As filed with the Securities and Exchange Commission on June 19, 1997
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------
DUKE ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 56-0205520
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
422 SOUTH CHURCH STREET
CHARLOTTE, NC 28242-0001
(704) 594-0887
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
1982 KEY EMPLOYEE STOCK OPTION PLAN
1989 NONEMPLOYEE DIRECTORS STOCK OPTION PLAN
1990 LONG TERM INCENTIVE PLAN
1994 LONG TERM INCENTIVE PLAN
OF PANENERGY CORP
ASSOCIATED NATURAL GAS CORPORATION EQUITY INCENTIVE PLAN
(Full title of the plan)
<TABLE>
<S> <C>
RICHARD J. OSBORNE JOHN SPUCHES
Executive Vice President and Chief Financial Officer Dewey Ballantine
422 South Church Street 1301 Avenue of the Americas
Charlotte, North Carolina 28242-0001 New York, New York 10019-6092
Telephone No. 704-382-5159 Telephone No. 212-259-7700
</TABLE>
(Names, addresses, including zip codes, and telephone numbers,
including area codes, of agents for service)
------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Title of securities Amount to be Proposed maximum Proposed maximum Amount of
to be registered registered offering price per aggregate offering registration fee
share(1) price(1)
- --------------------------------------------------------------------------------------------------------------
<S> <C>
Common Stock, 3,400,000 shares $45.50 $154,700,000 $46,879
without par value
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 457(h), these prices are estimated solely for the
purpose of calculating the registration fee and are based upon the average of
the high and low sales prices of the Registrant's Common Stock on the New York
Stock Exchange on June 12, 1997.
There also are registered hereunder such additional indeterminate
number of shares as may be issued as a result of the adjustment provisions of
the Plans.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
This Registration Statement on Form S-8 (the "Registration
Statement") is being filed by Duke Energy Corporation (the "Company" or
"Registrant") with respect to the 1982 Key Employee Stock Option Plan, 1989
Nonemployee Directors Stock Option Plan, 1990 Long Term Incentive Plan and 1994
Long Term Incentive Plan of PanEnergy Corp and the Equity Incentive Plan of
Associated Natural Gas Corporation (the "Plans"), referred to on the cover of
this Registration Statement. The document(s) containing the information required
in Part I of this Registration Statement will be sent or given to each of the
participants in the Plans, as specified by Rule 428(b)(1) promulgated by the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "1933 Act"). Such document(s) are not being filed
with the Commission but constitute (together with the documents incorporated
by reference into this Registration Statement pursuant to Item 3 of Part II
hereof) a prospectus that meets the requirements of Section 10(a) of the 1933
Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Commission are
incorporated herein by reference:
o Annual Report on Form 10-K of the Company for the
fiscal year ended December 31, 1996.
o Quarterly Report on Form 10-Q of the Company for the
quarter ended March 31, 1997.
o Current reports on Form 8-K of the Company dated
April 25, 1997, May 30, 1997 and June 18, 1997.
o Definitive Joint Proxy Statement-Prospectus of the
Company and PanEnergy Corp dated March 13, 1997.
o Annual Report on Form 10-K of PanEnergy Corp for the
fiscal year ended December 31, 1996.
o Quarterly Report on Form 10-Q of PanEnergy Corp
for the quarter ended March 31, 1997.
o The description of the Common Stock, without par
value (the "Common Stock"), of the Company, which is
contained in the Company's Registration Statement on
Form S-4, Registration No. 33-23227, filed with the
Commission on March 13, 1997, including any
amendments or reports filed for the purpose of
updating such description.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 after
the date of this Registration Statement and prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference and to be a part hereof from the date of
the filing of such documents.
Item 4. Description of Securities.
Not applicable.
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<PAGE>
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Sections 55-8-50 through 55-8-58 of the North Carolina
Business Corporation Act and the By-Laws of the Registrant permit
indemnification of the Registrant's directors and officers in a variety of
circumstances, which may include liabilities under the 1933 Act. In addition,
the Registrant has purchased insurance permitted by the law of North Carolina on
behalf of directors, officers, employees or agents which may cover liabilities
under the 1933 Act.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit
Number Description
------ -----------
4(A) 1982 Key Employee Stock Option Plan of
PanEnergy Corp (incorporated by reference to
Exhibit 10(g) of Form 10-K for the year ended
December 31, 1986 filed by Panhandle Eastern
Corporation (whose name was subsequently
changed to PanEnergy Corp), File No. 1-8157).
4(B) 1989 Nonemployee Directors Stock Option Plan
of PanEnergy Corp (incorporated by reference
to Exhibit 28(a) of Form S-8 (Registration
No. 33-28912) filed by Panhandle Eastern
Corporation (whose name was subsequently
changed to PanEnergy Corp), File No. 1-8157).
4(C) 1990 Long Term Incentive Plan of PanEnergy
Corp (incorporated by reference to Exhibit
10.14 of Form 10-K for the year ended December
31, 1990 filed by Panhandle Eastern
Corporation (whose name was subsequently
changed to PanEnergy Corp), File No. 1-8157).
4(D) 1994 Long Term Incentive Plan of PanEnergy
Corp (incorporated by reference to Exhibit
10.18 of Form 10-K for the year ended December
31, 1993 filed by Panhandle Eastern
Corporation (whose name was subsequently
changed to PanEnergy Corp), File No. 1-8157).
4(E) Associated Natural Gas Corporation Equity
Incentive Plan (incorporated by reference to
Exhibit 4.1 of Form S-8 (Registration No.
33-38996) filed by Associated Natural Gas
Corporation, File No. 1-10381).
4(F) Amendment to Associated Natural Gas
Corporation Equity Incentive Plan adopted as
of December 9, 1994 (incorporated by reference
to Exhibit 4.9 of Form S-8 (Registration No.
33-56865) filed by Panhandle Eastern
Corporation (whose name was subsequently
changed to PanEnergy Corp), File No. 1-8157).
4(G) Restated Articles of Incorporation of
Registrant, dated June 18, 1997.
3
<PAGE>
4(H) By-Laws of Registrant, as amended
(incorporated by reference to Exhibit 3-C of
the Registrant's Form 10-K for the year ended
December 31, 1995, File No. 1-4928).
5 Opinion of Peter C. Buck, Esq.
23(A) Independent Auditors' Consent of Deloitte &
Touche LLP.
23(B) Independent Auditors' Consent of KPMG Peat
Marwick LLP.
23(C) Consent of Peter C. Buck, Esq.
(included in Exhibit 5).
24(A) Copy of power of attorney authorizing W.
Edward Poe, Jr., and others to sign the
Registration Statement on behalf of the
Registrant and certain of its directors and
officers.
24(B) Certified copy of resolution of the Board of
Directors of the Registrant authorizing power
of attorney.
Item 9. Undertakings.
The undersigned registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the
registration statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set
forth in the registration statement.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if
the total dollar value of securities offered
would not exceed that which was registered)
and any deviation from the low or high end of
the estimated maximum offering range may be
reflected in the form of prospectus filed with
the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price
represent no more than a 20% change in the
maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in
the effective registration statement;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the
4
<PAGE>
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Charlotte, State of North Carolina, on the
19th day of June, 1997.
DUKE ENERGY CORPORATION
Registrant
By R. B. Priory
----------------------------------
R. B. Priory
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
--------- ----- ----
R.B. Priory Chairman of the Board and June 19, 1997
Chief Executive Officer
(Principal Executive Officer)
Richard J. Osborne Executive Vice President and June 19, 1997
Chief Financial Officer
(Principal Financial Officer)
Jeffrey L. Boyer Vice President and Corporate Controller June 19, 1997
(Principal Accounting Officer)
Paul M. Anderson
G. Alex Bernhardt
Robert J. Brown
William A. Coley
William T. Esrey
Ann Maynard Gray
Dennis R. Hendrix
Harold S. Hook All of the Directors June 19, 1997
George Dean Johnson, Jr.
W.W. Johnson
Max Lennon
Leo E. Linbeck, Jr.
James G. Martin
Buck Mickel
R.B. Priory
Russell M. Robinson, II
W. Edward Poe, Jr., by signing his name hereto, does hereby
sign this document on behalf of the Registrant and on behalf of each of the
above-named persons pursuant to a power of attorney duly executed by the
Registrant and such persons, filed with the Securities and Exchange Commission
as an exhibit hereto.
W. Edward Poe, Jr.
------------------------------
W. Edward Poe, Jr.
Attorney-in-Fact
6
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
4(A) 1982 Key Employee Stock Option Plan of PanEnergy Corp
(incorporated by reference to Exhibit 10(g) of Form 10-K
for the year ended December 31, 1986 filed by Panhandle
Eastern Corporation (whose name was subsequently changed to
PanEnergy Corp), File No. 1-8157).
4(B) 1989 Nonemployee Directors Stock Option Plan of PanEnergy
Corp (incorporated by reference to Exhibit 28(a) of Form
S-8 (Registration No. 33-28912) filed by Panhandle Eastern
Corporation (whose name was subsequently changed to PanEnergy
Corp), File No. 1-8157).
4(C) 1990 Long Term Incentive Plan of PanEnergy Corp (incorporated
by reference to Exhibit 10.14 of Form 10-K for the year ended
December 31, 1990 filed by Panhandle Eastern Corporation
(whose name was subsequently changed to PanEnergy Corp), File
No. 1-8157).
4(D) 1994 Long Term Incentive Plan of PanEnergy Corp (incorporated
by reference to Exhibit 10.18 of Form 10-K for the year ended
December 31, 1993 filed by Panhandle Eastern Corporation
(whose name was subsequently changed to PanEnergy Corp), File
No. 1-8157).
4(E) Associated Natural Gas Corporation Equity Incentive Plan
(incorporated by reference to Exhibit 4.1 of Form S-8
(Registration No. 33-38996) filed by Associated Natural Gas
Corporation, File No. 1-10381).
4(F) Amendment to Associated Natural Gas Corporation Equity
Incentive Plan adopted as of December 9, 1994 (incorporated
by reference to Exhibit 4.9 of Form S-8 (Registration No.
33-56865) filed by Panhandle Eastern Corporation (whose name
was subsequently changed to PanEnergy Corp), File No.
1-8157).
4(G) Restated Articles of Incorporation of Registrant, dated June
18, 1997.
4(H) By-Laws of Registrant, as amended (incorporated by reference
to Exhibit 3-C of Form 10-K for the year ended December 31,
1995, File No. 1-4928).
5 Opinion of Peter C. Buck, Esq.
23(A) Independent Auditors' Consent of Deloitte & Touche LLP.
23(B) Independent Auditors' Consent of KPMG Peat Marwick LLP.
23(C) Consent of Peter C. Buck, Esq. (included in Exhibit 5).
24(A) Copy of power of attorney authorizing Ellen T. Ruff and others
to sign the Registration Statement on behalf of the Registrant
and certain of its directors and officers.
24(B) Certified copy of resolution of the Board of Directors of the
Registrant authorizing power of attorney.
RESTATED ARTICLES OF
INCORPORATION
OF
DUKE ENERGY CORPORATION
(June 18, 1997)
<PAGE>
ARTICLE I
The name of the Corporation is Duke Energy Corporation.
ARTICLE II
The period of duration of the Corporation is perpetual.
ARTICLE III
The purposes for which the Corporation is organized are:
(a) To purchase, acquire, lease, manage, control and operate, and to
sell, lease and dispose of to such person, or persons, corporation or
corporations, and for such price or prices, and on such terms and conditions as
to this Corporation may seem proper, water, water rights, power, privileges and
appropriations for mining, milling, agriculture and other uses and purposes; and
to develop, control, generally deal in and dispose of to such person or persons,
corporation or corporations, and for such price or prices, and on such terms and
conditions as to the Corporation may seem proper, electrical and other power for
the generation, distribution and supply of electricity for light, heat and
power, and for any other uses and purposes to which the same are adapted;
(b) To manufacture, generate, buy, sell, accumulate, store, transmit,
furnish and distribute electric current for light, heat and power;
(c) To manufacture, buy, sell, lease, let or operate any or all
machinery or appliances for the manufacture, generation, storage, accumulation,
transmission or distribution of any or all types of electric current, and any or
all manner of electric machinery, apparatus or supplies of any nature or kind
whatsoever;
(d) To erect, buy, sell, operate, lease, and let power plants and
generating stations for the manufacture, generation, accumulation, storage,
transmission and distribution of electric current and any or all machinery used
therein or in connection therewith;
<PAGE>
(e) To manufacture, buy, sell, lease and let fixtures, chandeliers,
electroliers, brackets, lamps, globes, and other supplies and appurtenances used
for or in connection with the manufacture, generation, accumulation, storage,
transmission, distribution or use of electric current for light, heat or power,
or otherwise, and to carry on a general business of electricians, mechanical
engineers, suppliers of electricity for the purpose of light, heat, or power and
otherwise and install, erect, and operate, sell or lease wires, cables and
fixtures, both interior and exterior, for the transmission and use of electric
current; and to manufacture and deal in all apparatus and things required for or
capable of being used in connection with the generation, distribution, supply,
accumulation and employment of electricity;
(f) To buy, sell, operate or lease pole lines, erect poles, string
wires thereon, or on poles of other individuals or corporations, on any and all
streets, avenues, highways and roads of counties, townships, towns, villages and
cities, and over and under all canals and other waterways, and across any and
all bridges, and to use the same either for the transmission of electric current
for delivery to consumers on such lines or for transmission of current to
independent vendors thereof, and to sell or lease to other individuals or
corporations the right to string electric wires on or attach electric wires to
any or all poles so erected, owned or leased, and to use such lines both as
through lines and for local delivery;
(g) To build and construct and use, for any of the purposes stated
above, underground subways or conduits in such streets, avenues, highways and
roads, and under such canals and other waterways and string electric wires or
conductors therein, and to buy or lease from, or sell or let to any other
individual or corporation the right to string and to use as aforesaid said
electric wires or conductors in any such subways;
(h) To engage in the business of electric lighting, and to engage in
the business of manufacturing cloth, paper, woodenware or any other articles of
merchandise, in the manufacture of which electricity or electric power may be
used;
(i) To produce, purchase, sell and deal in farm and dairy products
and the various materials entering into or used in the production thereof;
(j) To the full extent permitted by law, to purchase, hold, sell,
assign, transfer, mortgage, pledge or otherwise dispose of the shares of the
capital stock of, or any bonds, securities or evidences of indebtedness created
by any other corporation or corporations of this or any other State, and by
individual or individuals, and while owner of such stock, to exercise all the
rights, powers and privileges of ownership including the right to vote thereon;
(k)To enter into, make, perform and carry out contracts of every kind
and for any lawful purpose, with any person, firm, association or corporation;
(l) To issue bonds, debentures or obligations of the Corporation from
time to time for any of the objects or purposes of the Corporation and to secure
the same by mortgage, pledge, deed of trust or otherwise;
2
<PAGE>
(m) To own and operate, by electricity or other appropriate motive
power, street railways and bus lines, with full power to acquire, construct,
own, use, equip, maintain and sell or otherwise dispose of the same, and all
rights, franchises, cars, coaches, appliances and property of every kind
whatsoever which may be necessary or convenient for such purposes;
(n) To acquire, manufacture, distribute and sell gas, and all
by-products and residual products thereof, with full power to acquire,
construct, own, use, equip, maintain, operate and sell or otherwise dispose of
all rights, franchises, works, plants, conduits, pipes, machinery, fittings,
apparatus, appliances and other property whatsoever which may be necessary or
convenient for such purposes, as well as supplies, articles, appliances,
fixtures and furnishings of every kind which may promote or be useful in the
consumption of gas;
(o) To purchase, lease or otherwise acquire and to hold, own, use,
develop, mortgage, lease or sell or otherwise dispose of all real or personal
property necessary or convenient for use as public amusement parks or resorts
and to conduct therein and thereon such public amusements as may be deemed
necessary or desirable;
(p) To acquire, construct, own, enlarge, maintain and operate water
works and to supply municipalities, corporations and individuals with water and
water power, and to acquire, erect, maintain, construct and enlarge all
necessary dams, buildings, plant machinery, fixtures and apparatus of every sort
for supplying water and water power for domestic, mechanical and all other
purposes and to carry on the business incidental thereto, including the purpose
of acquiring, constructing, enlarging, maintaining and operating water works,
pumping stations and a system of water supply and the dams, reservoirs, pumping
stations and conduits thereto appertaining; and to acquire, own, hold, possess
and convey franchises and grants from state or municipal authorities for
supplying cities, villages and towns, or either, and the inhabitants thereof
with water for all purposes and the carrying on of the business of operating
water works;
(q) To carry on and conduct the business of storage, cold storage,
refrigeration, freezing and ice-making, and buying or otherwise acquiring,
building, constructing, maintaining and operating buildings, plants and
machinery and equipment of any and all kinds for said purposes;
(r) To acquire all lands, rights of way, franchises, and easements of
any and all kinds, necessary or convenient in the prosecution of any business,
object or purpose herein and hereby authorized or set forth;
(s) To the full extent permitted by law, to acquire the good will,
rights, property and franchises, and to undertake the whole or any part of the
assets or liabilities of any persons, firm, association or corporation, and to
pay for the same in cash and/or stock and/or bonds of this Corporation and/or
otherwise, and to hold, use, maintain and operate and sell or otherwise dispose
of the whole or any part of the property so acquired, and to guarantee the
payment of dividends or interest on any shares, stocks, debentures or other
securities issued by, or any other contract or obligation of, any corporation,
whenever it may be deemed proper or necessary for the business and purposes of
this Corporation so to do;
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(t) To do all and everything that is or that may be deemed to be
necessary, suitable, convenient or proper for the accomplishment of any of the
purposes, or the attainment of any one or more of the objects herein enumerated,
or incidental to the powers herein named, or which shall at any time appear
conducive or expedient for the protection or benefit of the Corporation, either
as holders of or interested in, any property or otherwise; and
(u) To the extent and in the manner permitted by local laws, to conduct
business in any of the States, Territories, Colonies or Dependencies of the
United States, in the District of Columbia, and in any or all foreign countries,
to have one or more offices therein and therein to hold, purchase, mortgage,
lease and convey real and personal property.
