AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 22, 2002
REGISTRATION NO. 333-85486
333-85486-03
333-85486-02
333-85486-01
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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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DUKE ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
DUKE ENERGY CORPORATION NORTH CAROLINA 56-0205520
DUKE ENERGY CAPITAL TRUST III DELAWARE 52-2171524
DUKE ENERGY CAPITAL TRUST IV DELAWARE 52-2171526
DUKE ENERGY CAPITAL TRUST V DELAWARE 56-6575443
(Exact name of each registrant as (State or other jurisdiction of (I.R.S. Employer Identification
specified incorporation Nos.)
in its charter) or organization)
526 SOUTH CHURCH STREET
CHARLOTTE, NORTH CAROLINA 28202
(704) 594-6200
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
ROBERT P. BRACE VINCENT PAGANO, JR., ESQ.
EXECUTIVE VICE PRESIDENT AND SIMPSON THACHER & BARTLETT
CHIEF FINANCIAL OFFICER 425 LEXINGTON AVENUE
DUKE ENERGY CORPORATION NEW YORK, NEW YORK 10017
526 SOUTH CHURCH STREET (212) 455-2000
CHARLOTTE, NORTH CAROLINA 28202
(704) 382-3400
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this registration statement as determined by
market conditions and other factors.
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 being 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, please check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act 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, check the following box and list the Securities Act
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. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
MAXIMUM OFFERING MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE PRICE PER UNIT OFFERING PRICE REGISTRATION FEE
SECURITIES TO BE REGISTERED REGISTERED(1) (1)(2)(3) (1)(2)(3)(4) (1)(4)
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Duke Energy Corporation Senior Notes............. $ $ $
Duke Energy Corporation Junior Subordinated
Notes.......................................... $ $ $
Duke Energy Corporation First and Refunding
Mortgage Bonds................................. $ $ $
Duke Energy Corporation Common Stock, without par
value(5)....................................... $ $ $
Duke Energy Corporation Stock Purchase
Contracts...................................... $ $ $
Duke Energy Corporation Stock Purchase Units..... $ $ $
Duke Energy Capital Trust III Trust Preferred
Securities..................................... $ $ $
Duke Energy Capital Trust IV Trust Preferred
Securities..................................... $ $ $
Duke Energy Capital Trust V Trust Preferred
Securities..................................... $ $ $
Duke Energy Corporation Guarantees with respect
to Trust Preferred Securities of Duke Energy
Capital Trust III, Duke Energy Capital Trust IV
and Duke Energy Capital Trust V(6)(7).......... $ $ $
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Total............................................ $2,000,000,000 100% $2,000,000,000 $184,000
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(1) There are being registered hereunder such presently indeterminate number or
principal amount of Senior Notes, Junior Subordinated Notes, First and
Refunding Mortgage Bonds, shares of Common Stock, Stock Purchase Contracts
and Stock Purchase Units of Duke Energy Corporation and such presently
indeterminate number of Trust Preferred Securities of Duke Energy Capital
Trust III, Duke Energy Capital Trust IV and Duke Energy Capital Trust V with
an aggregate initial offering price, not to exceed $2,000,000,000. Duke
Energy Corporation Junior Subordinated Notes also may be issued to Duke
Energy Capital Trust III, Duke Energy Capital Trust IV or Duke Energy
Capital Trust V and later distributed upon dissolution and distribution of
the assets thereof, which would include such Junior Subordinated Notes for
which no separate consideration will be received. An indeterminate number of
shares of Common Stock may also be issued by Duke Energy Corporation upon
settlement of the Stock Purchase Contracts or Stock Purchase Units of Duke
Energy Corporation. Pursuant to Rule 457(o) under the Securities Act of
1933, which permits the registration fee to be calculated on the basis of
the maximum offering price of all the securities listed, the table does not
specify by each class information as to the amount to be registered,
proposed maximum offering price per unit or proposed maximum aggregate
offering price.
(2) Estimated solely for the purpose of determining the registration fee.
(3) Exclusive of accrued interest and distributions, if any.
(4) The registration fee of $160,602 associated with the securities registered
hereby has previously been paid. Accordingly, the registration fee consists
of $23,398 paid herewith and the $160,602 previously paid.
(5) Includes Duke Energy Corporation Preference Stock Purchase Rights. Prior to
the occurrence of certain events, purchase rights for Duke Energy
Corporation Series A Participating Preference Stock will not be evidenced
separately from the Duke Energy Corporation Common Stock.
(6) No separate consideration will be received for the Duke Energy Corporation
Guarantees. Pursuant to Rule 457(n) under the Securities Act of 1933, no
separate fee is payable in respect of the Duke Energy Corporation
Guarantees.
(7) Includes the obligations of Duke Energy Corporation under the respective
Trust Agreements, the Subordinated Indenture, the related series of Junior
Subordinated Notes, the respective Guarantees and the respective Agreements
as to Expenses and Liabilities, which include the Corporation's covenant to
pay any indebtedness, expenses or liabilities of the Trusts (other than
obligations pursuant to the terms of the Trust Preferred Securities or other
similar interests), all as described in this registration statement.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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The information in this prospectus is not completed 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 of these securities is not
permitted.
SUBJECT TO COMPLETION, DATED AUGUST 22, 2002
PROSPECTUS
$2,000,000,000
DUKE ENERGY CORPORATION
Senior Notes
Junior Subordinated Notes
First and Refunding Mortgage Bonds
Common Stock
Stock Purchase Contracts
Stock Purchase Units
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DUKE ENERGY CAPITAL TRUST III
DUKE ENERGY CAPITAL TRUST IV
DUKE ENERGY CAPITAL TRUST V
Trust Preferred Securities
Guaranteed, to the extent described herein, by
DUKE ENERGY CORPORATION
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This prospectus contains summaries of the general terms of these
securities. You will find the specific terms of these securities, and the manner
in which they are being offered, in supplements to this prospectus. You should
read this prospectus and the applicable prospectus supplement carefully before
you invest.
The Common Stock of Duke Energy is listed on the New York Stock Exchange
under the symbol "DUK."
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
This prospectus is dated , 2002.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that Duke Energy, Duke
Energy Capital Trust III, Duke Energy Capital Trust IV and Duke Energy Capital
Trust V filed with the SEC utilizing a "shelf" registration process. Under the
shelf registration process, Duke Energy may issue Senior Notes, Junior
Subordinated Notes, First and Refunding Mortgage Bonds, Common Stock, Stock
Purchase Contracts and Stock Purchase Units and the Trusts may issue Preferred
Securities in one or more offerings up to a total dollar amount of
$2,000,000,000.
