaction does not include any contracts for the output of the plants.
The plants covered by the agreement are as follows:
<TABLE>
<CAPTION>
NET
OPERATING
NUMBER CAPACITY
GENERATION TYPE COUNTY LOCATION OF UNITS MW
--------------- --------------- -------- ---------
<S> <C> <C> <C>
Gas-fired:
Moss Landing......................... Monterey 2 1,478
Morro Bay............................ San Luis Obispo 4 1,002
Diesel fueled combustion turbine:
Oakland.............................. Alameda 3 165
-----
Total 2,645
</TABLE>
On December 5, 1997, Duke Energy filed an application with the North
Carolina Utilities Commission to have its wholly-owned utility subsidiary,
Nantahala Power and Light Company, become an unincorporated division of Duke
Power, the division of Duke Energy which conducts its electric utility
business in North Carolina and South Carolina. See "Certain Information
Concerning Duke Energy." In its application, Duke Energy proposed that the
base rates for customers of such subsidiary not be increased through the year
2000. Duke Energy also plans to make filings in connection with such
transaction with The Public Service Commission of South Carolina and the
Federal Energy Regulatory Commission.
On December 9, 1997, Duke Energy Power Services LLC and United American
Energy Corp. acquired, through a jointly-owned limited liability company, a
50% ownership interest in American Ref-Fuel Company ("American Ref-Fuel") from
Air Products and Chemicals Inc. for a purchase price of $237 million. Duke
Energy Power Services LLC's interest in such limited liability company is 65%.
American Ref-Fuel is the third largest waste-to-energy company in the United
States, with revenues of about $350 million for the fiscal year ended
September 30, 1997. The other 50% interest in American Ref-Fuel is held by
Browning-Ferris Industries, Inc.
14
<PAGE>
PRICE RANGE OF SHARES; DIVIDENDS
There is no established trading market for any of the Series of Preferred.
The 6.375% Preferred A is listed and traded on the New York Stock Exchange
under the symbol "DUKA". The last reported sale price on the New York Stock
Exchange, as of the close of business on December 17, 1997 for the 6.375%
Preferred A is shown on the front cover of this Offer to Purchase.
SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS, IF AVAILABLE, FOR
THEIR SHARES.
The following table sets forth the high and low sales prices of the 6.375%
Preferred A on the New York Stock Exchange for the fiscal quarters indicated.
<TABLE>
<CAPTION>
6.375% PREFERRED A
------------------
HIGH LOW
------------------
<S> <C> <C>
1995:1st Quarter........................................ 23 20
2nd Quarter........................................ 23 7/8 21 3/4
3rd Quarter........................................ 24 1/8 22 3/4
4th Quarter........................................ 25 7/8 23 3/8
1996:1st Quarter........................................ 26 1/4 23 3/4
2nd Quarter........................................ 25 22 5/8
3rd Quarter........................................ 24 1/2 23
4th Quarter........................................ 26 23 3/4
1997:1st Quarter........................................ 26 24 1/4
2nd Quarter........................................ 25 1/2 24
3rd Quarter........................................ 26 1/2 25 3/16
4th Quarter (through December 17).................. 27 1/4 25 5/8
</TABLE>
Dividends for a Series of Preferred or a Series of Preferred A are payable
quarterly when, as and if declared by Duke Energy's Board of Directors at the
rate per annum included in the title of the Series of Preferred and the Series
of Preferred A listed on the front cover of this Offer to Purchase. A quarterly
dividend for each Series of Preferred and Series of Preferred A was paid on
December 16, 1997 to holders of record as of the close of business on November
14, 1997. Holders of Shares tendered and purchased pursuant to the Offer will
not be entitled to any dividends in respect of any later dividend periods (or
any portion thereof).
15
<PAGE>
PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER
Duke Energy is making the Offer because it believes that the purchase of the
Shares would be economically attractive to Duke Energy. The Offer also
provides shareholders an opportunity to sell their Shares at a price that Duke
Energy believes to be a premium over the market price and without the usual
transaction costs associated with a market sale.
After the consummation of the Offer, Duke Energy may determine to purchase
additional Shares on the open market, in privately negotiated transactions,
through one or more tender offers or otherwise. Any such purchases may be on
the same terms as, or on terms which are more or less favorable to holders of
Shares than, the terms of the Offer. However, Rule 13e-4(f)(6) under the
Exchange Act prohibits Duke Energy and its affiliates from purchasing any
Shares of a Series of Preferred or a Series of Preferred A, other than
pursuant to the Offer, until at least ten business days after the Expiration
Date with respect to that Series of Preferred or Series of Preferred A. Any
future purchases of Shares by Duke Energy would depend on many factors,
including the market price of the Shares, Duke Energy's business and financial
position, restrictions on Duke Energy's ability to purchase Shares imposed by
law or by New York Stock Exchange listing requirements, and general economic
and market conditions.
Shareholders are not under any obligation to tender Shares pursuant to the
Offer. The Offer does not constitute notice of redemption of any Series of
Preferred or Series of Preferred A pursuant to Duke Energy's Restated Articles
of Incorporation, nor does Duke Energy intend to effect any such redemption by
making the Offer. The Offer does not constitute a waiver by Duke Energy of any
option it has to redeem Shares and all Shares remaining outstanding after the
Offer will continue to be redeemable at the option of Duke Energy at
redemption prices which are greater than the applicable price per share
offered hereby. The 4.50% Series C is currently redeemable at the option of
Duke Energy at $101.00 per share plus dividends accrued to the redemption
date. The 7.85% Series S is redeemable at the option of Duke Energy on and
after September 16, 2002 at $103.93 per share and thereafter at prices
declining annually to $100.00 per share on and after September 16, 2012 plus,
in each case, dividends accrued to the redemption date. The 7.00% Series W is
redeemable at the option of Duke Energy on and after March 16, 2003 at $103.50
per share and thereafter at prices declining annually to $100.00 per share on
and after March 16, 2013 plus, in each case, dividends accrued to the
redemption date. The 6.75% Series X is redeemable at the option of Duke Energy
on and after June 16, 2003 at $103.94 per share and thereafter at prices
declining annually to $100.00 per share on and after June 16, 2017 plus, in
each case, dividends accrued to the redemption date. In addition, Duke Energy
must redeem through a sinking fund 20,000 shares of the 6.75% Series X on June
16, 2003 and on each June 16 thereafter to and including June 16, 2027 at
$100.00 per share plus dividends accrued to the redemption date, with Duke
Energy having the noncumulative option to redeem an additional 20,000 shares
of the 6.75% Series X at such price on each of such dates. The 7.04% Series Y
is redeemable at the option of Duke Energy on and after June 16, 2003 at
$103.52 per share and thereafter at prices declining annually to $100.00 per
share on and after June 16, 2013 plus, in each case, dividends accrued to the
redemption date. The 6.375% Preferred A is redeemable at the option of Duke
Energy on and after December 16, 2003 at $25.80 per share and thereafter at
prices declining annually to $25.00 per share on and after December 16, 2013
plus, in each case, dividends accrued to the redemption date.
The Series of Preferred rank equally with the Series of Preferred A with no
preference or priority of any Series of Preferred over any Series of Preferred
A or of any Series of Preferred A over any Series of Preferred and each Series
of Preferred and each Series of Preferred A are senior to both the Preference
Stock and the Common Stock of Duke Energy with respect to dividends and
distribution of assets upon liquidation, dissolution or winding up of Duke
Energy. In the event of any such liquidation, dissolution or winding up, the
holders of a Series of Preferred are entitled, before any
16
<PAGE>
amount is payable to the holders of the Preference Stock or the Common Stock
of Duke Energy, to receive (a) $105.00 per share if such action is voluntary
and (b) $100.00 per share if such action is involuntary plus, in each case,
the amount of any accrued and unpaid dividends thereon and the holders of a
Series of Preferred A are entitled, before any amount is payable to the
holders of the Preference Stock or the Common Stock of Duke Energy, to receive
(a) $26.25 per share if such action is voluntary and (b) $25.00 per share if
such action is involuntary plus, in each case, the amount of any accrued and
unpaid dividends thereon. The holders of a Series of Preferred or a Series of
Preferred A have no preemptive or conversion rights.
Shares that Duke Energy purchases pursuant to the Offer will be retired,
cancelled and returned thereafter to the status of authorized but unissued
shares of Duke Energy's Preferred Stock or Preferred Stock A, which will
reduce the number of Shares that might otherwise trade publicly and will
reduce the number of holders of Shares. This could adversely affect the
liquidity and market value of the Shares not purchased in the Offer. However,
Duke Energy does not believe that there is a reasonable likelihood, and it is
not a purpose of this Offer, that the Offer or purchases of Shares by Duke
Energy will, under the current published guidelines of the New York Stock
Exchange, cause the 6.375% Preferred A to be delisted from the New York Stock
Exchange. Duke Energy will not be required to accept for payment or pay for
Shares of the 6.375% Preferred A if Duke Energy has determined that the
consummation of the Offer with respect to such Shares would have a reasonable
likelihood of causing the 6.375% Preferred A to cease to be listed on the
NYSE. See "Terms of the Offer--Certain Conditions of the Offer."
Duke Energy has no plans or proposals which relate to or would result in:
(a) the acquisition by any person of additional securities of Duke Energy or
the disposition of securities of Duke Energy (other than as discussed under
"Source and Amount of Funds"); (b) an extraordinary corporate transaction,
such as a merger, reorganization or liquidation, involving Duke Energy or any
of its subsidiaries; (c) a sale or transfer of a material amount of assets of
Duke Energy or any of its subsidiaries; (d) any change in the present Board of
Directors or management of Duke Energy; (e) any material change in the present
dividend rate or policy, or indebtedness or capitalization of Duke Energy; (f)
any other material change in Duke Energy's corporate structure or business;
(g) any change in Duke Energy's Restated Articles of Incorporation or By-Laws
or any actions which may impede the acquisition of control of Duke Energy by
any person; (h) a class of equity securities of Duke Energy being delisted
from a national securities exchange; (i) a class of equity securities of Duke
Energy becoming eligible for termination of registration pursuant to Section
12(g)(4) of the Exchange Act; or (j) the suspension of Duke Energy's
obligation to file reports pursuant to Section 15(d) of the Exchange Act.
NEITHER DUKE ENERGY, ITS BOARD OF DIRECTORS NOR ANY OF ITS EXECUTIVE
OFFICERS MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER
ANY OR ALL SHARES. SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS AS TO WHETHER TO
TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER.
SOURCE AND AMOUNT OF FUNDS
Assuming that Duke Energy purchases all outstanding Shares pursuant to the
Offer, the total amount of funds required by Duke Energy to purchase the
Shares would be $355,371,000, excluding fees and other expenses. See "Fees and
Expenses." Duke Energy intends to use (i) proceeds in the amount of $155
million from the sale of its Series A 7.20% Junior Subordinated Notes due
September 30, 2037 (the "Notes") to Duke Energy Capital Trust I, a subsidiary
trust of Duke Energy, which trust, in order to fund the purchase of the Notes,
issued its 7.20% Cumulative Quarterly Income Preferred Securities in a public
offering and (ii) proceeds from the issuance of short-term debt to fund the
purchase of Shares pursuant to the Offer.
17
<PAGE>
TRANSACTIONS AND AGREEMENTS CONCERNING THE SHARES
Based upon Duke Energy's records and upon information provided to Duke
Energy by its directors and executive officers, neither Duke Energy nor, to
Duke Energy's knowledge, any of its associates, subsidiaries, directors,
executive officers or any associate of any such director or executive officer
owns any Shares or has engaged in any transactions involving Shares during the
40 business days preceding the date hereof. Neither Duke Energy nor, to Duke
Energy's knowledge, any of its directors or executive officers is a party to
any contract, arrangement, understanding or relationship relating directly or
indirectly to the Offer with any other person with respect to any securities
of Duke Energy other than as disclosed in this Offer to Purchase. See "Fees
and Expenses."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
In General. The following summary describes certain United States federal
income tax consequences to shareholders who tender Shares pursuant to the
Offer. The summary is based on the Internal Revenue Code of 1986, as amended
(the "Code"), existing Treasury regulations thereunder, and administrative
pronouncements and judicial decisions relating thereto, all of which are
subject to change (possibly on a retroactive basis). The tax treatment
described herein may vary depending upon each shareholder's particular
circumstances. The summary deals only with Shares held as capital assets
within the meaning of the Code and does not address tax consequences that may
be important to shareholders in special tax situations, such as certain
financial institutions, tax-exempt organizations, life insurance companies,
dealers in securities or currencies, or shareholders holding the Shares as
part of a conversion transaction, as part of a hedging transaction, or as a
position in a straddle for tax purposes. In addition, the summary does not
address the effect of any applicable state, local or foreign tax laws. EACH
SHAREHOLDER SHOULD CONSULT A TAX ADVISOR WITH REGARD TO THE OFFER AND THE
APPLICATION OF UNITED STATES FEDERAL INCOME TAX LAWS, AS WELL AS THE LAWS OF
ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION.
Characterization of the Sale. A sale of Shares pursuant to the Offer will be
a taxable transaction for United States federal income tax purposes and will
be treated as a "sale or exchange," rather than as a distribution by Duke
Energy with respect to the Shares, if under Section 302 of the Code the sale
(i) results in a "complete redemption" of all the stock in Duke Energy owned
by the shareholder or (ii) is "not essentially equivalent to a dividend" with
respect to the shareholder. The receipt of cash by a shareholder will
constitute a "complete redemption" if all of the Duke Energy stock actually
and constructively owned by the shareholder under the attribution rules
described below is sold pursuant to the Offer. "Complete redemption" treatment
may also apply where constructive ownership is based on certain family
relationships if all of the Duke Energy stock actually owned by the
shareholder is sold pursuant to the Offer and the shareholder is eligible to
waive, and effectively waives, such attribution of stock ownership in
accordance with the procedures described in Section 302(c)(2) of the Code.
Shareholders considering terminating their interest in accordance with Section
302(c)(2) of the Code should consult their own tax advisors. The receipt of
cash will qualify as "not essentially equivalent to a dividend" if the sale of
Shares results in a "meaningful reduction" in the shareholder's proportionate
interest in Duke Energy stock. The Internal Revenue Service has indicated in
published rulings that even a small reduction in the proportionate interest of
a minority shareholder in a publicly held corporation who exercises no control
over corporate affairs may constitute such a "meaningful reduction." A sale of
Shares by a shareholder who does not own, actually or constructively, any Duke
Energy Common Stock should qualify as "not essentially equivalent to a
dividend." Contemporaneous dispositions or acquisitions of Duke Energy stock
actually or constructively owned may be deemed to be part of an integrated
transaction which will be taken into account in this connection.
18
<PAGE>
In applying the foregoing Section 302 rules, there will be taken into
account not only stock actually owned by the shareholder, but also stock
constructively owned under the attribution rules of Section 318 of the Code.
Under Section 318, a shareholder may constructively own stock actually owned,
and in some cases constructively owned, by certain related individuals or
entities and stock which the shareholder has the right to acquire by exercise
of an option or conversion right.
If under Section 302 a sale of the Shares is treated as a "sale or
exchange," the tendering shareholder will recognize gain or loss equal to the
difference between the amount of cash received and the shareholder's tax basis
in the Shares sold. Any such gain or loss will be capital gain or loss and
will be long-term capital gain or loss if the Shares have been held for more
than one year. In the case of individuals, "net capital gain," i.e., the
excess of net long-term capital gain over net short-term capital loss, is
generally subject to a reduced rate of federal income tax. Capital gains and
losses from property held for more than 18 months will be taken into account
in determining "adjusted net capital gain," which is subject to a further
reduction in the rate of tax pursuant to a recent amendment of the Code.