ARTICLE IV
The total number of authorized shares of this Corporation is
524,000,000 shares, divided into 12,500,000 shares of Preferred Stock of the par
value of $100 each (hereafter called Preferred Stock), 10,000,000 shares of
Preferred Stock A of the par value of $25 each (hereafter called Preferred Stock
A), 1,500,000 shares of Preference Stock of the par value of $100 each
(hereafter called Preference Stock), and 500,000,000 shares of Common Stock
without nominal or par value (hereafter called Common Stock).
The Preferred Stock and the Preferred Stock A (sometimes collectively
referred to as the Preferred Stocks) shall rank equally with no preference or
priority of the Preferred Stock over the Preferred Stock A or of the Preferred
Stock A over the Preferred Stock with respect to dividends and distribution of
assets upon liquidation, dissolution or winding up of the Corporation.
(A) PREFERRED STOCK AND PREFERRED STOCK A
(1) The Board of Directors is hereby empowered, subject to the
provisions of paragraph (9) of this section (a) of Article IV, to cause the
authorized and unissued shares of the Preferred Stock and of the Preferred Stock
A to be issued in one or more series from time to time, upon such consideration
(not less than the par value thereof), upon such terms, and in such manner, and
with such variations as to (i) the rates of dividend payable thereon, (ii) the
periods of time during which dividends shall accrue and the dates on which
dividends shall become payable on the shares of such series, (iii) the terms on
which the same may be redeemed, (iv) the terms or amount of any sinking fund
provided for the purpose of redemption thereof, and (v) the terms upon which the
holders thereof may convert the same into stock of any other class or classes,
or into one or more series of the same class, or of another class or classes, as
may be determined by the Board of Directors at the time of the creation of each
series, but the amount at which said stock may be redeemed shall in no case be
less than the par value thereof.
(2) The shares of each series of the Preferred Stock and of the
Preferred Stock A shall entitle the holders thereof to receive out of the
retained earnings of the Corporation or net profits earned during the current or
preceding accounting period (each said period to be not less than six months or
more than one year in duration) or, if retained earnings and net profits are not
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available, out of capital surplus, a dividend at the annual rate fixed for the
particular series, but not exceeding such rate, cumulative from and after the
date of issuance thereof, payable quarterly on the 16th day of March, June,
September and December of each year (or, if any such day shall not be a business
day, on the next succeeding business day) or at such intervals and on such dates
as otherwise are expressly set forth in the resolution of the Board of Directors
creating such series or, if such intervals and dividend payment dates shall vary
from time to time for such series, the method by which such intervals and dates
shall be determined, before any dividend shall be set apart for or paid on the
Preference Stock or the Common Stock. Any dividends declared or paid on the
Preferred Stock or the Preferred Stock A in an amount less than full cumulative
dividends payable at such time upon all shares of the Preferred Stock or the
Preferred Stock A outstanding shall, if more than one series be outstanding, be
divided among the different series in proportion to the aggregate amounts that
would be distributable to the Preferred Stock simultaneously declared and paid
thereon at such time without regard to the applicable dividend payment dates.
(3) All series of the Preferred Stock shall rank equally and be alike
in all respects except for the variations and differences between series herein
expressly provided for, and all series of the Preferred Stock A shall rank
equally and be alike in all respects except for the variations and differences
between series herein expressly provided for.
(4) In case of liquidation or dissolution or distribution of the assets
of the Corporation, there shall be paid (a) to the holders of the Preferred
Stock (i) in case such liquidation, dissolution or distribution shall be
voluntary, $105 per share, and (ii) in case such liquidation, dissolution or
distribution shall be involuntary, $100 per share, and (b) to the holders of the
Preferred Stock A (i) in case such liquidation, dissolution or distribution
shall be voluntary, $26.25 per share, and (ii) in case such liquidation,
dissolution or distribution shall be involuntary, $25 per share, plus in each
case the amount of dividends (if any) accumulated and unpaid thereon, before any
amount shall be payable to the holders of the Preference Stock or the Common
Stock; the balance of the assets of the Corporation, subject to the rights of
the holders of the Preference Stock, shall be distributed ratably among the
holders of the Common Stock.
(5) Holders of the Preferred Stock and of the Preferred Stock A shall
not be entitled to any payment by way of dividends or otherwise, or have any
rights in the property of the Corporation or in the distribution thereof, other
than specifically provided in the preceding paragraphs.
(6) The Preferred Stock or the Preferred Stock A may be called for
redemption in whole or in part on any dividend date at the option of the Board
of Directors by mailing notice thereof to the holders of record of the shares to
be redeemed at least thirty (30) days prior to the date fixed for redemption,
and such shares may be then redeemed by paying for each share so called all
accrued and unpaid dividends thereon to the date fixed for such redemption and
such additional sum as shall have been fixed by the Board of Directors as the
redemption price of stock of the series of which the stock so to be redeemed is
a part. Whenever less than all of the outstanding shares of the Preferred Stock
or of the Preferred Stock A of any series are to be redeemed, either (i) the
shares of such series to be redeemed shall be selected by lot in such manner as
may be prescribed by the Board of Directors, or (ii) the redemption shall be
made in
5
<PAGE>
such manner that each holder of the Preferred Stock or of the Preferred Stock A
of the series to be redeemed shall participate therein in the proportion that
the number of shares of such series to be redeemed bears to the whole number of
shares of stock of that series then outstanding, provided that there shall be no
obligation to redeem less than a whole share. From and after the date of
redemption, unless default be made by the Corporation in payment of the
redemption price pursuant to such notice, all dividends on the shares called for
redemption shall cease to accrue, and all rights of the holders thereof in
respect of such stock, except the right to receive the redemption price plus
accrued and unpaid dividends to the date fixed for such redemption, shall cease
and determine.
(7) No holder of any of the Preferred Stock or of the Preferred Stock A
shall be entitled to vote at any election of directors or, except as otherwise
required by statute and except as provided in paragraphs (8), (9), (10) and (11)
of this section (a) of Article IV, on any other matter submitted to the
stockholders, provided that if and whenever dividends on any part of the
Preferred Stock or of the Preferred Stock A shall be in arrears in an amount
equivalent to the aggregate dividends required to be paid on such Preferred
Stock or such Preferred Stock A in any period of twelve (12) calendar months the
holders of the Preferred Stock as a class shall thereafter at all elections of
directors have the exclusive right to elect such number of directors of the
Corporation as shall constitute a majority of the authorized number of
directors, the holders of the Preferred Stock A as a class shall thereafter at
all elections of directors have the exclusive right to elect two directors, and
the holders of the Common Stock of the Corporation as a class shall have the
exclusive right, subject to the right of the holders of the Preference Stock as
a class to elect two directors under certain circumstances, to elect the
remaining number of directors of the Corporation which right of the holders of
the Preferred Stocks, however, shall cease when all accrued and unpaid dividends
on the Preferred Stocks shall have been paid in full. The terms of office of all
persons who may be directors of the Corporation at the time when the right to
elect directors shall accrue to the holders of the Preferred Stocks, as herein
provided, shall terminate upon the election of their successors at the next
annual meeting of the stockholders or at an earlier special meeting of the
stockholders held as hereinafter provided. Such special meeting shall be held at
any time after the accrual of such voting power, upon notice similar to that
provided in the By-Laws for an annual meeting, which notice shall be given at
the request in writing of the holders of not less than ten (10%) percent of the
number of shares of the then outstanding Preferred Stocks, addressed to the
Secretary of the Corporation at its principal business office. Upon the
termination of such right of the holders of the Preferred Stocks to elect
directors of the Corporation, the terms of office of all the directors of the
Corporation shall terminate upon the election of their successors at the next
annual meeting of the stockholders or at an earlier special meeting of the
stockholders held as hereinafter provided. Such special meeting shall be held at
any time after the termination of such right of the holders of the Preferred
Stocks to elect directors, upon notice similar to that provided in the By-Laws
for an annual meeting, which notice shall be given at the request in writing of
the holders of not less than ten (10%) percent of the number of shares of the
then outstanding Common Stock, addressed to the Secretary of the Corporation at
its principal business office.
(8)(i) So long as any of the Preferred Stock remains outstanding, the
authorization of the holders of at least two-thirds (2/3) of the Preferred Stock
then outstanding, voting as a class
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regardless of series (given at a meeting called for that purpose), shall be
necessary for effecting or validating the amendment, alteration, change or
repeal of any of the express terms of the Preferred Stock, or any series
thereof, then outstanding, in a manner prejudicial to the holders thereof;
provided that if any such amendment, alteration, change or repeal would be
prejudicial to the holders of the shares of one or more, but not all, of the
series of the Preferred Stock at the time outstanding, such authorization shall
be required only of the holders of at least two-thirds (2/3) of the total number
of outstanding shares of all series so affected.
(ii) So long as any of the Preferred Stock A remains outstanding, the
authorization of the holders of at least two-thirds (2/3) of the Preferred Stock
A then outstanding, voting as a class regardless of series (given at a meeting
called for that purpose), shall be necessary for effecting or validating the
amendment, alteration, change or repeal of any of the express terms of the
Preferred Stock A, or any series thereof, then outstanding, in a manner
prejudicial to the holders thereof; provided that if any such amendment,
alteration, change or repeal would be prejudicial to the holders of the shares
of one or more, but not all, of the series of the Preferred Stock A at the time
outstanding, such authorization shall be required only of the holders of at
least two-thirds (2/3) of the total number of outstanding shares of all series
so affected.
(9) So long as any of the Preferred Stock or of the Preferred Stock A
remains outstanding, the affirmative vote of the holders of at least two-thirds
(2/3) of the Preferred Stock then outstanding, voting as a class regardless of
series, and the affirmative vote of the holders of at least two-thirds (2/3) of
the Preferred Stock A then outstanding, voting as a class regardless of series,
shall be necessary to enable the Corporation to issue shares of Preferred Stock
in excess of 250,000 shares or shares of Preferred Stock A in excess of
1,000,000 shares, or any other class of stock having rights in the distribution
of the earnings or assets of the Corporation prior to or on a parity with those
of the Preferred Stock or of the Preferred Stock A, or any obligations
convertible into or evidencing the right to purchase any of such shares of
stock, unless both
(i) the net earnings of the Corporation available for
dividends on the Preferred Stock and on the Preferred Stock A,
determined in accordance with generally accepted accounting practices,
for any twelve (12) consecutive calendar months within the fifteen (15)
calendar months preceding the month within which the additional shares
shall be issued, shall have been at least twice the dividend
requirements for a twelve (12) months' period upon the entire amount of
the Preferred Stock and of the Preferred Stock A and all such other
stock ranking prior to or on a parity with the Preferred Stock and the
Preferred Stock A as to dividends or other distributions to be
outstanding immediately after the proposed issue of shares of the
Preferred Stock or of the Preferred Stock A or such other stock, and
(ii) the total net assets of the Corporation at a date not
more than ninety (90) days prior to the date on which the proposed
stock is to be issued shall equal at least twice the aggregate amount
payable, upon the involuntary liquidation of the Corporation, to the
holders of the Preferred Stock and of the Preferred Stock A and such
other stock to be outstanding immediately after the proposed issue of
such additional shares.
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(10) So long as any of the Preferred Stock or of the Preferred Stock A
remains outstanding, the affirmative vote of the holders of at least two-thirds
(2/3) of the Preferred Stock then outstanding, voting as a class regardless of
series, and the affirmative vote of the holders of at least two-thirds (2/3) of
the Preferred Stock A then outstanding, voting as a class regardless of series,
shall be necessary to authorize the creation of, or an increase in the
authorized number of shares of, any stock having preferential rights in the
distribution of earnings or assets of the Corporation prior to or on a parity
with those of the outstanding Preferred Stock or of the outstanding Preferred
Stock A.
(11) So long as any of the Preferred Stock or of the Preferred Stock A
remains outstanding, the consent or authorization of the holders of at least
two-thirds (2/3) of the Preferred Stock then outstanding, voting as a class
regardless of series (given at a meeting called for that purpose), and the
consent or authorization of the holders of at least two-thirds (2/3) of the
Preferred Stock A then outstanding, voting as a class regardless of series
(given at a meeting called for that purpose), shall be necessary for effecting
or validating (i) the sale or exchange of all, or substantially all, of the
property and assets of the Corporation, or (ii) the merger or consolidation of
the Corporation with any other corporation or corporations (other than
subsidiaries of the Corporation); provided that the provisions of this paragraph
shall not apply to the purchase or other acquisition by the Corporation of
franchises or other assets of another corporation, or to any merger or
consolidation ordered or authorized by the Federal Power Commission or by any
succeeding regulatory authority of the United States having jurisdiction in the
premises.
(12) At any meeting at which the holders of the Preferred Stock or of
the Preferred Stock A shall have the right to vote as a class, the presence in
person or by proxy of the holders of a majority of the outstanding shares of the
Preferred Stock or of the Preferred Stock A shall be required to constitute a
quorum of such class. Whenever the holders of the outstanding Preferred Stock or
of the outstanding Preferred Stock A shall have the right to vote, each holder
thereof shall be entitled to one vote for each share standing in his name.
(B) PREFERENCE STOCK
(1) The Preference Stock may be issued from time to time as herein
provided in one or more series. The Board of Directors of the Corporation is
hereby expressly granted authority, subject to the provisions of this Article
IV, to issue from time to time Preference Stock in one or more series out of the
then authorized and unissued shares of Preference Stock and with respect to each
series to fix, by resolution or resolutions providing for the issuance of such
series, such designations, preferences, limitations and relative rights of such
series as may be permitted to be fixed by the Board of Directors by the laws of
the State of North Carolina as in effect at the time the particular series is
authorized by the Board of Directors, including, without limitation, authority
so to fix any one or more of the following:
(i) The distinctive designation of such series and the number
of shares which shall constitute such series;
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(ii) The annual dividend rate for the shares of such series;
(iii) The terms on which shares of such series may be
redeemed, including, without limitation, the redemption price or prices
for such series, which may consist of a redemption price or scale of
redemption prices applicable only to redemption in connection with a
sinking fund and the same or a different redemption price or scale of
redemption prices applicable to any other redemption;
(iv) The terms and amount of any sinking fund provided for
the purchase or redemption of shares of such series;
(v) The amount per share payable on the shares of such series
upon the voluntary and involuntary liquidation, dissolution or winding
up of the Corporation, which amount may vary depending upon whether
such liquidation, dissolution or winding up is voluntary or
involuntary; and
(vi) The terms and conditions, if any, upon which holders of
shares of such series may convert the same into, or exchange the same
for, Common Stock, as well as provisions for adjustment of the
conversion rate in such events as the Board of Directors shall
determine.
All shares of Preference Stock of the same series shall be identical in
all respects. All shares of Preference Stock, irrespective of series, shall
constitute one and the same class of stock, shall be of equal rank and shall be
identical in all respects except that to the extent not otherwise limited in
this Article IV any series may differ from any other series with respect to any
one or more of the designations, preferences, limitations, and relative rights
described or referred to in subparagraphs (i) to (vi), inclusive above.
(2) Subject to full dividends accrued on all outstanding shares of
Preferred Stocks for all past dividend periods and for the then current dividend
period having been paid or declared and set apart for payment, holders of the
Preference Stock shall be entitled to receive, but only when and as declared by
the Board of Directors out of funds legally available for the declaration and
payment of dividends, cumulative dividends in cash at the annual dividend rate
per share fixed for the particular series, and no more, payable in respect of
each quarterly dividend period, commencing on the date specified for the first
dividend payment to stockholders of record on the respective dates fixed in
advance for the purpose by the Board of Directors prior to the payment of each
such dividend, which record date for each dividend shall be the same for all
series.
Dividends on shares of each series of the Preference Stock shall be
cumulative:
(i) on shares of any series issued prior to the first
dividend payment date for such series, from the date of issuance
of such shares; and
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(ii) on shares of any series issued on or after such first
dividend payment date, from the quarterly dividend payment date next
preceding the date of issuance of such shares or from the date of
issuance if that be a dividend payment date.
No dividend shall be declared on any series of the Preference Stock for
any quarterly dividend period unless there shall have been paid or declared and
set apart for payment like proportionate dividends, ratably, in proportion to
the annual dividend rates fixed therefor, on all shares at the time outstanding
of all series of the Preference Stock, in respect of the same quarterly dividend
period to the extent that such shares are entitled to receive dividends for such
quarterly dividend period.
The expression "dividends accrued," as used in this paragraph (2) and
in any resolutions providing for the issuance of series of the Preference Stock,
shall mean the sum of amounts in respect of shares of the particular class or
series then outstanding which, as to each share, shall be an amount computed at
the dividend rate per annum fixed for the particular share from the date from
which dividends on such share became cumulative to the date with reference to
which the expression is used, irrespective of whether such amount or any part
thereof shall have been declared as dividends or there shall have existed any
funds legally available for the declaration and payment thereof, less the
aggregate of all dividends paid on such share.
No dividend shall be declared or paid or set aside for payment or other
distribution declared or made upon the Common Stock, nor shall any Common Stock
be purchased or otherwise acquired for any consideration by the Corporation or
any subsidiary, while any of the Preference Stock is outstanding, unless, in
each case:
(a) full dividends accrued on all outstanding shares of the Preference
Stock for all past dividend periods shall have been paid or declared and set
apart for payment; and
(b) the Corporation shall have made, or set aside for payment, all
payments, if any, then or theretofore due under the requirements of any sinking
fund for the purchase or redemption of shares of any series of the Preference
Stock.
(3) Except as otherwise provided by law, the holders of the Preference
Stock shall not have any right to vote for the election of directors or for any
other purpose except as set forth below:
(i) In the event that at any time, or from time to time:
(a) six (6) or more quarterly dividends, whether consecutive
or not, on any series of the Preference Stock shall be in arrears and
unpaid, whether or not earned or declared; or
(b) the Corporation shall not have made, or set aside for
payment, all payments, if any, then or theretofore due under the
requirements of any sinking fund for the purchase or redemption of
shares of any series of the Preference Stock;
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the holders of the Preference Stock of all series then outstanding, voting as a
class without regard to series, shall have, subject to the rights of the holders
of the Preferred Stocks, the exclusive right to elect two directors at the next
annual meeting of stockholders. In any such event, subject to the voting rights
of the Preferred Stocks, the holders of the Common Stock, to the exclusion of
the holders of the Preference Stock entitled to elect two members of the Board
pursuant to this paragraph (3), shall be entitled to elect the balance of the
Board of Directors.
