AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 7, 1999
REGISTRATION NO. 333-79107
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED
(Exact name of Registrant as specified in its charter)
<TABLE>
<CAPTION>
NORTH CAROLINA 56-0233140
<S> <C>
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
400 COX ROAD, POST OFFICE BOX 1398
GASTONIA, NORTH CAROLINA 28053-1398
(704) 864-6731
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
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JACK G. MASON
400 COX ROAD, POST OFFICE BOX 1398
GASTONIA, NORTH CAROLINA 28053-1398
(704) 834-6422
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
COPIES TO:
<TABLE>
<S> <C>
B. ANDREW PICKENS, JR., ESQ. DAVID P. FALCK, ESQ.
MCGUIRE, WOODS, BATTLE & BOOTHE LLP WINTHROP, STIMSON, PUTNAM & ROBERTS
BANK OF AMERICA CORPORATE CENTER ONE BATTERY PARK PLAZA
100 NORTH TRYON STREET, SUITE 2900 NEW YORK, NEW YORK 10004-1490
CHARLOTTE, NORTH CAROLINA 28202 (212) 858-1000
(704) 373-8999
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of the Registration Statement as
determined by the registrant based on market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is used to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act of 1933 registration statement number
of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, please check the following box and list the
Securities Act of 1933 registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
The prospectus constituting a part of this Registration Statement also
relates to $25,000,000 of the registrant's debt securities registered for sale
in a Registration Statement on Form S-3 (File No. 33-65205), which securities
are being carried forward in the combined prospectus pursuant to Rule 429 under
the Securities Act of 1933, as amended.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
(SUBJECT TO COMPLETION, DATED , 1999)
PROSPECTUS
$150,000,000
PUBLIC SERVICE COMPANY OF NORTH CAROLINA,
INCORPORATED
SENIOR UNSECURED DEBT
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o We may use this prospectus to offer from time to time our senior
unsecured debt securities up to an aggregate amount of $150,000,000.
o The debt securities may be offered in one or more separate series.
o The specific terms of each series of debt securities issued will be
described in a supplement to this prospectus.
o The debt securities will be issued under the terms of an indenture, which
is described in this prospectus.
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THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE NOT
APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED THAT THIS PROSPECTUS OR
ANY SUPPLEMENT TO IT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
---------------
o We may sell debt securities through underwriters, dealers or agents,
including Morgan Stanley & Co. Incorporated, or directly to other
purchasers, or through any combination of these methods.
o A supplement to this prospectus will name any underwriters, dealers or
agents involved in the sale of debt securities and will describe their
compensation.
This prospectus may not be used to consummate sales of these debt securities
unless accompanied by a prospectus supplement. The prospectus supplement may
update or change information contained in this prospectus.
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MORGAN STANLEY DEAN WITTER
, 1999
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any document that we file with the SEC at its public reference rooms in
Washington, D.C. (450 Fifth Street, N.W. 20549), New York, New York (7 World
Trade Center, Suite 1300 10048) and Chicago, Illinois (Citicorp Center, 500
West Madison Street, Suite 1400 60661). You may call the SEC at 1-800-SEC-0330
for further information on the public reference rooms and the copy charges
prescribed by the SEC. Our filings are also available to the public on the
internet, through the SEC's EDGAR database. You may access the EDGAR database
at the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" into this prospectus the
information we file with them. This means that we can disclose important
financial and other information to you by referring you to the documents
containing this information. All information incorporated by reference is part
of this prospectus, unless that information is superseded by the information
contained in this prospectus. Information we file later with the SEC that is
incorporated by reference and any prospectus supplement will automatically
update and supersede any previous information that is part of this prospectus
or any prior prospectus supplement. We incorporate by reference the documents
listed below and any future filings made with the SEC under Sections 13(a),
13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until we sell all of
the securities we offer with this prospectus:
o Annual Report on Form 10-K for the fiscal year ended September 30, 1998;
o Quarterly Reports on Form 10-Q for the quarters ended December 31, 1998
and March 31, 1999; and
o Current Report on Form 8-K dated February 22, 1999.
This prospectus is part of a registration statement on Form S-3 that we
have filed with the SEC relating to the debt securities. As permitted by SEC
rules, this prospectus does not contain all the information contained in the
registration statement and accompanying exhibits and schedules we file with the
SEC. You may refer to the registration statement, the exhibits and schedules
for more information about us and our debt securities. The registration
statement, exhibits and schedules also are available at the SEC's public
reference rooms or through its EDGAR database on the internet.
You may obtain a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Public Service Company of North Carolina, Incorporated
400 Cox Road
Post Office Box 1398
Gastonia, North Carolina 28053-1398
Attn: Jack G. Mason, Vice President - Finance
Telephone: (704) 834-6422
You should rely only on the information provided in this prospectus or any
prospectus supplement or that is incorporated by reference. We have not
authorized anyone else to provide you with different information. We are not
making an offer of these securities in any state where the offer is not
permitted. Information is accurate only as of the date of the documents
containing the information, unless the information specifically indicates that
another date applies.
SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS
We make statements in this prospectus, any applicable prospectus
supplement and documents incorporated by reference into this prospectus that
constitute "forward-looking statements" within the meaning of federal
securities laws. Forward-looking statements are based on our management's
beliefs, assumptions, and expectations of our future economic performance,
taking into account the information currently available to them. These
statements are not statements of historical fact, and you are cautioned not to
rely to a great extent on them. Forward-looking statements involve risks and
uncertainties that may cause our actual results, performance or financial
condition to be materially different from the expectations of future results,
performance or financial condition we express or imply in any forward-looking
statements. We recommend that you consider these forward-looking statements in
light of various important factors, including those set forth in this
prospectus,
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and other factors set forth from time to time in the information that we file
with the SEC. Some of the important factors that could cause our actual
results, performance or financial condition to differ materially from our
expectations include, but are not limited to:
o Our ability to implement successfully internal performance goals;
o Performance issues with natural gas suppliers and transporters;
o The capital-intensive nature of our business;
o Regulatory issues (including rate relief to recover increased capital
and operating costs);
o Competition;
o Weather;
o Exposure to environmental issues and liabilities;
o The pending acquisition of our Company by SCANA Corporation;
o Our ability as well as the ability of our suppliers and customers and
other third parties to successfully address Year 2000 compliance issues;
o Variations in natural gas prices; and
o General and specific economic conditions.
We undertake no obligation to update forward-looking statements to reflect
events or circumstances after the date of this prospectus. From time to time,
subsequent to the date of the filing of this document, we may include
additional or revised forward-looking statements in oral statements or other
written documents. When used in our documents or oral presentations, words such
as "anticipate," "estimate," "expect," "objective," "projection," "forecast,"
"goal," "intend," or "believe" are intended to identify forward-looking
statements. We qualify any such forward-looking statements entirely by these
cautionary factors.
PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED
We are a public utility engaged primarily in transporting, distributing
and selling natural gas to approximately 343,000 residential, commercial and
industrial customers in North Carolina. In connection with our natural gas
distribution business, we promote, sell and install both new and replacement
cooking, water heating, laundry, space heating, cooling and humidity control
natural gas appliances and equipment. Through a nonregulated subsidiary, we
provide conversion and maintenance services for natural gas-fueled vehicles in
selected cities in and beyond our certificated territory. Through a subsidiary
and a multi-state joint venture with Sonat Marketing Company L.P., we also
participate in nonregulated businesses such as natural gas brokering and supply
services.
Our 31-county certificated service territory includes Raleigh, Durham and
the Research Triangle Park area in the north central portion of the state,
which accounted for approximately 61% of our customers and 52% of our total gas
sales and transportation in fiscal 1998. Our central North Carolina area
includes the cities of Gastonia, Concord and Statesville, located in the
greater Charlotte metropolitan area, which accounted for 27% of customers and
33% of total gas sales and transportation. Our western area includes Asheville,
Hendersonville and Brevard, which accounted for the remaining 12% of customers
and 15% of total gas sales and transportation. Our diversified industrial base
in our service territory includes manufacturers of textiles, chemicals,
ceramics and clay products, glass, automotive products, minerals,
pharmaceuticals, plastics, metals, electronic equipment, furniture and a
variety of food and tobacco products. The North Carolina Utilities Commission
regulates our utility operations.
We were organized as a North Carolina corporation in 1938. Our corporate
offices are located at 400 Cox Road, Post Office Box 1398, Gastonia, North
Carolina 28053-1398, telephone (704) 864-6731.
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ACQUISITION BY SCANA CORPORATION
We have entered into an Agreement and Plan of Merger dated as of February
16, 1999, as amended and restated as of May 10, 1999, with SCANA Corporation
and its wholly-owned acquisition subsidiaries providing for a merger
transaction among our Company, SCANA Corporation and those subsidiaries. For
more information, you may refer to our Current Report on Form 8-K dated
February 22, 1999, which is incorporated by reference into this prospectus, or
to the proxy statement/prospectus contained in the registration statement on
Form S-4 (File No. 333-78227) relating to the merger, which is on file with the
SEC. See "Where You Can Find More Information" above for a description of how
you may access those documents.
USE OF PROCEEDS
Unless we state otherwise in a prospectus supplement, the net proceeds
from the sale of the debt securities will be used to repay short-term debt
incurred primarily to finance our construction program and for other general
corporate purposes. Pending application of the net proceeds for specific
purposes, we may invest the proceeds in short-term or marketable securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table shows our ratio of earnings to fixed charges for the
fiscal years ended September 30 of the years indicated and for the twelve
months ended December 31, 1998 and March 31, 1999. Earnings represent
consolidated income from continuing operations before income taxes and fixed
charges. Fixed charges include interest, whether expensed or capitalized, and
the amortization of debt expense.
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
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DECEMBER 31, MARCH 31, YEARS ENDED SEPTEMBER 30,
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1998 1999 1994 1995 1996 1997 1998
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<S> <C> <C> <C> <C> <C> <C>
2.86 2.80 3.14 3.64 3.56 3.39 3.18
</TABLE>
DESCRIPTION OF DEBT SECURITIES
We may issue the debt securities at various times in one or more series
under an indenture between us and First Union National Bank, as trustee, dated
as of January 1, 1996. References in this prospectus to the indenture include
amendments and supplements to the indenture from time to time.
The following summary sets forth certain general terms and provisions of
the debt securities and the indenture. A prospectus supplement will provide the
particular terms of offered debt securities and will describe the extent, if
any, to which the general terms and provisions described in this prospectus do
not apply to those particular securities. Because this is a summary, it does
not contain all the information that may be important to you. You should read
the entire indenture, including the definitions of certain terms, and the
applicable prospectus supplement before you make any investment decision. Where
this summary or any prospectus supplement refers to particular sections,
provisions or defined terms in the indenture, those sections, provisions or
defined terms are incorporated by reference into this summary or the applicable
prospectus supplement. Section references used in this summary are references
to the indenture.
The covenants in the indenture do not necessarily protect you from a
decline in our credit quality due to highly leveraged or other transactions
involving us.
GENERAL
The debt securities will rank as to priority of payment equally with all
of our current and future outstanding unsubordinated and unsecured
indebtedness. The indenture does not limit the aggregate amount of debt
securities which we may issue under it, nor does it limit our incurring or
issuing other unsecured debt or secured debt, except to the extent described
under "Certain Covenants -- Limitations on Liens". Agreements governing our
other outstanding funded debt generally prohibit us from issuing additional
funded debt unless, after giving effect to the issuance, our consolidated
funded debt is equal to or less than 70% of consolidated capitalization and
earnings available for fixed charges for a recent 12-month period are at least
equal to 175% of fixed charges for that period.
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The indenture provides that we may issue debt securities from time to time
in one or more series. We may authorize the issuance and provide for the terms
of a series of debt securities under a supplemental indenture or pursuant to a
resolution (or action taken pursuant to a resolution) by our Board of
Directors, any duly authorized committee of the Board of Directors or any
committee of officers or other representatives of our Company duly authorized
by the Board of Directors for this purpose. The indenture allows us to "reopen"
a previous issue of a series of debt securities and to issue additional debt
securities of that series, if permitted by the terms of the applicable series.
(Section 3.1 of the indenture.)
The prospectus supplement relating to a particular series of debt
securities being offered by the prospectus supplement will describe the terms
of those debt securities, including, where applicable:
o the specific designation of the debt securities;
o any limit upon the aggregate principal amount of the debt securities;
o the date or dates on which the principal of and premium, if any, is
payable or the method of determining the payment date or dates;
o the rate or rates (which may be fixed, variable, or zero) at which the
debt securities will bear interest, if any, or the method of calculating
the rate or rates;
o the date or dates from which interest, if any, will accrue or the method
by which the date or dates will be determined;
o the date or dates on which interest, if any, will be payable and the
record date or dates;
o the place or places where principal of, premium, if any, and interest, if
any, will be payable;
o the period or periods within which, the price or prices at which, the
currency in which, and the other terms and conditions upon which, we may
redeem the debt securities, in whole or in part, at our option;
o our obligation or right, if any, to redeem or purchase the debt
securities pursuant to any sinking fund or analogous provisions, or on
the happening of a specified event, or at the option of a holder, and the
period or periods within which, the price or prices at which, and the
other terms and conditions upon which, the debt securities will be
redeemed or purchased, in whole or in part, pursuant to the obligation or
right;
o the denominations in which the debt securities are authorized to be
issued;
o if other than the currency of the United States that as of the time of
payment is legal tender for the payment of public and private debts, the
currency (including composite currencies) for which debt securities may
be purchased, or in which debt securities may be denominated, and/or in
which the debt securities are stated to be payable;
o if the amount of payments of principal of and premium, if any, or
interest, if any, on the debt securities may be determined with reference
to an index, formula, or other method (which may be based on a currency
other than that in which the debt securities are stated to be payable),
the index, formula, or other method by which that amount will be
determined;
o if the amount of payments of principal of and premium, if any, or
interest, if any, on the debt securities may be determined with reference
to an index, formula, or other method based on the prices of securities
or commodities, with reference to changes in the prices of particular
securities or commodities, or otherwise by application of a formula, the
index, formula, or other method by which that amount will be determined;
o if other than the entire principal amount of the debt securities, the
portion of the principal amount that will be payable upon declaration of
the acceleration of the maturity of the debt securities or the method by
which that portion will be determined;
o the person to whom any interest will be payable if other than the person
in whose name the debt security is registered on the applicable record
date;
o provisions, if any, granting special rights to the holders of the debt
securities on the occurrence of events as may be specified;
o any addition to, or modification or deletion of, any event of default (as
described below) or any covenant of ours specified in the indenture with
respect to the debt securities;
o any additional amounts we will pay in respect of the debt securities or
any option we have to redeem the debt securities in lieu of such payment;
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o whether the debt securities will be registered or bearer debt securities;
o the date any debt securities will be dated if other than the date of
issuance;
o the forms of the debt securities, and coupons, if any;
o the application, if any, of the defeasance provisions described below
under "Defeasance," or other means of defeasance as may be specified for
the debt securities;
o the identity of the registrar and any paying agent;
o whether the debt securities are to be issued in whole or in part in the
form of one or more temporary or permanent global securities, and, if so,
the identity of the depositary for the global security or securities and
whether interests in the debt securities in global form may be exchanged
for definitive certificated debt securities; and
o any other special terms pertaining to the debt securities. (Section 3.1
of the indenture.)
Unless otherwise specified in the applicable prospectus supplement, the
debt securities will not be listed on any securities exchange.
Unless otherwise specified in the applicable prospectus supplement, debt
securities will be issued only in fully registered, certificated form without
coupons or in the form of one or more registered global securities as described
below under "Global Debt Securities." (Section 2.1 of the indenture.) Unless
otherwise specified in the prospectus supplement, debt securities denominated
in U.S. dollars will be issued only in denominations of U.S. $1,000 and any
integral multiple thereof. (Section 3.2 of the indenture.)
If the amount of payments of principal of and premium, if any, or any
interest on debt securities of any series is determined with reference to any
type of index, or formula, or changes in prices of particular securities or
commodities, we will describe the federal income tax consequences, specific
terms, and other information with respect to the debt securities and the index
or formula and securities or commodities in the applicable prospectus
supplement.
PAYMENT, REGISTRATION, TRANSFER AND EXCHANGE
Unless otherwise provided in the applicable prospectus supplement,
payments in respect of the debt securities will be made in the designated
currency at the office or agency maintained by us for that purpose as we may
designate from time to time, except that, at our option, interest payments, if
any, on debt securities in registered, certificated form may be made (1) by
checks mailed to the holders of debt securities entitled to those payments at
their registered addresses or (2) by wire transfer to an account maintained by
the person entitled to those payments as specified in the register. (Sections
3.7(a) and 9.2 of the indenture.) Unless otherwise indicated in an applicable
prospectus supplement, payment of any installment of interest on debt
securities in registered form will be made to the person in whose name the debt
security is registered at the close of business on the regular record date for
such interest. (Section 3.7(a) of the indenture.)
We may at any time designate additional paying agents or rescind the
designation of any paying agents, except that, if debt securities of a series
are issuable as registered securities, we will be required to maintain at least
one paying agent in each place of payment for that series. (Section 9.2 of the
indenture.)
Unless otherwise provided in the applicable prospectus supplement, debt
securities in registered form will be transferable or exchangeable at the
agency of ours maintained for that purpose as designated by us from time to
time. (Sections 3.5 and 9.2 of the indenture.) Debt securities may be
transferred or exchanged without any service charge, other than any tax or
other governmental charge imposed in connection with the transfer or exchange.