If the sale is not treated under Section 302 as a "sale or exchange," the
tendering shareholder will be deemed to have received a dividend taxable as
ordinary income in the amount of the cash received to the extent of the
shareholder's allocable portion of Duke Energy's earnings and profits as
determined for federal income tax purposes. Any such dividend would be
includible in the gross income of the shareholder as ordinary income in its
entirety without reduction for the tax basis of the Shares sold pursuant to
the Offer. The shareholder's basis in the Shares sold would be added to such
shareholder's basis in any retained Duke Energy stock (except as described
below for corporate shareholders eligible for the dividends-received
deduction). To the extent that the amount of cash received exceeds the
shareholder's allocable portion of Duke Energy's earnings and profits, the
shareholder's basis will be reduced by the amount of such excess. Any amount
received in excess of the shareholder's tax basis will be treated as received
in exchange for the shareholder's Duke Energy stock.
Corporate Shareholders. If a sale of Shares is treated as a dividend, a
corporate shareholder may be entitled to claim a dividends-received deduction
for a portion of the dividend, subject to applicable limitations. Under
current law, the deduction would be equal to 70% of the dividend received
where the corporate shareholder owns less than 20% of the Duke Energy stock.
Corporate shareholders should consider the effect of Section 246(c) of the
Code which disallows the dividends-received deduction with respect to stock
that is held for 45 days or less during the 90-day period beginning on the
date which is 45 days before the date on which such stock became ex-dividend
with respect to such dividend. For this purpose, the length of time a
shareholder is deemed to have held stock may be reduced by periods during
which the shareholder's risk of loss with respect to the stock is diminished
by reason of the existence of certain options or other transactions. Also,
under Section 246A of the Code, if a corporate shareholder has incurred
indebtedness directly attributable to an investment in stock, the dividends-
received deduction may be reduced. Any amount received by a corporate
shareholder pursuant to the Offer that is treated as a dividend would be
likely to constitute an "extraordinary dividend" under Section 1059 of the
Code. Under Section 1059 of the Code a corporate shareholder is required to
reduce its basis (but not below zero) in its stock by the non-taxed portion of
the dividend (i.e., the portion of the dividend for which a dividends-received
deduction is allowed). If such portion exceeds the shareholder's tax basis in
the Shares sold (and, in certain circumstances, its tax basis in any other
stock of Duke Energy that it owns), the shareholder would be required to treat
the excess as gain from the sale of its Shares or other Duke Energy stock.
Foreign Shareholders. Duke Energy generally will assume that a foreign
shareholder will be treated as having received a dividend and will therefore
withhold United States federal income tax at a rate of 30% from gross proceeds
paid pursuant to the Offer to foreign shareholders, unless Duke Energy
determines that an exemption from or reduced rate of withholding is applicable
pursuant to a
19
<PAGE>
tax treaty or that an exemption from withholding is applicable because such
gross proceeds are effectively connected with the conduct of a trade or
business by the foreign shareholder within the United States. For this
purpose, a foreign shareholder is any shareholder that is not (a) a citizen or
resident of the United States, (b) a corporation, partnership or other entity
created or organized in or under the laws of the United States, (c) any estate
the income of which is subject to United States federal income taxation
regardless of its source, or (d) a trust if (i) a court within the United
States is able to exercise primary supervision over the administration of the
trust and (ii) one or more U.S. persons have the authority to control all
substantial decisions of the trust. In order to claim an exemption from
withholding on the ground that gross proceeds paid pursuant to the Offer are
effectively connected with the conduct of a trade or business by a foreign
shareholder within the United States, the shareholder must deliver to the
Depositary a properly executed Internal Revenue Service Form 4224. A foreign
shareholder may be eligible for a refund of any tax withheld or a portion of
such tax if such shareholder (i) meets the "complete redemption" or "not
essentially equivalent to a dividend" tests described above, (ii) is entitled
to a reduced rate of withholding pursuant to a treaty or (iii) is otherwise
able to establish that no tax or a reduced amount of tax was due.
Backup Withholding. ANY TENDERING SHAREHOLDER WHO FAILS TO COMPLETE AND SIGN
THE SUBSTITUTE FORM W-9 THAT IS INCLUDED IN THE LETTER OF TRANSMITTAL (OR, IN
THE CASE OF A FOREIGN SHAREHOLDER, FORM W-8 OBTAINABLE FROM THE DEPOSITARY)
MAY BE SUBJECT TO REQUIRED FEDERAL INCOME TAX BACKUP WITHHOLDING OF 31% OF THE
GROSS PROCEEDS PAYABLE TO SUCH SHAREHOLDER PURSUANT TO THE OFFER. See "Terms
of the Offer--Procedure for Tendering Shares" with respect to the potential
application of federal backup withholding tax.
THE TAX CONSEQUENCES OF A SALE PURSUANT TO THE OFFER MAY VARY DEPENDING UPON
THE PARTICULAR CIRCUMSTANCES OF THE TENDERING SHAREHOLDER. NO INFORMATION IS
PROVIDED HEREIN AS TO THE STATE, LOCAL OR FOREIGN TAX CONSEQUENCES OF THE
OFFER. EACH SHAREHOLDER IS URGED TO CONSULT SUCH SHAREHOLDER'S OWN TAX ADVISOR
TO DETERMINE THE PARTICULAR FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES
OF SALES PURSUANT TO THE OFFER TO SUCH SHAREHOLDER.
FEES AND EXPENSES
Goldman, Sachs & Co. and Merrill Lynch & Co. will act as Dealer Managers for
Duke Energy in connection with the Offer. Duke Energy has agreed to pay the
Dealer Managers a fee of 0.5% of the par value per Share for Shares purchased
pursuant to the Offer. Duke Energy will pay a solicitation fee of an amount
equal to 1.50% of the par value per Share for Shares that are tendered,
accepted for payment and paid for pursuant to the Offer (except that for
transactions for beneficial owners whose ownership equals or exceeds 2,500
Shares of a particular Series of Preferred or Series of Preferred A, Duke
Energy will pay a solicitation fee of an amount equal to 1.00% of the par
value per Share). With respect to fees payable pursuant to this paragraph
involving transactions for beneficial owners whose ownership is less than
2,500 Shares, any fees payable hereunder shall be paid in full to the Dealer
Managers unless a Soliciting Dealer (as defined below) is designated (as
herein described), in which case such fee shall be payable in full to such
designated Soliciting Dealer (which designated Soliciting Dealer may be a
Dealer Manager). With respect to fees payable pursuant to this paragraph
involving transactions for beneficial owners whose ownership equals or exceeds
2,500 Shares, any fees payable hereunder shall be paid in full to the Dealer
Managers unless a Soliciting Dealer is designated, in which case 80% of such
fee shall be paid to the Dealer Managers and 20% of such fee shall be paid to
the designated Soliciting Dealer (which designated Soliciting Dealer may be a
Dealer Manager).
The Dealer Managers will also be reimbursed by Duke Energy for their
reasonable out-of-pocket expenses, including attorneys' fees, and will be
entitled to indemnification against certain liabilities, including liabilities
under the federal securities laws. The Dealer Managers have rendered, are
20
<PAGE>
currently rendering and are expected to continue to render various investment
banking and other advisory services to Duke Energy. The Dealer Managers have
received, and will continue to receive, customary compensation from Duke
Energy for such services.
Duke Energy will, as provided in Instruction 10 of the Letter of
Transmittal, pay the solicitation fee described on the front cover of this
Offer to Purchase for Shares tendered and accepted for payment and paid for
pursuant to the Offer, covered by a Letter of Transmittal which designates, as
having solicited and obtained the tender, the name of (i) any broker or dealer
in securities, including a Dealer Manager in its capacity as a broker or
dealer, which is a member of any national securities exchange or of the NASD,
(ii) any foreign broker or dealer not eligible for membership in the NASD
which agrees to conform to the NASD's Rules of Fair Practice in soliciting
tenders outside the United States to the same extent as if it were an NASD
member, or (iii) any bank or trust company (each of which is referred to
herein as a "Soliciting Dealer"). No such fee shall be payable to a Soliciting
Dealer if such Soliciting Dealer is required for any reason to transfer the
amount of such fee to a depositing holder (other than itself). No such fee
shall be payable to a Soliciting Dealer with respect to Shares tendered for
such Soliciting Dealer's own account. No broker, dealer, bank, trust company
or fiduciary shall be deemed to be an agent of Duke Energy, the Depositary,
the Information Agent or the Dealer Managers for the purposes of the Offer.
Duke Energy has retained ChaseMellon Shareholder Services, L.L.C., as
Depositary and Georgeson & Company Inc. as Information Agent in connection
with the Offer. The Information Agent may contact shareholders by mail,
telephone, telex, telegraph and personal interviews, and may request brokers,
dealers, banks, trust companies and other nominees to forward materials
relating to the Offer to beneficial owners. The Depositary and the Information
Agent will receive reasonable and customary compensation for their services
and will also be reimbursed for certain out-of-pocket expenses. Duke Energy
has agreed to indemnify the Depositary and the Information Agent against
certain liabilities, including certain liabilities under the federal
securities laws, in connection with the Offer. Neither the Information Agent
nor the Depositary has been retained to make solicitations or recommendations
in connection with the Offer.
Other than as described above, Duke Energy will not pay any solicitation
fees to any broker, dealer, bank, trust company or other person for any Shares
purchased in connection with the Offer. Duke Energy will reimburse such
persons for customary handling and mailing expenses incurred in connection
with the Offer.
Duke Energy will pay all stock transfer taxes, if any, payable on account of
the acquisition of the Shares by Duke Energy pursuant to the Offer, except in
certain circumstances where special payment or delivery procedures are
utilized pursuant to Instruction 6 of the Letter of Transmittal.
CERTAIN INFORMATION CONCERNING DUKE ENERGY
Duke Power Company completed a merger with PanEnergy Corp on June 18, 1997
and changed its name to Duke Energy Corporation. Duke Energy is a global
energy company with more than $20 billion in assets.
Duke Energy 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. Duke Energy's service territory, approximately two-
thirds of which lies in North Carolina, covers approximately 20,000 square
miles 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. Duke Energy supplies electric service to
approximately two million residential, commercial and industrial customers in
over 200 cities, towns
21
<PAGE>
and unincorporated communities. As of September 30, 1997, Duke Energy owned 31
generating facilities with a total capacity of 17,246 MW. Net generation of
electricity by source for the nine-month period ended September 30, 1997 was
as follows: fossil, 58%, nuclear, 40%, and hydroelectric (including pumped
storage), 2%. Duke Energy's wholly-owned utility subsidiary, Nantahala Power &
Light Company, supplies electric service to approximately 55,000 customers,
most of which are residential, in five counties in western North Carolina.
Duke Energy is also engaged in the interstate transportation and storage of
natural gas. Through its four major pipeline subsidiaries--Texas Eastern
Transmission Corporation, Algonquin Gas Transmission Company, Panhandle
Eastern Pipeline Company and Trunkline Gas Company--Duke Energy owns and
operates one of the nation's largest gas transmission networks, delivering
approximately 12% of the natural gas consumed in the United States. This fully
interconnected, 37,500-mile system can receive natural gas from most major
North American producing regions for delivery to markets throughout the Mid-
Atlantic, New England and Midwest states.
The Energy Services group offers a broad variety of worldwide services in
energy asset monetization, engineering, construction, liquids, gas and
electric marketing, risk management, natural gas liquids shipping, gas
processing and transport and "inside-the-fence" and merchant power generation.
The Field Services unit is engaged in the business of purchasing, gathering,
transporting and marketing natural gas, natural gas liquids and crude oil to
industrial end users, local distribution companies, liquid petroleum gas
wholesalers and retailers and refiners. Through Duke Energy Trading and
Marketing L.L.C. and Duke Energy Marketing, L.P., Duke Energy markets natural
gas and electric power and provides risk management services to utilities,
municipalities and other large energy users.
Duke Engineering & Services, Inc. provides full-scope engineering, technical
and professional services to public and private sector clients worldwide in
all phases of nuclear, renewable and conventional power generation, from
conceptual design through construction and full life-cycle operation.
Specialized capabilities include engineering, design, project and construction
management, operations and maintenance, quality assurance, environmental
management, facility siting, petroleum services, power delivery services and
safety and health training. Duke/Fluor Daniel provides services related to the
engineering, procurement, construction and operation and maintenance of
fossil-fueled generating stations. The Global Asset Development group
develops, owns, manages and operates energy projects internationally, electric
generation facilities in the United States and Canada, and on-site, "inside-
the-fence" electric generation and energy conversion facilities for industrial
customers. DukeSolutions is Duke Energy's unregulated retail energy services
provider, offering customers a "one-stop shop" solution for natural gas and
electric commodities, energy efficiency and productivity services and asset
monetization.
Crescent Resources, Inc. conducts real estate management, forestry, and
commercial and residential real estate development operations. DukeNet
Communications, Inc. develops and manages communications systems, including
fiber optic and wireless digital network services. Duke Water Operations
provides franchised water service to 20,000 customers in parts of North
Carolina and South Carolina.
The principal executive offices of Duke Energy are located at 422 South
Church Street, Charlotte, North Carolina 28202, telephone (704) 594-0887.
22
<PAGE>
ADDITIONAL INFORMATION
Duke Energy is subject to the informational requirements of the Exchange Act
and, in accordance therewith, files reports, proxy statements and other
information with the Commission. Duke Energy has also filed an Issuer Tender
Offer Statement on Schedule 13E-4 with the Commission which includes certain
additional information relating to the Offer.
Such material can be inspected and copied at the public reference facilities
of the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, and the public reference facilities in the Commission's Regional
Offices located at Seven World Trade Center, Suite 1300, New York, New York
10048, and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material can be obtained at prescribed rates by writing to the
Commission, Public Reference Section, 450 Fifth Street, N.W., Washington, D.C.
20549. Copies of such material can also be inspected at the offices of the New
York Stock Exchange, 20 Broad Street, New York, New York 10005. Duke Energy's
Schedule 13E-4 will not be available at the Commission's Regional Offices. The
Commission maintains a Website (http://www.sec.gov) that contains reports,
proxy and information statements and other information regarding registrants,
such as Duke Energy, that file electronically with the Commission.
MISCELLANEOUS
The Offer is not being made to, nor will Duke Energy accept tenders from,
holders of Shares in any jurisdiction in which the Offer or its acceptance
would not be in compliance with the laws of such jurisdiction. Duke Energy is
not aware of any jurisdiction where the making of the Offer or the tender of
Shares would not be in compliance with applicable law. If Duke Energy becomes
aware of any jurisdiction where the making of the Offer or the tender of
Shares is not in compliance with any applicable law, Duke Energy will make a
good faith effort to comply with such law. If, after such good faith effort,
Duke Energy cannot comply with such law, the Offer will not be made to (nor
will tenders be accepted from or on behalf of) the holders of Shares residing
in such jurisdiction. In any jurisdiction in which the securities, blue sky or
other laws require the Offer to be made by a licensed broker or dealer, the
Offer will be deemed to be made on Duke Energy's behalf by one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
Facsimile copies of the applicable Letter of Transmittal for the Series of
Preferred or the Series of Preferred A to be tendered will be accepted. The
Letter of Transmittal and certificates for Shares should be sent or delivered
by each tendering shareholder of Duke Energy or such shareholder's broker,
dealer, bank or trust company to the Depositary at one of its addresses set
forth below.