The voting rights of the holders of the Preference Stock to elect two
directors shall continue until:
(x) all dividends on the Preference Stock in arrears shall
have been paid in full and dividends on the Preference Stock for the
current dividend period shall have been paid or declared and set aside
for payment; and
(y) all payments, if any, then or theretofore due under the
requirements of any sinking fund for the purchase or redemption of
shares of any series of the Preference Stock shall have been made or
set aside for payment;
in which event the voting rights of the holders of the Preference Stock to elect
two directors shall terminate, subject to revival as aforesaid, upon the
occurrence of any of the events specified in (a) or (b) of this clause (i) of
this paragraph (3), and in the event of the termination of such voting right,
the directors who have been elected by the holders of the Preference Stock shall
continue in office until the next annual meeting of stockholders.
(ii) The affirmative approval of the holders of at least two-thirds
(2/3) of the Preference Stock at the time outstanding, voting as a class without
regard to series, shall be required for any amendment of the Articles of
Incorporation altering materially any existing provision of the Preference Stock
or for the creation, or an increase in the authorized amount, of any class of
stock ranking, as to dividends or assets, prior to the Preference Stock, and the
affirmative approval of the holders of at least a majority of the Preference
Stock at the time outstanding, voting as a class without regard to series, shall
be required for an increase in the authorized amount of the Preference Stock or
for the creation, or an increase in the authorized amount, of any class of stock
ranking, as to dividends or assets, on a parity with the Preference Stock;
provided, however, that if any amendment of the Articles of Incorporation shall
affect adversely the rights or preferences of one or more, but not all, of the
series of Preference Stock at the time outstanding or shall unequally adversely
affect the rights or preferences of different series of Preference Stock at the
time outstanding, the affirmative approval of the holders of at least two-thirds
(2/3) of such shares of each such series so adversely or unequally adversely
affected shall be required in lieu of or (if such affirmative approval is
required by law) in addition to the affirmative approval of the holders of at
least two-thirds (2/3) of the outstanding shares of Preference Stock as a class.
At any meeting at which the holders of the Preference Stock shall have
the right to vote as a class, the presence in person or by proxy of the holders
of a majority of the outstanding shares of Preference Stock shall be required to
constitute a quorum of such class. Each holder
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of Preference Stock entitled to vote at any particular time shall have one vote
for each share of stock held of record by him.
(4) The Preference Stock shall rank junior to the Preferred Stocks with
respect to the distribution of assets of the Corporation. After the payment to
the holders of the Preferred Stocks of all amounts payable to them in the event
of any liquidation or dissolution or distribution of the assets (whether
voluntary or involuntary) of the Corporation, in the event of any liquidation,
dissolution or winding up (whether voluntary or involuntary) of the Corporation,
the holders of each series of the Preference Stock at the time outstanding shall
be entitled to be paid in cash the distributive amount fixed for the particular
series, which shall include dividends accrued thereon to the date fixed for
payment of such distributive amounts, and no more, before any such distribution
or payment shall be made to the holders of Common Stock. Neither the
consolidation nor merger of the Corporation with or into any other corporation
or corporations, nor the sale or transfer by the Corporation of all or any part
of its assets, shall be deemed a liquidation, dissolution or winding up of the
Corporation.
In the event of any liquidation, dissolution or winding up (whether
voluntary or involuntary) of the Corporation, no payment shall be made to the
holders of any series of the Preference Stock unless there shall likewise be
paid at the same time to the holders of all shares at the time outstanding of
each series of the Preference Stock like proportionate distributive payments,
ratably, in proportion to the full distributive payments to which they are
respectively entitled.
(5) The Corporation, at the option of the Board of Directors, may
redeem at any time or times, and from time to time, all or any part of any one
or more series of Preference Stock outstanding upon notice duly given as
hereinafter specified, by paying for each share the then applicable redemption
price fixed by the Board of Directors as provided herein, plus an amount equal
to dividends accrued thereon to the date fixed for redemption; provided,
however, that a notice specifying the shares to be redeemed and the time and
place of redemption shall be mailed, addressed to the holders of record of the
Preference Stock to be redeemed at their respective addresses as the same shall
appear upon the books of the Corporation, not less than thirty (30) days prior
to the date fixed for redemption. If less than the whole amount of any
outstanding series of Preference Stock is to be redeemed, the shares of such
series to be redeemed shall be selected by lot or pro rata in any manner
determined by resolution of the Board of Directors to be fair and proper. From
and after the date fixed in any such notice as the date of redemption (unless
default shall be made by the Corporation in providing moneys at the time and
place of redemption for the payment of the redemption price) all dividends upon
the Preference Stock so called for redemption shall cease to accrue, and all
rights of the holders of said Preference Stock as stockholders in the
Corporation, except the right to receive the redemption price upon surrender of
the certificate representing the Preference Stock so called for redemption, duly
endorsed for transfer, if required, shall cease and determine. With respect to
any shares of Preference Stock so called for redemption, if, before the
redemption date, the Corporation shall deposit with a bank or trust company in
the Borough of Manhattan, City of New York, having a capital and surplus of at
least $5,000,000, funds necessary for such redemption, in trust, to be applied
to the redemption of the shares of Preference Stock so called for redemption,
then from
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and after the date of such deposit, all rights of the holders of such shares of
Preference Stock, so called for redemption, shall cease and determine, except
the right to receive, on and after the redemption date, the redemption price
upon surrender of the certificates representing such shares of Preference Stock,
so called for redemption, duly endorsed for transfer, if required. Any interest
accrued on such funds shall be paid to the Corporation from time to time. Any
funds so deposited and unclaimed at the end of six (6) years from such
redemption date shall be released or repaid to the Corporation, after which the
holders of such shares of Preference Stock so called for redemption shall look
only to the Corporation for payment of the redemption price.
If at any time the Corporation shall have failed to declare and pay or
set apart for payment dividends in full upon the Preference Stock of all series
for all past dividend periods, or shall not have made, or set aside for payment,
all payments, if any, then or theretofore due under the requirements of any
sinking fund for the purchase or redemption of shares of any series of the
Preference Stock, thereafter and until all such dividends shall have been paid
in full or declared and set apart for payment and all sinking fund payments
shall have been made, or set aside for payment, the Corporation shall not redeem
or purchase, or permit any subsidiary to purchase, for any purpose, any shares
of Preference Stock of any series, unless all shares of Preference Stock of all
series then outstanding shall be redeemed or purchased.
(C) COMMON STOCK
(1) The Corporation may, from time to time, issue and sell any of its
authorized and unissued shares of Common Stock for such consideration, upon such
terms and in such manner as may from time to time be fixed and determined by the
Board of Directors, and any and all such shares so issued, the full
consideration for which shall have been paid, shall be conclusively deemed to be
fully paid and nonassessable.
(2) Whenever the full dividends on the Preferred Stocks and on the
Preference Stock at the time outstanding for all past dividend periods and for
the then current dividend period shall have been paid, or declared and a sum
sufficient for the payment thereof set apart, then, and then only, such
dividends (payable in cash, stock, or otherwise) as may be determined by the
Board of Directors, may be declared and paid on the Common Stock, from time to
time, out of the remaining retained earnings or net profits of the Corporation,
and the Preferred Stocks or Preference Stock shall not be entitled to
participate in any such dividends, whether payable in cash, stock or otherwise.
(3) In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, after payment in full has been
made to the holders of the Preferred Stocks and to the holders of the Preference
Stock of the amounts to which they are respectively entitled or sufficient sums
have been set apart for the payment thereof, the holders of the Common Stock
shall be entitled to receive ratably any and all assets remaining to be paid or
distributed, and neither the holders of the Preferred Stocks nor the holders of
the Preference Stock shall be entitled to share therein.
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(4) Holders of the Common Stock shall be entitled to one (1) vote for
each share of such stock held at any and all meetings of the stockholders of the
Corporation, and, except as otherwise stated in this Article IV or as otherwise
provided by law, the exclusive voting power for all purposes shall be vested in
the holders of the Common Stock.
ARTICLE V
No holder of any shares of any class of stock of the Corporation now or
hereafter authorized shall have any right as such holder to purchase, subscribe
for or otherwise acquire any shares of capital stock of the Corporation of any
class now or hereafter authorized, or any securities convertible into or
exchangeable for any such shares, or any warrants or other instruments
evidencing rights or options to subscribe for, purchase or otherwise acquire any
such shares.
ARTICLE VI
A director of the Corporation shall not be personally liable for
monetary damages for breach of fiduciary duty as a director except to the extent
such exemption from liability or limitation thereof is not permitted under the
North Carolina General Statutes as the same exist or may hereafter be amended.
Any repeal or modification of this Article by the shareholders of the
Corporation shall not adversely affect any right or protection of a director of
the Corporation existing at the time of such repeal or modification.
ARTICLE VII
The address of the registered office of the Corporation in North
Carolina is 422 South Church Street, Charlotte, Mecklenburg County, North
Carolina; and the name of the registered agent at such address is W. Edward Poe,
Jr.
ARTICLE VIII
(a) Number. Except as may be otherwise fixed by or pursuant to the
provisions of these Articles of Incorporation, as amended from time to time,
relating to the rights of the holders of any class of stock having a preference
over the Common Stock as to dividends or upon liquidation to elect directors
under specified circumstances, the number of directors constituting the Board of
Directors shall not be less than twelve nor more than twenty-four, as may be
fixed from time to time by the Board of Directors.
(b) Classification. The directors, other than those who may be elected
by the holders of any class of stock having a preference over the Common Stock
as to dividends or upon liquidation to elect directors under specified
circumstances, shall be classified, with respect to the time for which they
severally hold office, into three classes, as nearly equal in number as
possible, as shall be provided in the manner specified in the By-Laws of the
Company, one class (Class I) to be originally elected for a term expiring at the
annual meeting of shareholders to be held in 1992, another class (Class II) to
be originally elected for a term expiring at the annual
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meeting of shareholders to be held in 1993, and another class (Class III) to be
originally elected for a term expiring at the annual meeting of shareholders to
be held in 1994, with each class to hold office until its successor is elected
and qualified. At each annual meeting of the shareholders of the Company, the
successors of the class of directors whose term expires at that meeting shall be
elected to hold office for a term expiring at the annual meeting of shareholders
held in the third year following the year of their election.
(c) Removal. Subject to the rights of any class of stock having a
preference over the Common Stock as to dividends or upon liquidation to elect
directors under specified circumstances, any director may be removed from office
only with cause. For this purpose "cause" for removal of a director means
fraudulent or dishonest acts, or gross abuse of authority in the discharge of
duties to the Company, and must be established after written notice of specific
charges and an opportunity to meet and refute such charges.
(d) Newly created directorships; vacancies. Except as may be otherwise
provided for or fixed by or pursuant to the provisions of these Articles of
Incorporation, as amended from time to time, relating to the rights of the
holders of any class of stock having a preference over the Common Stock as to
dividends or upon liquidation to elect directors under specified circumstances,
newly created directorships resulting from any increase in the number of
directors and any vacancies on the Board of Directors resulting from death,
resignation, disqualification, removal or other cause shall be filled only by
the affirmative vote of a majority of the remaining directors then in office,
even though less than a quorum of the Board of Directors. Any director elected
in accordance with the preceding sentence shall hold office until the expiration
of the full term of the class for which such director is elected and until such
director's successor shall have been elected and qualified. No decrease in the
number of directors constituting the Board of Directors shall shorten the term
of any incumbent director.
(e) Amendment of Articles. The Company reserves the right to amend,
alter, change or repeal any provision contained in these Articles of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred on shareholders herein are granted subject to this reservation.
Notwithstanding the foregoing, the provisions of this Article VIII may not be
altered, amended or repealed in any respect, nor may any provision inconsistent
therewith be adopted, unless such alteration, amendment, repeal or adoption is
approved by the affirmative vote of the holders of at least 80% of the combined
voting power of the then outstanding shares of stock of all classes of the
Company entitled to vote generally in the election of directors, voting together
as a single class.
IN WITNESS WHEREOF, the Corporation has caused these Restated Articles
of Incorporation to be executed by its Chairman of the Board, this 18th day of
June, 1997.
DUKE ENERGY CORPORATION
By:
Richard B. Priory
Chairman of the Board
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EXHIBIT A
DESCRIPTION OF OUTSTANDING PREFERRED STOCKS
I. PREFERRED STOCK ($100 PAR VALUE)
1. 4.50% CUMULATIVE PREFERRED STOCK, SERIES C
(A) The 4.50% Cumulative Preferred Stock, Series C, consists of 350,000
shares of the par value of $100 each.
(B) The variations in the rights and preferences of the 4.50%
Cumulative Preferred Stock, Series C, which are permitted under the provisions
of Article IV(a) of the Articles of Incorporation of this Company, are as
follows:
(1) The annual dividend rate for the 4.50% Cumulative
Preferred Stock, Series C, shall be 4.50% per annum cumulative from the
date of issuance and dividends at that rate, as and when declared by
the Board of Directors, shall be payable quarterly on the 16th days of
March, June, September and December of each year (or, if any such day
shall not be a business day, on the next succeeding business day),
commencing September 16, 1964;
(2) The redemption price for the 4.50% Cumulative Preferred
Stock, Series C, shall be (i) $105.00 per share if redeemed prior to
September 16, 1969, (ii) $103.50 per share if redeemed thereafter and
prior to September 16, 1974, (iii) $102.25 per share if redeemed
thereafter and prior to September 16, 1979, and (iv) $101.00 per share
if redeemed thereafter, plus, in each case, dividends accrued to the
redemption date; provided, however, that this Company will not, prior
to September 16, 1969, redeem any shares of the 4.50% Cumulative
Preferred Stock, Series C, if such redemption is a part of or in
anticipation of any refunding operation involving the application,
directly or indirectly, of borrowed funds or the proceeds of issue of
any stock ranking prior to or on a parity with the 4.50% Cumulative
Preferred Stock, Series C, if such borrowed funds have an interest rate
or cost to this Company (calculated in accordance with generally
accepted financial practice), or such shares have a dividend rate or
cost to this Company (so calculated) less than the dividend rate per
annum of the 4.50% Cumulative Preferred Stock, Series C;
(3) There shall not be any sinking fund provided for
the purpose of redemption of the 4.50% Cumulative Preferred Stock,
Series C; and
(4) The 4.50% Cumulative Preferred Stock, Series C, shall not
be convertible by the holders thereof into stock of any other class or
classes or into one or more series of the same class or of another
class or classes.
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2. 5.72% CUMULATIVE PREFERRED STOCK, SERIES D
(A) The 5.72% Cumulative Preferred Stock, Series D, consists of 350,000
shares of the par value of $100 each.
(B) The variations in the rights and preferences of the 5.72%
Cumulative Preferred Stock, Series D, which are permitted under the provisions
of Article IV(a) of the Articles of Incorporation of this Company, are as
follows:
(1) The annual dividend rate for the 5.72% Cumulative
Preferred Stock, Series D, shall be 5.72% per annum cumulative from the
date of issuance and dividends at that rate, as and when declared by
the Board of Directors, shall be payable quarterly on the 16th days of
March, June, September and December of each year (or, if any such day
shall not be a business day, on the next succeeding business day);
(2) The redemption price for the 5.72% Cumulative Preferred
Stock, Series D, shall be (i) $108 per share if redeemed prior to
September 16, 1976, (ii) $103 per share if redeemed thereafter and
prior to September 16, 1981, and (iii) $101 per share if redeemed
thereafter, plus, in each case, dividends accrued to the redemption
date; provided, however, that this Company cannot, prior to September
16, 1973, redeem any shares of the 5.72% Cumulative Preferred Stock,
Series D, if such redemption is a part of or in anticipation of any
refunding operation involving the application, directly or indirectly,
of borrowed funds or the proceeds of an issue of any stock ranking
prior to or on a parity with the 5.72% Cumulative Preferred Stock,
Series D, if such borrowed funds have an interest rate or cost to this
Company (calculated in accordance with generally accepted financial
practice), or such stock has a dividend rate or cost to this Company
(so calculated) less than the dividend rate per annum of the 5.72%
Cumulative Preferred Stock, Series D;
(3) There shall not be any sinking fund provided for the
purpose of redemption of the 5.72% Cumulative Preferred Stock, Series
D; and
(4) The 5.72% Cumulative Preferred Stock, Series D, shall not
be convertible by the holders thereof into stock of any other class or
classes or into one or more series of the same class or of another
class or classes.
3. 6.72% CUMULATIVE PREFERRED STOCK, SERIES E
(A) The 6.72% Cumulative Preferred Stock, Series E, consists of 350,000
shares of the par value of $100 each.
(B) The variations in the rights and preferences of the 6.72%
Cumulative Preferred Stock, Series E, which are permitted under the provisions
of Article IV(a) of the Articles of Incorporation of this Company, are as
follows:
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(1) The annual dividend rate for the 6.72% Cumulative
Preferred Stock, Series E, shall be 6.72% per annum cumulative from the
date of issuance and dividends at that rate, as and when declared by
the Board of Directors, shall be payable quarterly on the 16th days of
March, June, September and December of each year (or, if any such day
shall not be a business day, on the next succeeding business day);
(2) The redemption price for the 6.72% Cumulative Preferred
Stock, Series E, shall be (i) $110 per share if redeemed prior to June
16, 1978, (ii) $107 per share if redeemed thereafter and prior to June
16, 1983, (iii) $105 per share if redeemed thereafter and prior to June
16, 1988, and (iv) $102 per share if redeemed thereafter, plus, in each
case, dividends accrued to the redemption date; provided, however, that
this Company cannot, prior to June 16, 1975, redeem any shares of the
6.72% Cumulative Preferred Stock, Series E, if such redemption is a
part of or in anticipation of any refunding operation involving the
application, directly or indirectly, of borrowed funds or the proceeds
of an issue of any stock ranking prior to or on a parity with the 6.72%
Cumulative Preferred Stock, Series E, if such borrowed funds have an
interest rate or cost to this Company (calculated in accordance with
generally accepted financial practice), or such stock has a dividend
rate or cost to this Company (so calculated) less than the dividend
rate per annum of the 6.72% Cumulative Preferred Stock, Series E;
(3) There shall not be any sinking fund provided for the
purpose of redemption of the 6.72% Cumulative Preferred Stock, Series
E; and
(4) The 6.72% Cumulative Preferred Stock, Series E, shall not
be convertible by the holders thereof into stock of any other class or
classes or into one or more series of the same class or of another
class or classes.
