EXHIBIT A
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ARTICLES OF AMENDMENT
OF
PUBLIC SERVICE COMPANY OF
NORTH CAROLINA, INCORPORATED
The undersigned Corporation hereby submits these Articles of Amendment
(these "Articles of Amendment" or this "Certificate") for the purpose of
amending its Amended and Restated Charter pursuant to Section 55-6-02 of the
North Carolina Business Incorporation Act:
1. The name of the Corporation before amendment: Public Service
Company of North Carolina, Incorporated.
2. The name of the Corporation after amendment: Public Service
Company of North Carolina, Incorporated.
3. The Amended and Restated Charter of the Corporation is hereby
amended by adding the following Section 4 to Article EIGHTH:
4. SERIES A. A further additional series of Cumulative
Preferred Stock consists of a series designated as "Series A Cumulative
Preferred Stock" (hereinafter called the "Series A Preferred Stock"),
which initially consisted of 1,500,000 shares. The relative rights and
preferences of the Series A Preferred Stock were and shall continue to
be as follows:
(A) Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking
prior and superior to the shares of Series A Preferred Stock
with respect to dividends, the holders of shares of Series A
Preferred Stock shall be entitled to receive, when, as and, if
declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash
on the first day of January, April, July and October in each
year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount
per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share
amount of all cash dividends, and 100 times the aggregate per
share amount (payable in kind) of all non-cash dividends or
other distributions other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on
the Common Stock, par value $1.00 per share, of the
Corporation ("Common Stock") since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of
any share or fraction of a share of Series A Preferred Stock.
In the event that the Corporation, at any time after April 9,
1997 (the "Rights Declaration Date"), shall (i) declare any
dividend on Common Stock payable in shares of Common Stock,
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(ii) subdivide the outstanding Common Stock, or (iii) combine
the outstanding Common Stock into a smaller number of shares,
then in each such case, the amount to which holders of shares
of Series A Preferred Stock were entitled immediately prior to
such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as set forth herein, holders of Series A
Preferred Stock shall have no voting rights and their consent
shall not be required for taking any corporate action.
(C) Whenever quarterly dividends or other dividends
or distributions payable on the Series A Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series A Preferred Stock outstanding
shall have been paid in full, the Corporation shall not
(1) declare or pay dividends on, make any
other distributions on, or redeem or purchase or
otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series
A Preferred Stock;
(2) declare or pay dividends on or make any
other distributions on any shares of stock ranking on
a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the
Series A Preferred Stock and all such parity stock on
which dividends are payable or in arrears in
proportion to the total amounts to which the holders
of all such shares are then entitled;
(3) redeem or purchase or otherwise acquire
for consideration shares of any stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A
Preferred Stock, provided that the Corporation, at
any time, may redeem, purchase, or otherwise acquire
shares of any such parity stock in exchange for
shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Preferred
Stock; or
(4) purchase or otherwise acquire for con-
sideration any shares of Series A Preferred Stock, or
any shares of stock ranking on a parity with the
Series A Preferred Stock, except in
accordance with a purchase offer made in writing or
by publication (as determined by the Board of
Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration
on of the respective annual dividend rates and other
relative rights and preferences of the respective
series and classes, shall determine in good faith
will result in fair and equitable treatment among the
respective series or classes.
(D) The Corporation shall not permit any subsidiary
of the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless
the Corporation, under Paragraph (C) of this Section 4, could
purchase or otherwise acquire such shares at such time and in
such manner.
(E) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Corporation, no distribution
shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock unless, prior
thereto, the holders of shares of Series A Preferred Stock
shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment (the
"Series A Liquidation Preferred"). Following the payment of
the full amount of the Series A Liquidation Preferred, no
additional distributions shall be made to the holders of
shares of Series A Preferred Stock unless, prior thereto, the
holders of shares of Common Stock shall have received an
amount per share ("Common Adjustment") equal to the quotient
obtained by dividing (i) the Series A Liquidation Preferred by
(ii) 100 (as appropriately adjusted as set forth in
subparagraph (C) below to reflect such events as stock splits,
stock dividends and recapitalizations with respect to the
Common Stock) (such number in clause (ii), the "Adjustment
Number"). Following the payment of the full amount of the
Series A Liquidation Preferred and the Common Adjustment in
respect of all outstanding shares of Series A Preferred Stock
and Common Stock, respectively, holders of Series A Preferred
Stock shall receive an amount per share equal to the quotient
obtained by dividing (i) the product of (a) the Adjustment
Number and (b) the remaining assets to be distributed by (ii)
the sum of (ii) number of shares of Common Stock and (b) the
product of (x) the Adjustment Number and (y) the number of
Series A Preferred Stock. After payment of the contemplated
amounts, holders of Common Stock shall receive the remaining
assets to be distributed on a pro rata basis.
(1) In the event, however, that the
Corporation lacks sufficient assets available to
permit payment in full of the Series A Liquidation
Preferred and the liquidation preferences of all
other series of preferred stock, if any, which rank
on a parity with the Series A Preferred Stock, then
such remaining assets shall be distributed ratably to
the holders of such parity shares in proportion to
their respective liquidation preferences. In the
event, however, that the Corporation lacks sufficient
assets available to permit payment in full of the
Common Adjustment, then such remaining assets to be
shall be distributed ratably to the holders of Common
Stock.
(2) In the event the Corporation, at any
time after the Rights Declaration Date, shall (i)
declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of
shares, then in each such case the Adjustment Number
in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a
fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after
such event and the denominator of which is the number
of shares of Common Stock that were outstanding
immediately prior to such event.
(F) The shares of Series A Preferred Stock shall not
be redeemable.
(G) The Series A Preferred Stock shall rank junior to
all other series of the Corporation's Preferred Stock as to
the payment of dividends and the distribution of assets,
unless the terms of such series shall provide otherwise.
(H) Series A Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in
proportion to such holders fractional shares, to exercise
voting rights, receive dividends, participate in distributions
and to have the benefit of all other rights of holders of
Series A Preferred Stock.
4. These Articles of Amendment were adopted by the Board of Directors
of the Corporation on April 9, 1997 prior to issuance of any shares of Series A
Preferred Stock in accordance with Section 55-6-02 of the North Carolina
Business Incorporation Act.
Shareholder action was not required.
5. These Articles of Amendment will be effective upon filing.
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IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury this 9th day
of April, 1997.
s/Charles E. Zeigler, Jr.
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Charles E. Zeigler, Jr.
Chairman of the Board, President and
Chief Executive Officer
Attest:
s/J. Paul Douglas
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J. Paul Douglas
Vice President - Corporate Counsel
and Secretary
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