23
<PAGE>
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By Mail: By Overnight Delivery: By Hand:
Post Office Box 3301 85 Challenger Road 120 Broadway, 13th Floor
South Hackensack, NJ 07606 Mail Drop--Reorg New York, NY 10271
Attn: Reorganization Ridgefield Park, NJ 07660 Attn: Reorganization
Department Attn: Reorganization Department Department
By Facsimile Transmission:
(201) 329-8936
Confirm by Telephone:
(201) 296-4860
Any questions or requests for assistance may be directed to the Information
Agent or the Dealer Managers at the respective telephone numbers and addresses
listed below. Requests for additional copies of this Offer to Purchase, the
applicable Letter of Transmittal or other tender offer materials may be
directed to the Information Agent or the Dealer Managers, and such copies will
be furnished promptly at Duke Energy's expense. Shareholders may also contact
their local broker, dealer, bank or trust company for assistance concerning
the Offer.
The Information Agent for the Offer is:
GEORGESON & COMPANY INC.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO. MERRILL LYNCH & CO.
85 Broad Street World Financial Center
New York, New York 10004 North Tower
(800) 828-3182 New York, New York 10281
(888) ML4-TNDR (toll-free)
(888) 654-8637
<PAGE>
EXHIBIT 9(a)(2)
LETTER OF TRANSMITTAL
TO ACCOMPANY
SHARES OF % PREFERRED STOCK, SERIES ($ PAR VALUE)
CUSIP NO.
OF
DUKE ENERGY CORPORATION
TENDERED PURSUANT TO THE OFFER TO PURCHASE,
DATED DECEMBER 18, 1997, FOR PURCHASE AT THE
PURCHASE PRICE OF $ PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON JANUARY 20, 1998, UNLESS THE OFFER IS EXTENDED.
TO: CHASEMELLON SHAREHOLDER SERVICES, L.L.C., DEPOSITARY
By Mail: By Overnight Delivery: By Hand:
Post Office Box 3301 85 Challenger Road 120 Broadway, 13th Floor
South Hackensack, NJ 07606 Mail Drop--Reorg New York, NY 10271
Attn: Reorganization Ridgefield Park, NJ 07660 Attn: Reorganization
Department Attn: Reorganization Department
Department
By Facsimile Transmission:
(201) 329-8936
Confirm by Telephone:
(201) 296-4860
DESCRIPTION OF SHARES TENDERED
(PLEASE FILL IN EXACTLY AS INFORMATION APPEARS ON CERTIFICATE(S))
(ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
<TABLE>
- -------------------------------------------------------------------
<CAPTION>
NAME(S) AND
ADDRESS(ES)
OF TOTAL NUMBER OF
REGISTERED CERTIFICATE SHARES REPRESENTED NUMBER
HOLDER(S) NUMBER(S)* BY CERTIFICATE(S)* OF SHARES TENDERED**
- -------------------------------------------------------------------
<S> <C> <C> <C>
------------------------------
------------------------------
------------------------------
------------------------------
------------------------------
------------------------------
TOTAL
- -------------------------------------------------------------------
</TABLE>
*Need not be completed by shareholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented
by any certificates delivered to the Depositary are being tendered. See
Instruction 4.
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER
OTHER THAN THE ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID
DELIVERY.
<PAGE>
DO NOT SEND ANY CERTIFICATES TO THE DEALER MANAGERS, THE
INFORMATION AGENT OR DUKE ENERGY CORPORATION.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. QUESTIONS AND
REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE OFFER TO PURCHASE,
THIS LETTER OF TRANSMITTAL AND THE APPLICABLE NOTICE OF GUARANTEED DELIVERY OR
OTHER TENDER OFFER MATERIALS MAY BE DIRECTED TO GEORGESON & COMPANY INC., THE
INFORMATION AGENT, AT WALL STREET PLAZA, NEW YORK, NY 10005, TELEPHONE (800)
223-2064 (TOLL FREE) OR FOR BANKS AND BROKERS (212) 440-9800 (COLLECT).
This Letter of Transmittal is to be used only if certificates are to be
forwarded herewith or if delivery of tendered Shares (as defined below) is to
be made by book-entry transfer to the Depositary's account at The Depository
Trust Company ("DTC") (the "Book-Entry Transfer Facility") pursuant to the
procedures set forth under "Terms of the Offer--Procedure for Tendering
Shares" in the Offer to Purchase (as defined below).
Shareholders who cannot deliver their Shares and all other documents
required hereby to the Depositary by the Expiration Date (as defined in the
Offer to Purchase) must tender their Shares pursuant to the guaranteed
delivery procedure set forth under "Terms of the Offer--Procedure for
Tendering Shares" in the Offer to Purchase. See Instruction 2. Delivery of
documents to Duke Energy Corporation or the Book-Entry Transfer Facility does
not constitute a valid delivery.
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND
COMPLETE THE FOLLOWING:
Name of tendering institution ___________________________________________
Account No. _____________________________________________________________
Transaction Code No. ____________________________________________________
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE
THE FOLLOWING:
Name(s) of tendering shareholder(s) _____________________________________
Date of execution of Notice of Guaranteed Delivery ______________________
Name of institution that guaranteed delivery ____________________________
If delivery is by book-entry transfer:
Name of tendering institution ___________________________________________
Account No. ________________________
Transaction Code No. ____________________________________________________
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Duke Energy Corporation, a North Carolina
corporation ("Duke Energy"), the shares listed on the cover hereof under
"Description of Shares Tendered" pursuant to Duke Energy's offer to purchase
any and all of the outstanding shares of the series of Duke Energy preferred
stock ("Series of Preferred") shown on the cover hereof as to which this
Letter of Transmittal is applicable (the "Shares") at the purchase price shown
on the cover hereof, net to the seller in cash, upon the terms and subject to
the conditions set forth in the Offer to Purchase, dated December 18, 1997
(the "Offer to Purchase"), receipt of which is hereby acknowledged, and in
this Letter of Transmittal (which as to the Shares, together with the Offer to
Purchase, constitutes the "Offer"). See "Terms of the Offer--Extension;
Termination; Amendments" and "Terms of the Offer--Certain Conditions of the
Offer" in the Offer to Purchase.
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the undersigned
hereby sells, assigns and transfers to, or upon the order of, Duke Energy all
right, title and interest in and to all the Shares that are being tendered
hereby and hereby constitutes and appoints ChaseMellon Shareholder Services,
L.L.C., as Depositary, the true and lawful agent and attorney-in-fact of the
undersigned with respect to such Shares, with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest), to (a) deliver certificates for such Shares, or transfer ownership
of such Shares on the account books maintained by the Book-Entry Transfer
Facility, together, in any such case, with all accompanying evidences of
transfer and authenticity, to or upon the order of Duke Energy, (b) present
such Shares for registration and transfer on the books of Duke Energy, (c)
issue payment for such Shares and/or certificates for unpurchased Shares or
deliver unpurchased Shares to the account of the undersigned, and (d) receive
all benefits and otherwise exercise all rights of beneficial ownership of such
Shares, all in accordance with the terms of the Offer. The Depositary will act
as agent for tendering shareholders for the purpose of receiving payment from
Duke Energy and transmitting payment to tendering shareholders.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and that, when and to the extent the same are accepted for payment by
Duke Energy, Duke Energy will acquire good, marketable and unencumbered title
thereto, free and clear of all liens, restrictions, charges, encumbrances,
conditional sales agreements or other obligations relating to the sale or
transfer thereof, and the same will not be subject to any adverse claims. The
undersigned will, upon request, execute and deliver any additional documents
deemed by the Depositary or Duke Energy to be necessary or desirable to
complete the sale, assignment and transfer of the Shares tendered hereby.
All authority herein conferred or agreed to be conferred shall not be
affected by, and shall survive, the death or incapacity of the undersigned,
and any obligations of the undersigned hereunder shall be binding upon the
heirs, personal representatives, successors and assigns of the undersigned.
Except as stated in the Offer, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described under "Terms of the Offer--Procedure for Tendering
Shares" in the Offer to Purchase and in the Instructions hereto will
constitute the undersigned's acceptance of the terms and conditions of the
Offer, including the undersigned's representation and warranty that (i) the
undersigned has a net long position in the Shares being tendered within the
meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934,
as amended, and (ii) the tender of such Shares complies with Rule 14e-4. Duke
Energy's acceptance for payment of Shares tendered pursuant to the Offer will
constitute a binding agreement between the undersigned and Duke Energy upon
the terms and subject to the conditions of the Offer.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, Duke Energy may terminate or amend the Offer or may not
be required to purchase any of the Shares tendered hereby. In either event,
the undersigned understands that certificate(s) for any Shares not tendered or
not purchased will be returned to the undersigned.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the purchase price of any Shares purchased, and/or return
any Shares not tendered or not purchased, in the name(s) of the undersigned
(and, in the case of Shares tendered by book-entry transfer, by credit to the
account at the Book-Entry Transfer Facility designated above). Similarly,
unless otherwise indicated under "Special Delivery Instructions," please mail
the check for the purchase price of any Shares purchased and/or any
certificates for Shares not tendered or not purchased (and accompanying
documents, as appropriate) to the undersigned at the address shown below the
undersigned's signature(s). In the event that both "Special Payment
Instructions" and "Special Delivery Instructions" are completed, please issue
the check for the
<PAGE>
purchase price of any Shares purchased and/or return any Shares not tendered
or not purchased in the name(s) of, and mail said check and/or any
certificates to, the person(s) so indicated. The undersigned recognizes that
Duke Energy has no obligation, pursuant to the "Special Payment Instructions,"
to transfer any Shares from the name of the registered holder(s) thereof if
Duke Energy does not accept for payment any of the Shares so tendered.
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 5, 6 AND 7) (SEE INSTRUCTIONS 1, 4 AND 7)
To be completed ONLY if the
To be completed ONLY if the check for the purchase price of
check for the purchase price of Shares purchased and/or certifi-
Shares purchased and/or certifi- cates for Shares not tendered or
cates for Shares not tendered or not purchased are to be mailed to
not purchased are to be issued in someone other than the under-
the name of someone other than signed or to the undersigned at
the undersigned. an address other than that shown
below the undersigned's signa-
ture(s).
Issue:[_] check and/or [_] cer- Mail:[_] check and/or [_] certif-
tificate(s) to: icate(s) to:
Name______________________________
(PLEASE PRINT) Name______________________________
Address___________________________ (PLEASE PRINT)
__________________________________ Address___________________________
(INCLUDE ZIP CODE) __________________________________
__________________________________ (INCLUDE ZIP CODE)
(TAXPAYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
[_]CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN AND
WISH TO TENDER HAVE BEEN LOST, DESTROYED OR STOLEN. (SEE INSTRUCTION 12.)
Number of Shares represented by the lost, destroyed or stolen certificates:
-------------------
<PAGE>
SOLICITED TENDERS
(SEE INSTRUCTION 10)
Duke Energy will pay to any Soliciting Dealer, as defined in Instruction
10, a solicitation fee of 1.50% of the par value per Share (except that for
transactions equal to or exceeding 2,500 Shares, Duke Energy will pay a
solicitation fee of 1.00% of the par value per Share) for each Share
tendered, accepted for payment and purchased pursuant to the Offer;
provided, however, that any fee payable pursuant to this sentence for
transactions equal to or exceeding 2,500 Shares shall be paid 80% to the
Dealer Managers and 20% to any Soliciting Dealer (which may be a Dealer
Manager).
The undersigned represents that the Soliciting Dealer that solicited and
obtained this tender is:
Name of Firm: ______________________________________________________________
(PLEASE PRINT)
Name of Individual Broker or Financial Consultant: _________________________
Telephone Number of Broker or Financial Consultant: ________________________
Identification Number (if known): __________________________________________
Address: ___________________________________________________________________
(INCLUDE ZIP CODE)
The following to be completed ONLY if customer's Shares held in nominee
name are tendered.
Name of Beneficial Owner Number of Shares Tendered
(Attach Additional List if Necessary)
__________________________________ __________________________________
__________________________________ __________________________________
__________________________________ __________________________________
The acceptance of compensation by such Soliciting Dealer will constitute
a representation by it that: (i) it has complied with the applicable
requirements of the Securities Exchange Act of 1934, as amended, and the
applicable rules and regulations thereunder, in connection with such
solicitation; (ii) it is entitled to such compensation for such
solicitation under the terms and conditions of the Offer to Purchase; (iii)
in soliciting tenders of Shares, it has used no soliciting materials other
than those furnished by Duke Energy; and (iv) if it is a foreign broker or
dealer not eligible for membership in the National Association of
Securities Dealers, Inc. (the "NASD"), it has agreed to conform to the
NASD's Rules of Fair Practice in making solicitations.
The payment of compensation to any Soliciting Dealer is dependent on such
Soliciting Dealer's returning a Notice of Solicited Tenders to the
Depositary.
(PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW)
<PAGE>
-- SIGN HERE: ______________________________________________________________ --
____________________________________________________________________________
SIGNATURE(S) OF OWNER(S)
Dated ______________________________________________________________________
Name(s) ____________________________________________________________________
____________________________________________________________________________
(PLEASE PRINT)
Capacity (full title) ______________________________________________________
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
Daytime Area Code and Telephone No. ________________________________________
(Must be signed by the registered holder(s) exactly as name(s) appear(s)
on the stock certificate(s) or on a security position listing or by
person(s) authorized to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or
other person acting in a fiduciary or representative capacity, please set
forth full title and see Instruction 5.)
GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5)
- -- Authorized Signature ____________________________________________________ --
Name _______________________________________________________________________
Name of Firm _______________________________________________________________
Address of Firm ____________________________________________________________
Area Code and Telephone No. ________________________________________________
Dated ______________________________________________________________________
NOTE: REMAINDER OF THIS LETTER OF TRANSMITTAL MUST BE
COMPLETED BY SIGNING THE SUBSTITUTE FORM W-9 BELOW.
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm that is
a member of a registered national securities exchange or the National
Association of Securities Dealers, Inc., or by a bank or trust company having
an office or correspondent in the United States which is a participant in an
approved Signature Guarantee Medallion Program (an "Eligible Institution").