4. PREFERRED STOCK, AUCTION SERIES A
(1) The Preferred Stock, Auction Series A, consists of 750,000
shares of the par value of $100 each (New Preferred Stock) which shall
be purchased, sold, transferred and redeemed only in units of 1,000
shares per unit, except during a Non-Payment Period.
(2) The variations in the rights and preferences of the New
Preferred Stock which are permitted under the provisions of Article
IV(a) of the Articles of Incorporation of this Company are as follows:
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SECTION I
New Preferred Stock and Units
Dividend Rate
The holders of New Preferred Stock will be entitled to receive
dividends at the rate per annum determined as set forth below under
"Determination of Dividend Rate."
Dividend Periods
The Initial Dividend Period will commence on October 23, 1990 and will
end on December 15, 1990. Notwithstanding any other provision herein, each
succeeding Dividend Period will be a Quarterly Period unless the Articles of
Incorporation are amended to permit the payment of dividends on Preferred Stock
on a day other than a Quarterly Dividend Payment Date. Following any such
amendment, the Company, as of the end of any Dividend Period, may designate a
Short-Term Period or a Quarterly Period, as provided herein.
Any Short-Term Period immediately following a Quarterly Period will end
on a Designated Day, which will be no earlier than the 46th day and no later
than the 98th day after the last day of the preceding Quarterly Period (in any
case, subject to adjustment for non-Business Days and for a change in the
Minimum Holding Period). Each subsequent Short-Term Period that immediately
follows a Short-Term Period will commence on the day after the last day of such
preceding Short-Term Period and will end (i) on the Designated Day in the
seventh week thereafter, in the case of a 49-day Short-Term Period, or (ii) on
the Designated Day in the thirteenth week thereafter, in the case of a 13-week
Short-Term Period (in each case, subject to adjustment for non-Business Days and
for a change in the Minimum Holding Period).
If the Company designates that a Short-Term Period will be followed by
a Quarterly Period, such Short-Term Period will be followed by a Transition
Period and such Transition Period will be followed by a Quarterly Period.
In the absence of a designation by the Company to the contrary, each
49-day Short-Term Period will be followed by a 49-day Short-Term Period, each
13-week Short-Term Period will be followed by a 13-week Short-Term Period and
each Quarterly Period will be followed by a Quarterly Period.
Following an amendment of the Articles of Incorporation to permit other
than quarterly dividend payments, and without regard to the designation by the
Company of the duration of the next Dividend Period, (i) if Sufficient Clearing
Bids are not submitted in an Auction, then the Dividend Period following the
date of such Auction will be a 49-day Short-Term Period and (ii) during a
Non-Payment Period each Dividend Period will be a 49-day Short-Term Period (in
each case, subject to adjustment for non-Business Days and for a change in the
Minimum Holding Period) and the Applicable Rate will be 200% of the Applicable
AA Composite Commercial
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Paper Rate calculated as of the second Business Day immediately preceding such
Dividend Period.
In the event of a change in law altering the Minimum Holding Period,
the length of each Short-Term Period commencing after the effective date of such
change in law shall be adjusted by the Company so that the number of days in
each such Short-Term Period shall exceed the number of days in the then current
Minimum Holding Period; provided that (i) each Short-Term Period that originally
was a 49-day Short-Term Period shall not exceed by more than nine days the
length of the then current Minimum Holding Period, (ii) the number of days in
any Short-Term Period shall be evenly divisible by seven and (iii) the maximum
number of days in any Short-Term Period shall not exceed 98 days. Upon any such
change in the number of days in any Short-Term Period, the Company will give
notice of such change to the Auction Agent, the record holders of the New
Preferred Stock and each Existing Holder.
If the Company exercises its right to designate a Short-Term Period
following a Quarterly Period or a Quarterly Period and related Transition Period
following a Short-Term Period or, during any Short-Term Period, to change the
duration of the next Short-Term Period, it will given written notice of such
designation or change to the Auction Agent and to the record holders of the New
Preferred Stock prior to 1:00 P.M., New York City time, on the fifth Business
Day prior to the next Auction Date.
Dividend Payment Dates
Dividends on shares of New Preferred Stock will accrue from the Date of
Original Issue and for the Initial Dividend Period will be payable, if, as and
when declared, out of funds legally available therefor, on the Initial Dividend
Payment Date. Dividends for a Quarterly Period will be payable in arrears, if,
as and when declared, out of funds legally available therefor, on the Quarterly
Dividend Payment Date. Dividends for a Transition Period will be payable in
arrears, if, as and when declared, out of funds legally available therefor, on
the Transition Dividend Payment Date. Dividends for a Short-Term Period will be
payable in arrears, if, as and when declared, out of funds legally available
therefor, on the Short-Term Dividend Payment Date.
Dividends will be payable to holders of record as the same appear on
the stock books of the Company or of the registrar of the New Preferred Stock,
as the case may be, on the Business Day immediately preceding the Dividend
Payment Date for such dividends; provided that during a Non-Payment Period such
dividends shall be paid to such holders as their names appear on the stock books
on such date as may be fixed by the Board of Directors (but not to exceed 15
days preceding such payment date).
Determination of Dividend Rate
The dividend rate for the New Preferred Stock for the Initial Dividend
Period will be 6.35% per annum. Dividend rates on the shares of New Preferred
Stock for each Dividend Period after the Initial Dividend Period will be equal
to the rate per annum that results from the Auction with respect to such
Dividend Period, except as provided in the next paragraph. The
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total dividends per Unit payable for the Initial Dividend Period shall be
computed by multiplying by a fraction (the numerator of which shall be the
number of days in the Initial Dividend Period (54 days) and the denominator of
which shall be 360) the product of 6.35% and $100,000. The total dividends per
Unit payable for any Quarterly Period shall be computed by dividing by four the
product of the Applicable Rate for such Dividend Period and $100,000. The total
dividends per Unit payable for a Short-Term Period shall be computed by
multiplying by a fraction (the numerator of which shall be the number of days in
such Short-Term Period and the denominator of which shall be 360) the product of
the Applicable Rate for such Short-Term Period and $100,000. The total dividends
per Unit payable for a Transition Period shall be computed by multiplying by a
fraction (the numerator of which shall be the number of days in such Transition
Period and the denominator of which shall be 360) the product of the Applicable
Rate for such Transition Period and $100,000.
If the Company fails to deposit with the Auction Agent funds which are
immediately available at 12:00 noon, New York City time, (i) on any Dividend
Payment Date in an amount sufficient to pay the dividends (whether or not
declared) payable on such Dividend Payment Date or (ii) on any redemption date
for shares of New Preferred Stock in an amount sufficient to redeem on such
redemption date the shares of New Preferred Stock as to which notice of
redemption has been given (including an amount equal to dividends thereon,
whether or not declared, accrued but unpaid to such redemption date), then, in
either case, beginning with the Dividend Payment Date on which such failure
occurs and continuing until the Dividend Payment Date that is or immediately
follows the date the Company remedies such failure (a "Non-Payment Period") as
provided in the third sentence of this paragraph, the Applicable Rate for the
New Preferred Stock shall be equal to 200% of the Applicable AA Composite
Commercial Paper Rate in effect on the second Business Day preceding the first
day of such Non-Payment Period or, in the case of each subsequent Dividend
Period during such Non-Payment Period, the second Business Day preceding the
first day of such subsequent Dividend Period. Notwithstanding the foregoing, if
the Company remedies such failure by depositing, in same-day funds, with the
Auction Agent by 12:00 noon, New York City time, on the first, second or third
Business Day following such Dividend Payment Date or redemption date, as the
case may be, an amount equal to (x) the unpaid dividends or unpaid redemption
payments plus (y) a late charge computed at an annual rate of 200% of the
Applicable AA Composite Commercial Paper Rate in effect on the second Business
Day preceding the date of such failure applied to the amount of such unpaid
dividends or unpaid redemption payments based on the number of days elapsed from
the applicable Dividend Payment Date or redemption date to the date on which
funds for such dividends or redemption payments are deposited with the Auction
Agent divided by 360, then the Applicable Rate for the then-current Dividend
Period will be that established on the immediately preceding Auction Date. If,
subsequent to the three-Business Day grace period referred to in the preceding
sentence, the Company remedies such failure to pay dividends or the redemption
payments by depositing with the Auction Agent all amounts required by the first
sentence of this paragraph plus all dividends (computed at the rate specified in
the first sentence of this paragraph) accrued (whether or not declared) but
unpaid to the Dividend Payment Date that is or immediately precedes the date of
such remedy, then the Applicable Rate in respect of each Dividend Period
commencing after such remedy will be determined in accordance with the Auction
Procedures until such time as there is another failure to pay either dividends
or the
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redemption payments with respect to shares of New Preferred Stock. In the event
of any such remedy described in the preceding sentence, the Company will, not
more than 30 nor less than five Business Days prior to the next Auction Date,
notify the Auction Agent, all Existing Holders and the record holders of the New
Preferred Stock in writing of the date of the next Auction.
Redemption Provisions
At the option of the Company, shares of New Preferred Stock may be
redeemed out of funds legally available therefor, in whole or from time to time
in part, on any Dividend Payment Date at a redemption price of $100 per share
($100,000 per Unit) plus an amount equal to the accrued and unpaid dividends on
such share to the date fixed for redemption. Unless all the outstanding shares
of New Preferred Stock are not held of record by the Securities Depository or
its nominee, such shares shall be redeemable only in whole Units.
If shares of New Preferred Stock are to be redeemed, the notice of
redemption shall be given by publication at least once in each of two calendar
weeks in each of two daily newspapers, one published and of general circulation
in Charlotte, North Carolina, and the other in the Borough of Manhattan, New
York City, the first publication to be at least 30 days and not more than 60
days prior to the date fixed for such redemption. Notice shall also be mailed to
the holders of record of New Preferred Stock to be redeemed, at the respective
addresses as the same shall appear on the books of the Auction Agent, not less
than 30 nor more than 60 days prior to the date fixed for redemption, with
postage thereon prepaid, but failure to mail such notice or any default therein
or in the mailing thereof shall not affect the validity of the proceedings for
the redemption of any shares so to be redeemed. Each notice of redemption will
include a statement setting forth: (i) the number of shares of New Preferred
Stock (if applicable, denominated in Units) to be redeemed, (ii) the date fixed
for redemption and (iii) the redemption price.
In the event that less than all the outstanding shares are to be
redeemed, the number of shares of New Preferred Stock to be redeemed shall be
selected on a per Unit basis. So long as shares of New Preferred Stock are held
of record by the Securities Depository or its nominee, the Company will give
notice to the Securities Depository of any such partial redemption, and the
Securities Depository shall determine the number of Units to be redeemed from
the account of the Agent Member of each Existing Holder.
The redemption price for the shares of New Preferred Stock called for
redemption shall be paid to each record holder thereof on the date fixed for
redemption against presentation of the stock certificates therefor.
Sinking Fund
There shall not be any sinking fund provided for the purpose of
redemption of the New Preferred Stock.
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Conversion
The New Preferred Stock shall not be convertible by the holders thereof
into stock of any other class or classes or into one or more series of the same
class or of another class or classes.
SECTION II
Definitions
(a) "Affiliate" shall mean any Person known to the Auction Agent to be
controlled by, in control of, or under common control with, the Company.
(b) "Agent Member" shall mean a member of the Securities Depository
that will act on behalf of a Bidder and is identified as such in such Bidder's
Master Purchaser's Letter.
(c) "Applicable AA Composite Commercial Paper Rate", on any date, shall
mean (i) with respect to a 49-day Short-Term Period, (A) the Interest Equivalent
of the 60-day rate on commercial paper placed on behalf of issuers whose
corporate bonds are rated "AA" by S&P, or the equivalent of such rating by S&P
or another rating agency, as such 60-day rate is made available on a discount
basis or otherwise by the Federal Reserve Bank of New York for the Business Day
immediately preceding such date, or (B) if the Federal Reserve Bank of New York
does not make available such rate, then the arithmetic average of the Interest
Equivalent of the 60-day rate on commercial paper placed on behalf of such
issuers, and as quoted, on a discount basis or otherwise, to the Auction Agent
for the close of business on the Business Day immediately preceding such date by
the Commercial Paper Dealers, (ii) with respect to a Quarterly Period or a
13-week Short-Term Period, the Interest Equivalent of the 90-day rate on such
commercial paper as so determined or (iii) with respect to a Transition Period,
the Interest Equivalent of the appropriate rate on such commercial paper as so
determined, provided that such appropriate rate shall be calculated based on: if
the number of days in such Transition Period is less than 70, the 60-day rate;
if the number of days in such Transition Period is 70 or more days but fewer
than 85 days, the arithmetic average of the 60-day rate and the 90-day rate; if
the number of days in such Transition Period is 85 or more days but fewer than
120 days, the 90-day rate; and if the number of days in such Transition Period
is greater than 120, the arithmetic average of the 90-day rate and the 180-day
rate. If either of the Commercial Paper Dealers does not quote a rate which is
required to determine the Applicable AA Composite Commercial Paper Rate, the
Applicable AA Composite Commercial Paper Rate shall be determined on the basis
of quotations furnished by the remaining Commercial Paper Dealer and the
Substitute Commercial Paper Dealer selected by the Company to provide such rate
or, if the Company does not select any such Substitute Commercial Paper Dealer,
solely by the remaining Commercial Paper Dealer. If the Company adjusts the
number of days in any Short-Term Period as a result of a change in the Minimum
Holding Period, then (x) if any such Short-Term Period shall have 70 or more
days but fewer than 85 days, the rate will be the arithmetic average of the
Interest Equivalent of the 60-day and 90-day rates on such commercial paper and
(y) if any such Short-Term Period shall have 85 or more days but fewer than 99
days, the rate will be the Interest Equivalent of the 90-day rate on such
commercial paper.
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(d) "Applicable Rate" shall mean the rate per annum at which dividends
are payable on shares of New Preferred Stock for any Dividend Period, other than
the Initial Dividend Period, including such rate used during a Non-Payment
Period.
(e) "Auction" shall mean each periodic implementation of the Auction
Procedures.
(f) "Auction Agent" shall mean Bankers Trust Company, or any successor
bank or trust company or other entity entering into an Auction Agent Agreement
with the Company.
(g) "Auction Agent Agreement" shall mean the agreement between the
Company and the Auction Agent which provides, among other things, that the
Auction Agent will follow the Auction Procedures for the purposes of determining
the Applicable Rate for New Preferred Stock.
(h) "Auction Date" shall mean, with respect to each Dividend Period,
the Business Day immediately preceding the commencement of such Dividend Period.
(i) "Auction Procedures" shall mean the procedures for holding an
Auction described in Section III.
(j) "Available Units" shall have the meaning specified in Paragraph
4(a)(i) of Section III.
(k) "Bid" shall mean a communication to a Broker-Dealer containing the
information set forth in Paragraph 2(a)(i)(B) or Paragraph 2(a)(ii) of Section
III, and "Bids" shall mean, collectively, every Bid.
(l) "Bidder" shall mean an Existing Holder or a Potential Holder
placing an Order in an Auction.
(m) "Bidders" shall mean all Existing Holders and all Potential
Holders placing Orders in an Auction.
(n) "Broker-Dealer" shall mean, on any date, any broker-dealer or other
entity permitted by law to perform the functions required of a Broker-Dealer
herein which is a member of, or a participant in, the Securities Depository,
which has been selected by the Company and which has entered into a
Broker-Dealer Agreement with the Auction Agent that is still effective on such
date.
(o) "Broker-Dealer Agreement" shall mean an agreement between the
Auction Agent and a Broker-Dealer pursuant to which such Broker-Dealer agrees to
follow the procedures with respect to Auctions specified in Section III.
(p) "Business Day" shall mean a day on which the New York Stock
Exchange is open for trading and which is not a day on which banks in New York
City are authorized by law to close.
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(q) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(r) "Commercial Paper Dealers" shall mean Merrill Lynch Money Markets
Inc. and Morgan Stanley & Co. Incorporated or, in lieu thereof, their respective
affiliates or successors that are engaged in the business of buying or selling
commercial paper.
(s) "Date of Original Issue" shall mean October 23, 1990.
(t) "Designated Day" shall mean, with respect to any continuous series
of Short-Term Periods, the day of the week designated by the Company to be the
last day of each such Short-Term Period.
(u) "Dividend Payment Date" shall mean the Initial Dividend Payment
Date, a Quarterly Dividend Payment Date, a Short-Term Dividend Payment Date or a
Transition Dividend Payment Date.
(v) "Dividend Period" shall mean either the Initial Dividend Period, a
Quarterly Period, a Short-Term Period or a Transition Period.
(w) "Dividends-Received Deduction" shall mean the dividends-received
deduction of section 243 of the Code, which entitles certain taxpayers, under
certain circumstances, to claim a deduction in an amount equal to 70% of the
dividends received on shares of New Preferred Stock.
(x) "Existing Holder" shall mean a Person who has executed a Master
Purchaser's Letter and who is listed as the beneficial owner of shares of New
Preferred Stock in the records of the Auction Agent.
(y) "Hold Order" and "Hold Orders" shall have the respective meanings
specified in Paragraph 2(a)(i)(A) of Section III.
(z) "Initial Dividend Payment Date" shall mean December 17, 1990.
(aa) "Initial Dividend Period" shall mean the period of time commencing
on the Date of Original Issue and ending on December 15, 1990.
(ab) "Interest Equivalent" shall mean the equivalent yield on a 360-day
basis of a discount basis security to an interest-bearing security.
(ac) "Master Purchaser's Letter" shall mean a letter addressed to the
Company, a remarketing agent, the Auction Agent, a Broker-Dealer, an Agent
Member and other Persons, in which the executing Person agrees, among other
things, to offer to purchase, to purchase, to offer to sell and to sell shares
of New Preferred Stock as set forth herein.
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(ad) "Maximum Rate" shall mean, at any Auction, the rate obtained by
multiplying the Applicable AA Composite Commercial Paper Rate on the date of
such Auction by the applicable percentage set forth below based on the lower of
the credit rating or ratings assigned to the New Preferred Stock by Moody's and
S&P (or if Moody's or S&P or both shall not make such rating available, the
equivalent of either or both of such ratings by a Substitute Rating Agency or
two Substitute Rating Agencies or, in the event that only one such rating shall
be available, the applicable percentage will be based on such rating).