This prospectus provides general descriptions of the securities Duke Energy
and the Trusts may offer. Each time securities are sold, a prospectus supplement
will provide specific information about the terms of that offering. The
prospectus supplement may also add, update or change information contained in
this prospectus. The registration statement filed with the SEC includes exhibits
that provide more details about the matters discussed in this prospectus. You
should read this prospectus, the related exhibits filed with the SEC and any
prospectus supplement, together with the additional information described under
the caption "Where You Can Find More Information."
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DUKE ENERGY CORPORATION
Duke Energy, together with its subsidiaries, an integrated provider of
energy and energy services, offers physical delivery and management of both
electricity and natural gas throughout the United States and abroad. Duke
Energy, together with its subsidiaries, provides these and other services
through seven business segments:
o Franchised Electric
o Natural Gas Transmission
o Field Services
o North American Wholesale Energy
o International Energy
o Other Energy Services
o Duke Ventures
Franchised Electric generates, transmits, distributes and sells electricity
in central and western North Carolina and western South Carolina. It conducts
operations primarily through Duke Power and Nantahala Power and Light. These
electric operations are subject to the rules and regulations of the Federal
Energy Regulatory Commission ("FERC"), the North Carolina Utilities Commission
and the Public Service Commission of South Carolina.
Natural Gas Transmission provides transportation, storage and distribution
of natural gas for customers throughout the east coast and southern portion of
the United States and Canada. Natural Gas Transmission provides gas gathering,
processing and transportation services to customers located in British Columbia,
Canada and in the Pacific northwest region of the United States. Natural Gas
Transmission does business primarily through Duke Energy Gas Transmission
Corporation. Duke Energy acquired Westcoast Energy, Inc. on March 14, 2002.
Interstate natural gas transmission and storage operations in the United States
are subject to the FERC's rules and regulations while natural gas gathering,
processing, transmission, distribution and storage operations in Canada are
subject to the rules and regulations of the National Energy Board, the Ontario
Energy Board and the British Columbia Utilities Commission.
Field Services gathers, processes, transports, markets and stores natural
gas and produces, transports, markets and stores natural gas liquids. It
conducts operations primarily through Duke Energy Field Services, LLC, which is
approximately 30% owned by Phillips Petroleum. Field Services operates gathering
systems in western Canada and 11 contiguous states in the United States. Those
systems serve major natural gas-producing regions in the Rocky Mountains,
Permian Basin, Mid-Continent, East Texas-Austin Chalk-North Louisiana, and
onshore and offshore Gulf Coast areas.
Duke Energy North America develops, operates and manages merchant
generation facilities and engages in commodity sales and services related to
natural gas and electric power. Duke Energy North America conducts business
throughout the United States and Canada through Duke Energy North America, LLC
and Duke Energy Trading and Marketing, LLC. Duke Energy Trading and Marketing is
approximately 40% owned by Exxon Mobil Corporation. Prior to April 1, 2002, the
Duke Energy North America business segment was combined with Duke Energy
Merchants Holdings, LLC to form a segment called North American Wholesale
Energy. As of June 30, 2002, management combined Duke Energy Merchants Holdings
with the Other Energy Services segment. Management separated Duke Energy North
America for increased reporting transparency. Previous periods have been
reclassified to conform to the current presentation. As of August 1, 2002, Duke
Energy's North American trading and marketing functions currently in Duke Energy
North America and Duke Energy Merchants Holdings, including Duke Energy Trading
and Marketing and the Canadian trading operations, were consolidated into one
group.
International Energy develops, operates and manages natural gas
transportation and power generation facilities and engages in energy trading and
marketing of natural gas and electric power. It conducts operations
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primarily through Duke Energy International, LLC and its activities target the
Latin American, Asia-Pacific and European regions.
Other Energy Services is composed of diverse energy businesses, operating
primarily through Duke Energy Merchants Holdings, Duke/Fluor Daniel and Energy
Delivery Services. Duke Energy Merchants Holdings engages in commodity buying
and selling, and risk management and financial services in the energy commodity
markets other than natural gas and power (such as refined products, liquefied
petroleum gas, residual fuels, crude oil and coal).
Duke/Fluor Daniel provides comprehensive engineering, procurement,
construction, commissioning and operating plant services for fossil-fueled
electric power generating facilities worldwide. It is a 50/50 partnership
between Duke Energy and Fluor Enterprises, Inc., a wholly owned subsidiary of
Fluor Corporation. Energy Delivery Services is an engineering, construction,
maintenance and technical services firm specializing in electric transmission
and distribution lines and substation projects. It was formed in the second
quarter of 2002 from the power delivery services component of Duke Engineering &
Services, Inc. This segment was excluded from the sale of Duke Engineering &
Services on April 30, 2002. Other Energy Services also retained the portion of
DukeSolutions, Inc. that was not sold on May 1, 2002. Duke Engineering &
Services and DukeSolutions were included in Other Energy Services through the
date of their sale.
Duke Ventures is composed of other diverse businesses, operating primarily
through Crescent Resources, LLC, DukeNet Communications, LLC and Duke Capital
Partners, LLC. Crescent Resources develops high-quality commercial, residential
and multi-family real estate projects and manages land holdings primarily in the
southeastern and southwestern United States. DukeNet Communications develops and
manages fiber optic communications systems for wireless, local and long distance
communications companies and selected educational, governmental, financial and
health care entities. Duke Capital Partners, a wholly owned merchant banking
company, provides debt and equity capital and financial advisory services
primarily to the energy industry.
The foregoing information about Duke Energy and its business segments is
only a general summary and is not intended to be comprehensive. For additional
information about Duke Energy and its business segments, you should refer to the
information described under the caption "Where You Can Find More Information."
Duke Energy is a North Carolina corporation. Its principal executive
offices are located at 526 South Church Street, Charlotte, North Carolina 28202
(telephone (704) 594-6200).
Ratio of Earnings to Fixed Charges
(unaudited)
YEAR ENDED DECEMBER 31, SIX MONTHS
----------------------------------- ENDED JUNE 30,
1997(1) 1998 1999 2000 2001 2002
------- ---- ---- ---- ---- --------------
Ratio of Earnings to Fixed Charges.... 4.0 4.5 2.7 3.6 3.8 2.7
For purposes of this ratio (a) earnings consist of income from continuing
operations before income taxes and fixed charges, and (b) fixed charges consist
of all interest deductions, the interest component of rentals and preference
security dividends of consolidated subsidiaries.
---------------
(1) Data reflects accounting for the stock-for-stock merger of Duke Energy and
PanEnergy Corp on June 18, 1997 as a pooling of interests. As a result, the
data gives effect to the merger as if it had occurred as of January 1, 1997.