Signatures on this Letter of Transmittal need not be guaranteed (a) if this
Letter of Transmittal is signed by the registered holder(s) of the Shares
(which term, for purposes of this document, shall include any participant in
the Book-Entry Transfer Facility whose name appears on a security position
listing as the owner of Shares) tendered herewith and such holder(s) has/have
not completed the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" on this Letter of Transmittal or (b)
if such Shares are tendered for the account of an Eligible Institution. See
Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARES. This Letter of Transmittal
is to be used either if certificates are to be forwarded herewith or if
delivery of Shares is to be made by book-entry transfer pursuant to the
procedures set forth under "Terms of the Offer--Procedure for Tendering
Shares" in the Offer to Purchase. Certificates for all physically delivered
Shares, or a confirmation of a book-entry transfer into the Depositary's
account at the Book-Entry Transfer Facility of all Shares delivered
electronically, as well as a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) and any other documents required by this
Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth on the cover of this Letter of Transmittal on or prior to
the Expiration Date (as defined in the Offer to Purchase) with respect to a
Series of Preferred. Shareholders who cannot deliver their Shares and all
other required documents to the Depositary on or prior to the Expiration Date
must tender their Shares pursuant to the guaranteed delivery procedure set
forth under "Terms of the Offer--Procedure for Tendering Shares--Guaranteed
Delivery Procedures" in the Offer to Purchase. Pursuant to such procedure: (a)
such tender must be made by or through an Eligible Institution, (b) a properly
completed and duly executed Notice of Guaranteed Delivery in the form provided
by Duke Energy (with any required signature guarantees) must be received by
the Depositary on or prior to the Expiration Date and (c) the certificates for
all physically delivered Shares, or a confirmation of a book-entry transfer
into the Depositary's account at the Book-Entry Transfer Facility of all
Shares delivered electronically, as well as a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) and any other documents
required by this Letter of Transmittal must be received by the Depositary
within three New York Stock Exchange trading days after the date of execution
of such Notice of Guaranteed Delivery, all as provided under "Terms of the
Offer--Procedure for Tendering Shares--Guaranteed Delivery Procedures" in the
Offer to Purchase.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
OPTION AND RISK OF THE TENDERING SHAREHOLDER. IF CERTIFICATES FOR SHARES ARE
SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED,
IS RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted. See
"Terms of the Offer--Number of Shares; Purchase Price; Expiration Date;
Receipt of Dividend" in the Offer to Purchase. By executing this Letter of
Transmittal (or facsimile thereof), the tendering shareholder waives any right
to receive any notice of the acceptance for payment of the Shares.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares represented by any certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
that are to be tendered in the box entitled "Number of Shares Tendered." In
such case, a new certificate for the remainder of the Shares represented by
the old certificate will be sent in the name of and to the person(s) signing
this Letter of Transmittal, unless otherwise provided in the "Special Payment
Instructions" or "Special Delivery Instructions" box on this Letter of
Transmittal, as promptly as practicable following the expiration or
termination of the Offer. All Shares represented by certificates delivered to
the Depositary will be deemed to have been tendered unless otherwise
indicated.
<PAGE>
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written
on the face of the certificates without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock
powers are required unless payment of the purchase price is to be made to, or
Shares not tendered or not purchased are to be registered in the name of, any
person other than the registered holder(s). Signatures on any such
certificates or stock powers must be guaranteed by an Eligible Institution.
See Instruction 1.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the
certificates for such Shares. Signature(s) on any such certificates or stock
powers must be guaranteed by an Eligible Institution. See Instruction 1.
If this Letter of Transmittal or any certificate or stock power is signed by
a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory
to Duke Energy of the authority of such person so to act must be submitted.
6. STOCK TRANSFER TAXES. Duke Energy will pay or cause to be paid any stock
transfer taxes with respect to the sale and transfer of any Shares to it or
its order pursuant to the Offer. If, however, payment of the purchase price is
to be made to, or Shares not tendered or not purchased are to be registered in
the name of, any person other than the registered holder(s), or if tendered
Shares are registered in the name of any person other than the person(s)
signing this Letter of Transmittal, the amount of any stock transfer taxes
(whether imposed on the registered holder(s), such other person or otherwise)
payable on account of the transfer to such person will be deducted from the
purchase price unless satisfactory evidence of the payment of such taxes, or
exemption therefrom, is submitted. See "Terms of the Offer--Acceptance for
Payment of Shares and Payment of Purchase Price" in the Offer to Purchase.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY TO AFFIX
TRANSFER TAX STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the purchase
price of any Shares purchased is to be issued in the name of, and/or any
certificates for Shares not tendered or not purchased are to be returned to, a
person other than the person(s) signing this Letter of Transmittal or if the
check and/or any certificate for Shares not tendered or not purchased are to
be mailed to someone other than the person(s) signing this Letter of
Transmittal or to an address other than that shown above in the box captioned
"Description of Shares Tendered," then the boxes captioned "Special Payment
Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal should be completed. Shareholders tendering Shares by book-entry
transfer will have any Shares not accepted for payment returned by crediting
the account maintained by such shareholder at the Book-Entry Transfer
Facility.
8. SUBSTITUTE FORM W-9 AND FORM W-8. The tendering shareholder is required
to provide the Depositary with either a correct Taxpayer Identification Number
("TIN") on Substitute Form W-9, which is provided under "Important Tax
Information" below, or a properly completed Form W-8. Failure to provide the
information on either Substitute Form W-9 or Form W-8 may subject the
tendering shareholder to 31% federal income tax backup withholding on the
payment of the purchase price. The box in Part 2 of Substitute Form W-9 may be
checked if the tendering shareholder has not been issued a TIN and has applied
for a number or intends to apply for a number in the near future. If the box
in Part 2 is checked and the Depositary is not provided with a TIN by the time
of payment, the Depositary will withhold 31% on all payments of the purchase
price thereafter until a TIN is provided to the Depositary.
<PAGE>
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests
for assistance may be directed to the Information Agent or the Dealer Managers
at their respective telephone numbers and addresses listed below. Requests for
additional copies of the Offer to Purchase, this Letter of Transmittal or
other tender offer materials may be directed to the Information Agent and such
copies will be furnished promptly at Duke Energy's expense. Shareholders may
also contact their local broker, dealer, bank or trust company for assistance
concerning the Offer.
10. SOLICITED TENDERS. Duke Energy will pay a solicitation fee of 1.50% of
the par value per Share (except that for transactions for beneficial owners
equal to or exceeding 2,500 Shares of a particular Series of Preferred or
Series of Preferred A, Duke Energy will pay a solicitation fee of 1.00% of the
par value per Share) for any Shares tendered, accepted for payment and paid
pursuant to the Offer, covered by the Letter of Transmittal which designates,
in the box captioned "Solicited Tenders," as having solicited and obtained the
tender, the name of (i) any broker or dealer in securities, including a Dealer
Manager in its capacity as a dealer or broker, which is a member of any
national securities exchange or of the National Association of Securities
Dealers, Inc. (the "NASD"), (ii) any foreign broker or dealer not eligible for
membership in the NASD which agrees to conform to the NASD's Rules of Fair
Practice in soliciting tenders outside the United States to the same extent as
though it were an NASD member, or (iii) any bank or trust company (each of
which is referred to herein as a "Soliciting Dealer"); provided, however, that
any fee payable pursuant to this sentence for transactions equal to or
exceeding 2,500 Shares shall be paid 80% to the Dealer Managers and 20% to any
Soliciting Dealer (which may be a Dealer Manager). No such fee shall be
payable to a Soliciting Dealer with respect to the tender of Shares by a
holder unless the Letter of Transmittal accompanying such tender designates
such Soliciting Dealer. No such fee shall be payable to a Soliciting Dealer in
respect of Shares (i) beneficially owned by such Soliciting Dealer or (ii)
registered in the name of such Soliciting Dealer unless such Shares are held
by such Soliciting Dealer as nominee and such Shares are being tendered for
the benefit of one or more beneficial owners identified on the Letter of
Transmittal or on the Notice of Solicited Tender (included in the materials
provided to brokers and dealers). No such fee shall be payable to a Soliciting
Dealer with respect to the tender of Shares by the holder of record, for the
benefit of the beneficial owner, unless the beneficial owner has designated
such Soliciting Dealer. If tendered Shares are being delivered by book-entry
transfer, the Soliciting Dealer must return a Notice of Solicited Tenders to
the Depositary within three New York Stock Exchange trading days after
expiration of the Offer to receive a solicitation fee. No such fee shall be
payable to a Soliciting Dealer if such Soliciting Dealer is required for any
reason to transfer the amount of such fee to any person (other than itself).
No broker, dealer, bank, trust company or fiduciary shall be deemed to be the
agent of Duke Energy, the Depositary, the Information Agent or the Dealer
Managers for purposes of the Offer.
11. IRREGULARITIES. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance of any tender
of Shares will be determined by Duke Energy, in its sole discretion, and its
determination shall be final and binding. Duke Energy reserves the absolute
right to reject any and all tenders of Shares that it determines are not in
proper form or the acceptance for payment of or payment for Shares that may,
in the sole opinion of Duke Energy's counsel, be unlawful. Duke Energy also
reserves the absolute right to waive any of the conditions to the Offer except
as set forth therein or any defect or irregularity in any tender of Shares and
Duke Energy's interpretation of the terms and conditions of the Offer
(including these Instructions) shall be final and binding. Unless waived, any
defects or irregularities in connection with tenders must be cured within such
time as Duke Energy shall determine. None of Duke Energy, the Dealer Managers,
the Depositary, the Information Agent or any other person shall be under any
duty to give notice of any defect or irregularity in tenders, nor shall any of
them incur any liability for failure to give any such notice. Tenders will not
be deemed to have been made until all defects and irregularities have been
cured or waived.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate representing
Shares has been lost, destroyed or stolen, the shareholder should promptly
notify the Depositary by checking the box immediately following the special
payment/special delivery instructions and indicating the number of Shares
lost, destroyed or stolen. The shareholder will then be instructed as to the
procedures that must be taken in order to replace the certificate. The tender
of Shares pursuant to this Letter of Transmittal will not be valid unless
prior to the Expiration Date (as defined in the Offer to Purchase): (i) such
procedures have been completed and a replacement certificate for the Shares
has been delivered to the Depositary or (ii) a Notice of Guaranteed Delivery
has been delivered to the Depositary. See Instruction 2.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY THEREOF), DULY
EXECUTED, TOGETHER WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER
AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, OR THE
NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR
TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE).
<PAGE>
IMPORTANT TAX INFORMATION
Under United States federal income tax law, a shareholder whose tendered
Shares are accepted for payment is required to provide the Depositary (as
payer) with either such shareholder's correct TIN and related certification on
Substitute Form W-9 below or a properly completed Form W-8. If such
shareholder is an individual, the TIN is his or her social security number.
For businesses and other entities, the number is the employer identification
number. If the Depositary is not provided with the correct TIN or properly
completed Form W-8, the shareholder may be subject to a $50 penalty imposed by
the Internal Revenue Service. In addition, payments that are made to such
shareholder with respect to Shares purchased pursuant to the Offer may be
subject to federal income tax backup withholding. The Form W-8 can be obtained
from the Depositary. See the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional instructions.
If federal income tax backup withholding applies, the Depositary is required
to withhold 31% of any payments made to the shareholder. Backup withholding is
not an additional tax. Rather, the federal income tax liability of persons
subject to backup withholding will be reduced by the amount of the tax
withheld. If any withholding results in an overpayment of taxes, a refund may
be obtained from the Internal Revenue Service.
Certain persons (including, among others, corporations and certain foreign
individuals) are not subject to these backup withholding requirements.
Nonetheless, in order to qualify for such exemption, exempt corporate
shareholders should complete the Substitute Form W-9 below and so indicate
their exempt status by writing "EXEMPT" across the face of the Substitute Form
W-9. A foreign person not subject to backup withholding should sign and
complete a Form W-8 in order to qualify for such exemption.
PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8
To avoid backup withholding on payments that are made to a shareholder with
respect to Shares purchased pursuant to the Offer, the shareholder is required
to notify the Depositary of his or her correct TIN by completing the
Substitute Form W-9 attached hereto certifying that the TIN provided on
Substitute Form W-9 is correct and that (1) the shareholder has not been
notified by the Internal Revenue Service that such shareholder is subject to
federal income tax backup withholding as a result of failure to report all
interest or dividends or (2) the Internal Revenue Service has notified the
shareholder that he or she is no longer subject to federal income tax backup
withholding. Foreign shareholders must submit a properly completed Form W-8 in
order to avoid the applicable backup withholding, provided, however, that
backup withholding will not apply to foreign shareholders subject to 30% (or
lower treaty rate) withholding on gross payments received pursuant to the
Offer.
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder is required to give the Depositary the social security
number or employer identification number of the registered owner of the
Shares. If the Shares are in more than one name or are not in the name of the
actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.
<PAGE>
PAYER'S NAME: CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
PART 1: PLEASE PROVIDE YOUR Social Security Number
TIN IN THE BOX AT RIGHT AND OR Employer
CERTIFY BY SIGNING AND Identification Number
DATING BELOW.
SUBSTITUTE
FORM W-9 TIN __________________
--------------------------------------------------------
DEPARTMENT OF THE
TREASURY INTERNAL Name (Please Print) _______________ PART 2: --
REVENUE SERVICE
Address ____________________________ Awaiting TIN [_]
PAYER'S REQUEST FOR
TAXPAYER IDENTIFICA-
TION NUMBER (TIN) AND City ____ State ____ Zip Code____
CERTIFICATION
--------------------------------------------------------
PART 3: CERTIFICATION--UNDER THE PENALTIES OF
PERJURY, I CERTIFY THAT: (1) the number shown on this
form is my correct taxpayer identification number (or
a TIN has not been issued to me but I have mailed or
delivered an application to receive a TIN or intend
to do so in the near future), (2) I am not subject to
backup withholding either because I have not been
notified by the Internal Revenue Service (the "IRS")
that I am subject to backup withholding as a result
of a failure to report all interest or dividends or
the IRS has notified me that I am no longer subject
to backup withholding, and (3) all other information
provided on this form is true, correct and complete.
SIGNATURE _____________________________ DATE _________
You must cross out item (2) above if you have been
notified by the IRS that you are currently subject to
backup withholding because of underreporting interest
or dividends on your tax return.
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR
ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE
IF YOU CHECKED THE BOX IN PART 2 OF THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me and either (1) I have mailed or delivered
an application to receive a taxpayer identification number to the
appropriate Internal Revenue Service Center or Social Security
Administration Office or (2) I intend to mail or deliver an application in
the near future. I understand that if I do not provide a taxpayer
identification number by the time of payment, 31% of all payments of the
purchase price made to me will be withheld until I provide a number.
SIGNATURE _________________________________________ DATE ___________________
<PAGE>
The Information Agent for the Offer is:
GEORGESON & COMPANY INC.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO. MERRILL LYNCH & CO.
85 Broad Street World Financial Center
New York, New York 10004 North Tower
(800) 828-3182 New York, New York 10281
(888) ML4-TNDR (toll-free)
(888) 654-8637
<PAGE>
EXHIBIT 9(a)(3)
% PREFERRED STOCK, SERIES
DUKE ENERGY CORPORATION
Notice of Guaranteed Delivery of
Shares of % Preferred Stock, Series ($ par value) of
Duke Energy Corporation
This form, or a form substantially equivalent to this form, must be used to
accept the Offer (as defined below) if certificates for the shares of Duke
Energy Corporation's % Preferred Stock, Series ($ par value) (the
"Shares") are not immediately available, if the procedure for book-entry
transfer cannot be completed on a timely basis, or if time will not permit all
other documents required by the applicable Letter of Transmittal to be
delivered to ChaseMellon Shareholder Services, L.L.C., as Depositary, on or
prior to the expiration of the Offer. Such form may be delivered by hand or
transmitted by mail, or by facsimile transmission, to the Depositary. See
"Terms of the Offer--Procedure for Tendering Shares" in the Offer to Purchase
(as defined below). THE ELIGIBLE INSTITUTION (AS DEFINED BELOW) WHICH
COMPLETES THIS FORM MUST COMMUNICATE THE GUARANTEE TO THE DEPOSITARY AND
EITHER THE APPLICABLE LETTER OF TRANSMITTAL AND CERTIFICATES FOR SHARES MUST
BE DELIVERED TO THE DEPOSITARY OR THE DEPOSITARY MUST RECEIVE CONFIRMATION OF
BOOK-ENTRY TRANSFER OF THE SHARES TO THE DEPOSITARY'S ACCOUNT AT THE
DEPOSITORY TRUST COMPANY WITHIN THREE NEW YORK STOCK EXCHANGE TRADING DAYS
AFTER THE DATE OF EXECUTION OF THIS NOTICE OF GUARANTEED DELIVERY. Failure to
do so could result in a financial loss to such Eligible Institution.