(Section 3.5 of the indenture.)
GLOBAL DEBT SECURITIES
Unless otherwise provided in the applicable prospectus supplement, we may
issue the debt securities of a series in whole or in part in the form of one or
more fully registered global securities that will be deposited with a
depositary or with a nominee for the depositary identified in the applicable
prospectus supplement. In that case, one or more global securities will be
issued in a denomination or aggregate denominations equal to the portion of the
aggregate principal amount of outstanding debt securities of the series to be
represented by that global security or securities. Unless and until it is
exchanged in whole or in part for debt securities in definitive certificated
form, a global security may not be registered for transfer or exchange except
as a whole by the depositary for that global security to a nominee of such
depositary or by a nominee of
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the depositary to the depositary or another nominee of the depositary or by the
depositary or any such nominee to a successor depositary for that series or a
nominee of that successor depositary and except in the circumstances described
in the applicable prospectus supplement. (Section 3.5 of the indenture.)
The specific terms of the depository arrangement with respect to any
portion of a series of debt securities to be represented by a global security
will be described in the applicable prospectus supplement. We expect that the
following provisions will apply to depository arrangements.
Upon the issuance of any global security, and the deposit of that global
security with or on behalf of the depositary for that global security, the
depositary will credit, on its book-entry registration and transfer system, the
respective principal amounts of the debt securities represented by the global
security to the accounts of institutions ("Participants") that have accounts
with the depositary or its nominee. The accounts to be credited will be
designated by the underwriters or agents engaging in the distribution of the
debt securities or by us, if the debt securities are offered and sold directly
by us. Ownership of beneficial interests in a global security will be limited
to Participants or persons that may hold interest through Participants.
Ownership of beneficial interests by Participants in the global security will
be shown on, and the transfer of those beneficial interests will be effected
only through, records maintained by the depositary for that global security or
by its nominee. Ownership of beneficial interests in the global security by
persons that hold through Participants will be shown on, and the transfer of
the beneficial interests within those Participants will be effected only
through, records maintained by the Participants. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of the securities in certificated form. The limitations described
above and those laws may impair the ability to transfer beneficial interests in
these global securities.
So long as the depositary for a global security, or its nominee, is the
registered owner of the global security, the depositary or its nominee, as the
case may be, will be considered the sole owner or holder of the debt securities
represented by the global security for all purposes under the indenture. Unless
otherwise specified in the applicable prospectus supplement and except as
specified below, owners of beneficial interests in the global security will not
be entitled to have debt securities of the series represented by the global
security registered in their names, will not receive or be entitled to receive
physical delivery of debt securities of that series in certificated form and
will not be considered the holders of the debt securities for any purposes
under the indenture. (Section 3.8 of the indenture.) Accordingly, each person
owning a beneficial interest in the global security must rely on the procedures
of the depositary and, if that person is not a Participant, on the procedures
of the Participant through which that person owns its interest, to exercise any
rights of a holder under the indenture. The depositary may grant proxies and
otherwise authorize Participants to give or take any request, demand,
authorization, direction, notice, consent, waiver, or other action which a
holder is entitled to give or take under the indenture. We understand that,
under existing industry practices, if we request any action of holders or any
owner of a beneficial interest in the global security desires to give any
notice or take any action a holder is entitled to give or take under the
indenture, the depositary would authorize the Participants to give that notice
or take that action, and Participants would authorize beneficial owners owning
through the Participants to give that notice or take that action or would
otherwise act on the instructions of beneficial owners owning through them.
Unless otherwise specified in the applicable prospectus supplement,
payments with respect to principal of, and premium, if any, and interest, if
any, on debt securities represented by a global security registered in the name
of a depositary or its nominee will be made by us through a paying agent to the
depositary or its nominee, as the case may be, as the registered owner of the
global security.
We expect that the depositary for any debt securities represented by a
global security, upon receipt of any payment of principal, premium or interest,
will immediately credit Participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of the global security as shown on the records of the depositary. We also
expect that payments by Participants to owners of beneficial interests in the
global security held through those Participants will be governed by standing
instructions and customary practices, as is now the case with the securities
held for the accounts of customers registered in "street name," and will be the
responsibility of the Participants. None of us, the trustee, or any agent of
ours or the trustee, will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial interests
of a global security, or for maintaining, supervising, or reviewing any records
relating to those beneficial interests. (Section 3.8 of the indenture.)
Unless otherwise specified in the applicable prospectus supplement, if the
depositary for any debt securities represented by a global security is at any
time unwilling or unable to continue as depositary and a successor depositary
is not appointed by us within 90 days, we will issue the debt securities in
definitive certificated form in exchange for the global security. In
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addition, we may, at any time and in our sole discretion, determine not to have
any of the debt securities of a series represented by one or more global
securities and, in that event, will issue debt securities of that series in
definitive certificated form in exchange for all of the global security or
securities representing the debt securities. (Section 3.5 of the indenture.)
Debt securities so issued in definitive certificated form will be issued in
denominations of $1,000 and integral multiples of $1,000 and will be issued in
registered form only, without coupons.
CERTAIN DEFINITIONS
"Attributable Debt" means, as to a lease under which any person is at the
time liable that is required to be classified and accounted for as a
Capitalized Lease Obligation on a person's balance sheet under GAAP, at any
date as of which the amount of the Attributable Debt is to be determined, the
total net amount of rent required to be paid by that person under the lease
during the remaining primary term of the lease, discounted from the respective
due dates of the rent to be paid to that date at the annual rate equal to the
interest rate implicit in the lease. The net amount of rent required to be paid
under the lease for that period will be the aggregate amount of rent payable by
lessee with respect to that period after excluding amounts required to be paid
on account of maintenance and repairs, insurance, taxes, assessments, water
rates, and similar expenses, or any amount required to be paid by the lessee
thereunder contingent on the amount of revenues (or other similar contingent
amounts). In the case of any lease that is terminable by the lessee upon the
payment of a penalty, the net amount will also include the amount of the
penalty, but no rent will be considered as required to be paid under the lease
after the first date on which it may be so terminated. Notwithstanding the
above, the term Attributable Debt excludes any amounts relating to any sale and
leaseback transaction which we or a subsidiary of ours is permitted to enter
into in accordance with the provisions described in the second and third
sentences under the caption "Limitation on Sale and Leaseback Transactions."
"Capitalized Lease Obligation" means, as applied to any person, the rental
obligation, as described above, under any lease of any property (whether real,
personal, or mixed) the discounted present value of the rental obligations of
that person as lessee under which, in conformity with GAAP, is required to be
capitalized on the balance sheet of that person.
"Consolidated Net Tangible Assets" means, with respect to us as of any
date, our total assets as they appear on our most recently prepared
consolidated balance sheet as of the end of a fiscal quarter, less (1) all
liabilities shown on the consolidated balance sheet that are classified and
accounted for as current liabilities or that otherwise would be considered
current liabilities under GAAP; and (2) all assets shown on the consolidated
balance sheet that are classified and accounted for as our intangible assets or
that otherwise would be considered intangible assets under GAAP, including,
without limitation, franchises, licenses, patents and patent applications,
trademarks, brand names, and goodwill.
"Funded Debt" means all indebtedness for borrowed money owed or guaranteed
by us or any of our subsidiaries and any other indebtedness which, under GAAP,
would appear as indebtedness on our most recent consolidated balance sheet,
which matures by its terms more than 12 months from the date of the
consolidated balance sheet or which matures by its terms in less than 12 months
but by its terms is renewable or extendible beyond 12 months from the date of
the consolidated balance sheet at the option of the borrower.
"GAAP" means generally accepted accounting principles in the United States
in effect on the date of application.
"Government Obligations" means securities that are (1) direct obligations
of the United States for which the full faith and credit of the United States
is pledged for payment or (2) obligations of a person controlled or supervised
by, and acting as an agency or instrumentality of, the United States, the full
and timely payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States, that, in either case, are not callable
or redeemable at the option of the issuer of the obligation, and will also
include a depository receipt issued by a bank or trust company subject to
federal or state supervision or examination with a combined capital and surplus
of at least $50,000,000 as custodian with respect to any such Government
Obligation or a specific payment of interest on or principal of any such
Government Obligation held by the custodian for the account of the holder of a
depository receipt; provided that (except as required by law) the custodian is
not authorized to make any deduction from the amount payable to the holder of
the depository receipt from any amount received by the custodian relating to
the Government Obligation or the specific payment of interest on or principal
of the Government Obligation evidenced by the depository receipt.
"subsidiary" of any person means any person of which at least a majority
of capital stock having ordinary voting power for the election of directors or
other governing body of that person is owned, directly or indirectly, by the
person directly or through one or more subsidiaries of the person.
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CERTAIN COVENANTS
LIMITATION ON LIENS. We will not, and will not permit any subsidiary to,
incur, assume, or guarantee any indebtedness for borrowed money secured by a
mortgage, pledge, lien, charge, security interest, trust arrangement,
conditional sale, or other title retention agreement, or other encumbrance of
any nature whatsoever (referred to in this prospectus as "liens") on any
property, if the sum, without duplication, of (a) the aggregate principal
amount of all secured debt and (b) all Attributable Debt in respect of sale and
leaseback transactions (other than certain excluded sale and leaseback
transactions) exceeds 15% of our Consolidated Net Tangible Assets, unless we
provide that the debt securities will be secured equally and ratably with (or,
at our option, prior to) such secured debt. The provisions described in the
preceding sentence do not apply to, and there will be excluded in computing the
aggregate amount of secured debt for purpose of such restriction, indebtedness
secured by the following liens:
o Liens existing as of the date of the indenture;
o Liens relating to a contract that was entered into by us or any of our
subsidiaries prior to the date of the indenture;
o Liens on any property existing at the time of acquisition of the property
(whether the acquisition is direct or by acquisition of stock, assets, or
otherwise) by us or any of our subsidiaries, provided that those liens do
not extend to or cover any property other than the property being acquired
and fixed improvements then or later erected on the property;
o Liens on or relating to any property, including any contract rights
relating to the property, acquired, constructed, refurbished or improved
by us or any of our subsidiaries, including but not limited to liens to
secure all or any part of the cost of construction, alteration, or repair
of any building, equipment, facility or other improvement on, all or any
part of such property, including any pipeline financing, after the date of
the indenture which are created, incurred or assumed:
o contemporaneously with, or within 360 days after, the latest to
occur of the acquisition (whether by acquisition of stock,
assets or otherwise), completion of construction, refurbishment,
or improvement, or the commencement of commercial operation, of
the property (or, in the case of liens on contract rights, the
completion of construction, or the commencement of commercial
operation of the facility to which the contract rights relate,
regardless of the date when the contract was entered into),
o to secure or provide for the payment of any part of the purchase
price of the property or the cost of the construction,
refurbishment, or improvement;
provided, however, that in the case of any such acquisition, construction,
refurbishment, or improvement, the lien will relate only to indebtedness
reasonably incurred to finance the acquisition, construction, refurbishment,
or improvement and will not extend to cover any other property other than
fixed improvements then or later existing on the property;
o Liens securing indebtedness owing by any subsidiary to us or to any
other subsidiary of ours;
o Liens in connection with the sale or other transfer in the ordinary
course of business of (1) crude oil, natural gas, other petroleum
hydrocarbons, or other minerals in place for a period of time until, or in
an amount such that, the purchaser or other transferee will realize a
specified amount of money (however determined) or a specified amount of
the minerals, or (2) any other interest in property of the character
commonly referred to as a "production payment";
o Liens on current assets to secure any indebtedness maturing (including
any extensions or renewals of the indebtedness) not more than one year
from the date of the creation of such lien; and
o Liens for the sole purpose of extending, renewing, or replacing in whole
or in part the indebtedness secured by the liens referred to in each of
the bullet points above, inclusive, or in this clause; provided, however,
that the liens excluded pursuant to this clause will be excluded only in
an amount not to exceed the principal amount of indebtedness secured at
the time of the extension, renewal, or replacement, and that such
extension, renewal, or replacement will be limited to all or part of the
property subject to the lien extended, renewed, or replaced (plus
refurbishment of, or improvements on or to, the property).
LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. Neither we nor any of our
subsidiaries may enter into, assume, guarantee, or otherwise become liable with
respect to any direct or indirect arrangement with any person or to which any
person is a party, providing for the leasing to us or a subsidiary of ours of
any property, whether owned at the date of the indenture or acquired
afterwards, which has been or is to be sold or transferred by us or the
subsidiary to that person or to any other person to whom funds have been or are
to be advanced by the person on the security of the property (referred to
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<PAGE>
in this prospectus as a "sale and leaseback transaction") involving any
property, if the latest to occur of the acquisition, the completion of
construction, or the commencement of commercial operation of the property will
have occurred more than 180 days prior to any such action, unless after giving
effect to that action the sum, without duplication, of (a) the aggregate
principal amount of all secured debt (excluding indebtedness secured by the
liens described in the exclusions to the restriction contained in the first
sentence under "Limitations on Liens" above) and (b) all Attributable Debt
relating to sale and leaseback transactions does not exceed 15% of our
Consolidated Net Tangible Assets.
o This restriction will not apply to any sale and leaseback transaction if,
within 180 days from the effective date of the sale and leaseback
transaction, we or the subsidiary apply an amount not less than the
greater of:
either the net proceeds of the sale of the property leased pursuant
to the arrangement, or
the fair value of the property to retire its Funded Debt, including,
for this purpose, any currently maturing portion of the Funded Debt, or
to purchase other property having a fair value at least equal to the
fair value of the property leased in the sale and leaseback
transaction.
o This restriction also does not apply to any sale and leaseback
transaction:
between us and any subsidiary or between any subsidiaries,
entered into prior to the date of the indenture, or
for which, at the time the transaction is entered into, the term of
the related lease to us or the subsidiary of the property sold pursuant
to the transaction is three years or less.
CONSOLIDATION, MERGER OR SALE BY OUR COMPANY
We will not consolidate or merge with or into, or transfer or lease all or
substantially all of our assets to, any person unless:
o the person formed by or surviving the consolidation or merger (if other
than our Company) or which acquires our assets, is organized and existing
under the laws of the United States, any state of the United States, or
the District of Columbia;
o the person formed by or surviving the consolidation or merger (if other
than our Company), or which acquires our assets, expressly assumes by
supplemental indenture all of our obligations under the debt securities
and the indenture; and
o immediately after giving effect to the transaction, no default or event
of default will have occurred and be continuing.
Upon any such consolidation, merger, or sale, the successor person formed by
such consolidation, or into which our Company is merged, or to which such sale
is made, will succeed to, and be substituted for, us under the indenture.
(Section 7.1 of the indenture.)
We will be required to comply with the provisions described in this
section in connection with our pending merger with SCANA Corporation.
The indenture contains no covenants or other specific provisions to afford
protection to holders of the debt securities in the event of a highly leveraged
transaction or a change in control of our Company, except to the limited extent
described above.
EVENTS OF DEFAULT, NOTICE AND CERTAIN RIGHTS ON DEFAULT
The indenture provides that, if an event of default specified in the
indenture occurs regarding the debt securities of any series and is continuing,
the trustee for that series or the holders of at least 33 1/3% in aggregate
principal amount of all of the outstanding debt securities of that series, by
written notice to us (and to the trustee for that series, if notice is given by
those holders of debt securities), may declare the principal of (or, if the
debt securities of that series are Original Issue Discount Securities (as
defined in the indenture), the portion of the principal amount specified in the
prospectus supplement) and accrued interest on all the debt securities of that
series to be immediately due and payable. (Section 5.2 of the indenture.) At
any time after such a declaration and before a judgment or decree for payment
for money due has been obtained by the trustee, the holders of a majority in
aggregate principal amount of those securities may rescind and annul the
declaration and its consequences, subject to certain limitations described in
the indenture.
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Events of default relating to debt securities of any series are defined in
the indenture as being:
o default for 30 days in payment of any interest on any debt security of
that series or any additional amount payable on debt securities of that
series as specified in the applicable prospectus supplement when due;
o default in payment of principal, or premium, if any, at maturity or on
redemption or otherwise, or in the making of a mandatory sinking fund
payment of any debt securities of that series when and as due;
o default for 90 days after notice to us by the trustee for that series, or
by the holders of 33 1/3% in aggregate principal amount of the debt
securities of that series then outstanding, in any material respect in the
performance of any other agreement in the debt securities of that series,
in the indenture (or in any supplemental indenture or board resolution
referred to in the indenture) under which the debt securities of that
series may have been issued;
o default constituting failure to pay any portion of the principal of,
premium, if any, or interest on, or resulting in acceleration of, other
indebtedness (in a principal amount outstanding of $20,000,000 or more)
for money borrowed by us where the default under the other indebtedness is
not cured or remedied, and any acceleration is not rescinded or annulled
within 30 days after the written notice of acceleration to us by the
trustee or to us and the trustee by the holders of 33 1/3% in aggregate
principal amount of the debt securities of that series then outstanding;
provided that, the event of default will be cured or waived if (1) the
payment default or default that resulted in any acceleration of the other
indebtedness for money borrowed is cured or waived and (2) any
acceleration is rescinded or annulled; and
o certain events of bankruptcy, insolvency or reorganization of our
Company. (Section 5.1 of the indenture.)
Events of default with respect to a specified series of debt securities
may be added to the indenture and, if added, will be described in the
applicable prospectus supplement. (Sections 3.1 and 5.1(7) of the indenture.)