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USE OF PROCEEDS
Unless Duke Energy states otherwise in the accompanying prospectus
supplement, Duke Energy intends to use the net proceeds from the sale of any
offered securities:
o to redeem or purchase from time to time presently outstanding securities
when it anticipates those transactions will result in an overall cost
savings;
o to repay maturing securities;
o to finance its ongoing construction program; or
o for general corporate purposes.
The proceeds from the sale of Preferred Securities by a Trust will be
invested in Junior Subordinated Notes issued by Duke Energy. Except as Duke
Energy may otherwise describe in the related prospectus supplement, Duke Energy
expects to use the net proceeds from the sale of such Junior Subordinated Notes
to the applicable Trust for the above purposes.
RECENT DEVELOPMENTS
Duke Energy adopted SFAS No. 142, "Goodwill and Other Intangible Assets,"
as of January 1, 2002. SFAS No. 142 requires that goodwill no longer be
amortized over an estimated useful life, as previously required. Instead,
goodwill amounts are subject to a fair-value-based annual impairment assessment.
Duke Energy did not recognize any material impairment due to the implementation
of SFAS No. 142. The standard also requires certain identifiable intangible
assets to be recognized separately and amortized as appropriate upon
reassessment. No adjustments to intangibles were identified by Duke Energy at
transition.
The following table shows what net income and earnings per share would have
been if amortization (including any related tax effects) related to goodwill
that is no longer being amortized had been excluded from prior periods.
FOR THE YEAR ENDED
------------------------------
2001 2000 1999
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(IN MILLIONS, EXCEPT PER SHARE
AMOUNTS)
Income Before Extraordinary Item and Cumulative Effect of
Change in Accounting Principle............................ $1,994 $1,776 $ 847
Extraordinary Gain, net of tax.............................. -- -- 660
Cumulative Effect of Change in Accounting Principle, net of
tax....................................................... (96) -- --
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Reported net income....................................... 1,898 1,776 1,507
Add back: Goodwill amortization, net of tax............... 75 56 39
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Adjusted net income....................................... $1,973 $1,832 $1,546
====== ====== ======
BASIC EARNINGS PER SHARE (BEFORE EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE)
Reported earnings per share............................... $ 2.58 $ 2.39 $ 1.13
Goodwill amortization..................................... 0.10 0.07 0.05
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Adjusted earnings per share............................... $ 2.68 $ 2.46 $ 1.18
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DILUTED EARNINGS PER SHARE (BEFORE EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE)
Reported earnings per share............................... $ 2.56 $ 2.38 $ 1.13
Goodwill amortization..................................... 0.10 0.07 0.05
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Adjusted earnings per share............................... $ 2.66 $ 2.45 $ 1.18
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5
FOR THE YEAR ENDED
------------------------------
2001 2000 1999
-------- -------- --------
(IN MILLIONS, EXCEPT PER SHARE
AMOUNTS)
BASIC EARNINGS PER SHARE
Reported earnings per share............................... $ 2.45 $ 2.39 $ 2.04
Goodwill amortization..................................... 0.10 0.07 0.05
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Adjusted earnings per share............................... $ 2.55 $ 2.46 $ 2.09
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DILUTED EARNINGS PER SHARE
Reported earnings per share............................... $ 2.44 $ 2.38 $ 2.03
Goodwill amortization..................................... 0.10 0.07 0.05
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Adjusted earnings per share............................... $ 2.54 $ 2.45 $ 2.08
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THE TRUSTS
Duke Energy formed each Trust as a statutory business trust under Delaware
law. Each Trust's business is defined in a trust agreement executed by Duke
Energy, as depositor, and Chase Manhattan Bank USA, National Association
(formerly known as Chase Manhattan Bank Delaware). Each trust agreement will be
amended when Preferred Securities are issued under it and will be in
substantially the form filed as an exhibit to the registration statement, of
which this prospectus is a part. An amended trust agreement is called a "Trust
Agreement" in this prospectus.
The Preferred Securities and the Common Securities of each Trust represent
undivided beneficial interests in the assets of that Trust. The Preferred
Securities and the Common Securities together are sometimes called the "Trust
Securities" in this prospectus.
The trustees of each Trust will conduct that Trust's business and affairs.
Duke Energy, as the holder of the Common Securities of each Trust, will appoint
the trustees of that Trust. The trustees of each Trust will consist of:
o two officers of Duke Energy as Administrative Trustees;
o The JPMorgan Chase Bank as Property Trustee; and
o Chase Manhattan Bank USA, National Association as Delaware Trustee.
The prospectus supplement relating to the Preferred Securities of a Trust
will provide further information concerning that Trust.
No separate financial statements of any Trust are included in this
prospectus. Duke Energy considers that such statements would not be material to
holders of the Preferred Securities because no Trust has any independent
operations and the sole purpose of each Trust is investing the proceeds of the
sale of its Trust Securities in Junior Subordinated Notes. Duke Energy does not
expect that any of the Trusts will be filing annual, quarterly or special
reports with the SEC.
The principal place of business of each Trust will be c/o Duke Energy
Corporation, 526 South Church Street, Charlotte, North Carolina 28202, telephone
(704) 594-6200.
Accounting Treatment
Each Trust will be treated as a subsidiary of Duke Energy for financial
reporting purposes. Accordingly, Duke Energy's consolidated financial statements
will include the accounts of each Trust. The Preferred Securities, along with
other trust preferred securities that Duke Energy guarantees on an equivalent
basis, will be presented as a separate line item in Duke Energy's consolidated
balance sheets, entitled "Guaranteed
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Preferred Beneficial Interests in Subordinated Notes of Duke Energy Corporation
or Subsidiaries." Duke Energy will record distributions that each Trust pays on
the Preferred Securities as an expense in its consolidated statement of income.
DESCRIPTION OF THE SENIOR NOTES
Duke Energy will issue the Senior Notes in one or more series under its
Senior Indenture dated as of September 1, 1998 between Duke Energy and JPMorgan
Chase Bank (formerly known as The Chase Manhattan Bank), as Trustee, as
supplemented from time to time. The Senior Indenture is an exhibit to the
registration statement, of which this prospectus is a part.
The Senior Notes are unsecured and unsubordinated obligations and will rank
equally with all of Duke Energy's other unsecured and unsubordinated
indebtedness. The First and Refunding Mortgage Bonds are effectively senior to
the Senior Notes to the extent of the value of the properties securing them. As
of June 30, 2002, there were approximately $790,000,000 in aggregate principal
amount of First and Refunding Mortgage Bonds outstanding.