To: CHASEMELLON SHAREHOLDER SERVICES, L.L.C., DEPOSITARY
By Mail: By Overnight Delivery: By Hand:
Post Office Box 3301 85 Challenger Road Mail 120 Broadway, 13th
South Hackensack, NJ Drop--Reorg Ridgefield Floor New York, NY
07606 Attn: Park, NJ 07660 Attn: 10271 Attn:
Reorganization Reorganization Reorganization
Department Department Department
By Facsimile Transmission:
(201) 329-8936
Confirm by Telephone:
(201) 296-4860
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER
THAN THE ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS TO BE USED FOR THE TENDER OF SHARES OF
DUKE ENERGY CORPORATION'S % PREFERRED STOCK, SERIES ($ PAR VALUE)
ONLY. ANY PERSON DESIRING TO TENDER SHARES OF ANY OTHER PREFERRED STOCK OR
PREFERRED STOCK A OF DUKE ENERGY CORPORATION FOR WHICH DUKE ENERGY CORPORATION
IS MAKING A TENDER OFFER MUST SUBMIT THE NOTICE OF GUARANTEED DELIVERY
RELATING TO THAT SPECIFIC PREFERRED STOCK OR PREFERRED STOCK A.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
(as defined herein) under the instructions thereto, such signature guarantee
must appear in the applicable space provided in the signature box on the
Letter of Transmittal.
1
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Duke Energy Corporation, a North Carolina
corporation, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated December 18, 1997 (the "Offer to Purchase"), and the
applicable Letter of Transmittal (which, together with the Offer to Purchase,
constitutes the "Offer"), receipt of which hereby is acknowledged, the number
of Shares of the % Preferred Stock, Series ($ par value) of Duke
Energy Corporation listed below, pursuant to the guaranteed delivery procedure
set forth in "Terms of the Offer -- Procedure for Tendering Shares" in the
Offer to Purchase.
Number of % Shares: Signature
- -------------------------------------- --------------------------------------
Certificate Nos. (if available): Name(s) of Record Holder(s)
(Please print)
- -------------------------------------- --------------------------------------
If % Shares will be Tendered by Address
Book-entry Transfer,
Name of Tendering Institution:
- -------------------------------------- --------------------------------------
- -------------------------------------- --------------------------------------
Account No. at The Depository Trust Area Code and Telephone Number
Company
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned financial institution (including most banks, savings and
loan associations and brokerage houses) that is a participant in the
Security Transfer Agents Medallion Program or the Stock Exchange Medallion
Program (each, an "Eligible Institution") guarantees to deliver to the
Depositary at one of its addresses set forth above (i) certificate(s) for
the Shares tendered hereby, in proper form for transfer, together with a
properly completed and duly executed Letter(s) of Transmittal, with any
required signature guarantee(s) and any other required documents, or (ii) a
confirmation of the book-entry transfer of the Shares tendered hereby into
the Depositary's account at The Depository Trust Company, all within three
New York Stock Exchange trading days after the date of execution of this
Notice of Guaranteed Delivery.
------------------------------------ ------------------------------------
Name of Firm Authorized Signature
------------------------------------ ------------------------------------
Address Name
------------------------------------ ------------------------------------
City, State, Zip Code Title
------------------------------------
Area Code and Telephone Number
Dated: _____________________________
DO NOT SEND CERTIFICATES WITH THIS FORM. YOUR CERTIFICATES MUST BE SENT
WITH THE APPLICABLE LETTER OF TRANSMITTAL.
2
<PAGE>
EXHIBIT 9(a)(4)
Goldman, Sachs & Co. Merrill Lynch & Co.
85 Broad Street World Financial Center
New York, New York 10004 North Tower
New York, New York 10281
DUKE ENERGY CORPORATION
OFFER TO PURCHASE ANY OR ALL SHARES OF DUKE ENERGY CORPORATION'S
4.50% Preferred Stock, Series C ($100 par value)
7.85% Preferred Stock, Series S ($100 par value)
7.00% Preferred Stock, Series W ($100 par value)
6.75% Preferred Stock, Series X ($100 par value)
7.04% Preferred Stock, Series Y ($100 par value) and
6.375% Preferred Stock A, 1993 Series ($25 par value)
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON JANUARY 20, 1998, UNLESS THE OFFER IS EXTENDED.
December 18, 1997
To Brokers, Dealers, Banks,
Trust Companies and Other Nominees:
We have been appointed Dealer Managers by Duke Energy Corporation ("Duke
Energy") in connection with the offer by Duke Energy to purchase, upon the
terms and subject to the conditions set forth in the Offer to Purchase dated
December 18, 1997 (the "Offer to Purchase"), and in the applicable Letter of
Transmittal (which, together with the Offer to Purchase, constitutes the
"Offer"), any and all shares of the following series of its Preferred Stock
and Preferred Stock A at the prices indicated:
<TABLE>
<CAPTION>
Purchase Price
Per Share
--------------
<S> <C>
4.50% Preferred Stock, Series C ("4.50% Series") $ 90.28
7.85% Preferred Stock, Series S ("7.85% Series") $118.46
7.00% Preferred Stock, Series W ("7.00% Series") $115.22
6.75% Preferred Stock, Series X ("6.75% Series") $115.35
7.04% Preferred Stock, Series Y ("7.04% Series") $115.90
6.375% Preferred Stock A, 1993 Series ("6.375% Series A") $ 28.28
</TABLE>
(collectively, the "Shares"; and each of the 4.50% Series, 7.85% Series, 7.00%
Series, 6.75% Series, 7.04% Series and 6.375% Series A, a "Series of
Preferred") that are validly tendered and not withdrawn.
Duke Energy will accept any and all Shares validly tendered and not
withdrawn, upon the terms and subject to the conditions of the Offer.
<PAGE>
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are
enclosing the following documents:
1. The Offer to Purchase;
2. A Letter of Transmittal relating to each Series of Preferred for your use
and for the information of your clients, together with Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9
providing information relating to federal income tax backup withholding;
3. A Notice of Guaranteed Delivery relating to each Series of Preferred to
be used to accept the Offer if certificates for the Shares of any Series of
Preferred and all other required documents cannot be delivered to the
Depositary on or prior to the Expiration Date (as defined in the Offer to
Purchase) for such Series of Preferred or if the book-entry transfer of the
Shares cannot be completed on or prior to the Expiration Date for such Series
of Preferred;
4. A form of letter that may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominee, with space
provided for obtaining such clients' instructions and designation of
Soliciting Dealer with regard to the Offer;
5. A letter from the Chairman of the Board of Duke Energy that may be
provided to your clients; and
6. A return envelope addressed to ChaseMellon Shareholder Services, L.L.C.,
the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON JANUARY 20, 1998, UNLESS THE OFFER IS EXTENDED.
NEITHER DUKE ENERGY, ITS BOARD OF DIRECTORS NOR ANY OF ITS EXECUTIVE
OFFICERS MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER
ANY OR ALL SHARES. SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS AS TO WHETHER TO
TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER.
Duke Energy will pay to each designated Soliciting Dealer (as defined
herein) the per Share solicitation fees shown in the following table:
<TABLE>
<CAPTION>
Number of Shares
--------------------------------
Less than 2,500 2,500 or greater
--------------- ----------------
<S> <C> <C>
4.50% Series $1.50 $1.00
7.85% Series $1.50 $1.00
7.00% Series $1.50 $1.00
6.75% Series $1.50 $1.00
7.04% Series $1.50 $1.00
6.375% Series A $0.375 $0.25
</TABLE>
provided, however, that any fee payable pursuant to this sentence for
transactions equal to or exceeding 2,500 Shares shall be payable 80% to the
Dealer Managers and 20% to any Soliciting Dealer (which may be a Dealer
Manager).
For purposes of this Offer, "Soliciting Dealer" includes (a) any broker or
dealer in securities, including a Dealer Manager in its capacity as a broker
or dealer, which is a member of any national securities exchange or of the
National Association of Securities Dealers, Inc. ("NASD"), (b) any foreign
broker or dealer not eligible for membership in the NASD which agrees to
conform to the NASD's Rules of Fair Practice in soliciting tenders outside the
United States to the same extent as if it were an NASD member, or (c) any bank
or trust company. No such fee shall be payable to a Soliciting Dealer in
respect of Shares (i) beneficially owned by such Soliciting Dealer or (ii)
registered in the name of such Soliciting Dealer unless such Shares are held
by such Soliciting Dealer as nominee and such Shares are being tendered for
the benefit of one or more beneficial owners identified
2
<PAGE>
in the applicable Letter of Transmittal or in the applicable Notice of
Solicited Tenders (including in the materials provided to brokers and
dealers). No such fee shall be payable to a Soliciting Dealer with respect to
the tender of Shares by a holder unless the applicable Letter of Transmittal
accompanying such tender designates such Soliciting Dealer. No such fee shall
be payable to the Soliciting Dealer unless the Soliciting Dealer returns a
Notice of Solicited Tenders to the Depositary within three business days after
the applicable Expiration Date. No broker, dealer, bank, trust company or
fiduciary shall be deemed to be the agent of Duke Energy, the Depositary, the
Information Agent or the Dealer Managers for purposes of the Offer.
Soliciting Dealers will include any of the organizations described in
clauses (a), (b) and (c) above even when the activities of such organizations
in connection with the Offer consist solely of forwarding to clients materials
relating to the Offer, including the Letter of Transmittal and tendering
Shares as directed by beneficial owners thereof. No Soliciting Dealer is
required to make any recommendation to holders of Shares as to whether to
tender or refrain from tendering in the Offer. No assumption is made, in
making payment to any Soliciting Dealer, that its activities in connection
with the Offer included any activities other than those described above, and
for all purposes noted in all materials relating to the Offer, the term
"solicit" shall be deemed to mean no more than "processing shares tendered" or
"forwarding to customers materials regarding the Offer."
If tendered Shares are being delivered by book-entry transfer made to an
account maintained by the Depositary with The Depository Trust Company, the
Soliciting Dealer must return a Notice of Solicited Tenders to the Depositary
within three New York Stock Exchange trading days after the applicable
Expiration Date in order to receive a solicitation fee. At the time of
tendering Shares in book-entry form, please indicate your request for
solicitation fees in the comments field. NO SOLICITATION FEE SHALL BE PAYABLE
TO A SOLICITING DEALER IF SUCH SOLICITING DEALER IS REQUIRED FOR ANY REASON TO
TRANSFER ANY PORTION OF SUCH FEE TO ANY PERSON (OTHER THAN ITSELF).
All questions as to the validity, form and eligibility (including time of
receipt) of Notices of Solicited Tenders will be determined by the Depositary,
in its sole discretion, which determination will be final and binding. Neither
the Depositary nor any other person will be under any duty to give
notification of any defects or irregularities in any Notice of Solicited
Tenders or incur any liability for failure to give such notification.
Duke Energy, upon request, will reimburse brokers, dealers, banks, trust
companies and other nominees for reasonable and necessary costs and expenses
incurred by them in forwarding materials to their customers. Duke Energy will
pay all stock transfer taxes applicable to the acceptance of Shares pursuant
to the Offer, subject to Instruction 6 of the Letter of Transmittal.
Soliciting Dealers should take care to ensure proper record-keeping to
document their entitlement to any solicitation fee.
Any inquiries you may have with respect to the Offer should be addressed to,
and additional copies of the enclosed materials may be obtained from, the
Information Agent or the undersigned at the addresses and telephone numbers
set forth on the back cover of the Offer to Purchase.
Very truly yours,
Goldman, Sachs & Co.
Merrill Lynch & Co.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
THE AGENT OF DUKE ENERGY, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE
DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE
ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN
THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE>
NOTICE OF SOLICITED TENDERS
List below the number of Shares tendered by each beneficial owner whose
tender you have solicited. All Shares beneficially owned by a beneficial
owner, whether in one account or several, and in however many capacities, must
be aggregated for purposes of completing the tables below. Any questions as to
what constitutes beneficial ownership should be directed to the Information
Agent. If the space below is inadequate, list the Shares on a separate signed
schedule and affix the list to this Notice of Solicited Tenders. PLEASE DO NOT
COMPLETE THE SECTIONS OF THE TABLE HEADED "TO BE COMPLETED ONLY BY
DEPOSITARY."
ALL NOTICES OF SOLICITED TENDERS SHOULD BE RETURNED TO THE DEPOSITARY AT THE
ADDRESS SET FORTH ON THE BACK COVER OF THE OFFER TO PURCHASE WITHIN THREE NEW
YORK STOCK EXCHANGE TRADING DAYS AFTER THE EXPIRATION OF THE OFFER. NOTICES
MAY BE FAXED TO THE DEPOSITARY AT (201) 329-8936; CONFIRMATION TELEPHONE
NUMBER (201) 296-4860. ALL QUESTIONS CONCERNING THE NOTICES OF SOLICITED
TENDERS SHOULD BE DIRECTED TO THE INFORMATION AGENT AT THE TELEPHONE NUMBER
SET FORTH ON THE BACK COVER OF THE OFFER TO PURCHASE.
SOLICITED TENDERS OF 4.50% SERIES
NOT BENEFICIALLY OWNED BY SOLICITING DEALER
BENEFICIAL OWNERS OF LESS THAN 2,500 SHARES - SOLICITATION FEE OF $1.50 PER
SHARE
<TABLE>
<CAPTION>
TO BE COMPLETED BY THE TO BE COMPLETED BY THE TO BE COMPLETED
SOLICITING DEALER SOLICITING DEALER ONLY BY DEPOSITARY
Number of Shares VOI Ticket DTC Participant
Beneficial Owners Tendered Number* Number
----------------- -------- ------- ------
<S> <C> <C> <C>
Beneficial Owner No. 1
---- ---------- ----
Beneficial Owner No. 2
---- ---------- ----
Beneficial Owner No. 3
---- ---------- ----
Beneficial Owner No. 4
---- ---------- ----
Beneficial Owner No. 5
---- ---------- ----
Total
==== ========== ====
</TABLE>
BENEFICIAL OWNERS OF 2,500 OR MORE SHARES - SOLICITATION FEE OF $1.00 PER
SHARE
<TABLE>
<CAPTION>
TO BE COMPLETED BY THE TO BE COMPLETED BY THE TO BE COMPLETED
SOLICITING DEALER SOLICITING DEALER ONLY BY DEPOSITARY
Number of Shares VOI Ticket DTC Participant
Beneficial Owners Tendered Number* Number
----------------- -------- ------- ------
<S> <C> <C> <C>
Beneficial Owner No. 1
---- ---------- ----
Beneficial Owner No. 2
---- ---------- ----
Beneficial Owner No. 3
---- ---------- ----
Beneficial Owner No. 4
---- ---------- ----
Beneficial Owner No. 5
---- ---------- ----
Total
==== ========== ====
</TABLE>
- -------------
* Complete if Shares delivered by book-entry transfer. Please submit a
separate VOI Ticket for Shares tendered when the solicitation fee is to be
directed to another Soliciting Dealer. At the time of tendering Shares in
book-entry form, please indicate your request for solicitation fees in the
comments field.