No event of default regarding any series of debt securities necessarily
constitutes an event of default regarding the debt securities of any other
series issued under the indenture.
The indenture provides that the trustee will, subject to certain
exceptions, within 90 days after the occurrence of a default known to it
regarding the debt securities of any series, give to the holders of the debt
securities of that series notice of all of those defaults unless the default
will have been cured or waived. "Default" means any event that is, or after
notice or passage of time or both, would be, an event of default under the
indenture. (Section 1.1 of the indenture.)
The indenture provides (subject to certain limitations) that the holders
of a majority in aggregate principal amount of the outstanding debt securities
of each series affected (with each of those series voting as a class) may
direct the time, method, and place of conducting any proceeding for any remedy
available to the trustee for that series, or exercising any trust or power
conferred on the trustee. (Section 5.8 of the indenture.)
The indenture includes a covenant that we will file annually with the
trustee a certificate as to our compliance with all conditions and covenants of
the indenture. (Section 9.7 of the indenture.)
The holders of a majority in aggregate principal amount of the outstanding
debt securities of any series by notice to the trustee may waive, on behalf of
the holders of all debt securities of that series, any past default or event of
default regarding that series and its consequences except (1) a default or
event of default in the payment of the principal of, premium, if any, or
interest, if any, on any debt security, or (2) a covenant or provision of the
indenture that cannot be modified or amended without the consent of each holder
of a debt security of that series. (Section 5.7 of the indenture.)
MODIFICATION OF THE INDENTURE
The indenture contains provisions permitting us and the trustee to enter
into one or more supplemental indentures without the consent of the holders of
any of the debt securities in order:
o to evidence the succession of another person to our Company and the
assumption of our covenants in the indenture and in the debt securities by
our successor;
o to add to our covenants or surrender any of our rights or powers;
o to add additional events of default with respect to all or any series of
debt securities;
o to add or change any provisions to the extent necessary to permit or
facilitate the issuance of debt securities in bearer form or in global
form;
o to change or eliminate any provision affecting debt securities not yet
issued;
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o to secure the debt securities;
o to establish the form or terms of debt securities;
o to evidence and provide for successor trustees;
o if allowed without penalty under applicable laws and regulations, to
permit payment of debt securities in bearer form in the United States;
o to correct or supplement any inconsistent provisions or to make any other
provisions regarding matters or questions arising under the indenture;
provided that the action does not adversely affect the interests of any
holder of debt securities of any series; or
o to cure any ambiguity or correct any mistake, provided that the action
does not adversely affect the interests of any holder of debt securities
of any series. (Section 8.1 of the indenture.)
The indenture also contains provisions permitting us and the trustee, with
the consent of the holders of a majority in aggregate principal amount of the
outstanding debt securities adversely affected by such a supplemental indenture
(with the debt securities of all series voting as one class), to execute
supplemental indentures adding any provisions to or changing or eliminating any
of the provisions of the indenture or any supplemental indenture or modifying
the rights of the holders of debt securities of that series; provided, however,
that no such supplemental indenture may, without the consent of the holder of
each debt security so affected:
o change the time for payment of principal or premium, if any, or interest
on any debt security;
o reduce the principal of, or any installment of principal of, or premium,
if any, or the rate of interest on any debt security, or change the manner
in which the amount of any of those items is determined;
o reduce the amount of premium, if any, payable on the redemption of any
debt security;
o reduce the amount of principal payable on acceleration of the maturity
of any Original Issue Discount Security;
o change the currency in which any debt security or any premium or
interest on a debt security is payable;
o change the index, securities or commodities with reference to which or
the formula by which the amount of principal or any premium or interest on
a debt security is determined;
o impair the right to institute suit for the enforcement of any payment on
or after the maturity or redemption of any debt security;
o reduce the percentage in principal amount of the outstanding debt
securities affected for which the consent of holders of debt securities is
required for modification or amendment of the indenture or for waiver of
compliance with certain provisions of the indenture or for waiver of
certain defaults;
o change our obligation to maintain an office or agency in the places and
for the purposes specified in the indenture; or
o modify the provisions relating to waiver of certain defaults or any of
the above provisions except to increase any percentage or to provide that
certain other provisions of the indenture cannot be modified or waived
without the consent of holders of each outstanding debt security affected
by the modification or waiver.(Section 8.2 of the indenture.)
DEFEASANCE
DEFEASANCE AND DISCHARGE. Unless the prospectus supplement relating to the
debt securities of a series provides otherwise, we, at our option, will be
deemed to have paid and will be discharged from any and all obligations
relating to those debt securities (except for, among other matters, certain
obligations to register the transfer or exchange of the debt securities, to
replace stolen, lost, or mutilated debt securities, to maintain paying
agencies, and to hold certain monies for payment in trust) if, among other
things:
o we have irrevocably deposited with the trustee, in trust, Government
Obligations that through the payment of interest and principal on the
Government Obligations in accordance with their terms will provide money
or a combination of money and Government Obligations in an amount
sufficient to pay in the currency in which those debt securities are
payable all the principal of, and interest on, those debt securities on
the dates the payments are due in accordance with the terms of those debt
securities;
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o we have delivered to the trustee an officers' certificate and an opinion
of counsel to the effect that the holders of those debt securities will
not recognize income, gain or loss for U.S. federal income tax purposes as
a result of our exercise of our option under this "Defeasance and
Discharge" provision and will be subject to U.S. federal income tax on the
same amounts in the same manner and at the same times as would have been
the case if the deposit, defeasance, and discharge had not occurred, which
Opinion of Counsel must be based upon (1) a ruling of the U.S. Internal
Revenue Service to the same effect or (2) a change in applicable U.S.
federal income tax law after the date of the indenture such that a ruling
is no longer required;
o no default or event of default has occurred or is continuing, and the
deposit will not result in a breach or violation of, or constitute a
default under, any other material agreement or instrument to which we are
a party or by which we are bound; and
o we have delivered to the trustee an Opinion of Counsel to the effect that
the trust resulting from the deposit referred to in the first bullet point
above does not constitute an investment company under the Investment
Company Act of 1940.
The prospectus supplement will more fully describe the provisions relating to
the discharge or termination of obligations. (Sections 4.3 and 4.6 of the
indenture.)
DEFEASANCE OF CERTAIN COVENANTS. Unless the prospectus supplement relating
to the debt securities of a series provides otherwise, we, at our option, need
not comply with certain restrictive covenants of the indenture (including those
described above under "Certain Covenants") on, among other things, the
irrevocable deposit with the trustee, in trust, of money and/or Government
Obligations that through the payment of interest and principal on in accordance
with their terms will provide money or a combination of money and Government
Obligations in an amount sufficient to pay in the currency in which the debt
securities are payable all the principal of, and interest on, those debt
securities on the dates such payments are due in accordance with the terms of
such debt securities, the satisfaction of the provisions described in the last
two bullet points of the preceding paragraph and the delivery by us to the
trustee of an Opinion of Counsel to the effect that, among other things, the
holders of those debt securities will not recognize income, gain or loss for
U.S. federal income tax purposes as a result of the deposit and defeasance of
certain covenants and will be subject to U.S. federal income tax on the same
amounts and in the same manner and at the same times as would have been the
case if the deposit and defeasance had not occurred. (Sections 4.5 and 4.6 of
the indenture.)
THE TRUSTEE
First Union National Bank is the trustee under the indenture. We also
maintain banking and other commercial relationships with the trustee and its
affiliates in the ordinary course of business.
GOVERNING LAW
The indenture and the debt securities will be governed by and construed in
accordance with the laws of the State of New York.
PLAN OF DISTRIBUTION
We may, from time to time, sell debt securities:
o through underwriters, dealers, or agents, including Morgan Stanley & Co.
Incorporated,
o directly in each case to the public, institutional investors and other
purchasers or
o through a combination of any of those methods.
A prospectus supplement will set forth the terms of the offering of the debt
securities, including the name or names of any underwriters, dealers or agents,
the purchase price of the debt securities, the proceeds to us from the sale,
any underwriting discounts and other items constituting underwriters
compensation, any initial public offering price, any discounts or concessions
allowed or reallowed or paid to dealers, and any securities exchange or market
on which the debt securities may be listed. Only underwriters named in a
prospectus supplement are deemed to be underwriters in connection with the debt
securities offered by that prospectus supplement.
If underwriters are used in the sale, the underwriters will acquire the
debt securities for their own account and may resell them from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price
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or at varying prices determined at the time of sale. The obligations of the
underwriters to purchase the debt securities will be subject to certain
conditions precedent, and the underwriters will be obligated to purchase all
the debt securities of the series offered by the prospectus supplement if any
of the debt securities are purchased. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time.
If dealers are used in the sale, unless otherwise indicated in the
prospectus supplement relating to the debt securities of any series, we will
sell the debt securities of that series to the dealers as principal. The
dealers may then resell the debt securities of that series to the public at
varying prices to be determined by the dealers at the time of resale.
Debt securities may also be sold directly, by us or through agents
designated by us from time to time. Any agent involved in the offering and sale
of debt securities in connection with which this prospectus is delivered will
be named, and any commissions payable by us to the agent will be set forth, in
the prospectus supplement. Unless otherwise indicated in the related prospectus
supplement, any such agent will be acting on a best-efforts basis for the
period of its appointment.
Debt securities offered may be a new issue of securities with no
established trading market. Any underwriters to whom we sell the debt
securities for public offering and sale may make a market in the debt
securities, but the underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of or the trading markets for any of the debt
securities.
Agents, underwriters and dealers may be entitled under agreements entered
into with us to indemnification by us against certain civil liabilities,
including liabilities under the Securities Act of 1933, or to contribution
regarding payments that the agents or underwriters may be required to make in
connection with those liabilities. Agents, underwriters, and dealers may be our
customers, engage in transactions with us, or perform services for us in the
ordinary course of business.
The place and time of delivery of the debt securities for which this
prospectus is delivered will be set forth in the prospectus supplement.
LEGAL MATTERS
The validity of the issuance of the debt securities offered pursuant to
this prospectus will be passed upon for us by McGuire, Woods, Battle & Boothe
LLP, Charlotte, North Carolina, our counsel, and J. Paul Douglas, Esq.,
Corporate Counsel and Secretary. Unless otherwise set forth in the prospectus
supplement, Winthrop, Stimson, Putnam & Roberts, New York, New York, will pass
upon certain legal matters on behalf of any underwriters, dealers or agents.
EXPERTS
The consolidated financial statements and schedules included in the
Company's annual report on Form 10-K for the fiscal year ended September 30,
1998 incorporated by reference in this prospectus and elsewhere in the
Registration Statement of which this prospectus is a part have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports relating to those financial statements and schedules and are included
in this prospectus in reliance on the authority of that firm as experts in
giving those reports.
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PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses payable by the Company in connection with the
issuance and distribution of the securities being offered hereby are:
<TABLE>
<S> <C>
Registration Fee ............................. $ 34,750*
Fees and Expenses of Indenture Trustee ....... 15,000
Printing ..................................... 70,000
Legal Fees and Expenses ...................... 125,000
Rating Agency Fees and Expenses .............. 68,000
Accounting Fees and Expenses ................. 75,000
Blue Sky Fees and Expenses ................... 3,000
North Carolina Utilities Commission .......... 250
Miscellaneous ................................ 4,000
---------
Total ...................................... $ 395,000
=========
</TABLE>
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* Does not include $8,621 paid previously in connection with a prior
registration statement (File No. 33-65205).
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The By-Laws of the Company contain provisions that require the Company to
indemnify current or former directors or officers to the fullest extent allowed
by law. Sections 55-8-50 through 55-8-58 of the North Carolina Business
Corporation Act provide for the indemnification of officers and directors under
certain circumstances against expenses incurred in successfully defending
against a claim and authorize North Carolina corporations to indemnify their
officers and directors under certain circumstances against expenses and
liabilities incurred in legal proceedings involving such persons because of
their being or having been an officer or director.
The Company maintains insurance to protect itself and its directors and
officers against expense or loss arising from any action, suit or proceeding
brought by reason of the fact that any person is a director or officer of the
Company. The policy provides for the payment on behalf of its directors and
officers of losses that arise from claims against the directors and officers
for a wrongful act while acting in that capacity. The policy also provides for
payment of losses that the Company may be required or permitted to pay as
indemnity due the directors or officers for claims against them for wrongful
acts.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- -------------
- ---------------------------------------------------------------------------------------------------
<S> <C>
1 Form of Underwriting Agreement
4(a) Indenture dated as of January 1, 1996 between the Company and First Union National Bank, as
supplemented by a First Supplemental Indenture dated as of January 1, 1996 (incorporated by
reference to Exhibit 4-E-1 to the Company's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1995 (File No. 1-11429))
4(b) Second Supplemental Indenture dated as of December 15, 1996 (incorporated by reference to Exhibit
4-E-3 to the Company's Quarterly Report on Form 10-Q for the quarter ended December 31, 1996
(File No. 1-11429))
4(c)* Form of Supplemental Indenture relating to debt securities to be offered pursuant to the
prospectus constituting a part of this Registration Statement
5* Opinion of McGuire, Woods, Battle & Boothe LLP
12* Ratio of Earnings to Fixed Charges
23(a) Consent of Arthur Andersen LLP
23(b) Consent of McGuire, Woods, Battle & Boothe LLP (contained in the opinion included as Exhibit 5)
24* Powers of Attorney (included in signature page)
25** Statement of Eligibility of Indenture Trustee Under Trust Indenture Act of 1939
</TABLE>
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* Previously filed.
** As amended from previous filing.
II-1
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ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
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;
(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 the undertakings set forth in paragraphs (a)(1)(i)
and (a)(1)(ii) above do not apply if the information required to be included in
a post-effective amendment by those paragraphs is contained in periodic reports
filed by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
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 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) The undersigned registrant hereby undertakes 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 section 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 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, the registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrants 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.
II-2
<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-3 and has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Gastonia, and the state of North Carolina, on
the 4th day of June, 1999.
PUBLIC SERVICE COMPANY OF NORTH
CAROLINA, INCORPORATED
By: /s/ CHARLES E. ZEIGLER, JR.
-------------------------------------
CHARLES E. ZEIGLER, JR.
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------- -------------------------------------- -------------
<S> <C> <C>
/s/ CHARLES E. ZEIGLER, JR. Chairman, President, Chief Executive June 4, 1999
---------------------------------- Officer, and Director (Principal
CHARLES E. ZEIGLER, JR. Executive Officer)
* Vice President - Finance June 4, 1999
---------------------------------- (Principal Financial and Accounting
JACK G. MASON Officer)
* Director June 4, 1999
----------------------------------
WILLIAM C. BURKHARDT
* Director June 4, 1999
----------------------------------
WILLIAM A.V. CECIL
* Director June 4, 1999
----------------------------------
BERT COLLINS
* Director June 4, 1999
----------------------------------
JOHN W. COPELAND
* Director June 4, 1999
----------------------------------
VAN E. EURE
* Director June 4, 1999
----------------------------------
WILLIAM L. O'BRIEN, JR.
* Director June 4, 1999
----------------------------------
D. WAYNE PETERSON
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------- ---------- -------------
<S> <C> <C>
* Director June 4, 1999
----------------------------------
BEN R. RUDISILL, II
* Director June 4, 1999
----------------------------------
G. SMEDES YORK
*By: /s/ J. PAUL DOUGLAS
--------------------------------
J. PAUL DOUGLAS
ATTORNEY-IN-FACT
</TABLE>
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- -------------
- ----------------------------------------------------------------------------------------------------
<S> <C>
1 Form of Underwriting Agreement
4(a) Indenture dated as of January 1, 1996 between the Company and First Union National Bank, as
supplemented by a First Supplemental Indenture dated as of January 1, 1996 (incorporated by
reference to Exhibit 4-E-1 to the Company's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1995 (File No. 1-11429))
4(b) Second Supplemental Indenture dated as of December 15, 1996 (incorporated by reference to Exhibit
4-E-3 to the Company's Quarterly Report on Form 10-Q for the quarter ended December 31, 1996
(File No. 1-11429))
4(c)* Form of Supplemental Indenture relating to debt securities to be offered pursuant to the
prospectus
constituting a part of this Registration Statement
5* Opinion of McGuire, Woods, Battle & Boothe LLP
12* Ratio of Earnings to Fixed Charges
23(a) Consent of Arthur Andersen LLP
23(b) Consent of McGuire, Woods, Battle & Boothe LLP (contained in the opinion included as Exhibit 5)
24* Powers of Attorney (included in signature page)
25** Statement of Eligibility of Indenture Trustee Under Trust Indenture Act of 1939
</TABLE>
- ---------
* Previously filed.
** As amended from previous filing.
Exhibit 1
[FORM OF UNDERWRITING AGREEMENT]
DEBT SECURITIES
UNDERWRITING AGREEMENT
PUBLIC SERVICE COMPANY OF NORTH CAROLINA,
INCORPORATED
P.O. Box 1398
Gastonia, North Carolina 28053-1398
400 Cox Road, Gastonia, North Carolina 28053-1398
[____________], 1999
Ladies and Gentlemen:
We (the "Representative") are acting on behalf of the underwriter or
underwriters (including ourselves) named in Schedule I (the "Underwriters"), and
we understand that Public Service Company of North Carolina, Incorporated, a
North Carolina corporation (the "Company"), proposes to issue and sell to the
Underwriters $[ ] aggregate principal amount of its [______]% Senior Debentures
due [_____] (the "Offered Securities"). The Offered Securities will be issued
pursuant to the provisions of the Indenture dated as of January 1, 1996 between
the Company and First Union National Bank of North Carolina, as trustee (the
"Trustee"), as heretofore supplemented and as it will be supplemented by a
supplemental indenture relating to the Offered Securities (said Indenture, as so
supplemented, the "Indenture").