Duke Energy conducts its non-electric operations, and certain of its
electric operations outside its service area in the Carolinas, through
subsidiaries. Accordingly, its ability to meet its obligations under the Senior
Notes is partly dependent on the earnings and cash flows of those subsidiaries
and the ability of those subsidiaries to pay dividends or to advance or repay
funds to Duke Energy. In addition, the rights that Duke Energy and its creditors
would have to participate in the assets of any such subsidiary upon the
subsidiary's liquidation or recapitalization will be subject to the prior claims
of the subsidiary's creditors. Certain of Duke Energy's subsidiaries have
incurred substantial amounts of debt in the expansion of their businesses, and
Duke Energy anticipates that certain of its subsidiaries will do so in the
future.
The following description of the Senior Notes is only a summary and is not
intended to be comprehensive. For additional information you should refer to the
Senior Indenture.
General
The Senior Indenture does not limit the amount of Senior Notes that Duke
Energy may issue under it. Duke Energy may issue Senior Notes from time to time
under the Senior Indenture in one or more series by entering into supplemental
indentures or by its Board of Directors or a duly authorized committee
authorizing the issuance. The form of supplemental indenture to the Senior
Indenture is an exhibit to the registration statement, of which this prospectus
is a part.
The Senior Notes of a series need not be issued at the same time, bear
interest at the same rate or mature on the same date.
The Senior Indenture does not protect the holders of Senior Notes if Duke
Energy engages in a highly leveraged transaction.
Provisions Applicable to Particular Series
The prospectus supplement for a particular series of Senior Notes being
offered will disclose the specific terms related to the offering, including the
price or prices at which the Senior Notes to be offered will be issued. Those
terms may include some or all of the following:
o the title of the series;
o the total principal amount of the Senior Notes of the series;
o the date or dates on which principal is payable or the method for
determining the date or dates, and any right that Duke Energy has to
change the date on which principal is payable;
o the interest rate or rates, if any, or the method for determining the
rate or rates, and the date or dates from which interest will accrue;
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o any interest payment dates and the regular record date for the interest
payable on each interest payment date, if any;
o whether Duke Energy may extend the interest payment periods and, if so,
the terms of the extension;
o the place or places where payments will be made;
o whether Duke Energy has the option to redeem the Senior Notes and, if so,
the terms of its redemption option;
o any obligation that Duke Energy has to redeem the Senior Notes through a
sinking fund or to purchase the Senior Notes through a purchase fund or
at the option of the holder;
o whether the provisions described under "Defeasance and Covenant
Defeasance" will not apply to the Senior Notes;
o the currency in which payments will be made if other than U.S. dollars,
and the manner of determining the equivalent of those amounts in U.S.
dollars;
o if payments may be made, at Duke Energy's election or at the holder's
election, in a currency other than that in which the Senior Notes are
stated to be payable, then the currency in which those payments may be
made, the terms and conditions of the election and the manner of
determining those amounts;
o the portion of the principal payable upon acceleration of maturity, if
other than the entire principal;
o whether the Senior Notes will be issuable as global securities and, if
so, the securities depositary;
o any changes in the events of default or covenants with respect to the
Senior Notes;
o any index or formula used for determining principal, premium or interest;
o if the principal payable on the maturity date will not be determinable on
one or more dates prior to the maturity date, the amount which will be
deemed to be such principal amount or the manner of determining it; and
o any other terms.
Unless Duke Energy states otherwise in the applicable prospectus
supplement, Duke Energy will issue the Senior Notes only in fully registered
form without coupons, and there will be no service charge for any registration
of transfer or exchange of the Senior Notes. Duke Energy may, however, require
payment to cover any tax or other governmental charge payable in connection with
any transfer or exchange. Subject to the terms of the Senior Indenture and the
limitations applicable to global securities, transfers and exchanges of the
Senior Notes may be made at JPMorgan Chase Bank, 450 West 33rd Street, New York,
New York 10001 or at any other office or agency maintained by Duke Energy for
such purpose.
The Senior Notes will be issuable in denominations of $1,000 and any
integral multiples of $1,000, unless Duke Energy states otherwise in the
applicable prospectus supplement.
Duke Energy may offer and sell the Senior Notes, including original issue
discount Senior Notes, at a substantial discount below their principal amount.
The applicable prospectus supplement will describe special United States federal
income tax and any other considerations applicable to those securities. In
addition, the applicable prospectus supplement may describe certain special
United States federal income tax or other considerations, if any, applicable to
any Senior Notes that are denominated in a currency other than U.S. dollars.
Global Securities
Duke Energy may issue some or all of the Senior Notes as book-entry
securities. Any such book-entry securities will be represented by one or more
fully registered global securities. Duke Energy will register each
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global security with or on behalf of a securities depositary identified in the
applicable prospectus supplement. Each global security will be deposited with
the securities depositary or its nominee or a custodian for the securities
depositary.
As long as the securities depositary or its nominee is the registered
holder of a global security representing Senior Notes, that person will be
considered the sole owner and holder of the global security and the Senior Notes
it represents for all purposes. Except in limited circumstances, owners of
beneficial interests in a global security:
o may not have the global security or any Senior Notes it represents
registered in their names;
o may not receive or be entitled to receive physical delivery of
certificated Senior Notes in exchange for the global security; and
o will not be considered the owners or holders of the global security or
any Senior Notes it represents for any purposes under the Senior Notes or
the Senior Indenture.
Duke Energy will make all payments of principal and any premium and
interest on a global security to the securities depositary or its nominee as the
holder of the global security. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of securities in
definitive form. These laws may impair the ability to transfer beneficial
interests in a global security.
Ownership of beneficial interests in a global security will be limited to
institutions having accounts with the securities depositary or its nominee,
which are called "participants" in this discussion, and to persons that hold
beneficial interests through participants. When a global security representing
Senior Notes is issued, the securities depositary will credit on its book entry,
registration and transfer system the principal amounts of Senior Notes the
global security represents to the accounts of its participants. Ownership of
beneficial interests in a global security will be shown only on, and the
transfer of those ownership interests will be effected only through, records
maintained by:
o the securities depositary, with respect to participants' interests; and
o any participant, with respect to interests the participant holds on
behalf of other persons.
Payments participants make to owners of beneficial interests held through
those participants will be the responsibility of those participants. The
securities depositary may from time to time adopt various policies and
procedures governing payments, transfers, exchanges and other matters relating
to beneficial interests in a global security. None of the following will have
any responsibility or liability for any aspect of the securities depositary's or
any participant's records relating to beneficial interests in a global security
representing Senior Notes, for payments made on account of those beneficial
interests or for maintaining, supervising or reviewing any records relating to
those beneficial interests:
o Duke Energy;
o the Senior Indenture Trustee; or
o an agent of either of them.