Applicable
Credit Rating Percentage
S&P Moody's
AA- or Above "aa3" or Above 110%
A- to A+ "a3" to "a1" 125%
BBB- to BBB+ "baa3" to "baa1" 150%
Below BBB- Below "baa3" 200%
The Company will take all reasonable action necessary to enable S&P and
Moody's to provide a rating for the New Preferred Stock. If either S&P or
Moody's shall not make such a rating available, or neither S&P nor Moody's shall
make such a rating available, Merrill Lynch, Pierce, Fenner & Smith Incorporated
and Morgan Stanley & Co. Incorporated, or their respective affiliates and
successors, after consultation with the Company, will select a nationally
recognized securities rating agency (a "Substitute Rating Agency") or two
nationally recognized securities rating agencies ("Substitute Rating Agencies")
to act as a substitute rating agency or substitute rating agencies, as the case
may be.
(ae) "Minimum Holding Period" shall mean, on any date, the number of
days in the minimum holding period required on such date for certain taxpayers
to be entitled to the Dividends-Received Deduction (such period is currently 46
days under section 246(c) of the Code).
(af) "Minimum Rate" shall mean, on any Auction Date, the rate equal to
59% of the Applicable AA Composite Commercial Paper Rate in effect on such
Auction Date.
(ag) "Moody's shall mean Moody's Investors Service, Inc. or its
successor.
(ah) "Non-Payment Period" has the meaning specified in the second
paragraph under "Determination of Dividend Rate" in Section I.
(ai) "Order" shall mean a Bid, a Hold Order or a Sell Order.
(aj) "Orders" shall mean, collectively, the Bids, the Hold Orders and
the Sell Orders.
(ak) "Outstanding Units" shall mean Units comprised of shares of New
Preferred Stock previously issued by the Company except, without duplication,
(i) any shares previously canceled or delivered to the Auction Agent for
cancellation or redeemed or deemed to have been redeemed by the Company, (ii)
any shares as to which the Company or any Affiliate shall be an Existing
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Holder, and (iii) any shares represented by any certificate in lieu of which a
new certificate has been executed and delivered by the Company.
(al) "Person" shall mean an individual, a partnership, a corporation, a
trust, an unincorporated association, a joint venture or other entity or a
government or any agency or political subdivision thereof.
(am) "Potential Holder" shall mean any Person, including any Existing
Holder, (i) who shall have executed a Master Purchaser's Letter and (ii) who may
be a prospective purchaser of one or more Units (or, in the case of an Existing
Holder, additional Units).
(an) "Quarterly Dividend Payment Date" shall mean for each Quarterly
Period the sixteenth day on March, June, September or December which is the day
after the last day of such Quarterly Period, unless such day is not a Business
Day, in which case the Quarterly Dividend Payment Date shall be the Business Day
following such day.
(ao) "Quarterly Period" shall mean a period of three months which
commences on the day after the last day of the immediately preceding Dividend
Period and ends on the fifteenth day of the March, June, September or December
next succeeding.
(ap) "Remaining Units" shall have the meaning specified in Paragraph
5(a)(iv) of Section III.
(aq) "S&P" shall mean Standard & Poor's Corporation or its successor.
(ar) "Securities Depository" shall mean The Depository Trust Company
and its successors and assigns or any other securities depository selected by
the Company which agrees to follow the procedures required to be followed by
such securities depository in connection with shares of New Preferred Stock.
(as) "Sell Order" and "Sell Orders" shall have the respective meanings
specified in Paragraph 2(a)(i)(C) of Section III.
(at) "Short-Term Dividend Payment Date" shall mean for each Short-Term
Period the day after the last day of such Short-Term Period; provided that with
respect to any such day (i) if such day and the last day of such Short-Term
Period are Business Days but the day after such day is not a Business Day, then
the Short-Term Dividend Payment Date will be the last day of such Short-Term
Period and (ii) if (A) such day is not a Business Day or (B) such day is a
Business Day but both the day after and the day before such day are not Business
Days, then the Short-Term Dividend Payment Date shall be the first Business Day
before such day that is immediately followed by a Business Day; provided further
that if any Short-Term Dividend Payment Date so set would occur in a number of
days after the immediately preceding Dividend Payment Date that would be less
than the number of days in the then current Minimum Holding Period required for
taxpayers to be entitled to the Dividends-Received Deduction, the Short-Term
Dividend Payment Date shall be the next Business Day that (x) is at least the
number of days
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after the immediately preceding Dividend Payment Date which equals the then
current Minimum Holding Period and (y) is immediately followed by a Business
Day; and provided further that where the application of the foregoing principles
would result in two consecutive Auction Dates with respect to 13-week Short-Term
Periods occurring within 85 consecutive days, such Short-Term Dividend Payment
Date shall be changed so that the immediately preceding Auction Date will occur
on the first Business Day after such 85th day.
(au) "Short-Term Period" shall mean a period of either 49 days or 13
weeks (in either case, subject to adjustment for non-Business Days and for a
change in the Minimum Holding Period).
(av) "Submission Deadline" shall mean 1:00 P.M., New York City time, on
any Auction Date or such other time on any Auction Date by which Broker-Dealers
are required to submit Orders to the Auction Agent as specified by the Auction
Agent from time to time.
(aw) "Submitted Bid" and "Submitted Bids" shall have the respective
meanings specified in Paragraph 4(a) of Section III.
(ax) "Submitted Hold Order" and "Submitted Hold Orders" shall have the
respective meanings specified in Paragraph 4(a) of Section III.
(ay) "Submitted Order" and "Submitted Orders" shall have the respective
meanings specified in Paragraph 4(a) of Section III.
(az) "Submitted Sell Order" and "Submitted Sell Orders" shall have the
respective meanings specified in Paragraph 4(a) of Section III.
(ba) "Substitute Commercial Paper Dealer" shall mean any commercial
paper dealer that is a leading dealer in the commercial paper market which the
Company may appoint from time to time with the consent of a Broker-Dealer or, in
lieu thereof, such commercial paper dealer's affiliates or successors.
(bb) "Substitute Rating Agencies" has the meaning specified under the
definition of "Maximum Rate" above.
(bc) "Substitute Rating Agency" has the meaning specified under the
definition of "Maximum Rate" above.
(bd) "Sufficient Clearing Bids" shall have the meaning specified in
Paragraph 4(a) of Section III.
(be) "Transition Dividend Payment" shall mean for each Transition
Period the sixteenth day of March, June, September or December which is the day
after the last day of such Transition Period, unless such day is not a Business
Day, in which case the Transition Dividend Payment Date shall be the Business
Day following such day.
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(bf) "Transition Period" shall mean the period of time between a
Short-Term Period and a Quarterly Period if the Company elects during a
Short-Term Period to change the Dividend Period to a Quarterly Period. Each
Transition Period (i) shall not be less than the number of days in the then
current Minimum Holding Period, (ii) shall not be greater than the number of
days in two Quarterly Periods less the number of days in the then current
Minimum Holding Period and (iii) shall end on the earliest of the next March 15,
June 15, September 15 or December 15.
(bg) "Unit" shall mean 1,000 shares of New Preferred Stock.
(bh) "Winning Bid Rate" shall have the meaning specified in Paragraph
4(a)(iii) of Section III.
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SECTION III
Auction Procedures
1. Definitions.
Any capitalized term used herein shall have the meaning ascribed
thereto in Section II.
2. Orders by Existing Holders and Potential Holders.
(a) Prior to the Submission Deadline on each Auction Date:
(i) each Existing Holder may submit by telephone to a
Broker-Dealer information as to:
(A) the number of Outstanding Units, if any, held by
such Existing Holder that such Existing Holder desires to
continue to hold for the next Dividend Period without regard
to the rate determined by the Auction Procedures (a "Hold
Order," collectively "Hold Orders");
(B) the number of Outstanding Units, if any, that
such Existing Holder desires to continue to hold for the next
Dividend Period, provided that the rate determined by the
Auction Procedures shall not be less than the rate per annum
specified by such Existing Holder; and/or
(C) the number of Outstanding Units, if any, held by
such Existing Holder that such Existing Holder offers to sell
without regard to the rate determined by the Auction
Procedures for the next Dividend Period (a "Sell Order",
collectively "Sell Orders"); and
(ii) each Broker-Dealer, using a list of Potential Holders, in
good faith for the purpose of conducting a competitive Auction in a
commercially reasonable manner, shall contact Potential Holders,
including Persons that are not Existing Holders, on such list to
determine the number of Outstanding Units, if any, that each such
Potential Holder offers to purchase, provided that the rate determined
by the Auction Procedures for the next Dividend Period shall not be
less than the rate per annum specified by such Potential Holder.
(b) On any Auction Date, (i) a Bid submitted by an Existing Holder
shall constitute an irrevocable offer to sell:
(A) the number of Outstanding Units specified in such
Bid if the rate determined by the Auction Procedures on such
Auction Date shall be less than the rate specified in such
Bid; or
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(B) such number or a lesser number of Outstanding
Units to be determined as set forth in Paragraph 5(a)(iv), if
the rate determined by the Auction Procedures on such Auction
Date shall be equal to the rate specified in such Bid; or
(C) a lesser number of Outstanding Units than was
specified in such Bid, to be determined as set forth in
Paragraph 5(b)(iii), if the rate specified in such Bid shall
be higher than the Maximum Rate and Sufficient Clearing Bids
do not exist.
(ii) A Sell Order by an Existing Holder shall constitute an
irrevocable offer to sell:
(A) the number of Outstanding Units specified in such
Sell Order; or
(B) such number or a lesser number of Outstanding
Units as set forth in Paragraph 5(b)(iii) if Sufficient
Clearing bids do not exist.
(iii) a Bid by a Potential Holder shall constitute an
irrevocable offer to purchase:
(A) the number of Outstanding Units specified in such
Bid if the rate determined by the Auction Procedures on such
Auction Date shall be higher than the rate specified in such
Bid; or
(B) such number or a lesser number of Outstanding
Units as set forth in Paragraph 5(a)(v) if the rate determined
by the Auction Procedures on such Auction Date shall be equal
to the rate specified in such Bid.
(c) On each Auction Date, the Auction Agent shall determine the
Applicable AA Composite Commercial Paper Rate, the Maximum Rate and the Minimum
Rate and shall notify the Company and each Broker-Dealer of each such rate not
later than 9:30 A.M. on such Auction Date or such other time on such Auction
Date as specified by the Auction Agent with the consent of the Company (which
consent shall not be unreasonably withheld).
3. Submission of Orders by Broker-Dealers to the Auction Agent.
(a) Each Broker-Dealer shall submit in writing to the Auction Agent
prior to the Submission Deadline on each Auction Date all Orders obtained by
such Broker-Dealer and specifying with respect to each Order:
(i) the name of the Bidder placing such Order;
(ii) the aggregate number of Units subject to such Order;
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(iii) to the extent that such Bidder is an Existing Holder:
(A) the number of Units, if any, subject to any
Hold Order placed by such Existing Holder;
(B) the number of Units, if any, subject to any Bid
placed by such Existing Holder and the rate specified in
such Bid; and
(C) the number of Units, if any, subject to any
Sell Order placed by such Existing Holder; and
(iv) to the extent that such Bidder is a Potential Holder, the
number of Units and the rate as specified in such Potential Holder's
Bid.
(b) If any rate specified in any Bid contains more than three figures
to the right of the decimal point, the Auction Agent shall round such rate up to
the next highest one-thousandth (.001) of 1%.
(c) If, for any reason, an Order or Orders covering all the Outstanding
Units held by any Existing Holder is not submitted to the Auction Agent prior to
the Submission Deadline, the Auction Agent shall deem a Hold Order to have been
submitted on behalf of such Existing Holder covering the number of Outstanding
Units held by such Existing Holder and not subject to Orders submitted to the
Auction Agent.
(d) If one or more Orders by an Existing Holder covering in the
aggregate more than the number of Outstanding Units held by such Existing Holder
are submitted to the Auction Agent by one or more Broker-Dealers on behalf of
such Existing Holder, such Orders shall be considered valid as follows and in
the following order of priority:
(i) any Hold Orders submitted on behalf of such Existing
Holder shall be considered valid up to and including, in the aggregate,
the number of Outstanding Units held by such Existing Holder; provided
that, if more than one Hold Order is submitted on behalf of such
Existing Holder and the number of Units subject to such Hold Orders
exceeds the number of Outstanding Units held by such Existing Holder,
the number of Units subject to such Hold Orders shall be reduced pro
rata so that such Hold Orders shall cover only the number of
Outstanding Units held by such Existing Holder;
(ii) (A) any Bid submitted on behalf of an Existing
Holder shall be considered valid up to and including the
excess of the number of Outstanding Units held by such
Existing Holder over the number of Units subject to valid Hold
Orders of such Existing Holder referred to in Paragraph
3(d)(i);
(B) subject to Paragraph 3(d)(ii)(A), if more than
one Bid with the same rate is submitted on behalf of such
Existing Holder and the aggregate number of Outstanding Units
subject to such Bids is greater than the excess referred to in
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Paragraph 3(d)(ii)(A), such Bids shall be considered valid up
to the amount of such excess and the number of Units subject
to such Bids shall be reduced pro rata so that such Bids shall
cover only the number of Units equal to such excess;
(C) subject to Paragraph 3(d)(ii)(A), if more than
one Bid with different rates is submitted on behalf of such
Existing Holder, such Bids shall be considered valid in their
entirety up to the excess referred to in Paragraph 3(d)(ii)(A)
in the ascending order of their respective rates; and
(D) in any such event specified in this Paragraph
3(d)(ii), the number, if any, of such Units subject to Bids
not valid under this Paragraph 3(d)(ii) shall be treated as
subject to a Bid by a Potential Holder; and
(iii) any Sell Order shall be considered valid up to and
including, in the aggregate, the excess of the number of Outstanding
Units held by such Existing Holder over the sum of the Units subject to
valid Hold Orders of such Existing Holder referred to in Paragraph
3(d)(i) and valid Bids by such Existing Holder referred to in Paragraph
3(d)(ii).
(e) In any Auction, if more than one Bid is submitted on behalf of any
Potential Holder, each Bid submitted shall be a separate Bid with the rate and
number of Units specified therein.
(f) Orders by Existing Holders and Potential Holders must specify a
whole number of Units. An Order that does not specify a whole number of Units
will not be considered a Submitted Order for purposes of the Auction.
4. Determination of Sufficient Clearing Bids, Winning Bid Rate and Applicable
Rate.
(a) Not earlier than the Submission Deadline on each Auction Date, the
Auction Agent shall assemble all Orders submitted or deemed submitted to it by
the Broker-Dealers (each such Order as submitted or deemed submitted by a
Broker-Dealer is referred to herein individually as a "Submitted Hold Order," a
"Submitted Bid" or a "Submitted Sell Order," as the case may be, or as a
"Submitted Order," and collectively as "Submitted Hold Orders," "Submitted Bids"
or "Submitted Sell Orders," as the case may be, or as "Submitted Orders") and
shall determine:
(i) the excess of the total number of Outstanding Units over
the number of Outstanding Units subject to Submitted Hold Orders (the
"Available Units");
(ii) from the Submitted Orders, whether the number of
Outstanding Units subject to Submitted Bids by Existing Holders and
Potential Holders specifying one or more rates equal to or lower than
the Maximum Rate exceeds or is equal to the sum of (A) the number of
Outstanding Units subject to Submitted Bids by Existing Holders
specifying one or more rates higher than the Maximum Rate and (B) the
number of Outstanding Units subject to Submitted Sell Orders;
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(in the event of such excess or such equality (other than because the number of
Units specified in each of Paragraphs 4(a)(i) and 4(a)(ii) is zero because all
the Outstanding Units are subject to Submitted Hold Orders), such Submitted Bids
in Paragraph 4(a)(ii) are herein referred to collectively as "Sufficient
Clearing Bids"); and
(iii) if Sufficient Clearing Bids exist, the lowest rate
specified in the Submitted Bids (the "Winning Bid Rate") which if
(A) each Submitted Bid from Existing Holders
specifying such Winning Bid Rate and all other Submitted Bids
from Existing Holders specifying lower rates were accepted,
thus entitling such Existing Holders to continue to hold the
Outstanding Units subject to such Submitted Bids; and
(B) each Submitted Bid from Potential Holders
specifying such Winning Bid Rate and all other Submitted Bids
from Potential Holders specifying lower rates were accepted,
thus requiring the Potential Holders to purchase the
Outstanding Units subject to such Submitted Bids;
would result in such Existing Holders described in Paragraph 4(a)(iii)(A)
continuing to hold an aggregate number of Outstanding Units that, when added to
the number of Outstanding Units to be purchased by such Potential Holders
described in Paragraph 4(a)(iii)(B), would at least equal the Available Units.
(b) In connection with an Auction and promptly after the Auction Agent
has made the determinations pursuant to Paragraph 4(a), the Auction Agent shall
advise the Company of the Applicable AA Composite Commercial Paper Rate and the
Maximum Rate and, based on such determinations, of the Applicable Rate for the
next Dividend Period and such other information as follows:
(i) if Sufficient Clearing Bids exist, that the Applicable
Rate for the next Dividend Period shall be equal to the Winning Bid
Rate so determined;
(ii) if Sufficient Clearing Bids do not exist (other than
because all the Outstanding Units are subject to Submitted Hold
Orders), that the Applicable Rate for the next Dividend Period shall be
equal to the Maximum Rate; or
(iii) if all the Outstanding Units are subject to Submitted
Hold Orders, that the Applicable Rate for the next Dividend Period
shall be equal to 59% of the Applicable AA Composite Commercial Paper
Rate in effect on the date of such Auction.
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5. Acceptance and Rejection of Submitted Bids and Submitted Sell Orders and
Allocation of Units.