If Schedule I names one person, firm or corporation, the term
"Underwriters" and the term "Representative," as used in this agreement (this
"Agreement" or the "Underwriting Agreement"), shall mean that person, firm or
corporation. All obligations of the Underwriters are several and not joint. The
use of the term "Underwriter" herein shall not be deemed to establish or admit
that a purchaser of the Offered Securities is an "underwriter" of the Offered
Securities as such term is defined in and used under the Securities Act of 1933,
as amended (the "Securities Act").
1. Representations and Warranties. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (Registration
Statement No. 33-65205), including a prospectus (the "1995 Registration
Statement"), for the registration of $125,000,000 aggregate principal amount of
the Company's senior unsecured debt securities, of which $25,000,000 aggregate
principal amount (comprising a portion of the Offered Securities) remains
<PAGE>
unsold. The Company has also filed with the Commission a registration statement
on Form S-3 (Registration Statement No. 333-79107) (the "1999 Registration
Statement") for the registration of $125,000,000 aggregate principal amount of
the Company's senior unsecured debt securities, also comprising a portion of the
Offered Securities, and has filed with, or transmitted for filing to, or shall
promptly hereafter file with or transmit for filing to, the Commission a
prospectus supplement (the "Prospectus Supplement") specifically relating to the
Offered Securities pursuant to Rule 424 under the Securities Act. The term
"Registration Statement" means, collectively, the 1995 Registration Statement
and the 1999 Registration Statement, in each case, including the exhibits
thereto, as amended to the date of this Agreement. The term "Basic Prospectus"
means the combined prospectus included in the 1999 Registration Statement and
relating, pursuant to Rule 429 under the Securities Act, to the Offered
Securities, as amended and supplemented to the date of this Agreement (exclusive
of any supplement to the prospectus relating solely to securities other than the
Offered Securities). The term "Prospectus" means the Basic Prospectus together
with the Prospectus Supplement. The term "preliminary prospectus" means a
preliminary prospectus supplement specifically relating to the Offered
Securities, together with the Basic Prospectus. As used herein, the terms "Basic
Prospectus," "Prospectus" and "preliminary prospectus" shall include in each
case the documents, if any, incorporated by reference therein. The terms
"supplement," "amendment" and "amend" as used herein shall include all documents
deemed to be incorporated by reference in the Prospectus that are filed
subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(b) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(c) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder or pursuant to
said rules and regulations will be deemed to comply therewith; (ii) each part of
the Registration Statement, on the effective date, did not contain, and each
such part, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
(iii) the Registration Statement, on the effective date, complied and the
Prospectus, when it is first filed with the Commission pursuant to Rule 424 and
when it is amended or supplemented, if applicable, will comply in all material
respects with the Securities Act and the applicable rules and regulations of the
Commission thereunder or pursuant to said rules and regulations will be deemed
to comply therewith; and (iv) the Prospectus does not, and when it is first
filed with the Commission pursuant to Rule 424 under the Securities Act and, as
amended or supplemented, if applicable, as of the Closing Date, will not,
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this Section 1(c) do not apply (A) to statements or
omissions in the Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter expressly for use therein or (B) to that part of the Registration
Statement that
2
<PAGE>
constitutes the Statement of Eligibility (Form T-l) under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), of the Trustee.
(d) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State of North
Carolina, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and to enter into and
perform its obligations under the Underwriting Agreement, the Indenture and the
Offered Securities. The Company is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and its subsidiaries, taken as a whole.
(e) Each subsidiary of the Company that is a corporation has
been duly incorporated and is validly existing as a corporation, and each
subsidiary of the Company that is a limited liability company has been duly
organized and is validly existing as a limited liability company, in each case,
in good standing under the laws of the jurisdiction of its incorporation or
organization, has the corporate or limited liability company (as the case may
be) power and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and its subsidiaries, taken as a whole.
(f) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by the
Company and is a valid and binding agreement of the Company, enforceable in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other laws affecting creditors' rights generally and by equitable principles of
general applicability (whether considered in a proceeding at law or in equity).
(g) The Offered Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Underwriters in accordance with the terms
of the Underwriting Agreement, will be entitled to the benefits of the
Indenture, and will be valid and binding obligations of the Company, enforceable
in accordance with their terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other laws affecting creditors' rights generally and by equitable
principles of general applicability (whether considered in a proceeding at law
or in equity).
(h) This Agreement has been duly authorized, executed and
delivered by the Company.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting Agreement,
the Indenture and the Offered Securities will not contravene, conflict with,
result in a breach of or constitute a default under any provision of (A)
applicable law, (B) the amended and restated charter or the by-laws of the
3
<PAGE>
Company, (C) any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or any of its subsidiaries is a party that is
material to the Company and its subsidiaries, taken as a whole or (D) any
judgment, order or decree of any governmental body, agency or court applicable
to the Company or any subsidiary.
(j) The North Carolina Utilities Commission (the "NCUC") has
issued an appropriate order or orders with respect to the issuance and sale of
the Offered Securities in accordance with the Underwriting Agreement; such order
or orders are in full force and effect; the issuance and sale of the Offered
Securities are in conformity with the terms of such order or orders; and no
other authorization, approval or consent of any other governmental body or
agency is legally required for the issuance and sale of the Offered Securities
as contemplated by the Underwriting Agreement, except as may be required under
the state securities or Blue Sky laws in connection with the purchase and
distribution of the Offered Securities by the Underwriters.
(k) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set forth in the
Prospectus.
(l) All legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is subject
that are required to be described in the Registration Statement or the
Prospectus are so described, and all statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement or the
Prospectus, or to be filed or incorporated by reference as exhibits to the
Registration Statement, are described, filed or incorporated as required.
(m) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act") and is
not a "holding company," as such term is defined in the Public Utility Holding
Company Act of 1935, as amended ("PUHCA").
(n) The Company and its subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or water, pollutants or
contaminants ("Environmental Laws"); (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses; and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries, taken as a
whole.
(o) In the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the course of
which it identifies and evaluates associated costs
4
<PAGE>
and liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties). On the
basis of such review, the Company has reasonably concluded that such associated
costs and liabilities would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
2. Public Offering. The Company is advised by the Representative that
the Underwriters propose to make a public offering of their respective portions
of the Offered Securities as soon after the Underwriting Agreement has been
entered into as in the Representative's judgment is advisable. The terms of the
public offering of the Offered Securities are set forth in the Prospectus.
3. Purchase and Delivery. Subject to the terms and conditions herein
set forth, the Company hereby agrees to sell and the Underwriters agree to
purchase, severally and not jointly, the respective principal amounts of Offered
Securities set forth opposite the name of such Underwriter in Schedule I hereto
at the purchase price set forth in Schedule II in the type of funds and method
of payment specified in Schedule II.
Delivery of the Offered Securities and payment of the purchase price
shall be made at the time, date and place indicated in Schedule II. The time and
date of such payment and delivery are hereinafter referred to as the Closing
Date.
The Offered Securities shall be delivered to the Underwriters in such
authorized denominations and registered in such names as the Representative
shall request in writing not less than one full business day prior to the date
of delivery. The Company agrees to make the Offered Securities available to the
Underwriters for checking not later than 2:30 P.M., New York time, on the last
business day preceding the Closing Date at such place as may be agreed upon
between the Representative and the Company.
4. Conditions to Closing. The several obligations of the Underwriters
hereunder are subject to the following conditions:
(a) Subsequent to the execution and delivery of the Underwriting
Agreement and prior to the Closing Date,
(i) no downgrading shall have occurred and no notice
shall have been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction
of the possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act;
(ii) no change, and no development involving a
prospective change, shall have occurred in the condition, financial or
otherwise, or in the earnings, business or operations, of the Company
and its subsidiaries, taken as a whole, from that set forth in the
Prospectus, that, in the judgment of Morgan Stanley & Co. Incorporated,
5
<PAGE>
is material and adverse and that makes it, in the judgment of Morgan
Stanley & Co. Incorporated, impracticable to market the Offered
Securities on the terms and in the manner contemplated in the
Prospectus; and
(iii) the Company shall have obtained an appropriate order
or orders of the NCUC authorizing the issuance, sale and delivery of
the Offered Securities as contemplated by this Agreement, which order
or orders at the Closing Date shall be in full force and effect and
shall not be contested or the subject of review or appeal.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of the
Company to the effect set forth in clause (a)(i) and (iii) above and that the
representations and warranties of the Company contained in this Agreement are
true and correct as of the Closing Date and that the Company has complied with
all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied on or before the Closing Date.
(c) The Representative shall have received on the Closing Date
an opinion dated the Closing Date of McGuire, Woods, Battle & Boothe LLP,
special counsel to the Company, to the effect that
(i) the Indenture has been duly qualified under the
Trust Indenture Act and is a valid and binding agreement of the
Company, enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other laws affecting the enforcement of creditors' rights
generally and by general equitable principles (whether considered in a
proceeding at law or in equity);
(ii) the Offered Securities, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters in accordance with the
terms of the Underwriting Agreement, will be entitled to the benefits
of the Indenture and will be valid and binding obligations of the
Company, in each case enforceable in accordance with their respective
terms, except as limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (whether considered in a proceeding at law or in equity);
(iii) the execution and delivery by the Company of, and
the performance by the Company of its obligations under, the
Underwriting Agreement, the Indenture and the Offered Securities will
not contravene, conflict with, result in a breach of or constitute a
default under any provision of (A) applicable law (assuming compliance
with all applicable state securities or Blue Sky laws), (B) to the best
of such counsel's knowledge after due inquiry, any indenture, mortgage,
deed of trust or other agreement or instrument to which the Company or
any of its subsidiaries is a party that is material to the Company and
its subsidiaries, taken as a whole or (C) to the best of such counsel's
knowledge after due inquiry, any judgment, order or decree of any
governmental body, agency or court applicable to the Company or any
subsidiary;
6
<PAGE>
(iv) no authorization, approval or consent of any other
governmental body or agency is legally required for the issuance and
sale of the Offered Securities as contemplated by the Underwriting
Agreement, except (A) as may be required under the state securities or
Blue Sky laws in connection with the purchase and distribution of the
Offered Securities by the Underwriters, (B) registration of the Offered
Securities under the Securities Act and (C) as may be required by any
securities exchange on which the Offered Securities may be listed;
(v) the statements in the Prospectus under the captions
"Description of Debentures," "Description of Debt Securities,"
"Underwriting" and "Plan of Distribution," in each case insofar as such
statements constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present the information called
for with respect to such legal matters, documents and proceedings and
fairly summarize the matters referred to therein;
(vi) to the best of such counsel's knowledge after due
inquiry, such counsel does not know of any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed or incorporated
by reference as exhibits to the Registration Statement that are not
described, filed or incorporated as required;
(vii) the Company is not (A) an "investment company" or an
entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act or (B) a "holding company," as
such term is defined in PUHCA;
(viii) the Registration Statement has become and is
effective under the Securities Act, and, to the best of such counsel's
knowledge, in the case of McGuire, Woods, Battle & Boothe LLP's
opinion, based solely on their inquiries with the Commission and the
Company, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for a stop order with
respect thereto are pending or threatened under Section 8(d) of the
Securities Act; and
(ix) such counsel (A) is of the opinion that (except for
financial statements and schedules and other financial and statistical
data contained or incorporated by reference therein, as to which such
counsel need not express any opinion) each document, if any, filed
pursuant to the Exchange Act and incorporated by reference in the
Prospectus complied when so filed as to form in all material respects
with the Exchange Act and the applicable rules and regulations of the
Commission thereunder, (B) believes that (except for financial
statements and schedules and other financial and statistical data
contained or incorporated by reference therein, as to which such
counsel need not express any belief and except for that part of the
Registration Statement that constitutes the Form T-l heretofore
referred to) each part of the Registration Statement, on the effective
date, did not, and, as of the date such opinion is delivered, does not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (C) is of the opinion that the
Registration Statement, on the effective date, and the Prospectus, when
it was first filed with the Commission pursuant to Rule 424 under the
Securities Act (in each case, except
7
<PAGE>
for financial statements and schedules and other financial and
statistical data included or incorporated by reference therein, as to
which such counsel need not express any opinion), complied as to form
in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder and (D) believes
that (except for financial statements and schedules and other financial
or statistical data contained or incorporated by reference therein, as
to which such counsel need not express any belief) the Prospectus, when
it was first filed with the Commission pursuant to Rule 424 under the
Securities Act, did not and as of the date such opinion is delivered,
does not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
In rendering such opinion, McGuire, Woods, Battle & Boothe LLP may limit the
matters set forth therein to those involving the application of the laws of the
State of New York and the federal laws of the United States of America.
(d) The Representative shall have received on the Closing Date
an opinion dated the Closing Date of J. Paul Douglas, Esq., Corporate Counsel
and Secretary of the Company, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of North Carolina, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus and
is duly qualified and in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole;
(ii) each subsidiary of the Company that is a corporation
has been duly incorporated and is validly existing as a corporation,
and each subsidiary of the Company that is a limited liability company
has been duly organized and is validly existing as a limited liability
company, in each case, in good standing under the laws of the
jurisdiction of its organization, has the corporate or limited
liability company (as the case may be) power and authority to own its
property and to conduct its business as described in the Prospectus and
is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole;
(iii) the Offered Securities have been duly authorized,
and this Agreement and the Indenture have been duly authorized,
executed and delivered, by the Company;
(iv) to the best of such counsel's knowledge after due
inquiry, such counsel does not know of any legal or governmental
proceedings pending or threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the
8
<PAGE>
Company or any of its subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not
so described;
(v) the statements (A) in the Registration Statement
under Item 15, (B) in "Item 3 - Legal Proceedings" of the Company's
most recent annual report on Form 10-K incorporated by reference in the
Prospectus and (C) in "Item 1 - Legal Proceedings" of Part II of the
Company's quarterly reports on Form 10-Q filed since such annual
report, and (D) in the Company's current report on Form 8-K filed
February 22, 1999, in each case insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect to such
legal matters, documents and proceedings and fairly summarize the
matters referred to therein;
(vi) NCUC has issued an appropriate order or orders with
respect to the issuance and sale of the Offered Securities in
accordance with the Underwriting Agreement; such order or orders are in
full force and effect and are sufficient to authorize such issuance and
sale as contemplated by the Agreement; the issuance and sale of the
Offered Securities are in conformity with the terms of such order or
orders; no challenge to or appeal of such order or orders after the
date of issuance of the Offered Securities can affect the validity of
the Offered Securities; and
(vii) the execution and delivery by the Company of, and
its performance of its obligations under, each of this Agreement, the
Indenture and the Offered Securities will not contravene, conflict
with, result in a breach of or constitute a default under any provision
of the Company's Amended and Restated Charter or Amended and Restated
By-Laws.
Such opinion shall also cover the matters referred to in
paragraph (c), other than clause (vii) thereof.
In rendering such opinion, J. Paul Douglas may limit the matters set forth
therein to those involving the application of the laws of the State of North
Carolina and the federal laws of the United States of America.
(e) The Representative shall have received on the Closing Date
an opinion dated the Closing Date of Winthrop, Stimson, Putnam & Roberts,
counsel for the Underwriters, covering the matters referred to in subparagraphs
(i), (ii), (v), (viii) and (ix) (but only as to the matters referred to in
clauses (B), (C) and (D) thereof) of paragraph (c) above.
As to matters of North Carolina law, Winthrop, Stimson, Putnam &
Roberts may rely upon the opinion of even date herewith of J. Paul Douglas.
With respect to the subparagraph (ix) of paragraph (c) above, McGuire,
Woods, Battle & Boothe LLP, special counsel to the Company, may state that their
opinion and belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
and review and discussion of the contents thereof (including the documents
incorporated by reference therein), but are without independent check or
verification, except as specified. With respect to clauses (B), (C) and (D) of
subparagraph (ix) of
9
<PAGE>
paragraph (c) above, Winthrop, Stimson, Putnam & Roberts may state that their
opinion and belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
(but not including documents incorporated therein by reference) and review and
discussion of the contents thereof (including documents incorporated therein by
reference) but are without independent check or verification, except as
specified.
The opinions of McGuire, Woods, Battle & Boothe LLP, special
counsel to the Company, described in paragraph (c) above and of J. Paul Douglas,
Esq., Vice-President - Corporate Counsel and Secretary, described in paragraph
(d) above, shall be rendered to the Representative at the request of the Company
and shall so state therein.
(f) The Representative shall have received on the date of this
Agreement a letter, dated the date of this Agreement, in form and substance
satisfactory to the Representative, from Arthur Andersen LLP, the Company's
independent public accountants, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in or incorporated by reference into the Prospectus.
(g) The Representative shall have received on the Closing Date
a letter, dated the Closing Date, in form and substance satisfactory to the
Representative, from Arthur Andersen LLP, the Company's independent public
accountants, to the effect that such accountants reaffirm, as of the Closing
Date, and as though made on the Closing Date, the statements made in the letter
furnished by such accountants pursuant to Section 4(e), except that the
specified date referred to therein shall be a date not more than five business
days prior to the Closing Date.