Redemption
Provisions relating to the redemption of Senior Notes will be set forth in
the applicable prospectus supplement. Unless Duke Energy states otherwise in the
applicable prospectus supplement, Duke Energy may redeem Senior Notes only upon
notice mailed at least 30 but not more than 60 days before the date fixed for
redemption. Unless Duke Energy states otherwise in the applicable prospectus
supplement, that notice may state that the redemption will be conditional upon
the Senior Indenture Trustee, or the applicable paying agent, receiving
sufficient funds to pay the principal, premium and interest on those Senior
Notes on the date fixed for redemption and that if the Senior Indenture Trustee
or the applicable paying agent does not receive those funds, the redemption
notice will not apply, and Duke Energy will not be required to redeem those
Senior Notes.
9
Duke Energy will not be required to:
o issue, register the transfer of, or exchange any Senior Notes of a series
during the period beginning 15 days before the date the notice is mailed
identifying the Senior Notes of that series that have been selected for
redemption; or
o register the transfer of or exchange any Senior Note of that series
selected for redemption except the unredeemed portion of a Senior Note
being partially redeemed.
Consolidation, Merger, Conveyance or Transfer
The Senior Indenture provides that Duke Energy may consolidate or merge
with or into, or convey or transfer all or substantially all of its properties
and assets to, another corporation or other entity. Any successor must, however,
assume Duke Energy's obligations under the Senior Indenture and the Senior Notes
issued under it, and Duke Energy must deliver to the Senior Indenture Trustee a
statement by certain of its officers and an opinion of counsel that affirm
compliance with all conditions in the Senior Indenture relating to the
transaction. When those conditions are satisfied, the successor will succeed to
and be substituted for Duke Energy under the Senior Indenture, and Duke Energy
will be relieved of its obligations under the Senior Indenture and the Senior
Notes.
Modification; Waiver
Duke Energy may modify the Senior Indenture with the consent of the holders
of a majority in principal amount of the outstanding Senior Notes of all series
of Senior Notes that are affected by the modification, voting as one class. The
consent of the holder of each outstanding Senior Note affected is, however,
required to:
o change the maturity date of the principal or any installment of principal
or interest on that Senior Note;
o reduce the principal amount, the interest rate or any premium payable
upon redemption on that Senior Note;
o reduce the amount of principal due and payable upon acceleration of
maturity;
o change the currency of payment of principal, premium or interest on that
Senior Note;
o impair the right to institute suit to enforce any such payment on or
after the maturity date or redemption date;
o reduce the percentage in principal amount of Senior Notes of any series
required to modify the Senior Indenture, waive compliance with certain
restrictive provisions of the Senior Indenture or waive certain defaults;
or
o with certain exceptions, modify the provisions of the Senior Indenture
governing modifications of the Senior Indenture or governing waiver of
covenants or past defaults.
In addition, Duke Energy may modify the Senior Indenture for certain other
purposes, without the consent of any holders of Senior Notes.
The holders of a majority in principal amount of the outstanding Senior
Notes of any series may waive, for that series, Duke Energy's compliance with
certain restrictive provisions of the Senior Indenture, including the covenant
described under "Negative Pledge." The holders of a majority in principal amount
of the outstanding Senior Notes of all series under the Senior Indenture with
respect to which a default has occurred and is continuing, voting as one class,
may waive that default for all those series, except a default in the payment of
principal or any premium or interest on any Senior Note or a default with
respect to a covenant or provision which cannot be modified without the consent
of the holder of each outstanding Senior Note of the series affected.
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Events of Default
The following are events of default under the Senior Indenture with respect
to any series of Senior Notes, unless Duke Energy states otherwise in the
applicable prospectus supplement:
o failure to pay principal of or any premium on any Senior Note of that
series when due;
o failure to pay when due any interest on any Senior Note of that series
that continues for 60 days; for this purpose, the date on which interest
is due is the date on which Duke Energy is required to make payment
following any deferral of interest payments by it under the terms of
Senior Notes that permit such deferrals;
o failure to make any sinking fund payment when required for any Senior
Note of that series that continues for 60 days;
o failure to perform any covenant in the Senior Indenture (other than a
covenant expressly included solely for the benefit of other series) that
continues for 90 days after the Senior Indenture Trustee or the holders
of at least 33% of the outstanding Senior Notes of that series give Duke
Energy written notice of the default; and
o certain bankruptcy, insolvency or reorganization events with respect to
Duke Energy.
In the case of the fourth event of default listed above, the Senior Indenture
Trustee may extend the grace period. In addition, if holders of a particular
series have given a notice of default, then holders of at least the same
percentage of Senior Notes of that series, together with the Senior Indenture
Trustee, may also extend the grace period. The grace period will be
automatically extended if Duke Energy has initiated and is diligently pursuing
corrective action.
Duke Energy may establish additional events of default for a particular
series and, if established, any such events of default will be described in the
applicable prospectus supplement.
If an event of default with respect to Senior Notes of a series occurs and
is continuing, then the Senior Indenture Trustee or the holders of at least 33%
in principal amount of the outstanding Senior Notes of that series may declare
the principal amount of all Senior Notes of that series to be immediately due
and payable. However, that event of default will be considered waived at any
time after the declaration but before a judgment for payment of the money due
has been obtained if:
o Duke Energy has paid or deposited with the Senior Indenture Trustee all
overdue interest, the principal and any premium due otherwise than by the
declaration and any interest on such amounts, and any interest on overdue
interest, to the extent legally permitted, in each case with respect to
that series, and all amounts due to the Senior Indenture Trustee; and
o all events of default with respect to that series, other than the
nonpayment of the principal that became due solely by virtue of the
declaration, have been cured or waived.
The Senior Indenture Trustee is under no obligation to exercise any of its
rights or powers at the request or direction of any holders of Senior Notes
unless those holders have offered the Senior Indenture Trustee security or
indemnity against the costs, expenses and liabilities which it might incur as a
result. The holders of a majority in principal amount of the outstanding Senior
Notes of any series have, with certain exceptions, the right to direct the time,
method and place of conducting any proceedings for any remedy available to the
Senior Indenture Trustee or the exercise of any power of the Senior Indenture
Trustee with respect to those Senior Notes. The Senior Indenture Trustee may
withhold notice of any default, except a default in the payment of principal or
interest, from the holders of any series if the Senior Indenture Trustee in good
faith considers it in the interest of the holders to do so.
The holder of any Senior Note will have an absolute and unconditional right
to receive payment of the principal, any premium and, within certain
limitations, any interest on that Senior Note on its maturity date or redemption
date and to enforce those payments.
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Duke Energy is required to furnish each year to the Senior Indenture
Trustee a statement by certain of its officers to the effect that it is not in
default under the Senior Indenture or, if there has been a default, specifying
the default and its status.