4
<PAGE>
NOTICE OF SOLICITED TENDERS
List below the number of Shares tendered by each beneficial owner whose
tender you have solicited. All Shares beneficially owned by a beneficial
owner, whether in one account or several, and in however many capacities, must
be aggregated for purposes of completing the tables below. Any questions as to
what constitutes beneficial ownership should be directed to the Information
Agent. If the space below is inadequate, list the Shares on a separate signed
schedule and affix the list to this Notice of Solicited Tenders. PLEASE DO NOT
COMPLETE THE SECTIONS OF THE TABLE HEADED "TO BE COMPLETED ONLY BY
DEPOSITARY."
ALL NOTICES OF SOLICITED TENDERS SHOULD BE RETURNED TO THE DEPOSITARY AT THE
ADDRESS SET FORTH ON THE BACK COVER OF THE OFFER TO PURCHASE WITHIN THREE NEW
YORK STOCK EXCHANGE TRADING DAYS AFTER THE EXPIRATION OF THE OFFER. NOTICES
MAY BE FAXED TO THE DEPOSITARY AT (201) 329-8936; CONFIRMATION TELEPHONE
NUMBER (201) 296-4860. ALL QUESTIONS CONCERNING THE NOTICES OF SOLICITED
TENDERS SHOULD BE DIRECTED TO THE INFORMATION AGENT AT THE TELEPHONE NUMBER
SET FORTH ON THE BACK COVER OF THE OFFER TO PURCHASE.
SOLICITED TENDERS OF 7.85% SERIES
NOT BENEFICIALLY OWNED BY SOLICITING DEALER
BENEFICIAL OWNERS OF LESS THAN 2,500 SHARES - SOLICITATION FEE OF $1.50 PER
SHARE
<TABLE>
<CAPTION>
TO BE COMPLETED BY THE TO BE COMPLETED BY THE TO BE COMPLETED
SOLICITING DEALER SOLICITING DEALER ONLY BY DEPOSITARY
Number of Shares VOI Ticket DTC Participant
Beneficial Owners Tendered Number* Number
----------------- -------- ------- ------
<S> <C> <C> <C>
Beneficial Owner No. 1
---- ---------- ----
Beneficial Owner No. 2
---- ---------- ----
Beneficial Owner No. 3
---- ---------- ----
Beneficial Owner No. 4
---- ---------- ----
Beneficial Owner No. 5
---- ---------- ----
Total
==== ========== ====
</TABLE>
BENEFICIAL OWNERS OF 2,500 OR MORE SHARES - SOLICITATION FEE OF $1.00 PER
SHARE
<TABLE>
<CAPTION>
TO BE COMPLETED BY THE TO BE COMPLETED BY THE TO BE COMPLETED
SOLICITING DEALER SOLICITING DEALER ONLY BY DEPOSITARY
Number of Shares VOI Ticket DTC Participant
Beneficial Owners Tendered Number* Number
----------------- -------- ------- ------
<S> <C> <C> <C>
Beneficial Owner No. 1
---- ---------- ----
Beneficial Owner No. 2
---- ---------- ----
Beneficial Owner No. 3
---- ---------- ----
Beneficial Owner No. 4
---- ---------- ----
Beneficial Owner No. 5
---- ---------- ----
Total
==== ========== ====
</TABLE>
- -------------
* Complete if Shares delivered by book-entry transfer. Please submit a
separate VOI Ticket for Shares tendered when the solicitation fee is to be
directed to another Soliciting Dealer. At the time of tendering Shares in
book-entry form, please indicate your request for solicitation fees in the
comments field.
5
<PAGE>
NOTICE OF SOLICITED TENDERS
List below the number of Shares tendered by each beneficial owner whose
tender you have solicited. All Shares beneficially owned by a beneficial
owner, whether in one account or several, and in however many capacities, must
be aggregated for purposes of completing the tables below. Any questions as to
what constitutes beneficial ownership should be directed to the Information
Agent. If the space below is inadequate, list the Shares on a separate signed
schedule and affix the list to this Notice of Solicited Tenders. PLEASE DO NOT
COMPLETE THE SECTIONS OF THE TABLE HEADED "TO BE COMPLETED ONLY BY
DEPOSITARY."
ALL NOTICES OF SOLICITED TENDERS SHOULD BE RETURNED TO THE DEPOSITARY AT THE
ADDRESS SET FORTH ON THE BACK COVER OF THE OFFER TO PURCHASE WITHIN THREE NEW
YORK STOCK EXCHANGE TRADING DAYS AFTER THE EXPIRATION OF THE OFFER. NOTICES
MAY BE FAXED TO THE DEPOSITARY AT (201) 329-8936; CONFIRMATION TELEPHONE
NUMBER (201) 296-4860. ALL QUESTIONS CONCERNING THE NOTICES OF SOLICITED
TENDERS SHOULD BE DIRECTED TO THE INFORMATION AGENT AT THE TELEPHONE NUMBER
SET FORTH ON THE BACK COVER OF THE OFFER TO PURCHASE.
SOLICITED TENDERS OF 7.00% SERIES
NOT BENEFICIALLY OWNED BY SOLICITING DEALER
BENEFICIAL OWNERS OF LESS THAN 2,500 SHARES - SOLICITATION FEE OF $1.50 PER
SHARE
<TABLE>
<CAPTION>
TO BE COMPLETED BY THE TO BE COMPLETED BY THE TO BE COMPLETED
SOLICITING DEALER SOLICITING DEALER ONLY BY DEPOSITARY
Number of Shares VOI Ticket DTC Participant
Beneficial Owners Tendered Number* Number
----------------- -------- ------- ------
<S> <C> <C> <C>
Beneficial Owner No. 1
---- ---------- ----
Beneficial Owner No. 2
---- ---------- ----
Beneficial Owner No. 3
---- ---------- ----
Beneficial Owner No. 4
---- ---------- ----
Beneficial Owner No. 5
---- ---------- ----
Total
==== ========== ====
</TABLE>
BENEFICIAL OWNERS OF 2,500 OR MORE SHARES - SOLICITATION FEE OF $1.00 PER
SHARE
<TABLE>
<CAPTION>
TO BE COMPLETED BY THE TO BE COMPLETED BY THE TO BE COMPLETED
SOLICITING DEALER SOLICITING DEALER ONLY BY DEPOSITARY
Number of Shares VOI Ticket DTC Participant
Beneficial Owners Tendered Number* Number
----------------- -------- ------- ------
<S> <C> <C> <C>
Beneficial Owner No. 1
---- ---------- ----
Beneficial Owner No. 2
---- ---------- ----
Beneficial Owner No. 3
---- ---------- ----
Beneficial Owner No. 4
---- ---------- ----
Beneficial Owner No. 5
---- ---------- ----
Total
==== ========== ====
</TABLE>
- -------------
* Complete if Shares delivered by book-entry transfer. Please submit a
separate VOI Ticket for Shares tendered when the solicitation fee is to be
directed to another Soliciting Dealer. At the time of tendering Shares in
book-entry form, please indicate your request for solicitation fees in the
comments field.
6
<PAGE>
NOTICE OF SOLICITED TENDERS
List below the number of Shares tendered by each beneficial owner whose
tender you have solicited. All Shares beneficially owned by a beneficial
owner, whether in one account or several, and in however many capacities, must
be aggregated for purposes of completing the tables below. Any questions as to
what constitutes beneficial ownership should be directed to the Information
Agent. If the space below is inadequate, list the Shares on a separate signed
schedule and affix the list to this Notice of Solicited Tenders. PLEASE DO NOT
COMPLETE THE SECTIONS OF THE TABLE HEADED "TO BE COMPLETED ONLY BY
DEPOSITARY."
ALL NOTICES OF SOLICITED TENDERS SHOULD BE RETURNED TO THE DEPOSITARY AT THE
ADDRESS SET FORTH ON THE BACK COVER OF THE OFFER TO PURCHASE WITHIN THREE NEW
YORK STOCK EXCHANGE TRADING DAYS AFTER THE EXPIRATION OF THE OFFER. NOTICES
MAY BE FAXED TO THE DEPOSITARY AT (201) 329-8936; CONFIRMATION TELEPHONE
NUMBER (201) 296-4860. ALL QUESTIONS CONCERNING THE NOTICES OF SOLICITED
TENDERS SHOULD BE DIRECTED TO THE INFORMATION AGENT AT THE TELEPHONE NUMBER
SET FORTH ON THE BACK COVER OF THE OFFER TO PURCHASE.
SOLICITED TENDERS OF 6.75% SERIES
NOT BENEFICIALLY OWNED BY SOLICITING DEALER
BENEFICIAL OWNERS OF LESS THAN 2,500 SHARES - SOLICITATION FEE OF $1.50 PER
SHARE
<TABLE>
<CAPTION>
TO BE COMPLETED BY THE TO BE COMPLETED BY THE TO BE COMPLETED
SOLICITING DEALER SOLICITING DEALER ONLY BY DEPOSITARY
Number of Shares VOI Ticket DTC Participant
Beneficial Owners Tendered Number* Number
----------------- -------- ------- ------
<S> <C> <C> <C>
Beneficial Owner No. 1
---- ---------- ----
Beneficial Owner No. 2
---- ---------- ----
Beneficial Owner No. 3
---- ---------- ----
Beneficial Owner No. 4
---- ---------- ----
Beneficial Owner No. 5
---- ---------- ----
Total
==== ========== ====
</TABLE>
BENEFICIAL OWNERS OF 2,500 OR MORE SHARES - SOLICITATION FEE OF $1.00 PER
SHARE
<TABLE>
<CAPTION>
TO BE COMPLETED BY THE TO BE COMPLETED BY THE TO BE COMPLETED
SOLICITING DEALER SOLICITING DEALER ONLY BY DEPOSITARY
Number of Shares VOI Ticket DTC Participant
Beneficial Owners Tendered Number* Number
----------------- -------- ------- ------
<S> <C> <C> <C>
Beneficial Owner No. 1
---- ---------- ----
Beneficial Owner No. 2
---- ---------- ----
Beneficial Owner No. 3
---- ---------- ----
Beneficial Owner No. 4
---- ---------- ----
Beneficial Owner No. 5
---- ---------- ----
Total
==== ========== ====
</TABLE>
- -------------
* Complete if Shares delivered by book-entry transfer. Please submit a
separate VOI Ticket for Shares tendered when the solicitation fee is to be
directed to another Soliciting Dealer. At the time of tendering Shares in
book-entry form, please indicate your request for solicitation fees in the
comments field.
7
<PAGE>
NOTICE OF SOLICITED TENDERS
List below the number of Shares tendered by each beneficial owner whose
tender you have solicited. All Shares beneficially owned by a beneficial
owner, whether in one account or several, and in however many capacities, must
be aggregated for purposes of completing the tables below. Any questions as to
what constitutes beneficial ownership should be directed to the Information
Agent. If the space below is inadequate, list the Shares on a separate signed
schedule and affix the list to this Notice of Solicited Tenders. PLEASE DO NOT
COMPLETE THE SECTIONS OF THE TABLE HEADED "TO BE COMPLETED ONLY BY
DEPOSITARY."
ALL NOTICES OF SOLICITED TENDERS SHOULD BE RETURNED TO THE DEPOSITARY AT THE
ADDRESS SET FORTH ON THE BACK COVER OF THE OFFER TO PURCHASE WITHIN THREE NEW
YORK STOCK EXCHANGE TRADING DAYS AFTER THE EXPIRATION OF THE OFFER. NOTICES
MAY BE FAXED TO THE DEPOSITARY AT (201) 329-8936; CONFIRMATION TELEPHONE
NUMBER (201) 296-4860. ALL QUESTIONS CONCERNING THE NOTICES OF SOLICITED
TENDERS SHOULD BE DIRECTED TO THE INFORMATION AGENT AT THE TELEPHONE NUMBER
SET FORTH ON THE BACK COVER OF THE OFFER TO PURCHASE.
SOLICITED TENDERS OF 7.04% SERIES
NOT BENEFICIALLY OWNED BY SOLICITING DEALER
BENEFICIAL OWNERS OF LESS THAN 2,500 SHARES - SOLICITATION FEE OF $1.50 PER
SHARE
<TABLE>
<CAPTION>
TO BE COMPLETED BY THE TO BE COMPLETED BY THE TO BE COMPLETED
SOLICITING DEALER SOLICITING DEALER ONLY BY DEPOSITARY
Number of Shares VOI Ticket DTC Participant
Beneficial Owners Tendered Number* Number
----------------- -------- ------- ------
<S> <C> <C> <C>
Beneficial Owner No. 1
---- ---------- ----
Beneficial Owner No. 2
---- ---------- ----
Beneficial Owner No. 3
---- ---------- ----
Beneficial Owner No. 4
---- ---------- ----
Beneficial Owner No. 5
---- ---------- ----
Total
==== ========== ====
</TABLE>
BENEFICIAL OWNERS OF 2,500 OR MORE SHARES - SOLICITATION FEE OF $1.00 PER
SHARE
<TABLE>
<CAPTION>
TO BE COMPLETED BY THE TO BE COMPLETED BY THE TO BE COMPLETED
SOLICITING DEALER SOLICITING DEALER ONLY BY DEPOSITARY
Number of Shares VOI Ticket DTC Participant
Beneficial Owners Tendered Number* Number
----------------- -------- ------- ------
<S> <C> <C> <C>
Beneficial Owner No. 1
---- ---------- ----
Beneficial Owner No. 2
---- ---------- ----
Beneficial Owner No. 3
---- ---------- ----
Beneficial Owner No. 4
---- ---------- ----
Beneficial Owner No. 5
---- ---------- ----
Total
==== ========== ====
</TABLE>
- -------------
* Complete if Shares delivered by book-entry transfer. Please submit a
separate VOI Ticket for Shares tendered when the solicitation fee is to be
directed to another Soliciting Dealer. At the time of tendering Shares in
book-entry form, please indicate your request for solicitation fees in the
comments field.
8
<PAGE>
NOTICE OF SOLICITED TENDERS
List below the number of Shares tendered by each beneficial owner whose
tender you have solicited. All Shares beneficially owned by a beneficial
owner, whether in one account or several, and in however many capacities, must
be aggregated for purposes of completing the tables below. Any questions as to
what constitutes beneficial ownership should be directed to the Information
Agent. If the space below is inadequate, list the Shares on a separate signed
schedule and affix the list to this Notice of Solicited Tenders. PLEASE DO NOT
COMPLETE THE SECTIONS OF THE TABLE HEADED "TO BE COMPLETED ONLY BY
DEPOSITARY."
ALL NOTICES OF SOLICITED TENDERS SHOULD BE RETURNED TO THE DEPOSITARY AT THE
ADDRESS SET FORTH ON THE BACK COVER OF THE OFFER TO PURCHASE WITHIN THREE NEW
YORK STOCK EXCHANGE TRADING DAYS AFTER THE EXPIRATION OF THE OFFER. NOTICES
MAY BE FAXED TO THE DEPOSITARY AT (201) 329-8936; CONFIRMATION TELEPHONE
NUMBER (201) 296-4860. ALL QUESTIONS CONCERNING THE NOTICES OF SOLICITED
TENDERS SHOULD BE DIRECTED TO THE INFORMATION AGENT AT THE TELEPHONE NUMBER
SET FORTH ON THE BACK COVER OF THE OFFER TO PURCHASE.