(h) On the Closing Date, Standard & Poor's Ratings Services
and Moody's Investors Service, Inc. shall have publicly assigned to the Offered
Securities ratings of A- and A2, respectively, which ratings shall be in full
force and effect on the Closing Date.
5. Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants as follows:
(a) To furnish the Representative, without charge, a signed
copy of the Registration Statement (including exhibits thereto) and to deliver
to each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and, during the period mentioned in paragraph (c)
below, as many copies of the Prospectus, any documents incorporated by reference
therein and any supplements and amendments thereto or to the Registration
Statement as the Underwriters may reasonably request.
(b) To cause the Prospectus to be filed with the Commission
pursuant to and in compliance with Rule 424 under the Securities Act.
(c) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to the Representative a copy of each
such proposed amendment or supplement and not to file any such proposed
amendment or supplement to which the Representative reasonably objects.
10
<PAGE>
(d) If, during such period after the first date of the public
offering of the Offered Securities as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in connection
with sales by an Underwriter or dealer, any event shall occur or condition exist
as a result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if, in the opinion of
counsel for the Underwriters, it is necessary to amend or supplement the
Prospectus to comply with law, forthwith to prepare, file with the Commission
and furnish, at its own expense, to the Underwriters, and to the dealers (whose
names and addresses the Representative will furnish to the Company) to which
Offered Securities may have been sold by the Representative on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the Prospectus,
as amended or supplemented, will comply with applicable law.
(e) To endeavor to qualify the Offered Securities for offer
and sale under the securities or Blue Sky laws of such jurisdictions as the
Representative shall reasonably request and to maintain such qualification for
as long as the Representative shall reasonably request.
(f) To make generally available to the Company's security
holders and to the Representative as soon as practicable an earning statement
covering a twelve month period beginning on the first day of the first full
fiscal quarter after the date of the Underwriting Agreement, which earning
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and the rules and regulations of the Commission thereunder. If such fiscal
quarter is the last fiscal quarter of the Company's fiscal year, such earning
statement shall be made available not later than 90 days after the close of the
period covered thereby and in all other cases shall be made available not later
than 45 days after the close of the period covered thereby.
(g) During the period beginning on the date of this Agreement
and continuing to and including the Closing Date, without the prior written
consent of Morgan Stanley & Co. Incorporated, not to (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend or
otherwise transfer or dispose of, directly or indirectly, any debt securities of
the Company or warrants to purchase debt securities of the Company substantially
similar to the Offered Securities or any securities convertible into or
exercisable or exchangeable therefor (other than (i) the Offered Securities,
(ii) commercial paper issued in the ordinary course of business and (iii) other
debt securities evidencing commercial bank loans) or (2) enter into any swap or
similar arrangement that transfers, in whole or part, the economic consequences
of ownership of any of the foregoing, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of the Offered Securities
or such other securities, in cash or otherwise.
(h) Whether or not any sale of the Offered Securities is
consummated, to pay all expenses incident to the performance of its obligations
under the Underwriting Agreement, including: (i) the preparation and filing of
the Registration Statement and the Prospectus and all amendments and supplements
thereto, (ii) the preparation, issuance and delivery of the Offered Securities,
(iii) the fees and disbursements of the Company's counsel and accountants and of
the Trustee and its counsel, (iv) the qualification of the Offered Securities
under securities or Blue
11
<PAGE>
Sky laws in accordance with the provisions of Section 5(e), including filing
fees and the fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of any Blue Sky
Memoranda, (v) the printing and delivery to the Underwriters in quantities as
hereinabove stated of copies of the Registration Statement and all amendments
thereto and of the Prospectus and any amendments or supplements thereto, (vi)
any fees charged by rating agencies for the rating of the Offered Securities,
(vii) the fees and expenses, if any, incurred with respect to any filing with
the National Association of Securities Dealers, Inc. and (viii) all document
production charges and expenses of counsel to the Underwriters (but not
including their fees for professional services) in connection with the
preparation of this Agreement.
6. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred by any Underwriter or any such
controlling person in connection with investigating or defending any such action
or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Representative expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
to such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through the
Representative expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such
12
<PAGE>
proceeding (including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all such indemnified parties and that all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by the
Representative, in the case of parties indemnified pursuant to paragraph (a)
above, and by the Company, in the case of parties indemnified pursuant to
paragraph (b) above. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 6 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Offered Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other hand in connection with the offering of the Offered Securities
shall be deemed to be in the same respective proportions as the net proceeds
from the offering of such Offered Securities (before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus Supplement, bear to the aggregate public offering price
of the Offered Securities. The relative fault of the Company on the one hand and
of the Underwriters on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
13
<PAGE>
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Underwriters' respective obligations to
contribute pursuant to this Section 6 are several in proportion to the
respective principal amounts of the Offered Securities they have purchased
hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 6 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Offered
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 6 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
7. Termination. This Agreement shall be subject to termination, by
notice given by the Representative to the Company, if (a) after the execution
and delivery of the Underwriting Agreement and prior to the Closing Date (i)
trading generally shall have been suspended or materially limited on or by, as
the case may be, any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Nasdaq
National Market, the Chicago Board Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) trading of any securities of the
Company shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New York
shall have been declared by either Federal or New York State authorities or (iv)
there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in the judgment of
Morgan Stanley & Co. Incorporated, is material and adverse and (b) in the case
of any of the events specified in clauses (a)(i) through (iv), such event,
singly or together with any other such event, makes it, in the judgment of
Morgan Stanley & Co. Incorporated, impracticable to market the Offered
Securities on the terms and in the manner contemplated in the Prospectus. This
Agreement may also be terminated at any time prior to the Closing Date if in the
judgment of Morgan Stanley & Co. Incorporated the subject matter of any
amendment or supplement to the Registration Statement or Prospectus prepared and
furnished by the Company reflects a material adverse change in the business,
properties or financial condition of the Company which renders it either
inadvisable to proceed with such offering, if any, or inadvisable to proceed
with the delivery of the Offered Securities to be purchased hereunder.
14
<PAGE>
8. Defaulting Underwriters. If, on the Closing Date, any one or more of
the Underwriters shall fail or refuse to purchase the Offered Securities that it
has or they have agreed to purchase hereunder on such date, and the aggregate
amount of Offered Securities which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate amount of the Offered Securities to be purchased on such date, the
other Underwriters shall be obligated severally in the proportions that the
amount of Offered Securities set forth opposite their respective names in the
Underwriting Agreement bears to the aggregate amount of the Offered Securities
set forth opposite the names of all such non-defaulting Underwriters, or in such
other proportions as the Representative may specify, to purchase the Offered
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase on such date; provided that in no event shall the amount
of the Offered Securities that any Underwriter has agreed to purchase pursuant
to this Agreement be increased pursuant to this Section 8 by an amount in excess
of one-ninth of such amount of the Offered Securities without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase the Offered Securities that it has
or they have agreed to purchase and the aggregate amount of the Offered
Securities with respect to which such default occurs is more than one-tenth of
the aggregate amount of the Offered Securities to be purchased on such date, and
arrangements satisfactory to the Representative and the Company for the purchase
of such Offered Securities are not made within 36 hours after such default, the
Underwriting Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case either the
Representative or the Company shall have the right to postpone the Closing Date
but in no event for longer than seven days, in order that the required changes,
if any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. Any action taken under this paragraph
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under the Underwriting Agreement.
If the Underwriting Agreement shall be terminated by the Underwriters,
or any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of the Underwriting
Agreement, or if for any reason the Company shall be unable to perform its
obligations under the Underwriting Agreement, the Company will reimburse the
Underwriters or such Underwriters as have so terminated the Underwriting
Agreement with respect to themselves, severally, for all out-of-pocket expenses
(including the fees and disbursements of their counsel) reasonably incurred by
such Underwriters in connection with the Underwriting Agreement or the offering
of the Offered Securities.
9. Representations and Indemnities to Survive. The respective indemnity
and contribution agreements and the representations, warranties and other
statements of the Company, its officers and the Underwriters set forth in the
Underwriting Agreement will remain in full force and effect, regardless of any
termination of the Underwriting Agreement, any investigation made by or on
behalf of any Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Section 6 and delivery of and payment for the
Offered Securities.
10. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors and controlling persons referred to in Section 6, and no
other person will have any right or obligation hereunder.
15
<PAGE>
11. Counterparts. The Underwriting Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
12. Applicable Law. The Underwriting Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
13. Headings. The headings of the sections of the Underwriting
Agreement have been inserted for convenience of reference only and shall not be
deemed a part of the Underwriting Agreement.
14. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telecopied and confirmed
to Morgan Stanley & Co. Incorporated at 1585 Broadway, 2nd Floor, New York, New
York 10036, Attn: Managing Director - Debt Syndicate, Telecopy No: (212)
761-0783, or, if sent to the Company, will be mailed, delivered or telecopied
and confirmed to it at P.O. Box 1398, Gastonia, North Carolina 28053-1398 400
Cox Road, Gastonia, North Carolina 28053-1398, Attn: Mr. Jack G. Mason, Vice
President - Finance, Telecopy No: (704) 834-6538.
15. Effective Date. As used herein, the term "effective date" shall
mean the later of (i) the date the Registration Statement (or the most recent
post-effective amendment thereto) was declared effective by the Commission under
the Securities Act and (ii) the date the Company's most recent Annual Report on
Form 10-K was filed with the Commission pursuant to the Exchange Act.
16
<PAGE>
Please confirm your agreement by having an authorized officer sign a
copy of the Underwriting Agreement in the space set forth below.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
By:______________________________
Name:
Title:
Accepted, [ ]
PUBLIC SERVICE COMPANY OF NORTH CAROLINA,
INCORPORATED
By:_________________________________
Name:
Title:
17
<PAGE>
Schedule I
Principal Amount
Name of Underwriter of Offered Securities
- ------------------- ----------------------
Morgan Stanley & Co. Incorporated .. . . . . . . . . . . . . $[ ]
<PAGE>
Schedule II
Underwriting Agreement dated [ ]
Registration Statement No. 33-65205, 333-79107
Representative and Address:
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Securities: Senior Debentures
Designation: [ ]% Senior Debentures due [ ]
Principal Amount: $[ ]
Supplemental Indenture dated as of: [ ]
Date of Maturity: [ ]
Interest Rate: [ ]%
Purchase Price: [ ]% [plus accrued interest, if any, from [ ]]
Public Offering Price: [ ]% [plus accrued interest, if any, from [ ]]
Type of Funds/Method of Payment: Immediately Available Funds/Wire Transfer
Closing Date and Location: [ ], at the offices of McGuire, Woods, Battle &
Boothe LLP or at such other location as is agreed upon by the parties hereto.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated October 30, 1998,
included in Public Service Company of North Carolina, Incorporated's Form 10-K
for the year ended September 30, 1998, and to all references to our firm
included in this registration statement.
Charlotte, North Carolina,
June 7, 1999.
/s/ARTHUR ANDERSEN LLP
----------------------
ARTHUR ANDERSEN LLP
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
----------
FIRST UNION NATIONAL BANK
(Exact name of trustee as specified in its charter)
United States National Bank 22-1147033
(State of incorporation if (I.R.S. employer
not a national bank) identification no.)
First Union National Bank
230 South Tryon Street, 9th Floor
Charlotte, North Carolina 28288-1179
(Address of principal (Zip Code)
executive offices)
Same as above
-------------
(Name, address and telephone number, including
area code, of trustee's agent for service)
Public Service Company of North
Carolina,Inc.
(Exact name of obligor as specified in its charter)
State of North Carolina
(State or other jurisdiction of incorporation or organization)
56-0233140
(I.R.S. employer identification no.)
Mr. Robert Thorton
Dir.,Investor Relations/Financial Projects
400 Cox Rd, PO Box 1398
Gastonia, NC 28053-1398
(704)834-6313
(Address, including zip code, of principal executive offices)
--------------------
Senior Unsecured Debt
(Title of the indenture securities)
------------------------------------------------
1. General information. Furnish the following information as to the trustee:
<PAGE>
(a) Name and address of each examining or supervising authority to which it
is subject
-----------------------------------------------------------------
Name Address
------------------------------------------------------------------
Federal Reserve Bank of Richmond, Richmond, VA
Comptroller of the Currency Washington, D.C.
Securities and Exchange Commission
Division of Market Regulation Washington, D.C.
Federal Deposit Insurance Corporation Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
2. Affiliations with obligor and underwriters. If the obligor or any underwriter
for the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
(See Note 1 on Page 4.)
Because the obligor is not in default on any securities issued under indentures
under which the applicant is trustee, Items 3 through 15 are not required
herein.
16. List of Exhibits.
All exhibits identified below are filed as a part of this statement of
eligibility.
1. A copy of the Articles of Association of First
<PAGE>
Union National Bank as now in effect, which contain the authority to commence
business and a grant of powers to exercise corporate trust powers.
2. A copy of the certificate of authority of the trustee to commence business,
if not contained in the Articles of Association.
3. A copy of the authorization of the trustee to exercise corporate trust
powers, if such authorization is not contained in the documents specified in
exhibits (1) or (2) above.
4. A copy of the existing By-laws of First Union National Bank, or instruments
corresponding thereto.
5. Inapplicable.
6. The consent of the trustee required by Section 321(b) of the Trust Indenture
Act of 1939 is included at Page 4 of this Form T-1 Statement.
7. A copy of the latest report of condition of the trustee published pursuant to
law or to the requirements of its supervising or examining authority is attached
hereto.
8. Inapplicable.
9. Inapplicable.
3
<PAGE>
NOTE
Note 1: Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information. Item 2 may, however,
be considered correct unless amended by an amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended,
the trustee, First Union National Bank, a national association organized and
existing under the laws of the United States of America, has duly caused
this statement of eligibility and qualification to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Charlotte, and State of North Carolina, on the 21st day of May, 1999.
FIRST UNION NATIONAL BANK
(trustee)
By: /s/ Joanne M. Gonot
---------------------------
Its: Assistant Vice President
------------------------
CONSENT OF TRUSTEE
Under section 321(b) of the Trust Indenture Act of 1939, as amended, and in
connection with the proposed issuance by Public Service Company of North
Carolina,Inc., First Union National Bank as the trustee herein named, hereby
consents that reports of examinations of said Trustee by Federal, State,
Territorial or District authorities may be furnished by such authorities
to the Securities and Exchange Commission upon requests therefor.
FIRST UNION NATIONAL BANK
By: /s/ Joanne M. Gonot
-----------------------------
Name: Joanne M. Gonot
-------------------------
Title: Assistant Vice President
------------------------
Dated: May 21, 1999
4
<PAGE>
Charter No. 22693
FIRST UNION NATIONAL BANK
ARTICLES OF ASSOCIATION
-----------------------
(as restated effective February 26, 1998)
For the purpose of organizing an Association to carry on the business of banking
under the laws of the United States, the undersigned do enter into the following
Articles of Association:
FIRST. The title of this Association shall be FIRST UNION NATIONAL BANK.
SECOND. The main office of the Association shall be in Charlotte, County of
Mecklenburg, State of North Carolina. The general business of the Association
shall be conducted at its main office and its branches.
THIRD. The Board of Directors of this Association shall consist of not less
than five nor more than twenty-five directors, the exact number of directors
within such minimum and maximum limits to be fixed and determined from time to
time by resolution of a majority of the full Board of Directors or by resolution
of the shareholders at any annual or special meeting thereof. Unless otherwise
provided by the laws of the United States, any vacancy in the Board of Directors
for any reason, including an increase in the number thereof, may be filled by
action of the Board of Directors.
FOURTH. The annual meeting of the shareholders for the election of directors
and the transaction of whatever other business may be brought before said
meeting shall be held at the main office or such other place as the Board of
Directors may designate, on the day of each year specified therefor in the
By-Laws, but if no election is held on that day, it may be held on any
subsequent day according to the provisions of law; and all elections shall be
held according to such lawful regulations as may be prescribed by the Board of
Directors.
Nominations for election to the Board of Directors may be made by the Board
of Directors or by any stockholder of any outstanding class of capital stock of
the bank entitled to vote for election of directors. Nominations, other than
those made by or on behalf of the existing management of the bank, shall be made
in writing and shall be delivered or mailed to the President of the bank and to
the Comptroller of the Currency, Washington, D.C., not less than 14 days nor
more than 50 days prior to any meeting of stockholders called for the election
of directors, provided, however, that if less than 21 days' notice of the
meeting is given to shareholders, such nomination shall be mailed or delivered
to the President of the Bank and to the Comptroller of the Currency not later
than the close of business on the seventh day following the day on which the
notice of meeting was mailed. Such notification shall contain the following
information to the extent known to the notifying shareholder: (a) the name and
address of each proposed nominee; (b) the principal occupation of each proposed
nominee; (c) the total number of shares of capital stock of the bank that will
be voted for each proposed nominee; (d) the name and residence address of the
notifying shareholder; and (e) the number of shares of capital stock of the bank
owned by the notifying shareholder. Nominations not made in accordance herewith
may, in his discretion, be disregarded by the Chairman of the meeting, and upon
his instructions, the vote tellers may disregard all votes cast for each such
nominee.
FIFTH.