Payments; Paying Agent
The paying agent will pay the principal of any Senior Notes only if those
Senior Notes are surrendered to it. The paying agent will pay interest on Senior
Notes issued as global securities by wire transfer to the holder of those global
securities. Unless Duke Energy states otherwise in the applicable prospectus
supplement, the paying agent will pay interest on Senior Notes that are not in
global form at its office or, at Duke Energy's option:
o by wire transfer to an account at a banking institution in the United
States that is designated in writing to the Senior Indenture Trustee at
least 16 days prior to the date of payment by the person entitled to that
interest; or
o by check mailed to the address of the person entitled to that interest as
that address appears in the security register for those Senior Notes.
Unless Duke Energy states otherwise in the applicable prospectus
supplement, the Senior Indenture Trustee will act as paying agent for that
series of Senior Notes, and the principal corporate trust office of the Senior
Indenture Trustee will be the office through which the paying agent acts. Duke
Energy may, however, change or add paying agents or approve a change in the
office through which a paying agent acts.
Any money that Duke Energy has paid to a paying agent for principal or
interest on any Senior Notes which remains unclaimed at the end of two years
after that principal or interest has become due will be repaid to Duke Energy at
its request. After repayment to Duke Energy, holders should look only to Duke
Energy for those payments.
Negative Pledge
While any of the Senior Notes remain outstanding, Duke Energy will not
create, or permit to be created or to exist, any mortgage, lien, pledge,
security interest or other encumbrance upon any of its property, whether owned
on or acquired after the date of the Senior Indenture, to secure any
indebtedness for borrowed money of Duke Energy, unless the Senior Notes then
outstanding are equally and ratably secured for so long as any such indebtedness
is so secured.
The foregoing restriction does not apply with respect to, among other
things:
o purchase money mortgages, or other purchase money liens, pledges,
security interests or encumbrances upon property that Duke Energy
acquired after the date of the Senior Indenture;
o mortgages, liens, pledges, security interests or other encumbrances
existing on any property at the time Duke Energy acquired it, including
those which exist on any property of an entity with which Duke Energy is
consolidated or merged or which transfers or leases all or substantially
all of its properties to Duke Energy;
o mortgages, liens, pledges, security interests or other encumbrances upon
any property of Duke Energy that existed on the date of the initial
issuance of the Senior Notes;
o pledges or deposits to secure performance in connection with bids,
tenders, contracts (other than contracts for the payment of money) or
leases to which Duke Energy is a party;
o liens created by or resulting from any litigation or proceeding which at
the time is being contested in good faith by appropriate proceedings;
o liens incurred in connection with the issuance of bankers' acceptances
and lines of credit, bankers' liens or rights of offset and any security
given in the ordinary course of business to banks or others to secure
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any indebtedness payable on demand or maturing within 12 months of the
date that such indebtedness is originally incurred;
o liens incurred in connection with repurchase, swap or other similar
agreements (including commodity price, currency exchange and interest
rate protection agreements);
o liens securing industrial revenue or pollution control bonds;
o liens, pledges, security interests or other encumbrances on any property
arising in connection with any defeasance, covenant defeasance or
in-substance defeasance of indebtedness of Duke Energy;
o liens created in connection with, and created to secure, a non-recourse
obligation;
o Bonds issued or to be issued from time to time under Duke Energy's First
and Refunding Mortgage, and the "permitted liens" specified in Duke
Energy's First and Refunding Mortgage;
o indebtedness which Duke Energy may issue in connection with its
consolidation or merger with or into any other entity, which may be its
affiliate, in exchange for or otherwise in substitution for secured
indebtedness of that entity ("Third Party Debt") which by its terms (1)
is secured by a mortgage on all or a portion of the property of that
entity, (2) prohibits that entity from incurring secured indebtedness,
unless the Third Party Debt is secured equally and ratably with such
secured indebtedness or (3) prohibits that entity from incurring secured
indebtedness;
o indebtedness of any entity which Duke Energy is required to assume in
connection with a consolidation or merger of that entity, with respect to
which any property of Duke Energy is subjected to a mortgage, lien,
pledge, security interest or other encumbrance;
o mortgages, liens, pledges, security interests or other encumbrances upon
any property that Duke Energy acquired, constructed, developed or
improved after the date of the Senior Indenture which are created before,
at the time of, or within 18 months after such acquisition -- or in the
case of property constructed, developed or improved, after the completion
of the construction, development or improvement and commencement of full
commercial operation of that property, whichever is later -- to secure or
provide for the payment of any part of its purchase price or cost;
provided that, in the case of such construction, development or
improvement, the mortgages, liens, pledges, security interests or other
encumbrances shall not apply to any property that Duke Energy owns other
than real property that is unimproved up to that time; and
o the replacement, extension or renewal of any mortgage, lien, pledge,
security interest or other encumbrance described above; or the
replacement, extension or renewal (not exceeding the principal amount of
indebtedness so secured together with any premium, interest, fee or
expense payable in connection with any such replacement, extension or
renewal) of the indebtedness so secured; provided that such replacement,
extension or renewal is limited to all or a part of the same property
that secured the mortgage, lien, pledge, security interest or other
encumbrance replaced, extended or renewed, plus improvements on it or
additions or accessions to it.
In addition, Duke Energy may create or assume any other mortgage, lien, pledge,
security interest or other encumbrance not excepted in the Senior Indenture
without Duke Energy equally and ratably securing the Senior Notes, if
immediately after that creation or assumption, the principal amount of
indebtedness for borrowed money of Duke Energy that all such other mortgages,
liens, pledges, security interests and other encumbrances secure does not exceed
an amount equal to 10% of Duke Energy's common stockholders' equity as shown on
its consolidated balance sheet for the accounting period occurring immediately
before the creation or assumption of that mortgage, lien, pledge, security
interest or other encumbrance.
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Defeasance and Covenant Defeasance
The Senior Indenture provides that Duke Energy may be:
o discharged from its obligations, with certain limited exceptions, with
respect to any series of Senior Notes, as described in the Senior
Indenture, such a discharge being called a "defeasance" in this
prospectus; and
o released from its obligations under certain restrictive covenants
especially established with respect to any series of Senior Notes,
including the covenant described under "Negative Pledge," as described in
the Senior Indenture, such a release being called a "covenant defeasance"
in this prospectus.
Duke Energy must satisfy certain conditions to effect a defeasance or covenant
defeasance. Those conditions include the irrevocable deposit with the Senior
Indenture Trustee, in trust, of money or government obligations which through
their scheduled payments of principal and interest would provide sufficient
money to pay the principal and any premium and interest on those Senior Notes on
the maturity dates of those payments or upon redemption.