SOLICITED TENDERS OF 6.375% SERIES A
NOT BENEFICIALLY OWNED BY SOLICITING DEALER
BENEFICIAL OWNERS OF LESS THAN 2,500 SHARES - SOLICITATION FEE OF $0.375 PER
SHARE
<TABLE>
<CAPTION>
TO BE COMPLETED BY THE TO BE COMPLETED BY THE TO BE COMPLETED
SOLICITING DEALER SOLICITING DEALER ONLY BY DEPOSITARY
Number of Shares VOI Ticket DTC Participant
Beneficial Owners Tendered Number* Number
----------------- -------- ------- ------
<S> <C> <C> <C>
Beneficial Owner No. 1
---- ---------- ----
Beneficial Owner No. 2
---- ---------- ----
Beneficial Owner No. 3
---- ---------- ----
Beneficial Owner No. 4
---- ---------- ----
Beneficial Owner No. 5
---- ---------- ----
Total
==== ========== ====
</TABLE>
BENEFICIAL OWNERS OF 2,500 OR MORE SHARES - SOLICITATION FEE OF $0.25 PER
SHARE
<TABLE>
<CAPTION>
TO BE COMPLETED BY THE TO BE COMPLETED BY THE TO BE COMPLETED
SOLICITING DEALER SOLICITING DEALER ONLY BY DEPOSITARY
Number of Shares VOI Ticket DTC Participant
Beneficial Owners Tendered Number* Number
----------------- -------- ------- ------
<S> <C> <C> <C>
Beneficial Owner No. 1
---- ---------- ----
Beneficial Owner No. 2
---- ---------- ----
Beneficial Owner No. 3
---- ---------- ----
Beneficial Owner No. 4
---- ---------- ----
Beneficial Owner No. 5
---- ---------- ----
Total
==== ========== ====
</TABLE>
- -------------
* Complete if Shares delivered by book-entry transfer. Please submit a
separate VOI Ticket for Shares tendered when the solicitation fee is to be
directed to another Soliciting Dealer. At the time of tendering Shares in
book-entry form, please indicate your request for solicitation fees in the
comments field.
9
<PAGE>
The undersigned hereby confirms that: (i) it has complied with the applicable
requirements of the Securities Exchange Act of 1934, as amended, and the
applicable rules and regulations thereunder, in connection with such
solicitation; (ii) it is entitled to such compensation for such solicitation
under the terms and conditions of the Offer to Purchase (unless the
undersigned is not being compensated for such solicitation); (iii) in
soliciting tenders of Shares, it has used no soliciting materials other than
those furnished by Duke Energy; and (iv) if it is a foreign broker or dealer
not eligible for membership in the NASD, it has agreed to conform to the
NASD's Rules of Fair Practice in making solicitations outside the United
States to the same extent as though it were an NASD member.
- -------------------------------------
(Name of Firm)
- -------------------------------------
(Authorized Signature)
- -------------------------------------
(Area Code and Telephone Number)
- -------------------------------------
(Address)
- -------------------------------------
(City, State, Zip Code)
- -------------------------------------
(Attention)
Date:________________________________
DO NOT SEND STOCK CERTIFICATES WITH THIS FORM.
YOUR STOCK CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL.
10
<PAGE>
EXHIBIT 9(a)(5)
DUKE ENERGY CORPORATION
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES OF THE FOLLOWING
SERIES OF ITS PREFERRED STOCK AND PREFERRED STOCK A
4.50% Preferred Stock, Series C ($100 par value)
7.85% Preferred Stock, Series S ($100 par value)
7.00% Preferred Stock, Series W ($100 par value)
6.75% Preferred Stock, Series X ($100 par value)
7.04% Preferred Stock, Series Y ($100 par value) and
6.375% Preferred Stock A, 1993 Series ($25 par value)
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON JANUARY 20, 1998, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated December
18, 1997 (the "Offer to Purchase"), and applicable Letter of Transmittal
(which together constitute the "Offer") setting forth an offer by Duke Energy
Corporation, a North Carolina corporation ("Duke Energy"), to purchase any and
all shares of the following series of its Preferred Stock and Preferred Stock
A at the prices indicated:
<TABLE>
<CAPTION>
Purchase Price
Per Share
--------------
<S> <C>
4.50% Preferred Stock, Series C ("4.50% Series") $ 90.28
7.85% Preferred Stock, Series S ("7.85% Series") $118.46
7.00% Preferred Stock, Series W ("7.00% Series") $115.22
6.75% Preferred Stock, Series X ("6.75% Series") $115.35
7.04% Preferred Stock, Series Y ("7.04% Series") $115.90
6.375% Preferred Stock A, 1993 Series ("6.375% Series A") $ 28.28
</TABLE>
(collectively, the "Shares"; and each of the series of Preferred Stock and
Preferred Stock A, a "Series of Preferred"), net to the seller in cash, upon
the terms and subject to the conditions of the Offer. Duke Energy will
purchase any and all Shares of each Series of Preferred validly tendered and
not withdrawn, upon the terms and subject to the conditions of the Offer (as
described in the Offer to Purchase).
We are the holder of record of Shares held for your account. A tender of
such Shares can be made only by us as the holder of record and pursuant to
your instructions. The applicable Letter of Transmittal for each Series of
Preferred held by us for you is furnished to you for your information only and
cannot be used by you to tender any Shares held by us for your account.
We request instructions as to whether you wish us to tender any or all of
the Shares of each Series of Preferred held by us for your account, upon the
terms and subject to the conditions set forth in the Offer to Purchase and
applicable Letter (or Letters) of Transmittal.
Your attention is invited to the following:
(1) The Offer is for any and all Shares of each Series of Preferred. The
Offer is not conditioned upon any minimum number of Shares of any Series of
Preferred being tendered. The Offer for Shares of one Series of Preferred is
not conditioned on the Offer for Shares of any other Series of Preferred, but
the Offer is subject to certain other conditions.
<PAGE>
(2) The Offer will expire at 12:00 midnight, New York City time, January 20,
1998, unless the Offer is extended. Your instructions to us should be
forwarded to us in ample time to permit us to submit a tender on your behalf.
If you would like to withdraw your Shares that we have tendered, you can
withdraw them so long as the Offer remains open or at any time after the
expiration of 40 business days from the commencement of the Offer if such
Shares have not been accepted for payment.
(3) Any stock transfer taxes applicable to the sale of Shares to Duke Energy
pursuant to the Offer will be paid by Duke Energy, except as otherwise
provided in Instruction 6 of each Letter of Transmittal.
NEITHER DUKE ENERGY, ITS BOARD OF DIRECTORS NOR ANY OF ITS EXECUTIVE
OFFICERS MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER
ANY OR ALL SHARES. YOU MUST MAKE YOUR OWN DECISION AS TO WHETHER TO TENDER
SHARES AND, IF SO, HOW MANY SHARES TO TENDER.
If you wish to have us tender any or all of your Shares of any Series of
Preferred held by us for your account upon the terms and subject to the
conditions set forth in the Offer, please so instruct us by completing,
executing, detaching and returning to us the instruction form on the
detachable part hereof. If you hold Shares of more than one Series of
Preferred, you must specify the number of Shares tendered for each Series of
Preferred. An envelope to return your instructions to us is enclosed. If you
authorize tender of your Shares, all such Shares will be tendered unless
otherwise specified on the detachable part hereof. Your instructions should be
forwarded to us in ample time to permit us to submit a tender on your behalf
by the expiration of the Offer.
The Offer is being made to all holders of Shares. Duke Energy is not aware
of any jurisdiction where the making of the Offer or the tender of Shares
would not be in compliance with applicable law. If Duke Energy becomes aware
of any jurisdiction where the making of the Offer or the tender of Shares is
not in compliance with any applicable law, Duke Energy will make a good faith
effort to comply with such law. If, after such good faith effort, Duke Energy
cannot comply with such law, the Offer will not be made to (nor will tenders
be accepted from or on behalf of) the holders of Shares residing in such
jurisdiction. In any jurisdiction in which the securities, blue sky or other
laws require the Offer to be made by a licensed broker or dealer, the Offer
will be deemed to be made on Duke Energy's behalf by one or more registered
brokers or dealers licensed under the laws of such jurisdiction.
2
<PAGE>
INSTRUCTIONS
WITH RESPECT TO OFFER TO PURCHASE FOR CASH ANY AND ALL SHARES OF
4.50% PREFERRED STOCK, SERIES C ($100 PAR VALUE)
7.85% PREFERRED STOCK, SERIES S ($100 PAR VALUE)
7.00% PREFERRED STOCK, SERIES W ($100 PAR VALUE)
6.75% PREFERRED STOCK, SERIES X ($100 PAR VALUE)
7.04% PREFERRED STOCK, SERIES Y ($100 PAR VALUE) AND
6.375% PREFERRED STOCK A, 1993 SERIES ($25 PAR VALUE)
of
DUKE ENERGY CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase, dated December 18, 1997, and the applicable Letter of Transmittal
(which together constitute the "Offer") in connection with the Offer by Duke
Energy Corporation ("Duke Energy") to purchase any and all shares of the
following series of its Preferred Stock and Preferred Stock A at the prices
indicated:
<TABLE>
<CAPTION>
Purchase Price
Per Share
--------------
<S> <C>
4.50% Preferred Stock, Series C ("4.50% Series") $ 90.28
7.85% Preferred Stock, Series S ("7.85% Series") $118.46
7.00% Preferred Stock, Series W ("7.00% Series") $115.22
6.75% Preferred Stock, Series X ("6.75% Series") $115.35
7.04% Preferred Stock, Series Y ("7.04% Series") $115.90
6.375% Preferred Stock A, 1993 Series ("6.375% Series A") $ 28.28
</TABLE>
(collectively, the "Shares"; and each series of Preferred Stock or Preferred
Stock A, a "Series of Preferred"), net to the undersigned in cash.
This will instruct you to tender to Duke Energy the number of shares of each
Series of Preferred indicated below (or, if no number is indicated below, all
shares of such Series of Preferred) which are held by us for you for the
account of the undersigned, upon the terms and subject to the conditions of
the Offer.
3
<PAGE>
(Check only one*)
[_] Number of Preferred to be Tendered: Shares**
--- ---------
[_] Number of Preferred to be Tendered: Shares**
--- ---------
[_] Number of Preferred to be Tendered: Shares**
--- ---------
[_] Number of Preferred to be Tendered: Shares**
--- ---------
[_] Number of Preferred to be Tendered: Shares**
--- ---------
[_] Number of Preferred Series A to be Tendered: Shares**
--- ---------
- -------------------------------------------------------------------------------
SIGN HERE
Signature(s):
-------------------------------------------------------------
Name(s):
------------------------------------------------------------------
Address:
------------------------------------------------------------------
Social Security or Taxpayer ID No.:
---------------------------------------
Dated:
--------------------------------------------------------------------
- -----------------
* A separate instruction must be completed for each Series of Preferred
tendered.
** Unless otherwise indicated, it will be assumed that all Shares of such Series
of Preferred held by us for your account are to be tendered.
Please designate in the box below any Soliciting Dealer who solicited your
tender.
SOLICITED TENDERS
The undersigned represents that the Soliciting Dealer who solicited and
obtained this tender is:
Name of Firm:
-------------------------------------------------------------
(Please Print)
Name of Individual Broker or Financial Consultant:
------------------------
Identification Number (if known):
-----------------------------------------
Address:
------------------------------------------------------------------
---------------------------------------------------------------------------
(Include Zip Code)
4
<PAGE>
EXHIBIT 9(a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
WHAT NAME AND NUMBER TO GIVE THE REQUESTER
<TABLE>
- ------------------------------------------------
<CAPTION>
GIVE THE SSN OR,
IF APPLICABLE,
FOR THIS TYPE OF ACCOUNT: EIN OF:
- -------------------------------------------------
<S> <C>
1. Individual The individual
2. Two or more individuals The actual owner
(joint account) of the account
or, if combined
funds, the first
individual on
the account(1)
3. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
4. a. The usual revocable The grantor-
savings trust (grantor trustee(1)
is also trustee)
b. So-called trust account The actual
that is not a legal or owner(1)
valid trust under state
law
5. Sole proprietorship The owner(3)
6. A valid trust, estate Legal entity (Do
or pension trust not furnish the
identifying
number of the
personal
representative
or trustee
unless the legal
entity itself is
not designated
in the account
title)(4)
</TABLE>
- ------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------
GIVE THE SSN OR,
IF APPLICABLE,
FOR THIS TYPE OF ACCOUNT: EIN OF:
- ------------------------------------------------
<S> <C>
7. Corporate The corporation
8. Association, club, The organization
religious, charitable,
educational or other
tax-exempt
organization
9. Partnership The partnership
10. A broker or registered The broker or
nominee nominee
11. Account with the The public
Department of entity
Agriculture in the
name of a public
entity (such as a
state or local
government, school
district or prison)
that receives
agriculture program
payments
</TABLE>
- -----------------------------------------------
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has an SSN, that person's number must
be furnished.
(2) Circle the minor's name and furnish the minor's SSN.
(3) Show the name of the owner. May also use business name and its EIN (if
any).
(4) List first and circle the name of the legal trust, estate or pension
trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
SECTION REFERENCES ARE TO THE INTERNAL REVENUE CODE OF 1986
PURPOSE OF FORM. A person who is required to file an information return with
the Internal Revenue Service (the "IRS") must obtain your correct TIN to
report income paid to you, real estate transactions, mortgage interest you
paid, the acquisition or abandonment of secured property, or contributions you
made to an IRA. Use Substitute Form W-9 to furnish your correct TIN to the
requester (the person asking you to furnish your TIN) and, when applicable,
(1) to certify that the TIN you are furnishing is correct (or that you are
waiting for a number to be issued), (2) to certify that you are not subject to
backup withholding and (3) to claim exemption from backup withholding if you
are an exempt payee. Furnishing your correct TIN and making the appropriate
certifications will prevent certain payments from being subject to backup
withholding.
HOW TO OBTAIN A TIN. If you do not have a TIN, apply for one immediately. To
apply, get Form SS-5, Application for a Social Security Card (for
individuals), from your local office of the Social Security Administration, or
Form SS-4, Application for Employer Identification Number (for businesses and
all other entities), from your local IRS office.
To complete Substitute Form W-9 if you do not have a TIN, check the box in
Part 2 of Substitute Form W-9, sign and date the form, including the
Certificate of Awaiting Taxpayer Identification Number, and give it to the
requester. Generally, you must obtain a TIN and furnish it to the requester by
the time of payment. If the requester does not receive your TIN by the time of
payment, backup withholding, if applicable, will begin and continue until you
furnish your TIN to the requester.
NOTE: Checking the box in Part 2 of the Substitute Form W-9 means that you
have already applied for a TIN or that you intend to apply for one in the near
future.
As soon as you receive your TIN, complete another Substitute Form W-9,
include your TIN, sign and date the form, and give it to the requester.
WHAT IS BACKUP WITHHOLDING? Persons making certain payments to you are
required to withhold and pay to the IRS 31% of such payments under certain
conditions. This is called "backup withholding." Payments that could be
subject to backup withholding include interest, dividends, broker and barter
exchange transactions, rents, royalties, nonemployee
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
compensation, and certain payments from fishing boat operators, but do not
include real estate transactions.