(a) General. The amount of capital stock of this Association shall be (i)
25,000,000 shares of common stock of the par value of twenty dollars ($20.00)
each (the "Common Stock") and (ii) 160,540 shares of preferred stock of the par
value of one dollar ($ 1. 00) each (the "Non-Cumulative Preferred Stock"),
having the rights, privileges and preferences set forth below, but said capital
stock may be increased or decreased from time to time in accordance with the
provisions of the laws of the United States.
(b) Terms of the Non-Cumulative Preferred Stock.
1. General. Each share of Non-Cumulative Preferred Stock shall be identical
in all respects with the other shares of Non-Cumulative Preferred Stock. The
authorized number of shares of Non-Cumulative Preferred Stock may from time
to time be increased or decreased (but not below the number then
outstanding) by the Board of Directors. Shares of Non-Cumulative Preferred
Stock redeemed by the Association shall be canceled and shall revert to
authorized but unissued shares of Non-Cumulative Preferred Stock.
2. Dividends.
(a) General. The holders of Non-Cumulative Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of
Directors, but only out of funds legally available therefor,
non-cumulative cash dividends at the annual rate of $83.75 per share,
and no more, payable quarterly on the first days of December, March,
June and September, respectively, in each year with respect to the
quarterly dividend period (or portion thereof) ending on the day
preceding such respective dividend payment date, to shareholders of
record on the respective date, not exceeding fifty days preceding such
dividend payment date, fixed for that purpose by the Board of Directors
in advance of payment of each particular dividend. Notwithstanding the
foregoing, the cash dividend to be paid on the first dividend payment
date after the initial issuance of Non-Cumulative Preferred Stock and
on any dividend payment date with respect to a partial dividend period
shall be $83.75 per share multiplied by the fraction produced by
dividing the number of days since such initial issuance or in such
partial dividend period, as the case may be, by 360.
(b) Non-cumulative Dividends. Dividends on the shares of Non-cumulative
Stock shall not be cumulative and no rights shall accrue to the holders
of shares of Non-Cumulative Preferred Stock by reason of the fact that
the Association may fail to declare or pay dividends on the shares of
Non-Cumulative Preferred Stock in any amount in any quarterly dividend
period, whether or not the earnings of the Association in any quarterly
dividend period were sufficient to pay such dividends in whole or in
part, and the Association shall have no obligation at any time to pay
any such dividend.
(c) Payment of Dividends. So long as any share of Non-Cumulative
Preferred Stock remains outstanding, no dividend whatsoever shall be
paid or declared and no distribution made on any junior stock other
than a dividend payable in junior stock, and no shares of junior stock
shall be purchased, redeemed or otherwise acquired for consideration by
the Association, directly or indirectly (other than as a result of a
reclassification of junior stock, or the exchange or conversion of one
junior stock for or into another junior stock, or other than through
the use of the proceeds of a substantially contemporaneous sale of
other junior stock), unless all dividends on all shares of
non-cumulative Preferred Stock and non-cumulative Preferred Stock
ranking on a parity as to dividends with the shares of Non-Cumulative
Preferred Stock for the most recent dividend period ended prior to the
date of such payment or declaration shall have been paid in full and
all dividends on all shares of cumulative Preferred Stock ranking on a
parity as to dividends with the shares of Non-Cumulative Stock
(notwithstanding that dividends on such stock are cumulative) for all
past dividend periods shall have been paid in full. Subject to the
foregoing, and not otherwise, such dividends (payable in cash, stock or
otherwise) as may be determined by the Board of Directors may be
declared and paid on any junior stock from time to time out of any
funds legally available therefor, and the Non-Cumulative Preferred
Stock shall not be entitled to participate in any such dividends,
whether payable in cash, stock or otherwise. No dividends shall be paid
or declared upon any shares of any class or series of stock of the
Association ranking on a parity (whether dividends on such stock are
cumulative or non-cumulative) with the Non-Cumulative Preferred Stock
in the payment of dividends for any period unless at or prior to the
time of such payment or declaration all dividends payable on the
Non-cumulative Preferred Stock for the most recent dividend period
ended prior to the date of such payment or declaration shall have been
paid in full. When dividends are not paid in full, as aforesaid, upon
the Non-Cumulative Preferred Stock and any other series of Preferred
Stock ranking on a parity as to dividends (whether dividends on such
stock are cumulative or non-cumulative) with the Non-Cumulative
Preferred Stock, all dividends declared upon the Non-Cumulative
Preferred Stock and any other series of Preferred Stock ranking on a
parity as to dividends with the Non-Cumulative Preferred Stock shall be
declared pro rata so that the amount of dividends declared per share on
the Non-cumulative Preferred Stock and such other Preferred Stock shall
in all cases bear to each other the same ratio that accrued dividends
per share on the Non-Cumulative Preferred Stock (but without any
accumulation in respect of any unpaid dividends for prior dividend
periods on the shares of Non-Cumulative Stock) and such other Preferred
Stock bear to each other. No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or
payments on the Non-Cumulative Preferred Stock which may be in arrears.
3. Voting. The holders of Non-Cumulative Preferred Stock shall not have any
right to vote for the election of directors or for any other purpose.
4. Redemption.
(a) Optional Redemption. The Association, at the option of the Board of
Directors, may redeem the whole or any part of the shares of
Non-Cumulative Preferred Stock at the time outstanding, at any time or
from time to time after the fifth anniversary of the date of original
issuance of the Non-Cumulative Preferred Stock, upon notice given as
hereinafter specified, at the redemption price per share equal to
$1,000 plus an amount equal to the amount of accrued and unpaid
dividends from the immediately preceding dividend payment date (but
without any accumulation for unpaid dividends for prior dividend
periods on the shares of Non-Cumulative Preferred Stock) to the
redemption date.
(b) Procedures. Notice of every redemption of shares of Non-Cumulative
Preferred Stock shall be mailed by first class mail, postage prepaid,
addressed to the holders of record of the shares to be redeemed at
their respective last addresses as they shall appear on the books of
the Association. Such mailing shall be at least 10 days and not more
than 60 days prior to the date fixed for redemption. Any notice which
is mailed in the manner herein provided shall be conclusively presumed
to have been duly given, whether or not the shareholder receives such
notice, and failure duly to give such notice by mail, or any defect in
such notice, to any holder of shares of Non-Cumulative Preferred Stock
designated for redemption shall not affect the validity of the
proceedings for the redemption of any other shares of Non-Cumulative
Preferred Stock.
In case of redemption of a part only of the shares of Non-Cumulative
Preferred Stock at the time outstanding the redemption may be either
pro rata or by lot or by such other means as the Board of Directors of
the Association in its discretion shall determine. The Board of
Directors shall have full power and authority, subject to the
provisions herein contained, to prescribe the terms and conditions upon
which shares of the Non-Cumulative Preferred Stock shall be redeemed
from time to time.
If notice of redemption shall have been duly given, and, if on or
before the redemption date specified therein, all funds necessary for
such redemption shall have been set aside by the Association, separate
and apart from its other funds, in trust for the pro rata benefit of
the holders of the shares called for redemption, so as to be and
continue to be available therefor, then, notwithstanding that any
certificate for shares so called for redemption shall not have been
surrendered for cancellation, all shares so called for redemption shall
no longer be deemed outstanding on and after such redemption date, and
all rights with respect to such shares shall forthwith on such
redemption date cease and terminate, except only the right of the
holders thereof to, receive the amount payable on redemption thereof,
without interest.
If such notice of redemption shall have been duly given or if the
Association shall have given to the bank or trust company hereinafter
referred to irrevocable authorization promptly to give such notice,
and, if on or before the redemption date specified therein, the funds
necessary for such redemption shall have been deposited by the
Association with such bank or trust company in trust for the pro rata
benefit of the holders of the shares called for redemption, then,
notwithstanding that any certificate for shares so called for
redemption shall not have been surrendered for cancellation, from and
after the time of such deposit, all shares so called for redemption
shall no longer be deemed to be outstanding and all rights with respect
to such shares shall forthwith cease and terminate, except only the
right of the holders thereof to receive from such bank or trust company
at any time after the time of such deposit the funds so deposited,
without interest. The aforesaid bank or trust company shall be
organized and in good standing under the laws of the United States of
America or any state thereof, shall have capital, surplus and undivided
profits aggregating at least $50,000,000 according to its last
published statement of condition, and shall be identified in the notice
of redemption. Any interest accrued on such funds shall be paid to the
Association from time to time. In case fewer than all the shares of
Non-Cumulative Preferred Stock represented by a stock certificate are
redeemed, a new certificate shall be issued representing the unredeemed
shares without cost to the holder thereof.
Any funds so set aside or deposited, as the case may be, and unclaimed
at the end of the relevant escheat period under applicable state law
from such redemption date shall, to the extent permitted by law, be
released or repaid to the Association, after which repayment the
holders of the shares so called for redemption shall look only to the
Association for payment thereof.
5. Liquidation.
(a) Liquidation Preference. In the event of any voluntary liquidation,
dissolution or winding up of the affairs of the Association, the
holders of Non-cumulative Preferred Stock shall be entitled, before any
distribution or payment is made to the holders of any junior stock, to
be paid in full an amount per share equal to an amount equal to $1,000
plus an amount equal to the amount of accrued and unpaid dividends per
share from the immediately preceding dividend payment date (but without
any accumulation for unpaid dividends for prior dividend periods on the
shares of Non-cumulative Preferred Stock) per share to such
distribution or payment date (the "liquidation amount").
In the event of any involuntary liquidation, dissolution or winding up
of the affairs of the Association, then, before any distribution or
payment shall be made to the holders of any junior stock, the holders
of Non-Cumulative Preferred Stock shall be entitled to be paid in full
an amount per share equal to the liquidation amount.
If such payment shall have been made in full to all holders of shares
of Non-Cumulative Preferred Stock, the remaining assets of the
Association shall be distributed among the holders of junior stock,
according to their respective rights and preferences and in each case
according to their respective numbers of shares.
(b) Insufficient Assets. In the event that, upon any such voluntary or
involuntary liquidation, dissolution or winding up, the available
assets of the Association are insufficient to pay such liquidation
amount on all outstanding shares of Non-cumulative Preferred Stock,
then the holders of Non-Cumulative Preferred Stock shall share ratably
in any distribution of assets in proportion to the full amounts to
which they would otherwise be respectively entitled.
(c) Interpretation. For the purposes of this paragraph 5, the
consolidation or merger of the Association with any other corporation
or association shall not be deemed to constitute a liquidation,
dissolution or winding up of the Association.
6. Preemptive Rights. The Non-Cumulative Preferred Stock is not entitled
to any preemptive, subscription, conversion or exchange rights in
respect of any securities of the Association.
7. Definitions. As used herein with respect to the Non-Cumulative
Preferred Stock, the following terms shall have the following meanings:
(a) The term "junior stock" shall mean the Common Stock and any other
class or series of shares of the Association hereafter authorized over
which the Non-Cumulative Preferred Stock has preference or priority in
the payment of dividends or in the distribution of assets on any
liquidation, dissolution or winding up of the Association.
(b) The term "accrued dividends", with respect to any share of any
class or series, shall mean an amount computed at the annual dividend
rate for the class or series of which the particular share is a part,
from, if such share is cumulative, the date on which dividends on such
share became cumulative to and including the date to which such
dividends are to be accrued, less the aggregate amount of all dividends
theretofore paid thereon and, if such share is noncumulative, the
relevant date designated to and including the date to which such
dividends are accrued, less the aggregate amount of all dividends
theretofore paid with respect to such period.
(c) The term "Preferred Stock" shall mean all outstanding shares of all
series of preferred stock of the Association as defined in this Article
Fifth of the Articles of Association, as amended, of the Association.
8. Restriction on Transfer. No shares of Non-Cumulative Preferred Stock,
or any interest therein, may be sold, pledged, transferred or otherwise
disposed of without the prior written consent of the Association. The
foregoing restriction shall be stated on any certificate for any shares
of Non-Cumulative Preferred Stock.
9. Additional Rights. The shares of Non-Cumulative Preferred Stock shall
not have any relative, participating, optional or other special rights
and powers other than as set forth herein.
SIXTH. The Board of Directors shall appoint one of its members President of
this Association, who shall be Chairman of the Board, unless the Board appoints
another director to be the Chairman. The Board of Directors shall have the power
to appoint one or more Vice Presidents; and to appoint a cashier or such other
officers and employees as may be required to transact the business of this
Association.
The Board of Directors shall have the power to define the duties of the
officers and employees of the Association, to fix the salaries to be paid to
them; to dismiss them, to require bonds from them and to fix the penalty
thereof; to regulate the manner in which any increase of the capital of the
Association shall be made; to manage and administer the business and affairs of
the Association; to make all By-Laws that it may be lawful for them to make; and
generally to do and perform all acts that it may be legal for a Board of
Directors to do and perform.
SEVENTH. The Board of Directors shall have the power to change the location
of the main office to any other place within the limits of Charlotte, North
Carolina, without the approval of the shareholders but subject to the approval
of the Comptroller of the Currency; and shall have the power to establish or
change the location of any branch or branches of the Association to any other
location, without the approval of the shareholders but subject to the approval
of the Comptroller of the Currency.
EIGHTH. The corporate existence of this Association shall continue until
terminated in accordance with the laws of the United States.
NINTH. The Board of Directors of this Association, or any three or more
shareholders owning, in the aggregate, not less than 10 percent of the stock of
this Association, may call a special meeting of shareholders at any time. Unless
otherwise provided by the laws of the United States, a notice of the time,
place, and purpose of every annual and special meeting of the shareholders shall
be given by first-class mail, postage prepaid, mailed at least ten days prior to
the date of such meeting to each shareholder of record at his address as shown
upon the books of this Association.
TENTH. Each director and executive officer of this Association shall be
indemnified by the association against liability in any proceeding (including
without limitation a proceeding brought by or on behalf of the Association
itself) arising out of his status as such or his activities in either of the
foregoing capacities, except for any liability incurred on account of activities
which were at the time taken known or believed by such person to be clearly in
conflict with the best interests of the Association. Liabilities incurred by a
director or executive officer of the Association in defending a proceeding shall
be paid by the Association in advance of the final disposition of such
proceeding upon receipt of an undertaking by the director or executive officer
to repay such amount if it shall be determined, as provided in the last
paragraph of this Article Tenth, that he is not entitled to be indemnified by
the Association against such liabilities.
The indemnity against liability in the preceding paragraph of this Article
Tenth, including liabilities incurred in defending a proceeding, shall be
automatic and self-operative.
Any director, officer or employee of this Association who serves at the
request of the Association as a director, officer, employee or agent of a
charitable, not-for-profit, religious, educational or hospital corporation,
partnership, joint venture, trust or other enterprise, or a trade association,
or as a trustee or administrator under an employee benefit plan, or who serves
at the request of the Association as a director, officer or employee of a
business corporation in connection with the administration of an estate or trust
by the Association, shall have the right to be indemnified by the Association,
subject to the provisions set forth in the following paragraph of this Article
Tenth, against liabilities in any manner arising out of or attributable to such
status or activities in any such capacity, except for any liability incurred on
account of activities which were at the time taken known or believed by such
person to be clearly in conflict with the best interests of the Association, or
of the corporation, partnership, joint venture, trust, enterprise, Association
or plan being served by such person.
In the case of all persons except the directors and executive officers of
the Association, the determination of whether a person is entitled to
indemnification under the preceding paragraph of this Article Tenth shall be
made by and in the sole discretion of the Chief Executive Officer of the
Association. In the case of the directors and executive officers of the
Association, the indemnity against liability in the preceding paragraph of this
Article Tenth shall be automatic and self-operative.
For purposes of this Article Tenth of these Articles of Association only,
the following terms shall have the meanings indicated:
(a) "Association" means First Union National Bank and its direct and
indirect wholly-owned subsidiaries.
(b) "Director" means an individual who is or was a director of the
Association.
(c) "Executive officer" means an officer of the Association who by
resolution of the Board of Directors of the Association has been determined to
be an executive officer of the Association for purposes of Regulation O of the
Federal Reserve Board.
(d) "Liability" means the obligation to pay a judgment, settlement,
penalty, fine (including an excise tax assessed with respect to an employee
benefit plan), or reasonable expenses, including counsel fees and expenses,
incurred with respect to a proceeding.
(e) "Party" includes an individual who was, is, or is threatened to be
made a named defendant or respondent in a proceeding.
(f) "Proceeding" means any threatened, pending, or completed claim,
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal.
The Association shall have no obligation to indemnify any person for an
amount paid in settlement of a proceeding unless the Association consents in
writing to such settlement.
The right to indemnification herein provided for shall apply to persons who
are directors, officers, or employees of banks or other entities that are
hereafter merged or otherwise combined with the Association only after the
effective date of such merger or other combination and only as to their status
and activities after such date.
The right to indemnification herein provided for shall inure to the benefit
of the heirs and legal representatives of any person entitled to such right.
No revocation of, change in, or adoption of any resolution or provision in
the Articles of Association or By-laws of the Association inconsistent with,
this Article Tenth shall adversely affect the rights of any director, officer,
or employee of the Association with respect to (i) any proceeding commenced or
threatened prior to such revocation, change, or adoption, or (ii) any proceeding
arising out of any act or omission occurring prior to such revocation, change,
or adoption, in either case, without the written consent of such director,
officer, or employee.
The rights hereunder shall be in addition to and not exclusive of any other
rights to which a director, officer, or employee of the Association may be
entitled under any statute, agreement, insurance policy, or otherwise.