Following a defeasance, payment of the Senior Notes defeased may not be
accelerated because of an event of default under the Senior Indenture. Following
a covenant defeasance, the payment of Senior Notes may not be accelerated by
reference to the covenants from which Duke Energy has been released. A
defeasance may occur after a covenant defeasance.
Under current United States federal income tax laws, a defeasance would be
treated as an exchange of the relevant Senior Notes in which holders of those
Senior Notes might recognize gain or loss. In addition, the amount, timing and
character of amounts that holders would thereafter be required to include in
income might be different from that which would be includible in the absence of
that defeasance. Duke Energy urges investors to consult their own tax advisors
as to the specific consequences of a defeasance, including the applicability and
effect of tax laws other than United States federal income tax laws.
Under current United States federal income tax law, unless accompanied by
other changes in the terms of the Senior Notes, a covenant defeasance should not
be treated as a taxable exchange.
Concerning the Senior Indenture Trustee
JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank) is the
Senior Indenture Trustee and is also the trustee under Duke Energy's
Subordinated Indenture and the trustee under Duke Energy's First and Refunding
Mortgage. Duke Energy and certain of its affiliates maintain deposit accounts
and banking relationships with JPMorgan Chase Bank. JPMorgan Chase Bank also
serves as trustee or agent under other indentures and agreements pursuant to
which securities of Duke Energy and of certain of its affiliates are
outstanding.
The Senior Indenture Trustee will perform only those duties that are
specifically set forth in the Senior Indenture unless an event of default under
the Senior Indenture occurs and is continuing. In case an event of default
occurs and is continuing, the Senior Indenture Trustee will exercise the same
degree of care as a prudent individual would exercise in the conduct of his or
her own affairs.
DESCRIPTION OF THE JUNIOR SUBORDINATED NOTES
Duke Energy will issue the Junior Subordinated Notes in one or more series
under its Subordinated Indenture dated as of December 1, 1997 between Duke
Energy and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as
Trustee, as supplemented from time to time. The Subordinated Indenture is an
exhibit to the registration statement, of which this prospectus is a part.
The Junior Subordinated Notes are unsecured obligations of Duke Energy and
are junior in right of payment to "Senior Indebtedness" of Duke Energy. You will
find a description of the subordination provisions of the Junior Subordinated
Notes, including a description of Senior Indebtedness of Duke Energy, under
"Subordination."
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Duke Energy conducts its non-electric operations, and certain of its
electric operations outside its service area in the Carolinas, through
subsidiaries. Accordingly, its ability to meet its obligations under the Junior
Subordinated Notes is partly dependent on the earnings and cash flows of those
subsidiaries and the ability of those subsidiaries to pay dividends or to
advance or repay funds to Duke Energy. In addition, the rights that Duke Energy
and its creditors would have to participate in the assets of any such subsidiary
upon the subsidiary's liquidation or recapitalization will be subject to the
prior claims of the subsidiary's creditors. Certain of Duke Energy's
subsidiaries have incurred substantial amounts of debt in the expansion of their
businesses and Duke Energy anticipates that certain of its subsidiaries will do
so in the future.
The following description of the Junior Subordinated Notes is only a
summary and is not intended to be comprehensive. For additional information you
should refer to the Subordinated Indenture.
General
The Subordinated Indenture does not limit the amount of Subordinated Notes,
including Junior Subordinated Notes, that Duke Energy may issue under it. Duke
Energy may issue Subordinated Notes, including Junior Subordinated Notes, from
time to time under the Subordinated Indenture in one or more series by entering
into supplemental indentures or by its Board of Directors or a duly authorized
committee authorizing the issuance. Two forms of supplemental indenture to the
Subordinated Indenture (one with respect to Junior Subordinated Notes initially
issued to a Trust and the other with respect to Junior Subordinated Notes
initially issued to the public) are exhibits to the registration statement, of
which this prospectus is a part.
The Junior Subordinated Notes of a series need not be issued at the same
time, bear interest at the same rate or mature on the same date.
The Subordinated Indenture does not protect the holders of Junior
Subordinated Notes if Duke Energy engages in a highly leveraged transaction.
Provisions Applicable to Particular Series
The prospectus supplement for a particular series of Junior Subordinated
Notes being offered will disclose the specific terms related to the offering,
including the price or prices at which the Junior Subordinated Notes to be
offered will be issued. Those terms may include some or all of the following:
o the title of the series;
o the total principal amount of the Junior Subordinated Notes of the
series;
o the date or dates on which principal is payable or the method for
determining the date or dates, and any right that Duke Energy has to
change the date on which principal is payable;
o the interest rate or rates, if any, or the method for determining the
rate or rates, and the date or dates from which interest will accrue;
o any interest payment dates and the regular record date for the interest
payable on each interest payment date, if any;
o whether Duke Energy may extend the interest payment periods and, if so,
the terms of the extension;
o the place or places where payments will be made;
o whether Duke Energy has the option to redeem the Junior Subordinated
Notes and, if so, the terms of its redemption option;
o any obligation that Duke Energy has to redeem the Junior Subordinated
Notes through a sinking fund or to purchase the Junior Subordinated Notes
through a purchase fund or at the option of the holder;
o whether the provisions described under "Defeasance and Covenant
Defeasance" will not apply to the Junior Subordinated Notes;
15
o the currency in which payments will be made if other than U.S. dollars,
and the manner of determining the equivalent of those amounts in U.S.
dollars;
o if payments may be made, at Duke Energy's election or at the holder's
election, in a currency other than that in which the Junior Subordinated
Notes are stated to be payable, then the currency in which those payments
may be made, the terms and conditions of the election and the manner of
determining those amounts;
o the portion of the principal payable upon acceleration of maturity, if
other than the entire principal;
o whether the Junior Subordinated Notes will be issuable as global
securities and, if so, the securities depositary;
o any changes in the events of default or covenants with respect to the
Junior Subordinated Notes;
o any index or formula used for determining principal, premium or interest;
o if the principal payable on the maturity date will not be determinable on
one or more dates prior to the maturity date, the amount which will be
deemed to be such principal amount or the manner of determining it;
o the subordination of the Junior Subordinated Notes to any other of Duke
Energy's indebtedness, including other series of Subordinated Notes; and
o any other terms.
The interest rate and interest and other payment dates of each series of
Junior Subordinated Notes issued to a Trust will correspond to the rate at which
distributions will be paid and the distribution and other payment dates of the
Preferred Securities of that Trust.
Unless Duke Energy states otherwise in the applicable prospectus
supplement, Duke Energy will issue the Junior Subordinated Notes only in fully
registered form without coupons, and there will be no service charge for any
registration of transfer or exchange of the Junior Subordinated Notes. Duke
Energy may, however, require payment to cover any tax or other governmental
charge payable in connection with any transfer or exchange. Subject to the terms
of the Subordinated Indenture and the limitations applicable to global
securities, transfers and exchanges of the Junior Subordinated Notes may be made
at JPMorgan Chase Bank, 450 West 33rd Street, New York, New York 10001 or at any
other office maintained by Duke Energy for such purpose.