Based on the determinations made pursuant to Paragraph 4(a), the Submitted Bids
and Submitted Sell Orders shall be accepted or rejected and the Auction Agent
shall take such other action as set forth below:
(a) If Sufficient Clearing Bids have been made, subject to the
provisions of Paragraphs 5(d) and 5(e), Submitted Bids and Submitted Sell Orders
shall be accepted or rejected in the following order of priority and all other
Submitted Bids shall be rejected:
(i) the Submitted Sell Orders of each Existing Holder shall be
accepted and the Submitted Bids of each Existing Holder specifying any
rate that is higher than the Winning Bid Rate shall be rejected, thus
requiring each such Existing Holder to sell the Outstanding Units
subject to such Sell Orders or Submitted Bids;
(ii) the Submitted Bids of each Existing Holder specifying any
rate that is lower than the Winning Bid Rate shall be accepted, thus
entitling each such Existing Holder to continue to hold the Outstanding
Units subject to such Submitted Bids;
(iii) the Submitted Bids of each Potential Holder specifying
any rate that is lower than the Winning Bid Rate shall be accepted,
thus requiring each such Potential Holder to purchase the number of
Outstanding Units subject to such Submitted Bids;
(iv) the Submitted Bids of each Existing Holder specifying a
rate that is equal to the Winning Bid Rate shall be accepted, thus
entitling such Existing Holder to continue to hold the Outstanding
Units subject to each such Submitted Bid, unless the number of
Outstanding Units subject to all such Submitted Bids of Existing
Holders shall be greater than the number of Outstanding Units (the
"Remaining Units") equal to the excess of the Available Units over the
number of Outstanding Units subject to Submitted Bids described in
Paragraphs 5(a)(ii) and 5(a)(iii), in which event the Submitted Bids of
each such Existing Holder shall be rejected, and each such Existing
Holder shall be required to sell its Units, but only in an amount equal
to the difference between (A) the number of Outstanding Units then held
by such Existing Holder subject to such Submitted Bid and (B) the
number of Outstanding Units obtained by multiplying (x) the number of
Remaining Units by (y) a fraction (the numerator of which shall be the
number of Outstanding Units held by such Existing Holder subject to
such Submitted Bid and the denominator of which shall be the sum of the
number of Outstanding Units subject to such Submitted Bids made by all
such Existing Holders that specified a rate equal to the Winning Bid
Rate); and
(v) the Submitted Bid of each Potential Holder specifying a
rate that is equal to the Winning Bid Rate shall be accepted, but only
in an amount equal to the number of Outstanding Units obtained by
multiplying the difference between the Available Units and the number
of Outstanding Units subject to Submitted Bids described in Paragraphs
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5(a)(ii), 5(a)(iii) and 5(a)(iv) by a fraction (the numerator of which
shall be the number of Outstanding Units subject to such Submitted Bid
of such Potential Holder and the denominator of which shall be the sum
of the number of Outstanding Units subject to Submitted Bids that
specified rates equal to the Winning Bid Rate submitted by all such
Potential Holders).
(b) If Sufficient Clearing Bids have not been made (other than because
all the Outstanding Units are subject to Submitted Hold Orders), subject to the
provisions of Paragraph 5(d), Submitted Orders shall be accepted or rejected in
the following order of priority and all other Submitted Bids shall be rejected:
(i) the Submitted Bids of each Existing Holder specifying any
rate that is equal to or lower than the Maximum Rate shall be accepted,
thus entitling such Existing Holder to continue to hold the Outstanding
Units subject to such Submitted Bids;
(ii) the Submitted Bids of each Potential Holder specifying
any rate that is equal to or lower than the Maximum Rate shall be
accepted, thus requiring such Potential Holder to purchase the
Outstanding Units subject to such Submitted Bids; and
(iii) the Submitted Bids of each Existing Holder specifying
any rate that is higher than the Maximum Rate shall be rejected, and
each Submitted Sell Order of each Existing Holder shall be accepted,
thus requiring such Existing Holder to sell the Outstanding Units
subject to each such Submitted Bid or Submitted Sell Order, in both
cases only in an amount equal to the difference between (A) the number
of Outstanding Units then held by such Existing Holder subject to such
Submitted Bid or Submitted Sell Order and (B) the number of Outstanding
Units obtained by multiplying (x) the difference between the Available
Units and the aggregate number of Outstanding Units subject to
Submitted Bids described in Paragraphs 5(b)(i) and 5(b)(ii) by (y) a
fraction (the numerator of which shall be the number of Outstanding
Units held by such Existing Holder subject to such Submitted Bid or
Submitted Sell Order and the denominator of which shall be the number
of Outstanding Units subject to all such Submitted Bids and Submitted
Sell Orders of Existing Holders).
(c) If all the Outstanding Units are subject to Submitted Hold Orders,
all Submitted Bids shall be rejected.
(d) If, as a result of the procedures described in Paragraph 5(a) or
5(b), any Existing Holder would be entitled to hold or required to sell, or any
Potential Holder would be required to purchase, a fraction of a Unit on any
Auction Date, the Auction Agent shall, in such manner as it shall determine in
its sole discretion, round up or down the number of Units to be held or sold by
any Existing Holder or purchased by any Potential Holder on such Auction Date so
that the number of Units held or sold by each Existing Holder or purchased by
any Potential Holder on such Auction Date shall be a whole number of Units.
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(e) If, as a result of the procedures described in Paragraph 5(a), any
Potential Holder would be entitled or required to purchase less than a whole
Unit on any Auction Date, the Auction Agent shall, in such manner as it shall
determine in its sole discretion, allocate Units for purchase among Potential
Holders so that only whole Units are purchased on such Auction Date by any
Potential Holder, even if such allocation results in one or more of such
Potential Holders not purchasing any Units on such Auction Date.
(f) Based on the results of each Auction, the Auction Agent shall
determine the aggregate number of Outstanding Units to be purchased and the
aggregate number of Outstanding Units to be sold by Potential Holders and
Existing Holders on whose behalf each Broker-Dealer submitted Bids or Sell
Orders and, with respect to each Broker-Dealer, to the extent that such
aggregate numbers of Units to be sold differ, determine to which other
Broker-Dealer or Broker-Dealers acting for one or more purchasers such
Broker-Dealer shall deliver, or from which other Broker-Dealer or Broker-Dealers
acting for one or more sellers such Broker-Dealer shall receive, as the case may
be, such Units.
6. Miscellaneous.
(a) So long as the Applicable Rate is based on the results of an
Auction, an Existing Holder (i) may sell, transfer or otherwise dispose of
shares of New Preferred Stock only in Units and only pursuant to a Bid or Sell
Order in accordance with the procedures described herein, or to or through a
Broker-Dealer or to a Person that has delivered a signed copy of a Master
Purchaser's Letter to the Auction Agent; provided that, in the case of all
transfers other than pursuant to Auctions, such Existing Holder or its
Broker-Dealer or its Agent Member advises the Auction Agent of such transfer,
and (ii) shall have the ownership of shares of New Preferred Stock held by it
maintained in book-entry form by the Securities Depository in the account of its
Agent Member, which in turn will maintain records of such Existing Holder's
beneficial ownership.
(b) Neither the Company nor any Affiliate may submit an Order
in any Auction.
(c) All references to time of day refer to New York City time.
(d) During a Non-Payment Period and during any period in which there
shall not be a Securities Depository, shares of New Preferred Stock may be
registered for transfer or exchange and new certificates issued upon surrender
of the old certificates properly endorsed for transfer with (i) all necessary
endorsers' signatures guaranteed in such manner and form as the Auction Agent
(or such other transfer agent or registrar) may require by a guarantor
reasonably believed by the Auction Agent (or such other transfer agent or
registrar) to be responsible, (ii) accompanied by such assurances as the Auction
Agent (or such other transfer agent or registrar) shall deem necessary or
appropriate to evidence the genuineness and effectiveness of each necessary
endorsement and (iii) satisfactory evidence of compliance with all applicable
laws relating to the collection of taxes or funds necessary for the payment of
such taxes.
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(e) During a Non-Payment Period the Company or an Affiliate, at the
option of the Company, may perform any of the functions to be performed by the
Auction Agent or the Securities Depository set forth herein.
(f) The Board of Directors of the Company may interpret the provisions
of these Auction Procedures to resolve any inconsistency or ambiguity which may
arise or be revealed in connection herewith, and, if such inconsistency or
ambiguity reflects an inaccurate provision hereof, the Board of Directors of the
Company may, in appropriate circumstances, authorize the filing of a corrected
articles of amendment.
5. 7.50% CUMULATIVE PREFERRED STOCK, SERIES R
(A) The 7.50% Cumulative Preferred Stock, Series R, consists of 850,000
shares of the par value of $100 each (Series R Preferred Stock).
(B) The variations in the rights and preferences of the Series R
Preferred Stock which are permitted under the provisions of Article IV(a) of the
Articles of Incorporation of this Company are as follows:
(1) The annual dividend rate for the Series R Preferred Stock
shall be 7.50% per annum cumulative from and after the date of issuance
and dividends at that rate, when, as and if declared by the Board of
Directors, shall be payable quarterly on the 16th day of March, June,
September and December of each year (or, if any such day shall not be a
business day, on the next succeeding business day) with the initial
dividend payable June 16, 1992 covering the full period from the date
of issuance through such date;
(2) The Series R Preferred Stock shall not be redeemable prior
to March 16, 1997. Thereafter, the redemption price for the Series R
Preferred Stock shall be (i) $105.00 per share if redeemed beginning
March 16, 1997 and prior to March 16, 1998; (ii) $104.50 per share if
redeemed beginning March 16, 1998 and prior to March 16, 1999; (iii)
$104.00 per share if redeemed beginning March 16, 1999 and prior to
March 16, 2000; (iv) $103.50 per share if redeemed beginning March 16,
2000 and prior to March 16, 2001; (v) $103.00 per share if redeemed
beginning March 16, 2001 and prior to March 16, 2002; (vi) $102.50 per
share if redeemed beginning March 16, 2002 and prior to March 16, 2003;
(vii) $102.00 per share if redeemed beginning March 16, 2003 and prior
to March 16, 2004; (viii) $101.50 per share if redeemed beginning March
16, 2004 and prior to March 16, 2005; (ix) $101.00 per share if
redeemed beginning March 16, 2005 and prior to March 16, 2006; (x)
$100.50 per share if redeemed beginning March 16, 2006 and prior to
March 16, 2007; (xi) $100.00 per share if redeemed on and after March
16, 2007, plus, in each case, all accrued and unpaid dividends thereon
to the redemption date;
(3) As a sinking fund for the retirement of the Series R
Preferred Stock, subject to the provisions of paragraph (4) below, on
March 16, 1998 and on each March 16 thereafter to and including March
16, 2017 (so long as any shares of the Series R
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Preferred Stock are outstanding), this Company shall redeem 42,500
shares of the Series R Preferred Stock (or the number of shares of the
Series R Preferred Stock then outstanding if less than 42,500) at a
price of $100.00 per share, plus all accrued and unpaid dividends
thereon to the redemption date. Shares of the Series R Preferred Stock
purchased by this Company may be credited against any sinking fund
retirement required by this paragraph (3). No redemption of shares of
the Series R Preferred Stock pursuant to paragraph (2) above shall
constitute a retirement of such shares in lieu of or as a credit
against any sinking fund retirement required by this paragraph (3);
(4) The shares of the Series R Preferred Stock shall be called
for redemption for the sinking fund as required by paragraph (3) above
in the manner prescribed for redemption of shares of the Preferred
Stock of this Company at the option of the Board of Directors of this
Company, but only when, as and if directed by resolution of the Board
of Directors and subject to any applicable restrictions of law. In no
event, however, shall any shares of the Series R Preferred Stock be
called for redemption for the sinking fund unless and until full
dividends accrued on all outstanding shares of all series of Preferred
Stock and Preferred Stock A of this Company, other than shares
previously or then to be called for redemption, shall have been paid or
declared and set apart for payment for all past dividend periods ending
on or before the redemption date. Nevertheless, the obligation of this
Company to redeem shares of the Series R Preferred Stock annually
commencing on March 16, 1998, pursuant to paragraph (3) above, shall be
cumulative and, so long as any shares of the Series R Preferred Stock
shall be outstanding, this Company shall not declare any dividend on
the Common Stock, Preference Stock or any other stock ranking as to
dividends or assets junior to the Preferred Stock or the Preferred
Stock A or make any payment on account of, or set apart money for a
sinking or other analogous fund for, the purchase, redemption or other
retirement of any shares of Common Stock, Preference Stock or other
such junior stock, or make any distribution in respect thereof, either
directly or indirectly, and whether in cash or property or in
obligations or stock of this Company (other than stock ranking as to
dividends and assets junior to the Preferred Stock or the Preferred
Stock A), unless at the date of declaration in the case of any such
dividend, or at the date of any such other payment, setting apart or
distribution, no sinking fund retirement required by paragraph (3)
above shall be in arrears;
(5) This Company may, at its option, on March 16, 1998 and on
each March 16 thereafter to and including March 16, 2017, redeem 42,500
shares of the Series R Preferred Stock, or any lesser number of such
shares constituting a multiple of 1,000, in addition to shares then to
be redeemed for the sinking fund pursuant to paragraph (3) above, at a
price of $100.00 per share, plus, in each case, all accrued and unpaid
dividends thereon to the redemption date, which privilege shall be
noncumulative; and
(6) The Series R Preferred Stock shall not be convertible by
the holders thereof into stock of any other class or classes or into
one or more series of the same class or of another class or classes.
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6. 7.85% CUMULATIVE PREFERRED STOCK, SERIES S
(A) The 7.85% Cumulative Preferred Stock, Series S, consists of 600,000
shares of the par value of $100 each (Series S Preferred Stock).
(B) The variations in the rights and preferences of the Series S
Preferred Stock which are permitted under the provisions of Article IV(a) of the
Articles of Incorporation of this Company are as follows:
(1) The annual dividend rate for the Series S Preferred Stock
shall be 7.85% per annum cumulative from and after the date of issuance
and dividends at that rate, when, as and if declared by the Board of
Directors, shall be payable quarterly on the 16th day of March, June,
September and December of each year (or, if any such day shall not be a
business day, on the next succeeding business day) with the initial
dividend payable September 16, 1992 covering the full period from the
date of issuance through such date;
(2) The Series S Preferred Stock shall not be redeemable prior
to September 16, 2002. Thereafter, the redemption price for the Series
S Preferred Stock shall be (i) $103.93 per share if redeemed beginning
September 16, 2002 and prior to September 16, 2003; (ii) $103.53 per
share if redeemed beginning September 16, 2003 and prior to September
16, 2004; (iii) $103.14 per share if redeemed beginning September 16,
2004 and prior to September 16, 2005; (iv) $102.75 per share if
redeemed beginning September 16, 2005 and prior to September 16, 2006;
(v) $102.36 per share if redeemed beginning September 16, 2006 and
prior to September 16, 2007; (vi) $101.96 per share if redeemed
beginning September 16, 2007 and prior to September 16, 2008; (vii)
$101.57 per share if redeemed beginning September 16, 2008 and prior to
September 16, 2009; (viii) $101.18 per share if redeemed beginning
September 16, 2009 and prior to September 16, 2010; (ix) $100.79 per
share if redeemed beginning September 16, 2010 and prior to September
16, 2011; (x) $100.39 per share if redeemed beginning September 16,
2011 and prior to September 16, 2012; (xi) $100.00 per share if
redeemed on and after September 16, 2012, plus, in each case, all
accrued and unpaid dividends thereon to the redemption date; and
(3) The Series S Preferred Stock shall not be convertible by
the holders thereof into stock of any other class or classes or into
one or more series of the same class or of another class or classes.
7. 6.20% CUMULATIVE PREFERRED STOCK, SERIES T
(A) The 6.20% Cumulative Preferred Stock, Series T, consists of 130,000
shares of the par value of $100 each (Series T Preferred Stock).
(B) The variations in the rights and preferences of the Series T
Preferred Stock which are permitted under the provisions of Article IV(a) of the
Articles of Incorporation of this Company are as follows:
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(1) The annual dividend rate for the Series T Preferred Stock
shall be 6.20% per annum cumulative from and after the date of issuance
and dividends at that rate, when, as and if declared by the Board of
Directors, shall be payable quarterly on the 16th day of March, June,
September and December of each year (or, if any such day shall not be a
business day, on the next succeeding business day) with the initial
dividend payable March 16, 1993 covering the full period from the date
of issuance through such date;
(2) The Series T Preferred Stock shall not be redeemable prior
to December 16, 1999. The Series T Preferred Stock shall be redeemable,
beginning on December 16, 1999, at the option of the Company, in whole
or in part, at $100 per share, plus all accrued and unpaid dividends
thereon to the redemption date;
(3) As a sinking fund for the retirement of the Series T
Preferred Stock, subject to the provisions of paragraph (4) below, on
December 16, 2000, this Company shall redeem all shares of the Series T
Preferred Stock then outstanding at a price of $100 per share, plus all
accrued and unpaid dividends thereon to the redemption date;
(4) The shares of the Series T Preferred Stock shall be called
for redemption for the sinking fund as required by paragraph (3) above
in the manner prescribed for redemption of shares of the Preferred
Stock of this Company at the option of the Board of Directors of this
Company, but only when, as and if directed by resolution of the Board
of Directors and subject to any applicable restrictions of law. In no
event, however, shall any shares of the Series T Preferred Stock be
called for redemption for the sinking fund unless and until full
dividends accrued on all outstanding shares of all series of Preferred
Stock and Preferred Stock A of this Company, other than shares
previously or then to be called for redemption, shall have been paid or
declared and set apart for payment for all past dividend periods ending
on or before the redemption date. In any event, this Company shall not
declare any dividend on the Common Stock, Preference Stock or any other
stock ranking as to dividends or assets junior to the Preferred Stock
or the Preferred Stock A or make any payment on account of, or set
apart money for a sinking or other analogous fund for, the purchase,
redemption or other retirement of any shares of Common Stock,
Preference Stock or other such junior stock, or make any distribution
in respect thereof, either directly or indirectly, and whether in cash
or property or in obligations or stock of this Company (other than
stock ranking as to dividends and assets junior to the Preferred Stock
or the Preferred Stock A), unless at the date of declaration in the
case of any such dividend, or at the date of any such other payment,
setting apart or distribution, the sinking fund retirement required by
paragraph (3) above shall have been fully effected by this Company; and
(5) The Series T Preferred Stock shall not be convertible by
the holders thereof into stock of any other class or classes or into
one or more series of the same class or of another class or classes.
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8. 6.30% CUMULATIVE PREFERRED STOCK, SERIES U
(A) The 6.30% Cumulative Preferred Stock, Series U, consists of 130,000
shares of the par value of $100 each (Series U Preferred Stock).