The Association shall have the power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, or employee of the
Association, or is or was serving at the request of the Association as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, trade association, employee benefit plan, or other enterprise,
against any liability asserted against such director, officer, or employee in
any such capacity, or arising out of their status as such, whether or not the
Association would have the power to indemnify such director, officer, or
employee against such liability, excluding insurance coverage for a formal order
assessing civil money penalties against an Association director or employee.
Notwithstanding anything to the contrary provided herein, no person shall
have a right to indemnification with respect to any liability (i) incurred in an
administrative proceeding or action instituted by an appropriate bank regulatory
agency which proceeding or action results in a final order assessing civil money
penalties or requiring affirmative action by an individual or individuals in the
form of payments to the Association, (ii) to the extent such person is entitled
to receive payment therefor under any insurance policy or from any corporation,
partnership, joint venture, trust, trade association, employee benefit plan, or
other enterprise other than the Association, or (iii) to the extent that a court
of competent jurisdiction determines that such indemnification is void or
prohibited under state or federal law.
ELEVENTH. These Articles of Association may be amended at any regular or
special meeting of the shareholders by the affirmative vote of the holders of a
majority of the stock of this Association, unless the vote of holders of a
greater amount of stock is required by law, and in that case, by the vote of the
holders of such greater amount.
<PAGE>
[LOGO APPEARS HERE]
- --------------------------------------------------------------------------------
Comptroller of the Currency
Administrator of National Banks
- --------------------------------------------------------------------------------
Washington, D.C. 20219
CERTIFICATE OF FIDUCIARY POWERS
I, John D. Hawke, Jr., Comptroller of the Currency, do hereby certify that:
1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq.,
as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and
control of all records pertaining to the chartering of all National Banking
Associations.
2. "First Union National Bank," Charlotte, North Carolina, (Charter
No. 000001), was granted, under the hand and seal of the Comptroller, the right
to act in all fiduciary capacities authorized under the provisions of the Act of
Congress approved September 28, 1962, 76 Stat. 668, 12 U.S.C. 92a, and that the
authority so granted remains in full force and effect on the date of this
Certificate.
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal
[CURRENCY BUREAU SEAL of office to be affixed to these
APPEARS HERE] presents at the Treasury Department
in the City of Washington and
District of Columbia, this 7th
day of April, 1999.
/s/ John D. Hawke, Jr.
---------------------------------
Comptroller of the Currency
<PAGE>
BY-LAWS OF
FIRST UNION NATIONAL BANK
CHARTER NO. 26693
AS RESTATED EFFECTIVE FEBRUARY 26, 1998
<PAGE>
BY-LAWS OF
FIRST UNION NATIONAL BANK
ARTICLE I
Meetings of Shareholders
Section 1.1 Annual Meeting. The annual meeting of the shareholders for
the election of directors and for the transaction of such other business as may
properly come before the meeting shall be held on the third Tuesday of April in
each year, commencing with the year 1998, except that the Board of Directors
may, from time to time and upon passage of a resolution specifically setting
forth its reasons, set such other date for such meeting during the month of
April as the Board of Directors may deem necessary or appropriate; provided,
however, that if an annual meeting would otherwise fall on a legal holiday, then
such annual meeting shall be held on the second business day following such
legal holiday. The holders of a majority of the outstanding shares entitled to
vote which are represented at any meeting of the shareholders may choose persons
to act as Chairman and as Secretary of the meeting.
Section 1.2 Special Meetings. Except as otherwise specifically provided
by statute, special meetings of the shareholders may be called for any purpose
at any time by the Board of Directors or by any three or more shareholders
owning, in the aggregate, not less than ten percent of the stock of the
Association. Every such special meeting, unless otherwise provided by law, shall
be called by mailing, postage prepaid, not less than ten days prior to the date
fixed for such meeting, to each shareholder at his address appearing on the
books of the Association, a notice stating the purpose of the meeting.
Section 1.3 Nominations for Directors. Nominations for election to the
Board of Directors may be made by the Board of Directors or by any stockholder
of any outstanding class of capital stock of the bank entitled to vote for the
election of directors. Nominations, other than those made by or on behalf of the
existing management of the bank, shall be made in writing and shall be delivered
or mailed to the President of the Bank and to the Comptroller of the Currency,
Washington, D. C., not less than 14 days nor more than 50 days prior to any
meeting of stockholders called for the election of directors, provided however,
that if less than 21 days' notice of such meeting is given to shareholders, such
nomination shall be mailed or delivered to the President of the Bank and to the
Comptroller of the Currency not later than the close of business on the seventh
day following the day on which the notice of meeting was mailed. Such
notification shall contain the following information to the extent known to the
notifying shareholder: (a) the name and address of each proposed nominee; (b)
the principal occupation of each proposed nominee; (c) the total number of
shares of capital stock of the bank that will be voted for each proposed
nominee; (d) the name and residence address of the notifying shareholder; and
(e) the number of shares of capital stock of the bank owned by the notifying
shareholder. Nominations not made in accordance herewith may, in his discretion,
be disregarded by the chairman of the meeting, and upon his instructions, the
vote tellers may disregard all votes cast for each such nominee.
Section 1.4 Judges of Election. The Board may at any time appoint from
among the shareholders three or more persons to serve as Judges of Election at
any meeting of shareholders; to act as judges and tellers with respect to all
votes by ballot at such meeting and to file with the Secretary of the meeting a
Certificate under their hands, certifying the result thereof.
Section 1.5 Proxies. Shareholders may vote at any meeting of the
shareholders by proxies duly authorized in writing, but no officer or employee
of this Association shall act as proxy. Proxies shall be valid only for one
meeting, to be specified therein, and any adjournments of such meeting. Proxies
shall be dated and shall be filed with the records of the meeting.
Section 1.6 Quorum. A majority of the outstanding capital stock,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders, unless otherwise provided by law; but less than a quorum may
adjourn any meeting, from time to time, and the meeting may be held, as
adjourned, without further notice. A majority of the votes cast shall decide
every question or matter submitted to the shareholders at any meeting, unless
otherwise provided by law or by the Articles of Association.
ARTICLE II
Directors
Section 2.1 Board of Directors. The Board of Directors (hereinafter
referred to as the "Board"), shall have power to manage and administer the
business and affairs of the Association. Except as expressly limited by law, all
corporate powers of the Association shall be vested in and may be exercised by
said Board.
Section 2.2 Number. The Board shall consist of not less than five nor
more than twenty-five directors, the exact number within such minimum and
maximum limits to be fixed and determined from time to time by resolution of a
majority of the full Board or by resolution of the shareholders at any meeting
thereof; provided, however, that a majority of the full Board of Directors may
not increase the number of directors to a number which, (1) exceeds by more than
two the number of directors last elected by shareholders where such number was
fifteen or less, and (2) to a number which exceeds by more than four the number
of directors last elected by shareholders where such number was sixteen or more,
but in no event shall the number of directors exceed twenty-five.
Section 2.3 Organization Meeting. The Secretary of the meeting upon
receiving the certificate of the judges, of the result of any election, shall
notify the directors-elect of their election and of the time at which they are
required to meet at the Main Office of the Association for the purpose of
organizing the new Board and electing and appointing officers of the Association
for the succeeding year. Such meeting shall be held as soon thereafter as
practicable. If, at the time fixed for such meeting, there shall not be a quorum
present, the directors present may adjourn the meeting from time to time, until
a quorum is obtained.
Section 2.4 Regular Meetings. Regular meetings of the Board of
Directors shall be held at such place and time as may be designated by
resolution of the Board of Directors. Upon adoption of such resolution, no
further notice of such meeting dates or the places or times thereof shall be
required. Upon the failure of the Board of Directors to adopt such a resolution,
regular meetings of the Board of Directors shall be held, without notice, on the
third Tuesday in February, April, June, August, October and December, commencing
with the year 1997, at the main office or at such other place and time as may be
designated by the Board of Directors. When any regular meeting of the Board
would otherwise fall on a holiday, the meeting shall be held on the next
business day unless the Board shall designate some other day.
Section 2.5 Special Meetings. Special meetings of the Board of
Directors may be called by the President of the Association, or at the request
of three (3) or more directors. Each member of the Board of Directors shall be
given notice stating the time and place, by telegram, letter, or in person, of
each such special meeting.
Section 2.6 Quorum. A majority of the directors shall constitute a
quorum at any meeting, except when otherwise provided by law; but a less number
may adjourn any meeting, from time to time, and the meeting may be held, as
adjourned, without further notice.
Section 2.7 Vacancies. When any vacancy occurs among the directors, the
remaining members of the Board, in accordance with the laws of the United
States, may appoint a director to fill such vacancy at any regular meeting of
the Board, or at a special meeting called for that purpose.
Section 2.8 Advisory Boards. The Board of Directors may appoint
Advisory Boards for each of the states in which the Association conducts
operations. Each such Advisory Board shall consist of as many persons as the
Board of Directors may determine. The duties of each Advisory Board shall be to
consult and advise with the Board of Directors and senior officers of the
Association in such state with regard to the best interests of the Association
and to perform such other duties as the Board of Directors may lawfully
delegate. The senior officer in such state, or such officers as directed by such
senior officer, may appoint advisory boards for geographic regions within such
state and may consult with the State Advisory Boards prior to such appointments.
ARTICLE III
Committees of the Board
Section 3.1 The Board of Directors, by resolution adopted by a majority
of the number of directors fixed by these By-Laws, may designate two or more
directors to constitute an Executive Committee and other committees, each of
which, to the extent authorized by law and provided in such resolution, shall
have and may exercise all of the authority of the Board of Directors and the
management of the Association. The designation of any committee and the
delegation thereto of authority shall not operate to relieve the Board of
Directors, or any member thereof, of any responsibility or liability imposed
upon it or any member of the Board of Directors by law. The Board of Directors
reserves to itself alone the power to act on (1) dissolution, merger or
consolidation, or disposition of substantially all corporate property, (2)
designation of committees or filling vacancies on the Board of Directors or on a
committee of the Board (except as hereinafter provided), (3) adoption, amendment
or repeal of By-laws, (4) amendment or repeal of any resolution of the Board
which by its terms is not so amendable or repealable, and (5) declaration of
dividends, issuance of stock, or recommendations to stockholders of any action
requiring stockholder approval.
The Board of Directors or the Chairman of the Board of Directors of the
Association may change the membership of any committee at any time, fill
vacancies therein, discharge any committee or member thereof either with or
without cause at any time, and change at any time the authority and
responsibility of any such committee.
A majority of the members of any committee of the Board of Directors
may fix such committee's rules of procedure. All action by any committee shall
be reported to the Board of Directors at a meeting succeeding such action,
except such actions as the Board may not require to be reported to it in the
resolution creating any such committee. Any action by any committee shall be
subject to revision, alteration, and approval by the Board of Directors, except
to the extent otherwise provided in the resolution creating such committee;
provided, however, that no rights or acts of third parties shall be affected by
any such revision or alteration.
ARTICLE IV
Officers and Employees
Section 4.1 Officers. The officers of the Association may be a Chairman
of the Board, a Vice Chairman of the Board, one or more Chairmen or Vice
Chairmen (who shall not be required to be directors of the Association), a
President, one or more Vice Presidents, a Secretary, a Cashier or Treasurer, and
such other officers, including officers holding similar or equivalent titles to
the above in regions, divisions or functional units of the Association, as may
be appointed by the Board of Directors. The Chairman of the Board and the
President shall be members of the Board of Directors. Any two or more offices
may be held by one person, but no officer shall sign or execute any document in
more than one capacity.
Section 4.2 Election, Term of Office, and Qualification. Each officer
shall be chosen by the Board of Directors and shall hold office until the annual
meeting of the Board of Directors held next after his election or until his
successor shall have been duly chosen and qualified, or until his death, or
until he shall resign, or shall have been disqualified, or shall have been
removed from office.
Section 4.2(a) Officers Acting as Assistant Secretary. Notwithstanding
Section 1 of these By-laws, any Senior Vice President, Vice President, or
Assistant Vice President shall have, by virtue of his office, and by authority
of the By-laws, the authority from time to time to act as an Assistant Secretary
of the Bank, and to such extent, said officers are appointed to the office of
Assistant Secretary.
Section 4.3 Chief Executive Officer. The Board of Directors shall
designate one of its members to be the President of this Association, and the
officer so designated shall be an ex officio member of all committees of the
Association except the Examining Committee, and its Chief Executive Officer
unless some other officer is so designated by the Board of Directors.
Section 4.4 Duties of Officers. The duties of all officers shall be
prescribed by the Board of Directors. Nevertheless, the Board of Directors may
delegate to the Chief Executive Officer the authority to prescribe the duties of
other officers of the corporation not inconsistent with law, the charter, and
these By-laws, and to appoint other employees, prescribe their duties, and to
dismiss them. Notwithstanding such delegation of authority, any officer or
employee also may be dismissed at any time by the Board of Directors.
Section 4.5 Other Employees. The Board of Directors may appoint from
time to time such tellers, vault custodians, bookkeepers, and other clerks,
agents, and employees as it may deem advisable for the prompt and orderly
transaction of the business of the Association, define their duties, fix the
salary to be paid them, and dismiss them. Subject to the authority of the Board
of Directors, the Chief Executive Officer or any other officer of the
Association authorized by him, may appoint and dismiss all such tellers, vault
custodians, bookkeepers and other clerks, agents, and employees, prescribe their
duties and the conditions of their employment, and from time to time fix their
compensation.
Section 4.6 Removal and Resignation. Any officer or employee of the
Association may be removed either with or without cause by the Board of
Directors. Any employee other than an officer elected by the Board of Directors
may be dismissed in accordance with the provisions of the preceding Section 4.5.
Any officer may resign at any time by giving written notice to the Board of
Directors or to the Chief Executive Officer of the Association. Any such
resignation shall become effective upon its being accepted by the Board of
Directors, or the Chief Executive Officer.
ARTICLE V
Fiduciary Powers
Section 5.1 Capital Management Group. There shall be an area of this
Association known as the Capital Management Group which shall be responsible for
the exercise of the fiduciary powers of this Association. The Capital Management
Group shall consist of four service areas: Fiduciary Services, Retail Services,
Investments and Marketing. The Fiduciary Services unit shall consist of personal
trust, employee benefits, corporate trust and operations. The General Office for
the Fiduciary Services unit shall be located in Charlotte, N.C., with City Trust
Offices located in such cities within the State of North Carolina as designated
by the Board of Directors.
Section 5.2 Trust Officers. There shall be a General Trust Officer of
this Association whose duties shall be to manage, supervise and direct all the
activities of the Capital Management Group. Further, there shall be one or more
Senior Trust Officers designated to assist the General Trust Officer in the
performance of his duties. They shall do or cause to be done all things
necessary or proper in carrying out the business of the Capital Management Group
in accordance with provisions of applicable law and regulation.
Section 5.3 Capital Management/General Trust Committee. There shall be
a Capital Management/General Trust Committee composed of not less than four (4)
members of the Board of Directors or officers of this Association who shall be
appointed annually or from time to time by the Board of Directors of the
Association. The General Trust Officer shall serve as an ex-officio member of
the Committee. Each member shall serve until his successor is appointed. The
Board of Directors or the Chairman of the Board may change the membership of the
Capital Management/General Trust Committee at any time, fill vacancies therein,
or discharge any member thereof with or without cause at any time. The Committee
shall counsel and advise on all matters relating to the business or affairs of
the Capital Management Group and shall adopt overall policies for the conduct of
the business of the Capital Management Group including but not limited to:
general administration, investment policies, new business development, and
review for approval of major assignments of functional responsibilities. The
Committee shall meet at least quarterly or as called for by its Chairman or any
three (3) members of the Committee. A quorum shall consist of three (3) members.
In carrying out its responsibilities, the Capital Management/General Trust
Committee shall review the actions of all officers, employees and committees
utilized by this Association in connection with the activities of the Capital
Management Group and may assign the administration and performance of any
fiduciary powers or duties to any of such officers or employees or to the
Investment Policy Committee, Personal Trust Administration Committee, Account
Review Committee, Corporate and Institutional Accounts Committee, or any other
committees it shall designate. One of the methods to be used in the review
process will be the thorough scrutiny of the Report of Examination by the Office
of the Comptroller of the Currency and the reports of the Audit Division of
First Union Corporation, as they relate to the activities of the Capital
Management Group. These reviews shall be in addition to reviews of such reports
by the Audit Committee of the Board of Directors. The Chairman of the Capital
Management/General Trust Committee shall be appointed by the Chairman of the
Board of Directors. He shall cause to be recorded in appropriate minutes all
actions taken by the Committee. The minutes shall be signed by its Secretary and
approved by its Chairman. Further, the Committee shall summarize all actions
taken by it and shall submit a report of its proceedings to the Board of
Directors at its next regularly scheduled meeting following a meeting of the
Capital Management/General Trust Committee. As required by Section 9.7 of
Regulation 9 of the Comptroller of the Currency, the Board of Directors retains
responsibility for the proper exercise of the fiduciary powers of this
Association.
The Fiduciary Services unit of the Capital Management Group will
maintain a list of securities approved for investment in fiduciary accounts and
will from time to time provide the Capital Management/General Trust Committee
with current information relative to such list and also with respect to
transactions in other securities not on such list. It is the policy of this
Association that members of the Capital Management/General Trust Committee
should not buy, sell or trade in securities which are on such approved list or
in any other securities in which the Fiduciary Services unit has taken, or
intends to take, a position in fiduciary accounts in any circumstances in which
any such transaction could be viewed as a possible conflict of interest or could
constitute a violation of applicable law or regulation. Accordingly, if any such
securities are owned by any member of the Capital Management/General Trust
Committee at the time of appointment to such Committee, the Capital Management
Group shall be promptly so informed in writing. If any member of the Capital
Management/General Trust Committee intends to buy, sell, or trade in any such
securities while serving as a member of the Committee, he should first notify
the Capital Management Group in order to make certain that any proposed
transaction will not constitute a violation of this policy or of applicable law
or regulation.