If you give the requester your correct TIN, make the appropriate
certifications, and report all your taxable interest and dividends on your tax
return, your payments will not be subject to backup withholding. Payments you
receive will be subject to backup withholding if:
1. You do not furnish your TIN to the requester, or
2. The IRS notifies the requester that you furnished an incorrect TIN, or
3. You are notified by the IRS that you are subject to backup withholding
because you failed to report all your interest and dividends on your tax
return (for reportable interest and dividends only), or
4. You do not certify to the requester that you are not subject to backup
withholding (for reportable interest and dividend accounts opened after
1983 only), or
5. You do not certify your TIN when required.
PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING
The following is a list of payees exempt from backup withholding and for which
no information reporting is required. For interest and dividends, all listed
payees are exempt except item (9). For broker transactions, payees listed in
(1) through (13) and a person registered under the Investment Advisors Act of
1940 who regularly acts as a broker are exempt. Payments subject to reporting
under sections 6041 and 6041A are generally exempt from backup withholding
only if made to payees described in items (1) through (7), except a
corporation that provides medical and health care services or bills and
collects payments for such services is not exempt from backup withholding or
information reporting. Only payees described in items (2) through (6) are
exempt from backup withholding for barter exchange transactions and patronage
dividends.
(1) A corporation.
(2) An organization exempt from tax under section 501(a), or an IRA, or a
custodial account under section 403(b)(7).
(3) The United States or any of its agencies or instrumentalities.
(4) A state, the District of Columbia, a possession of the United States, or
any of their political subdivisions or instrumentalities.
(5) A foreign government or any of its political subdivisions, agencies or
instrumentalities.
(6) An international organization or any of its agencies or instrumentalities.
(7) A foreign central bank of issue.
(8) A registered dealer in securities or commodities required to register in
the United States or a possession of the United States.
(9) A futures commission merchant registered with the Commodity Futures
Trading Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the
Investment Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in
the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List.
(15) A trust exempt from tax under section 664 or described in section 4947.
Payments of dividends and patronage dividends generally not subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident alien partner.
. Payments of patronage dividends not paid in money.
. Payments made by certain foreign organizations.
. Section 404(k) payments made by an ESOP.
Payments of interest generally not subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct TIN to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in section 6049(b)(5) to nonresident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Mortgage interest paid to you.
Payments that are not subject to information reporting are also not subject
to backup withholding. For details, see sections 6041, 6041A(a), 6042, 6044,
6045, 6049, 6050A and 6050N, and the regulations thereunder.
EXEMPT PAYEES AND PAYMENTS.--If you are exempt from backup withholding, you
should complete the Substitute Form W-9 to avoid possible erroneous backup
withholding. Enter your correct TIN to the right of Part 1 of the Substitute
Form W-9, write "EXEMPT" on the face of the form, and sign and date it. If you
are a foreign person not subject to backup withholding, give the requester a
properly completed Form W-8, Certificate of Foreign Status.
PRIVACY ACT NOTICE.--Section 6109 requires you to furnish your correct TIN to
persons who must file information returns with the IRS to report interest,
dividends and certain other income paid to you. The IRS uses the numbers for
identification purposes and to help verify the accuracy of your tax return.
You must provide your TIN whether or not you are required to file a tax
return. Payers must generally withhold 31% of taxable interest, dividends and
certain other payments to a payee who does not furnish a TIN to a payer.
Certain penalties may also apply.
PENALTIES
FAILURE TO FURNISH TIN.--If you fail to furnish your correct TIN to a
requester, you are subject to a penalty of $50 for each such failure unless
your failure is due to reasonable cause and not to willful neglect.
CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you make
a false statement with no reasonable basis that results in no imposition of
backup withholding, you are subject to a $500 penalty.
CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
<PAGE>
EXHIBIT 9(a)(7)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase, dated
December 18, 1997, and the related Letter of Transmittal. The Offer is
being made to all holders of Shares, provided that the Offer is not
being made to, nor will tenders be accepted from or on behalf of,
holders of Shares in any jurisdiction in which making or
accepting the Offer would require the Offer to violate
that jurisdiction's laws. In those jurisdictions
whose "blue sky" or securities laws require the
the Offer to be made by a licensed broker or
dealer, the Offer shall be deemed to be made
on behalf of Duke Energy Corporation by
Goldman, Sachs & Co. or Merrill Lynch,
Pierce, Fenner & Smith Incorporated
or one or more registered brokers
or dealers licensed under the laws
of such jurisdictions.
NOTICE OF OFFER TO PURCHASE
ANY AND ALL OUTSTANDING SHARES
OF THE FOLLOWING SERIES OF
PREFERRED AND SERIES OF PREFERRED A
OF
DUKE ENERGY CORPORATION
<TABLE>
<CAPTION>
CUSIP Outstanding Purchase Price
Title of Series Number Shares (per share)
- --------------- ------ ------ -----------
<S> <C> <C> <C>
Preferred Stock ($100 par value)
4.50% Series C 264399791 350,000 $ 90.28
7.85% Series S 264399759 600,000 $118.46
7.00% Series W 264399668 500,000 $115.22
6.75% Series X 264399650 500,000 $115.35
7.04% Series Y 264399643 600,000 $115.90
Preferred Stock A ($25 par value)
6.375% 1993 Series 264399635 2,400,000 $ 28.28
</TABLE>
Duke Energy Corporation, a North Carolina corporation ("Duke Energy"), invites
the holders of shares of each series of Duke Energy Preferred Stock and
Preferred Stock A listed above (the "Series of Preferred" and the "Series of
Preferred A," respectively) to tender any and all of their shares of such Series
of Preferred or Series of Preferred A (the "Shares") for purchase at the
purchase price per Share listed above for the Shares tendered, net to the seller
in cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase and in the Letter of Transmittal for the Series of Preferred or Series
of Preferred A tendered. As to each Series of Preferred and Series of Preferred
A, the Offer to Purchase, together with the applicable Letter of Transmittal,
constitutes the "Offer." Duke Energy will purchase all Shares validly tendered
and not withdrawn, upon the terms and subject to the conditions of the Offer.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON JANUARY 20, 1998, UNLESS THE OFFER IS EXTENDED.
<PAGE>
The Offer for a Series of Preferred or a Series of Preferred A is independent
of the Offer for any other Series of Preferred or Series of Preferred A. The
Offer is not conditioned upon any minimum number of Shares of the applicable
Series of Preferred or Series of Preferred A being tendered. The Offer,
however, is subject to certain conditions. See "Terms of the Offer--Certain
Conditions of the Offer" in the Offer to Purchase.
Any holder desiring to tender any or all of such holder's Shares should either
(1) complete and sign the applicable Letter of Transmittal or a facsimile
thereof in accordance with the instructions in the Letter of Transmittal, mail
or deliver it and any other required documents to ChaseMellon Shareholder
Services, L.L.C. (the "Depositary"), and either deliver the certificates for the
Shares to the Depositary along with the Letter of Transmittal or deliver such
Shares pursuant to the procedure for book-entry transfer set forth in "Terms of
the Offer--Procedure for Tendering Shares" in the Offer to Purchase or (2)
request such beneficial owner's broker, dealer, bank, trust company, or other
nominee to effect the transaction. A beneficial owner whose Shares are
registered in the name of a broker, dealer, bank, trust company, or other
nominee must contact such broker, dealer, bank, trust company, or other nominee
if such beneficial owner desires to tender such Shares. Any holder who desires
to tender Shares and whose certificates for such Shares are not immediately
available, or who cannot comply in a timely manner with the procedure for book-
entry transfer, should tender such Shares by following the procedures for
guaranteed delivery set forth in the Offer to Purchase under "Terms of the
Offer--Procedure for Tendering Shares--Guaranteed Delivery Procedure." Duke
Energy will, as provided in Instruction 10 of the Letter of Transmittal, pay to
any soliciting dealer a solicitation fee as further detailed in the Offer to
Purchase.
Each Series of Preferred and Series of Preferred A has its own Letter of
Transmittal, and only the applicable Letter of Transmittal for a particular
Series or a Notice of Guaranteed Delivery for such Series may be used to tender
Shares of such Series.
Neither Duke Energy, its Board of Directors nor any of its executive officers
makes any recommendation to any holder as to whether to tender any or all
Shares. Holders must make their own decisions as to whether to tender Shares
and, if so, how many Shares to tender.
Tenders of Shares of a Series of Preferred or Series of Preferred A made
pursuant to the Offer may be withdrawn at any time prior to the Expiration Date
with respect to such Series of Preferred or Series of Preferred A. Thereafter,
such tenders are irrevocable, except that they may be withdrawn after February
18, 1998, unless theretofore accepted for payment as provided in the Offer to
Purchase.
The Offer to Purchase is first being mailed on or about December 18, 1997.
The information required to be disclosed by Rule 13-4(d)(1) of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended, is
combined in the Offer to Purchase and is incorporated herein by reference.
Copies of the Offer to Purchase and the applicable Letter of Transmittal are
being mailed to record holders of Shares and will be furnished to brokers,
dealers, banks, trust companies and other nominees whose names, or the names of
whose nominees, appear on Duke Energy's shareholder list or, if applicable, who
are listed as participants in a book-entry transfer facility's security position
listing for subsequent transmittal to beneficial owners of Shares.
The Offer to Purchase and the accompanying Letter of Transmittal contain
important information which should be read before any decision is made with
respect to the Offer.
Any questions or requests for assistance may be directed to the Information
Agent or the Dealer Managers at their respective telephone numbers and addresses
listed below. Requests for additional copies of the Offer to Purchase, the
applicable Letter of Transmittal or other tender offer materials may be directed
to the Information Agent or the Dealer Managers, and such copies will be
furnished promptly at Duke Energy's expense. Holders of Shares may also contact
their local broker, dealer, bank, trust company or other nominee for assistance
concerning the Offer.
Information on the Offer is available from MCM "CorporateWatch" on Telerate
page 41925 and Bloomberg page MCM7625.
The Information Agent for the Offer is:
[LOGO OF GEORGESON & COMPANY INC. APPEARS HERE]
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect:
(212) 440-9800
All Others Call Toll-Free:
(800) 223-2064
The Dealer Managers for the Offer are:
Goldman, Sachs & Co. Merrill Lynch & Co.
Liability Management Group World Financial Center
85 Broad Street North Tower
New York, New York 10004 New York, New York 10281
(800) 828-3182 (888) ML4-TNDR (toll-free)
(888) 654-8637
December 19, 1997
<PAGE>
EXHIBIT 9(a)(8)
[LOGO OF DUKE ENERGY]
December 18, 1997
Dear Holders of Duke Energy
Corporation's
4.50% Preferred Stock, Series C ($100 par value)
7.85% Preferred Stock, Series S ($100 par value)
7.00% Preferred Stock, Series W ($100 par value)
6.75% Preferred Stock, Series X ($100 par value)
7.04% Preferred Stock, Series Y ($100 par value) ("Preferred Stock") and
6.375% Preferred Stock A, 1993 Series ($25 par value) ("Preferred Stock
A"):
RE: TENDER OFFER FOR PREFERRED STOCK AND PREFERRED STOCK A
Duke Energy Corporation is offering to purchase any and all shares of
Preferred Stock and Preferred Stock A at the applicable price set forth in the
enclosed Offer to Purchase.
This offer gives you the opportunity to sell your shares of Preferred Stock
and Preferred Stock A at a price that Duke Energy Corporation believes to be a
premium over the market price and without the usual transaction costs
associated with a market sale.
All shares of Preferred Stock and Preferred Stock A that are properly
tendered in accordance with the terms and conditions set forth in the enclosed
Offer to Purchase and the applicable Letter of Transmittal will be purchased in
cash at the applicable price.
The offer is explained in detail in the enclosed Offer to Purchase and
applicable Letter of Transmittal. A separate Letter of Transmittal has been
prepared for each series of Preferred Stock and Preferred Stock A (each a
"Series of Preferred") and only the applicable Letter of Transmittal may be
used to tender shares for that Series of Preferred. If you want to participate
in the offer, the instructions on how to tender shares are in the enclosed
materials. I encourage you to carefully read these materials before making any
decision with respect to the offer.
The offer for shares of one Series of Preferred is independent of the offer
for shares of any other Series of Preferred.
Duke Energy Corporation, its Board of Directors and its executive officers
make no recommendation to any shareholder as to whether to tender any or all
shares pursuant to the offer. Shareholders must make their own decisions as to
whether to tender shares pursuant to the offer and, if so, how many shares to
tender. If you do not wish to participate in the offer, you do not need to take
any action.
Sincerely,
/s/ R.B. Priory
R.B. Priory
Chairman of the Board
<PAGE>
EXHIBIT 9(a)(9)
DRAFT NEWS RELEASE
FOR RELEASE DEC. 18, A.M.
FYI -- PRICES FOR STOCKS TO BE PUT IN AFTER MARKET CLOSES THE DAY BEFORE
COMMENTS TO DUKE BY 3 P.M. 12-17-97
FINAL APPROVAL: PAUL FERGUSON
Dec. 18, 1997 CONTACT: Randy Wheeless
Office : 704/382-8379
24-Hour : 704/594-0681
DUKE ENERGY CORP. OFFERS TO PURCHASE SIX PREFERRED ISSUES
CHARLOTTE, N.C. -- Duke Energy Corp. today announced offers to purchase any
and all outstanding shares of six preferred issues with an aggregate par value
totaling $315 million. The offers will expire at midnight Eastern time on
Jan. 20, 1998, unless extended.
Purchase prices for the issues are as follows:
<TABLE>
<CAPTION>
ISSUE CUSIP NUMBER PURCHASE PRICE
PREFERRED STOCK ($100 PAR VALUE)
<S> <C> <C>
4.50 percent Series C 264399791 $ 90.28
6.75 percent Series X 264399650 $115.35
7.00 percent Series W 264399668 $115.22
7.04 percent Series Y 264399643 $115.90
7.85 percent Series S 264399759 $118.46
<CAPTION>
PREFERRED STOCK A ($25 PAR VALUE)
<S> <C> <C>
6.375 percent 1993 Series 264399635 $ 28.28
</TABLE>
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell shares. The offers are made solely by the Offer to Purchase, dated
Dec. 18, 1997, and are subject to certain conditions specified therein. The
offer for each series of preferred is independent of the offer for any other
series of preferred.
In addition to the above action, Duke Energy completed a call of $195 million
par value of preferred stock (with a weighted average coupon of 7.09 percent) on
Dec. 16. Duke Energy will reflect a charge to earnings for common in the fourth
quarter associated with the tender and call.
Duke Energy also closed Dec. 8 on a $350 million issue of trust preferred
securities of a subsidiary trust of Duke Energy priced at 7.20 percent.
The dealer-managers for the tender offers are Goldman, Sachs & Co. and
Merrill Lynch & Co. The information agent is Georgeson & Co.
Shareholders, who have questions or requests for assistance, should call the
information agent at (800) 223-2064, Goldman, Sachs & Co. at (800) 828-3182,
or Merrill Lynch & Co. at (888) 654-8637.
Duke Energy Corporation (NYSE:DUK) is a global energy company with more than
$20 billion in assets. Duke Energy companies provide electric service to
approximately 2 million customers; operate pipelines that deliver
12 percent of the natural gas consumed in the United States; and are leading
marketers of electricity, natural gas and natural gas liquids. Globally the
companies develop, own and operate energy facilities and provide engineering,
management, operating and environmental services. Contact Duke Energy on the
World Wide Web at http://www.duke-energy.com.
# # #