(B) The variations in the rights and preferences of the Series U
Preferred Stock which are permitted under the provisions of Article IV(a) of the
Articles of Incorporation of this Company are as follows:
(1) The annual dividend rate for the Series U Preferred Stock
shall be 6.30% per annum cumulative from and after the date of issuance
and dividends at that rate, when, as and if declared by the Board of
Directors, shall be payable quarterly on the 16th day of March, June,
September and December of each year (or, if any such day shall not be a
business day, on the next succeeding business day) with the initial
dividend payable March 16, 1993 covering the full period from the date
of issuance through such date;
(2) The Series U Preferred Stock shall not be redeemable prior
to December 16, 2000. The Series U Preferred Stock shall be redeemable,
beginning on December 16, 2000, at the option of the Company, in whole
or in part, at $100 per share, plus all accrued and unpaid dividends
thereon to the redemption date;
(3) As a sinking fund for the retirement of the Series U
Preferred Stock, subject to the provisions of paragraph (4) below, on
December 16, 2001, this Company shall redeem all shares of the Series U
Preferred Stock then outstanding at a price of $100 per share, plus all
accrued and unpaid dividends thereon to the redemption date;
(4) The shares of the Series U Preferred Stock shall be called
for redemption for the sinking fund as required by paragraph (3) above
in the manner prescribed for redemption of shares of the Preferred
Stock of this Company at the option of the Board of Directors of this
Company, but only when, as and if directed by resolution of the Board
of Directors and subject to any applicable restrictions of law. In no
event, however, shall any shares of the Series U Preferred Stock be
called for redemption for the sinking fund unless and until full
dividends accrued on all outstanding shares of all series of Preferred
Stock and Preferred Stock A of this Company, other than shares
previously or then to be called for redemption, shall have been paid or
declared and set apart for payment for all past dividend periods ending
on or before the redemption date. In any event, this Company shall not
declare any dividend on the Common Stock, Preference Stock or any other
stock ranking as to dividends or assets junior to the Preferred Stock
or the Preferred Stock A or make any payment on account of, or set
apart money for a sinking or other analogous fund for, the purchase,
redemption or other retirement of any shares of Common Stock,
Preference Stock or other such junior stock, or make any distribution
in respect thereof, either directly or indirectly, and whether in cash
or property or in obligations or stock of this Company (other than
stock ranking as to dividends and assets junior to the Preferred Stock
or the Preferred Stock A), unless at the date of declaration in the
case of any such dividend, or at the date of any such other
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<PAGE>
payment, setting apart or distribution, the sinking fund retirement
required by paragraph (3) above shall have been fully effected by this
Company; and
(5) The Series U Preferred Stock shall not be convertible by
the holders thereof into stock of any other class or classes or into
one or more series of the same class or of another class or classes.
9. 6.40% CUMULATIVE PREFERRED STOCK, SERIES V
(A) The 6.40% Cumulative Preferred Stock, Series V, consists of 130,000
shares of the par value of $100 each (Series V Preferred Stock).
(B) The variations in the rights and preferences of the Series V
Preferred Stock which are permitted under the provisions of Article IV(a) of the
Articles of Incorporation of this Company are as follows:
(1) The annual dividend rate for the Series V Preferred Stock
shall be 6.40% per annum cumulative from and after the date of issuance
and dividends at that rate, when, as and if declared by the Board of
Directors, shall be payable quarterly on the 16th day of March, June,
September and December of each year (or, if any such day shall not be a
business day, on the next succeeding business day) with the initial
dividend payable March 16, 1993 covering the full period from the date
of issuance through such date;
(2) The Series V Preferred Stock shall not be redeemable prior
to December 16, 2001. The Series V Preferred Stock shall be redeemable,
beginning on December 16, 2001, at the option of the Company, in whole
or in part, at $100 per share, plus all accrued and unpaid dividends
thereon to the redemption date;
(3) As a sinking fund for the retirement of the Series V
Preferred Stock, subject to the provisions of paragraph (4) below, on
December 16, 2002, this Company shall redeem all shares of the Series V
Preferred Stock then outstanding at a price of $100 per share, plus all
accrued and unpaid dividends thereon to the redemption date;
(4) The shares of the Series V Preferred Stock shall be called
for redemption for the sinking fund as required by paragraph (3) above
in the manner prescribed for redemption of shares of the Preferred
Stock of this Company at the option of the Board of Directors of this
Company, but only when, as and if directed by resolution of the Board
of Directors and subject to any applicable restrictions of law. In no
event, however, shall any shares of the Series V Preferred Stock be
called for redemption for the sinking fund unless and until full
dividends accrued on all outstanding shares of all series of Preferred
Stock and Preferred Stock A of this Company, other than shares
previously or then to be called for redemption, shall have been paid or
declared and set apart for payment for all past dividend periods ending
on or before the redemption date. In any event, this Company shall not
declare any dividend on the Common Stock, Preference Stock or any other
stock ranking as to dividends or assets junior to the
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<PAGE>
Preferred Stock or the Preferred Stock A or make any payment on account
of, or set apart money for a sinking or other analogous fund for, the
purchase, redemption or other retirement of any shares of Common Stock,
Preference Stock or other such junior stock, or make any distribution
in respect thereof, either directly or indirectly, and whether in cash
or property or in obligations or stock of this Company (other than
stock ranking as to dividends and assets junior to the Preferred Stock
or the Preferred Stock A), unless at the date of declaration in the
case of any such dividend, or at the date of any such other payment,
setting apart or distribution, the sinking fund retirement required by
paragraph (3) above shall have been fully effected by this Company; and
(5) The Series V Preferred Stock shall not be convertible by
the holders thereof into stock of any other class or classes or into
one or more series of the same class or of another class or classes.
10. 7% CUMULATIVE PREFERRED STOCK, SERIES W
(A) The 7% Cumulative Preferred Stock, Series W, consists of 500,000
shares of the par value of $100 each (Series W Preferred Stock).
(B) The variations in the rights and preferences of the Series W
Preferred Stock which are permitted under the provisions of Article IV(a) of the
Articles of Incorporation of this Company are as follows:
(1) The annual dividend rate for the Series W Preferred Stock
shall be 7% per annum cumulative from and after the date of issuance
and dividends at that rate, when, as and if declared by the Board of
Directors, shall be payable quarterly on the 16th day of March, June,
September and December of each year (or, if any such day shall not be a
business day, on the next succeeding business day) with the initial
dividend payable June 16, 1993 covering the full period from the date
of issuance through such date;
(2) The Series W Preferred Stock shall not be redeemable prior
to March 16, 2003. Thereafter, the redemption price for the Series W
Preferred Stock shall be (i) $103.50 per share if redeemed during the
twelve-month period beginning March 16, 2003; (ii) $103.15 per share if
redeemed during the twelve-month period beginning March 16, 2004; (iii)
$102.80 per share if redeemed during the twelve-month period beginning
March 16, 2005; (iv) $102.45 per share if redeemed during the
twelve-month period beginning March 16, 2006; (v) $102.10 per share if
redeemed during the twelve-month period beginning March 16, 2007; (vi)
$101.75 per share if redeemed during the twelve-month period beginning
March 16, 2008; (vii) $101.40 per share if redeemed during the
twelve-month period beginning March 16, 2009; (viii) $101.05 per share
if redeemed during the twelve-month period beginning March 16, 2010;
(ix) $100.70 per share if redeemed during the twelve-month period
beginning March 16, 2011; (x) $100.35 per share if redeemed during the
twelve-month period beginning March 16, 2012; and (xi) thereafter at
$100.00 per share, plus, in each case, all accrued and unpaid dividends
thereon to the redemption date; and
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<PAGE>
(3) The Series W Preferred Stock shall not be convertible by
the holders thereof into stock of any other class or classes or into
one or more series of the same class or of another class or classes.
11. 6.75% CUMULATIVE PREFERRED STOCK, SERIES X
(A) The 6.75% Cumulative Preferred Stock, Series X, consists of 500,000
shares of the par value of $100 each (Series X Preferred Stock);
(B) The variations in the rights and preferences of the Series X
Preferred Stock which are permitted under the provisions of Article IV(a) of the
Articles of Incorporation of this Company are as follows:
(1) The annual dividend rate for the Series X Preferred Stock
shall be 6.75% per annum cumulative from and after the date of issuance
and dividends at that rate, when, as and if declared by the Board of
Directors, shall be payable quarterly on the 16th day of March, June,
September and December of each year (or, if any such day shall not be a
business day, on the next succeeding business day) with the initial
dividend payable June 16, 1993 covering the full period from the date
of issuance through such date;
(2) The Series X Preferred Stock shall not be redeemable prior
to June 16, 2003. Thereafter, the redemption price for the Series X
Preferred Stock shall be (i) $103.94 per share if redeemed beginning
June 16, 2003 and prior to June 16, 2004; (ii) $103.66 per share if
redeemed beginning June 16, 2004 and prior to June 16, 2005; (iii)
$103.38 per share if redeemed beginning June 16, 2005 and prior to June
16, 2006; (iv) $103.09 per share if redeemed beginning June 16, 2006
and prior to June 16, 2007; (v) $102.81 per share if redeemed beginning
June 16, 2007 and prior to June 16, 2008; (vi) $102.53 per share if
redeemed beginning June 16, 2008 and prior to June 16, 2009; (vii)
$102.25 per share if redeemed beginning June 16, 2009 and prior to June
16, 2010; (viii) $101.97 per share if redeemed beginning June 16, 2010
and prior to June 16, 2011; (ix) $101.69 per share if redeemed
beginning June 16, 2011 and prior to June 16, 2012; (x) $101.41 per
share if redeemed beginning June 16, 2012 and prior to June 16, 2013;
(xi) $101.13 per share if redeemed beginning June 16, 2013 and prior to
June 16, 2014; (xii) $100.84 per share if redeemed beginning June 16,
2014 and prior to June 16, 2015; (xiii) $100.56 per share if redeemed
beginning June 16, 2015 and prior to June 16, 2016; (xiv) $100.28 per
share if redeemed beginning June 16, 2016 and prior to June 16, 2017;
and (xv) $100.00 per share, if redeemed on and after June 16, 2017,
plus, in each case, all accrued and unpaid dividends thereon to the
redemption date;
(3) As a sinking fund for the retirement of the Series X
Preferred Stock, subject to the provisions of paragraph (4) below, on
June 16, 2003 and on each June 16 thereafter to and including June 16,
2027 (so long as any shares of the Series X Preferred Stock are
outstanding), this Company shall redeem 20,000 shares of the Series X
Preferred Stock (or the number of shares of the Series X Preferred
Stock then outstanding if less than 20,000) at a price of $100.00 per
share, plus all accrued and unpaid dividends
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<PAGE>
thereon to the redemption date. Shares of the Series X Preferred Stock
purchased by this Company may be credited against any sinking fund
retirement required by this paragraph (3). No redemption of shares of
the Series X Preferred Stock pursuant to paragraph (2) above shall
constitute a retirement of such shares in lieu of or as a credit
against any sinking fund retirement required by this paragraph (3);
(4) The shares of the Series X Preferred Stock shall be called
for redemption for the sinking fund as required by paragraph (3) above
in the manner prescribed for redemption of shares of the Preferred
Stock of this Company at the option of the Board of Directors of this
Company, but only when, as and if directed by resolution of the Board
of Directors and subject to any applicable restrictions of law. In no
event, however, shall any shares of the Series X Preferred Stock be
called for redemption for the sinking fund unless and until full
dividends accrued on all outstanding shares of all series of Preferred
Stock and Preferred Stock A of this Company, other than shares
previously or then to be called for redemption, shall have been paid or
declared and set apart for payment for all past dividend periods ending
on or before the redemption date. Nevertheless, the obligation of this
Company to redeem shares of the Series X Preferred Stock annually
commencing on June 16, 2003, pursuant to paragraph (3) above, shall be
cumulative and, so long as any shares of the Series X Preferred Stock
shall be outstanding, this Company shall not declare any dividend on
the Common Stock, Preference Stock or any other stock ranking as to
dividends or assets junior to the Preferred Stock or the Preferred
Stock A or make any payment on account of, or set apart money for a
sinking or other analogous fund for, the purchase, redemption or other
retirement of any shares of Common Stock, Preference Stock or other
such junior stock, or make any distribution in respect thereof, either
directly or indirectly, and whether in cash or property or in
obligations or stock of this Company (other than stock ranking as to
dividends and assets junior to the Preferred Stock or the Preferred
Stock A), unless at the date of declaration in the case of any such
dividend, or at the date of any such other payment, setting apart or
distribution, no sinking fund retirement required by paragraph (3)
above shall be in arrears;
(5) This Company may, at its option, on June 16, 2003 and on
each June 16 thereafter to and including June 16, 2027, redeem 20,000
shares of the Series X Preferred Stock, or any lesser number of such
shares constituting a multiple of 1,000, in addition to shares then to
be redeemed for the sinking fund pursuant to paragraph (3) above, at a
price of $100.00 per share, plus, in each case, all accrued and unpaid
dividends thereon to the redemption date, which privilege shall be
noncumulative; and
(6) The Series X Preferred Stock shall not be convertible by
the holders thereof into stock of any other class or classes or into
one or more series of the same class or of another class or classes.
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<PAGE>
12. 7.04% CUMULATIVE PREFERRED STOCK, SERIES Y
(A) The 7.04% Cumulative Preferred Stock, Series Y, consists of 600,000
shares of the par value of $100 each (Series Y Preferred Stock).
(B) The variations in the rights and preferences of the Series Y
Preferred Stock which are permitted under the provisions of Article IV(a) of the
Articles of Incorporation of this Company are as follows:
(1) The annual dividend rate for the Series Y Preferred Stock
shall be 7.04% per annum cumulative from and after the date of issuance
and dividends at that rate, when, as and if declared by the Board of
Directors, shall be payable quarterly on the 16th day of March, June,
September and December of each year (or, if any such day shall not be a
business day, on the next succeeding business day) with the initial
dividend payable September 16, 1993 covering the full period from the
date of issuance through such date;
(2) The Series Y Preferred Stock shall not be redeemable prior
to June 16, 2003. Thereafter, the redemption price for the Series Y
Preferred Stock shall be (i) $103.52 per share if redeemed during the
twelve-month period beginning June 16, 2003; (ii) $103.17 per share if
redeemed during the twelve-month period beginning June 16, 2004; (iii)
$102.82 per share if redeemed during the twelve-month period beginning
June 16, 2005; (iv) $102.46 per share if redeemed during the
twelve-month period beginning June 16, 2006; (v) $102.11 per share if
redeemed during the twelve-month period beginning June 16, 2007; (vi)
$101.76 per share if redeemed during the twelve-month period beginning
June 16, 2008; (vii) $101.41 per share if redeemed during the
twelve-month period beginning June 16, 2009; (viii) $101.06 per share
if redeemed during the twelve-month period beginning June 16, 2010;
(ix) $100.70 per share if redeemed during the twelve-month period
beginning June 16, 2011; (x) $100.35 per share if redeemed during the
twelve-month period beginning June 16, 2012; and (xi) thereafter at
$100.00 per share, plus, in each case, all accrued and unpaid dividends
thereon to the redemption date; and
(3) The Series Y Preferred Stock shall not be convertible by
the holders thereof into stock of any other class or classes or into
one or more series of the same class or of another class or classes.
II. PREFERRED STOCK A ($25 PAR VALUE)
1. 7.72% CUMULATIVE PREFERRED STOCK A, 1992 SERIES
(A) The 7.72% Cumulative Preferred Stock A, 1992 Series, consists of
1,600,000 shares of the par value of $25 each (Preferred Stock A, 1992 Series).
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<PAGE>
(B) The variations in the rights and preferences of the Preferred Stock
A, 1992 Series, which are permitted under the provisions of Article IV(a) of the
Articles of Incorporation of this Company are as follows:
(1) The annual dividend rate for the Preferred Stock A, 1992
Series, shall be 7.72% per annum cumulative from and after the date of
issuance and dividends at that rate, when, as and if declared by the
Board of Directors, shall be payable quarterly on the 16th day of
March, June, September and December of each year (or, if any such day
shall not be a business day, on the next succeeding business day) with
the initial dividend payable September 16, 1992 covering the full
period from the date of issuance through such date;
(2) The Preferred Stock A, 1992 Series, shall not be
redeemable prior to September 16, 1997. Thereafter, the redemption
price for the Preferred Stock A, 1992 Series, shall be (i) $26.93 per
share if redeemed beginning September 16, 1997 and prior to September
16, 2002; (ii) $26.75 per share if redeemed beginning September 16,
2002 and prior to September 16, 2003; (iii) $26.58 per share if
redeemed beginning September 16, 2003 and prior to September 16, 2004;
(iv) $26.40 per share if redeemed beginning September 16, 2004 and
prior to September 16, 2005; (v) $26.23 per share if redeemed beginning
September 16, 2005 and prior to September 16, 2006; (vi) $26.05 per
share if redeemed beginning September 16, 2006 and prior to September
16, 2007; (vii) $25.88 per share if redeemed beginning September 16,
2007 and prior to September 16, 2008; (viii) $25.70 per share if
redeemed beginning September 16, 2008 and prior to September 16, 2009;
(ix) $25.53 per share if redeemed beginning September 16, 2009 and
prior to September 16, 2010; (x) $25.35 per share if redeemed beginning
September 16, 2010 and prior to September 16, 2011; (xi) $25.18 per
share if redeemed beginning September 16, 2011 and prior to September
16, 2012; and (xii) $25.00 per share if redeemed on and after September
16, 2012, plus, in each case, all accrued and unpaid dividends thereon
to the redemption date;
(3) There shall not be any sinking fund provided for the
purpose of redemption of the Preferred Stock A, 1992 Series; and
(4) The Preferred Stock A, 1992 Series, shall not be
convertible by the holders thereof into stock of any other class or
classes or into one or more series of the same class or of another
class or classes.