Section 5.4 Investment Policy Committee. There shall be an Investment
Policy Committee composed of not less than seven (7) officers and/or employees
of this Association who shall be appointed annually or from time to time by the
Board of Directors. Each member shall serve until his successor is appointed.
Meetings shall be called by the Chairman or any two (2) members of the
Committee. A quorum shall consist of five (5) members. The Investment Policy
Committee shall exercise such fiduciary powers and perform such duties as may be
assigned to it by the Capital Management/General Trust Committee. All actions
taken by the Investment Policy Committee shall be recorded in appropriate
minutes, signed by the Secretary thereof, approved by its Chairman and submitted
to the Capital Management/General Trust Committee at its next ensuing regular
meeting for its review and approval.
Section 5.5 Personal Trust Administration Committee. There shall be a
Personal Trust Administration Committee composed of not less than five (5)
officers, who shall be appointed annually or from time to time by the Board of
Directors. Each member shall serve until his successor is appointed. Meetings
shall be called by the Chairman or any three (3) members of the Committee. A
quorum shall consist of three (3) members. The Personal Trust Administration
Committee shall exercise such fiduciary powers and perform such duties as may be
assigned to it by the Capital Management/General Trust Committee. All action
taken by the Personal Trust Administration Committee shall be recorded in
appropriate minutes signed by the Secretary thereof, approved by its Chairman,
and submitted to the Capital Management/General Trust Committee at its next
ensuing regular meeting for its review and approval.
Section 5.6 Account Review Committee. There shall be an Account Review
Committee composed of not less than four (4) officers and/or employees of this
Association, who shall be appointed annually or from time to time by the Board
of Directors. Each member shall serve until his successor is appointed. Meetings
shall be called by the Chairman or any two (2) members of the Committee. A
quorum shall consist of three (3) members. The Account Review Committee shall
exercise such fiduciary powers and perform such duties as may be assigned to it
by the Capital Management/General Trust Committee. All actions taken by the
Account Review Committee shall be recorded in appropriate minutes, signed by the
Secretary thereof, approved by its Chairman and submitted to the Capital
Management/General Trust Committee at its next ensuing regular meeting for its
review and approval.
Section 5.7 Corporate and Institutional Accounts Committee. There shall
be a Corporate and Institutional Accounts Committee composed of not less than
five (5) officers and/or employees of this Association, who shall be appointed
annually, or from time to time, by the Capital Management/General Trust
Committee and approved by the Board of Directors. Meetings may be called by the
Chairman or any two (2) members of the Committee. A quorum shall consist of
three (3) members. The Corporate and Institutional Accounts Committee shall
exercise such fiduciary powers and duties as may be assigned to it by the
General Trust Committee. All actions taken by the Corporate and Institutional
Accounts Committee shall be recorded in appropriate minutes, signed by the
Secretary thereof, approved by its Chairman and made available to the General
Trust Committee at its next ensuing regular meeting for its review and approval.
ARTICLE VI
Stock and Stock Certificates
Section 6.1 Transfers. Shares of stock shall be transferable on the
books of the Association, and a transfer book shall be kept in which all
transfers of stock shall be recorded. Every person becoming a shareholder by
such transfer shall, in proportion to his shares, succeed to all rights and
liabilities of the prior holder of such shares.
Section 6.2 Stock Certificates. Certificates of stock shall bear the
signature of the Chairman, the Vice Chairman, the President, or a Vice President
(which may be engraved, printed, or impressed), and shall be signed manually or
by facsimile process by the Secretary, Assistant Secretary, Cashier, Assistant
Cashier, or any other officer appointed by the Board of Directors for that
purpose, to be known as an Authorized Officer, and the seal of the Association
shall be engraved thereon. Each certificate shall recite on its face that the
stock represented thereby is transferable only upon the books of the Association
properly endorsed.
ARTICLE VII
Corporate Seal
Section 7.1 The President, the Cashier, the Secretary, or any Assistant
Cashier, or Assistant Secretary, or other officer thereunto designated by the
Board of Directors shall have authority to affix the corporate seal to any
document requiring such seal, and to attest the same. Such seal shall be
substantially in the following form.
ARTICLE VIII
Miscellaneous Provisions
Section 8.1 Fiscal Year. The fiscal year of the Association shall be
the calendar year.
Section 8.2 Execution of Instruments. All agreements, indentures,
mortgages, deeds, conveyances, transfers, certificates, declarations, receipts,
discharges, releases, satisfactions, settlements, petitions, notices,
applications, schedules, accounts, affidavits, bonds, undertakings, proxies, and
other instruments or documents may be signed, executed, acknowledged, verified,
delivered or accepted in behalf of the Association by the Chairman of the Board,
the Vice Chairman of the Board, any Chairman or Vice Chairman, the President,
any Vice President or Assistant Vice President, the Secretary or any Assistant
Secretary, the Cashier or Treasurer or any Assistant Cashier or Assistant
Treasurer, or any officer holding similar or equivalent titles to the above in
any regions, divisions or functional units of the Association, or, if in
connection with the exercise of fiduciary powers of the Association, by any of
said officers or by any Trust Officer or Assistant Trust Officer (or equivalent
titles); provided, however, that where required, any such instrument shall be
attested by one of said officers other than the officer executing such
instrument. Any such instruments may also be executed, acknowledged, verified,
delivered or accepted in behalf of the Association in such other manner and by
such other officers as the Board of Directors may from time to time direct. The
provisions of this Section 8.2 are supplementary to any other provision of these
By-laws.
Section 8.3 Records. The Articles of Association, the By-laws, and the
proceedings of all meetings of the shareholders, the Board of Directors,
standing committees of the Board, shall be recorded in appropriate minute books
provided for the purpose. The minutes of each meeting shall be signed by the
Secretary, Cashier, or other officer appointed to act as Secretary of the
meeting.
ARTICLE IX
By-laws
Section 9.1 Inspection. A copy of the By-laws, with all amendments
thereto, shall at all times be kept in a convenient place at the Head Office of
the Association, and shall be open for inspection to all shareholders, during
banking hours.
Section 9.2 Amendments. The By-laws may be amended, altered or
repealed, at any regular or special meeting of the Board of Directors, by a vote
of a majority of the whole number of Directors.
Exhibit A
First Union National Bank
Article X
Emergency By-laws
In the event of an emergency declared by the President of the United
States or the person performing his functions, the officers and employees of
this Association will continue to conduct the affairs of the Association under
such guidance from the directors or the Executive Committee as may be available
except as to matters which by statute require specific approval of the Board of
Directors and subject to conformance with any applicable governmental directives
during the emergency.
OFFICERS PRO TEMPORE AND DISASTER
Section 1. The surviving members of the Board of Directors or the
Executive Committee shall have the power, in the absence or disability of any
officer, or upon the refusal of any officer to act, to delegate and prescribe
such officer's powers and duties to any other officer, or to any director, for
the time being.
Section 2. In the event of a state of disaster of sufficient severity
to prevent the conduct and management of the affairs and business of this
Association by its directors and officers as contemplated by these By-laws, any
two or more available members of the then incumbent Executive Committee shall
constitute a quorum of that Committee for the full conduct and management of the
affairs and business of the Association in accordance with the provisions of
Article II of these By-laws; and in addition, such Committee shall be empowered
to exercise all of the powers reserved to the General Trust Committee under
Section 5.3 of Article V hereof. In the event of the unavail- ability, at such
time, of a minimum of two members of the then incumbent Executive Committee, any
three available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Association in
accordance with the foregoing provisions of this section. This By-law shall be
subject to implementation by resolutions of the Board of Directors passed from
time to time for that purpose, and any provisions of these By-laws (other than
this section) and any resolutions which are contrary to the provisions of this
section or to the provisions of any such implementary resolutions shall be
suspended until it shall be determined by an interim Executive Committee acting
under this section that it shall be to the advantage of this Association to
resume the conduct and management of its affairs and business under all of the
other provisions of these By-laws.
Officer Succession
BE IT RESOLVED, that if consequent upon war or warlike damage or
disaster, the Chief Executive Officer of this Association cannot be located by
the then acting Head Officer or is unable to assume or to continue normal
executive duties, then the authority and duties of the Chief Executive Officer
shall, without further action of the Board of Directors, be automatically
assumed by one of the following persons in the order designated:
Chairman
President
Division Head/Area Administrator - Within this officer class, officers
shall take seniority on the basis of length of service in such office
or, in the event of equality, length of service as an officer of the
Association.
Any one of the above persons who in accordance with this resolution
assumes the authority and duties of the Chief Executive Officer shall continue
to serve until he resigns or until five-sixths of the other officers who are
attached to the then acting Head Office decide in writing he is unable to
perform said duties or until the elected Chief Executive Officer of this
Association, or a person higher on the above list, shall become available to
perform the duties of Chief Executive Officer of the Association.
BE IT FURTHER RESOLVED, that anyone dealing with this Association may
accept a certification by any three officers that a specified individual is
acting as Chief Executive Officer in accordance with this resolution; and that
anyone accepting such certification may continue to consider it in force until
notified in writing of a change, said notice of change to carry the signatures
of three officers of the Association.
Alternate Locations
The offices of the Association at which its business shall be conducted
shall be the main office thereof in each city which is designated as a City
Office (and branches, if any), and any other legally authorized location which
may be leased or acquired by this Association to carry on its business. During
an emergency resulting in any authorized place of business of this Association
being unable to function, the business ordinarily conducted at such location
shall be relocated elsewhere in suitable quarters, in addition to or in lieu of
the locations heretofore mentioned, as may be designated by the Board of
Directors or by the Executive Committee or by such persons as are then, in
accordance with resolutions adopted from time to time by the Board of Directors
dealing with the exercise of authority in the time of such emergency, conducting
the affairs of this Association. Any temporarily relocated place of business of
this Association shall be returned to its legally authorized location as soon as
practicable and such temporary place of business shall then be discontinued.
Acting Head Offices
BE IT RESOLVED, that in case of and provided because of war or warlike
damage or disaster, the General Office of this Association, located in
Charlotte, North Carolina, is unable temporarily to continue its functions, the
Raleigh office, located in Raleigh, North Carolina, shall automatically and
without further action of this Board of Directors, become the "Acting Head
Office of this Association";
BE IT FURTHER RESOLVED, that if by reason of said war or warlike damage
or disaster, both the General Office of this Association and the said Raleigh
Office of this Association are unable to carry on their functions, then and in
such case, the Asheville Office of this Association, located in Asheville, North
Carolina, shall, without further action of this Board of Directors, become the
"Acting Head Office of this Association"; and if neither the Raleigh Office nor
the Asheville Office can carry on their functions, then the Greensboro Office of
this Association, located in Greensboro, North Carolina, shall, without further
action of this Board of Directors, become the "Acting Head Office of this
Association"; and if neither the Raleigh Office, the Asheville Office, nor the
Greensboro Office can carry on their functions, then the Lumberton Office of
this Association, located in Lumberton, North Carolina, shall, without further
action of this Board of Directors, become the "Acting Head Office of this
Association". The Head Office shall resume its functions at its legally
authorized location as soon as practicable.
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Legal Title of Bank: First Union National Bank Call Date: 6/30/98 ST-BK: 37-0351 FFIEC 031
Address: Two First Union Center Page RC-1
City, State, Zip: Charlotte, NC 28288-0201
FDIC Certificate #: 33869
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400
<S> <C>
Dollar Amount in Thousands RCFD Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------
ASSETS ////////////////////////
1. Cash and balances due from depository institutions (from Schedule RC-A): ////////////////////////
a. Noninterest-bearing balances and currency and coin (1)....................... 0081 12,220,276 1.a.
b. Interest-bearing balances (2)................................................ 0071 2,533,262 1.b.
2. Securities: ////////////////////////
a. Held-to-maturity securities (from Schedule RC-B, column A)................... 1754 1,891,097 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)................. 1773 36,783,824 2.b.
3. Federal funds sold and securities purchased under agreements to resell............ 1350 8,034,320 3.
4. Loans and lease financing receivables ////////////////////////
a. Loans and leases, net of unearned income (from Schedule RC-C)
RCFD 2122 133,283,216 //////////////////////// 4.a.
b. LESS: Allowance for loan and lease losses
RCFD 3123 1,810,465 //////////////////////// 4.b.
c. LESS: Allocated transfer risk reserve
RCFD 3128 0 ////////////////////////
d. Loans and leases, net of unearned income, ////////////////////////
allowance, and reserve (item 4.a minus 4.b and 4.c)...................... 2125 131,472,751 4.d.
5. Trading assets (from Schedule RC-D............................................... 3545 7,042,399 5.
6. Premises and fixed assets (including capitalized leases)......................... 2145 3,165,970 6.
7. Other real estate owned (from Schedule RC-M)..................................... 2150 128,223 7.
8. Investments in unconsolidated subsidiaries and associated companies
(from Schedule RC-M).......................................................... 2130 323,890 8.
9. Customers' liability to this bank on acceptances outstanding....................` 2155 1,268,425 9.
10. Intangible assets (from Schedule RC-M)........................................... 2143 5,200,418 10.
11. Other assets (from Schedule RC-F)................................................ 2160 12,418,468 11.
12. Total assets (sum of items 1 through 11)......................................... 2170 222,483,323 12.
- ----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Legal Title of Bank: First Union National Bank Call Date: 6/30/98 ST-BK: 37-0351 FFIEC 031
Address: Two First Union Center Page RC-1
City, State, Zip: Charlotte, NC 28288-0201
FDIC Certificate #: 33869
</TABLE>
Schedule RC--Continued
<TABLE>
<CAPTION>
Dollar Amounts in Thousands Bil Mil Thou
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
LIABILITIES ///////////////////////////////
13. Deposits: ///////////////////////////////
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, ///////////////////////////////
part I)...................................................................... RCON 2200 137,007,272 13.a.
(1) Noninterest-bearing (1)..........................RCON 6631 25,154,252 /////////////////////////////// 13.a.(1)
(2) Interest-bearing.................................RCON 6636 110,853,020 /////////////////////////////// 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from ///////////////////////////////
Schedule RC-E, part II)................................................ RCFN 2200 10,021,556 13.b.
(1) Noninterest-bearing..................................RCFN 6631 477,500 /////////////////////////////// 13.b.(1)
(2) Interest-bearing.....................................RCFN 6636 9,544,056 /////////////////////////////// 13.b.(2)
14. Federal funds purchased and securities sold under agreements to repurchase...... RCFD 2800 19,607,885 14.
15. a. Demand notes issued to the U.S. Treasury................................... RCON 2840 389,283 15.a.
b. Trading liabilities (from Schedule RC-D)................................... RCFD 3548 5,075,053 15.b.
16. Other borrowed money (includes mortgage indebtedness and obligations under ///////////////////////////////
capitalized leases):............................................................ ///////////////////////////////
a. With a remaining maturity of one year or less.............................. RCFD 2332 14,089,286 16.a.
b. With a remaining maturity of more than one year through three years........ RCFD A547 2,371,510 16.b.
c. With a remaining maturity of more than three years......................... RCFD A548 767,010 16.c.
17. Not applicable.................................................................. ///////////////////////////////
18. Bank's liability on acceptances executed and outstanding........................ RCFD 2920 1,290,934 18.
19. Subordinated notes and debentures (2)........................................... RCFD 3200 4,045,123 19.
20. Other liabilities (from Schedule RC-G).......................................... RCFD 2930 9,151,594 20.
21. Total liabilities (sum of items 13 through 20).................................. RCFD 2948 203,806,506 21.
22. Not applicable.................................................................. ///////////////////////////////
EQUITY CAPITAL ///////////////////////////////
23. Perpetual preferred stock and related surplus................................... RCFD 3838 160,540 23.
24. Common stock.................................................................... RCFD 3230 454,543 24.
25. Surplus (exclude all surplus related to preferred stock)........................ RCFD 3839 13,206,325 25.
26. a. Undivided profits and capital reserves...................................... RCFD 3632 4,441,457 26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities` RCFD 8434 417,625 26.b.
27. Cumulative foreign currency translation adjustments............................. RCFD 3284 (3,673) 27.
28. Total equity capital (sum of items 23 through 27)............................... RCFD 3210 18,676,017 28.
29. Total liabilities and equity capital (sum of items 21 and 28)................... RCFD 3300 222,483,323 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best describes the
most comprehensive level of auditing work performed for the bank by independent external Number
auditors as of any date during 1997............................................ RCFD 6724 N/A M.1.
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1 =Independent audit of the bank conducted in accordance with generally accepted
auditing standards by a certified public accounting firm which submits a report
on the bank
2 =Independent audit of the bank's parent holding company conducted
in accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company (but
not on the bank separately)
3 =Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 =Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5 =Review of the bank's financial statements by external auditors
6 =Compilation of the bank's financial statements by external auditors
7 =Other audit procedures (excluding tax preparation work)
8 =No external audit work
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(1) Includes total demand deposits and noninterest-bearing time and savings
deposit.
(2) Includes limited-life preferred stock and related surplus.