2. 5.95% CUMULATIVE PREFERRED STOCK A, 1992 SERIES B
(A) The 5.95% Cumulative Preferred Stock A, 1992 Series B, consists of
800,000 shares of the par value of $25 each (Preferred Stock A, 1992 Series B);
(B) The variations in the rights and preferences of the Preferred Stock
A, 1992 Series B, which are permitted under the provisions of Article IV(a) of
the Articles of Incorporation of this Company are as follows:
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<PAGE>
(1) The annual dividend rate for the Preferred Stock A, 1992
Series B, shall be 5.95% per annum cumulative from and after the date
of issuance and dividends at that rate, when, as and if declared by the
Board of Directors, shall be payable quarterly on the 16th day of
March, June, September and December of each year (or, if any such day
shall not be a business day, on the next succeeding business day) with
the initial dividend payable December 16, 1992 covering the full period
from the date of issuance through such date;
(2) The Preferred Stock A, 1992 Series B, shall not be
redeemable prior to September 16, 1998. The Preferred Stock A, 1992
Series B, shall be redeemable, beginning on September 16, 1998, at the
option of the Company, in whole or in part, at $25.00 per share plus
all accrued and unpaid dividends thereon to the redemption date;
(3) As a sinking fund for the retirement of the Preferred
Stock A, 1992 Series B, subject to the provisions of paragraph (4)
below, on September 16, 1999, this Company shall redeem all shares of
the Preferred Stock A, 1992 Series B, then outstanding at a price of
$25.00 per share, plus all accrued and unpaid dividends thereon to the
redemption date;
(4) The shares of the Preferred Stock A, 1992 Series B, shall
be called for redemption for the sinking fund as required by paragraph
(3) above in the manner prescribed for redemption of shares of the
Preferred Stock A of this Company at the option of the Board of
Directors of this Company, but only when, as and if directed by
resolution of the Board of Directors and subject to any applicable
restrictions of law. In no event, however, shall any shares of the
Preferred Stock A, 1992 Series B, be called for redemption for the
sinking fund unless and until full dividends accrued on all outstanding
shares of all series of Preferred Stock and Preferred Stock A of this
Company, other than shares previously or then to be called for
redemption, shall have been paid or declared and set apart for payment
for all past dividend periods ending on or before the redemption date.
In any event, this Company shall not declare any dividend on the Common
Stock, Preference Stock or any other stock ranking as to dividends or
assets junior to the Preferred Stock or the Preferred Stock A or make
any payment on account of, or set apart money for a sinking or other
analogous fund for, the purchase, redemption or other retirement of any
shares of Common Stock, Preference Stock or other such junior stock, or
make any distribution in respect thereof, either directly or
indirectly, and whether in cash or property or in obligations or stock
of this Company (other than stock ranking as to dividends and assets
junior to the Preferred Stock or the Preferred Stock A), unless at the
date of declaration in the case of any such dividend, or at the date of
any such other payment, setting apart or distribution, the sinking fund
retirement required by paragraph (3) above shall have been fully
effected by this Company;
(5) The Preferred Stock A, 1992 Series B, shall not be
convertible by the holders thereof into stock of any other class or
classes or into one or more series of the same class or of another
class or classes.
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<PAGE>
3. 6.10% CUMULATIVE PREFERRED STOCK A, 1992 SERIES C
(A) The 6.10% Cumulative Preferred Stock A, 1992 Series C, consists of
800,000 shares of the par value of $25 each (Preferred Stock A, 1992 Series C).
(B) The variations in the rights and preferences of the Preferred Stock
A, 1992 Series C, which are permitted under the provisions of Article IV(a) of
the Articles of Incorporation of this Company are as follows:
(1) The annual dividend rate for the Preferred Stock A, 1992
Series C, shall be 6.10% per annum cumulative from and after the date
of issuance and dividends at that rate, when, as and if declared by the
Board of Directors, shall be payable quarterly on the 16th day of
March, June, September and December of each year (or, if any such day
shall not be a business day, on the next succeeding business day) with
the initial dividend payable December 16, 1992 covering the full period
from the date of issuance through such date;
(2) The Preferred Stock A, 1992 Series C, shall not be
redeemable prior to September 16, 1999. The Preferred Stock A, 1992
Series C, shall be redeemable, beginning on September 16, 1999, at the
option of the Company, in whole or in part, at $25.00 per share plus
all accrued and unpaid dividends thereon to the redemption date;
(3) As a sinking fund for the retirement of the Preferred
Stock A, 1992 Series C, subject to the provisions of paragraph (4)
below, on September 16, 2000, this Company shall redeem all shares of
the Preferred Stock A, 1992 Series C, then outstanding at a price of
$25.00 per share, plus all accrued and unpaid dividends thereon to the
redemption date;
(4) The shares of the Preferred Stock A, 1992 Series C, shall
be called for redemption for the sinking fund as required by paragraph
(3) above in the manner prescribed for redemption of shares of the
Preferred Stock A of this Company at the option of the Board of
Directors of this Company, but only when, as and if directed by
resolution of the Board of Directors and subject to any applicable
restrictions of law. In no event, however, shall any shares of the
Preferred Stock A, 1992 Series C, be called for redemption for the
sinking fund unless and until full dividends accrued on all outstanding
shares of all series of Preferred Stock and Preferred Stock A of this
Company, other than shares previously or then to be called for
redemption, shall have been paid or declared and set apart for payment
for all past dividend periods ending on or before the redemption date.
In any event, this Company shall not declare any dividend on the Common
Stock, Preference Stock or any other stock ranking as to dividends or
assets junior to the Preferred Stock or the Preferred Stock A or make
any payment on account of, or set apart money for a sinking or other
analogous fund for, the purchase, redemption or other retirement of any
shares of Common Stock, Preference Stock or other such junior stock, or
make any distribution in respect thereof, either directly or
indirectly, and whether in cash or property or in obligations or stock
of this Company (other than stock
A-35
<PAGE>
ranking as to dividends and assets junior to the Preferred Stock or the
Preferred Stock A), unless at the date of declaration in the case of
any such dividend, or at the date of any such other payment, setting
apart or distribution, the sinking fund retirement required by
paragraph (3) above shall have been fully effected by this Company;
(5) The Preferred Stock A, 1992 Series C, shall not be
convertible by the holders thereof into stock of any other class or
classes or into one or more series of the same class or of another
class or classes.
4. 6.20% CUMULATIVE PREFERRED STOCK A, 1992 SERIES D
(A) The 6.20% Cumulative Preferred Stock A, 1992 Series D, consists of
800,000 shares of the par value of $25 each (Preferred Stock A, 1992 Series D).
(B) The variations in the rights and preferences of the Preferred Stock
A, 1992 Series D, which are permitted under the provisions of Article IV(a) of
the Articles of Incorporation of this Company are as follows:
(1) The annual dividend rate for the Preferred Stock A, 1992
Series D, shall be 6.20% per annum cumulative from and after the date
of issuance and dividends at that rate, when, as and if declared by the
Board of Directors, shall be payable quarterly on the 16th day of
March, June, September and December of each year (or, if any such day
shall not be a business day, on the next succeeding business day) with
the initial dividend payable December 16, 1992 covering the full period
from the date of issuance through such date;
(2) The Preferred Stock A, 1992 Series D, shall not be
redeemable prior to September 16, 2000. The Preferred Stock A, 1992
Series D, shall be redeemable, beginning on September 16, 2000, at the
option of the Company, in whole or in part, at $25.00 per share plus
all accrued and unpaid dividends thereon to the redemption date;
(3) As a sinking fund for the retirement of the Preferred
Stock A, 1992 Series D, subject to the provisions of paragraph (4)
below, on September 16, 2001, this Company shall redeem all shares of
the Preferred Stock A, 1992 Series D, then outstanding at a price of
$25.00 per share, plus all accrued and unpaid dividends thereon to the
redemption date;
(4) The shares of the Preferred Stock A, 1992 Series D, shall
be called for redemption for the sinking fund as required by paragraph
(3) above in the manner prescribed for redemption of shares of the
Preferred Stock A of this Company at the option of the Board of
Directors of this Company, but only when, as and if directed by
resolution of the Board of Directors and subject to any applicable
restrictions of law. In no event, however, shall any shares of the
Preferred Stock A, 1992 Series D, be called for redemption for the
sinking fund unless and until full dividends accrued on all outstanding
shares of all series of Preferred Stock and Preferred Stock A of this
Company,
A-36
<PAGE>
other than shares previously or then to be called for redemption, shall
have been paid or declared and set apart for payment for all past
dividend periods ending on or before the redemption date. In any event,
this Company shall not declare any dividend on the Common Stock,
Preference Stock or any other stock ranking as to dividends or assets
junior to the Preferred Stock or the Preferred Stock A or make any
payment on account of, or set apart money for a sinking or other
analogous fund for, the purchase, redemption or other retirement of any
shares of Common Stock, Preference Stock or other such junior stock, or
make any distribution in respect thereof, either directly or
indirectly, and whether in cash or property or in obligations or stock
of this Company (other than stock ranking as to dividends and assets
junior to the Preferred Stock or the Preferred Stock A), unless at the
date of declaration in the case of any such dividend, or at the date of
any such other payment, setting apart or distribution, the sinking fund
retirement required by paragraph (3) above shall have been fully
effected by this Company;
(5) The Preferred Stock A, 1992 Series D, shall not be
convertible by the holders thereof into stock of any other class or
classes or into one or more series of the same class or of another
class or classes.
5. 6.375% CUMULATIVE PREFERRED STOCK A, 1993 SERIES
(A) The 6.375% Cumulative Preferred Stock A, 1993 Series, consists of
2,400,000 shares of the par value of $25 each (Preferred Stock A, 1993 Series).
(B) The variations in the rights and preferences of the Preferred Stock
A, 1993 Series, which are permitted under the provisions of Article IV(a) of the
Articles of Incorporation of this Company are as follows:
(1) The annual dividend rate for the Preferred Stock A, 1993
Series, shall be 6.375% per annum cumulative from and after the date of
issuance and dividends at that rate, when, as and if declared by the
Board of Directors, shall be payable quarterly on the 16th day of
March, June, September and December of each year (or, if any such day
shall not be a business day, on the next succeeding business day) with
the initial dividend payable March 16, 1994 covering the full period
from the date of issuance through such date;
(2) The Preferred Stock A, 1993 Series, shall not be
redeemable prior to December 16, 2003. Thereafter, the redemption price
for the Preferred Stock A, 1993 Series, shall be (i) $25.80 per share
if redeemed beginning December 16, 2003 and prior to December 16, 2004;
(ii) $25.72 per share if redeemed beginning December 16, 2004 and prior
to December 16, 2005; (iii) $25.64 per share if redeemed beginning
December 16, 2005 and prior to December 16, 2006; (iv) $25.56 per share
if redeemed beginning December 16, 2006 and prior to December 16, 2007;
(v) $25.48 per share if redeemed beginning December 16, 2007 and prior
to December 16, 2008; (vi) $25.40 per share if redeemed beginning
December 16, 2008 and prior to December 16, 2009; (vii) $25.32 per
share if redeemed beginning December 16, 2009 and prior to December 16,
2010; (viii)
A-37
<PAGE>
$25.24 per share if redeemed beginning December 16, 2010 and prior to
December 16, 2011; (ix) $25.16 per share if redeemed beginning December
16, 2011 and prior to December 16, 2012; (x) $25.08 per share if
redeemed beginning December 16, 2012 and prior to December 16, 2013;
and (xi) $25.00 per share if redeemed on and after December 16, 2013,
plus, in each case, all accrued and unpaid dividends thereon to the
redemption date;
(3) There shall not be any sinking fund provided for the
purpose of redemption of the Preferred Stock A, 1993 Series; and
(4) The Preferred Stock A, 1993 Series, shall not be
convertible by the holders thereof into stock of any other class or
classes or into one or more series of the same class or of another
class or classes.
* * * * *
A-38
<PAGE>
EXHIBIT 5
June 19, 1997
Duke Energy Corporation
422 South Church Street
Charlotte, NC 28242-0001
Gentlemen:
I am a Deputy General Counsel of Duke Energy Corporation, a
North Carolina corporation (the "Company"), and in such capacity I have examined
the Company's Registration Statement on Form S-8 (the "Registration Statement")
under the Securities Act of 1933, as amended (the "1933 Act"), for the
registration of 3,400,000 shares of the Company's Common Stock, without par
value (the "Shares"), which Shares will be issued under the Plans of PanEnergy
Corp and Associated Natural Gas Corporation referred to therein (the "Plans").
I have examined and am familiar with originals or copies,
certified or otherwise identified to my satisfaction, of such documents,
corporate records, certificates of public officials and officers of the Company
and such other instruments as I have deemed necessary or appropriate as a basis
for the opinions expressed below.
Based on the foregoing, I am of the opinion that the Shares
are duly authorized and when the Shares have been issued and delivered in
accordance with the terms of the applicable Plan, such Shares will be legally
issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as Exhibit 5 to
the Registration Statement. In giving such consent, I do not thereby admit that
I come within the category of persons whose consent is required under Section 7
of the 1933 Act, as amended, or the rules and regulations of the Securities and
Exchange Commission thereunder.
Very truly yours,
/s/ Peter C. Buck
-----------------
Peter C. Buck
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this
Registration Statement on Form S-8 of Duke Energy Corporation of our report
dated February 7, 1997 appearing in the annual report on Form 10-K of Duke
Power Company for the year ended December 31, 1996.
Deloitte & Touche LLP
- ---------------------
Deloitte & Touche LLP
Charlotte, North Carolina
June 19, 1997
EXHIBIT 23(B)
INDEPENDENT AUDITORS' CONSENT
We consent to incorporation by reference in this registration
statement on Form S-8 of Duke Energy Corporation of our
report dated January 17, 1997 appearing in the annual report on Form
10-K of PanEnergy Corp for the year ended December 31, 1996.
KPMG Peat Marwick LLP
------------------------------
KPMG Peat Marwick LLP
Houston, Texas
June 19, 1997
<PAGE>
EXHIBIT 23(C)
CONSENT OF COUNSEL
The consent of Peter C. Buck, Esq., is contained in his
opinion filed as Exhibit 5 to this Registration Statement.
Exhibit 24(A)
DUKE ENERGY CORPORATION
POWER OF ATTORNEY
Registration Statements under the Securities Act of 1933
with respect to up to 7,283,130 shares of Common Stock, without par value, of
Duke Energy Corporation to be issued in connection with
various employee benefit and/or stock purchase and dividend reinvestment plans
of said Duke Energy Corporation and its subsidiaries
(Registration Statements)
The undersigned DUKE ENERGY CORPORATION, a North Carolina corporation, and
certain of its officers and/or directors, do each hereby constitute and appoint
Richard J. Osborne, Robert S. Lilien and W. Edward Poe, Jr., and each of them,
to act as attorneys-in-fact for and in the respective names, places, and stead
of the undersigned, to execute, seal, sign, and file with Securities and
Exchange Commission the Registration Statements of said Duke Energy Corporation
and any and all amendments thereto, or amendments to existing Registration
Statements, hereby granting to said attorneys-in-fact, and each of them, full
power and authority to do and perform all and every act and thing whatsoever
requisite, necessary, or proper to be done in and about the premises, as fully
to all intents and purposes as the undersigned, or any of them, might or could
do if personally present, hereby ratifying and approving the acts of said
attorneys-in-fact.
Executed the 18th day of June, 1997.
DUKE ENERGY CORPORATION
By /s/ R. B. Priory
________________________________
Chairman and Chief Executive Officer
(Corporate Seal)
ATTEST:
/s/ Robert T. Lucas III
______________________________
Assistant Secretary
<PAGE>
/s/ R. B. Priory
________________________________ Chairman and Chief Executive Officer
R. B. Priory (Principal Executive Officer and Director)
/s/ Richard J. Osborne
______________________________ Executive Vice President and Chief Financial
Richard J. Osborne Officer (Principal Financial Officer)
/s/ Jeffrey L. Boyer
______________________________ Vice President and Corporate Controller
Jeffrey L. Boyer (Principal Accounting Officer)
/s/ Paul M. Anderson
______________________________ (Director)
Paul M. Anderson
/s/ G. Alex Bernhardt
______________________________ (Director)
G. Alex Bernhardt
/s/ Robert J. Brown
______________________________ (Director)
Robert J. Brown
/s/ William A. Coley
______________________________ (Director)
William A. Coley
/s/ William T. Esrey
______________________________ (Director)
William T. Esrey
/s/ Ann Maynard Gray
______________________________ (Director)
Ann Maynard Gray
/s/ Dennis R. Hendrix
______________________________ (Director)
Dennis R. Hendrix
<PAGE>
/s/ Harold S. Hook
______________________________ (Director)
Harold S. Hook
/s/ George Dean Johnson, Jr.
______________________________ (Director)
George Dean Johnson, Jr.
/s/ W. W. Johnson
______________________________ (Director)
W. W. Johnson
/s/ Max Lennon
______________________________ (Director)
Max Lennon
/s/ Leo E. Linbeck, Jr.
______________________________ (Director)
Leo E. Linbeck, Jr.
/s/ James G. Martin
______________________________ (Director)
James G. Martin
/s/ Buck Mickel
______________________________ (Director)
Buck Mickel
/s/ Russell M. Robinson, II
______________________________ (Director)
Russell M. Robinson, II
<Certified copy of resolution of the Board of Directors--
Exhibit 24(B)
DUKE ENERGY CORPORATION
CERTIFICATE
The undersigned officer of DUKE ENERGY CORPORATION, a North Carolina
corporation (the "Corporation"), does hereby certify that attached hereto is a
true and complete copy of a resolution adopted at a meeting of the Board of
Directors of the Corporation with respect to the Registration Statements, which
resolution is presently in full force and effect.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and affixed
the corporate seal of the Corporation this 19th day of June, 1997.
/s/ Robert T. Lucas III
-----------------------
Robert T. Lucas III
Assistant Secretary
(Corporate Seal)
FURTHER RESOLVED, that each officer and director who may be required to
execute such registration statements or amendments thereto or amendments to
existing registration statements (whether on behalf of the Corporation or as an
officer or director thereof or by attesting the seal of the Corporation or
otherwise) be and hereby is authorized to execute a power of attorney appointing
Richard J. Osborne, Robert S. Lilien and W. Edward Poe, Jr., and each of them,
as true and lawful attorneys and agents to execute in his or her name, place and
stead (in any such capacity) such registration statements or amendments thereto
or amendments to existing registration statements and all instruments necessary
or advisable in connection therewith, to attest the seal of the Corporation
thereon and to file the same with the Securities and Exchange Commission, each
of said attorneys and agents to have power to act with or without the others and
to have full power and authority to do and perform in the name and on behalf of
each of such officers and directors, or both, as the case may be, every act
whatsoever necessary or advisable to be done in the premises as fully and to all
intents and purposes as any such officer or director might or could do in
person;