The Junior Subordinated Notes will be issuable in denominations of $1,000
and any integral multiples of $1,000, unless Duke Energy states otherwise in the
applicable prospectus supplement.
Duke Energy may offer and sell the Junior Subordinated Notes, including
original issue discount Junior Subordinated Notes, at a substantial discount
below their principal amount. The applicable prospectus supplement will describe
special United States federal income tax and any other considerations applicable
to those securities. In addition, the applicable prospectus supplement may
describe certain special United States federal income tax or other
considerations, if any, applicable to any Junior Subordinated Notes that are
denominated in a currency other than U.S. dollars.
Global Securities
Duke Energy may issue some or all of the Junior Subordinated Notes as
book-entry securities. Any such book-entry securities will be represented by one
or more fully registered global certificates. Duke Energy will register each
global security with or on behalf of a securities depositary identified in the
applicable prospectus supplement. Each global security will be deposited with
the securities depositary or its nominee or a custodian for the securities
depositary.
As long as the securities depositary or its nominee is the registered
holder of a global security representing Junior Subordinated Notes, that person
will be considered the sole owner and holder of the global security and
16
the Junior Subordinated Notes it represents for all purposes. Except in limited
circumstances, owners of beneficial interests in a global security:
o may not have the global security or any Junior Subordinated Notes it
represents registered in their names;
o may not receive or be entitled to receive physical delivery of
certificated Junior Subordinated Notes in exchange for the global
security; and
o will not be considered the owners or holders of the global security or
any Junior Subordinated Notes it represents for any purposes under the
Junior Subordinated Notes or the Subordinated Indenture.
Duke Energy will make all payments of principal and any premium and
interest on a global security to the securities depositary or its nominee as the
holder of the global security. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of securities in
definitive form. These laws may impair the ability to transfer beneficial
interests in a global security.
Ownership of beneficial interests in a global security will be limited to
institutions having accounts with the securities depositary or its nominee,
which are called "participants" in this discussion, and to persons that hold
beneficial interests through participants. When a global security representing
Junior Subordinated Notes is issued, the securities depositary will credit on
its book-entry, registration and transfer system the principal amounts of Junior
Subordinated Notes the global security represents to the accounts of its
participants. Ownership of beneficial interests in a global security will be
shown only on, and the transfer of those ownership interests will be effected
only through, records maintained by:
o the securities depositary, with respect to participants' interests; and
o any participant, with respect to interests the participant holds on
behalf of other persons.
Payments participants make to owners of beneficial interests held through
those participants will be the responsibility of those participants. The
securities depositary may from time to time adopt various policies and
procedures governing payments, transfers, exchanges and other matters relating
to beneficial interests in a global security. None of the following will have
any responsibility or liability for any aspect of the securities depositary's or
any participant's records relating to beneficial interests in a global security
representing Junior Subordinated Notes, for payments made on account of those
beneficial interests or for maintaining, supervising or reviewing any records
relating to those beneficial interests:
o Duke Energy;
o the Subordinated Indenture Trustee;
o the Trust (if the Junior Subordinated Notes are issued to a Trust); or
o any agent of any of them.
Redemption
Provisions relating to the redemption of Junior Subordinated Notes will be
set forth in the applicable prospectus supplement. Unless Duke Energy states
otherwise in the applicable prospectus supplement, Duke Energy may redeem Junior
Subordinated Notes only upon notice mailed at least 30 but not more than 60 days
before the date fixed for redemption.
Duke Energy will not be required to:
o issue, register the transfer of, or exchange any Junior Subordinated
Notes of a series during the period beginning 15 days before the date the
notice is mailed identifying the Junior Subordinated Notes of that series
that have been selected for redemption; or
o register the transfer of or exchange any Junior Subordinated Note of that
series selected for redemption except the unredeemed portion of a Junior
Subordinated Note being partially redeemed.
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Consolidation, Merger, Conveyance or Transfer
The Subordinated Indenture provides that Duke Energy may consolidate or
merge with or into, or convey or transfer all or substantially all of its
properties and assets to, another corporation or other entity. Any successor
must, however, assume Duke Energy's obligations under the Subordinated Indenture
and the Subordinated Notes, including the Junior Subordinated Notes, and Duke
Energy must deliver to the Subordinated Indenture Trustee a statement by certain
of its officers and an opinion of counsel that affirm compliance with all
conditions in the Subordinated Indenture relating to the transaction. When those
conditions are satisfied, the successor will succeed to and be substituted for
Duke Energy under the Subordinated Indenture, and Duke Energy will be relieved
of its obligations under the Subordinated Indenture and any Subordinated Notes,
including the Junior Subordinated Notes.
Modification; Waiver
Duke Energy may modify the Subordinated Indenture with the consent of the
holders of a majority in principal amount of the outstanding Subordinated Notes
of all series that are affected by the modification, voting as one class. The
consent of the holder of each outstanding Subordinated Note affected is,
however, required to:
o change the maturity date of the principal or any installment of principal
or interest on that Subordinated Note;
o reduce the principal amount, the interest rate or any premium payable
upon redemption on that Subordinated Note;
o reduce the amount of principal due and payable upon acceleration of
maturity;
o change the currency of payment of principal, premium or interest on that
Subordinated Note;
o impair the right to institute suit to enforce any such payment on or
after the maturity date or redemption date;
o reduce the percentage in principal amount of Subordinated Notes of any
series required to modify the Subordinated Indenture, waive compliance
with certain restrictive provisions of the Subordinated Indenture or
waive certain defaults; or
o with certain exceptions, modify the provisions of the Subordinated
Indenture governing modifications of the Subordinated Indenture or
governing waiver of covenants or past defaults.
In addition, Duke Energy may modify the Subordinated Indenture for certain other
purposes, without the consent of any holders of Subordinated Notes, including
Junior Subordinated Notes.
The holders of a majority in principal amount of the outstanding Junior
Subordinated Notes of any series may waive, for that series, Duke Energy's
compliance with certain restrictive provisions of the Subordinated Indenture.
The holders of a majority in principal amount of the outstanding Subordinated
Notes of all series under the Subordinated Indenture with respect to which a
default has occurred and is continuing, voting as one class, may waive that
default for all those series, except a default in the payment of principal or
any premium or interest on any Subordinated Note or a default with respect to a
covenant or provision which cannot be modified without the consent of the holder
of each outstanding Subordinated Note of the series affected.
Duke Energy may not amend the Subordinated Indenture to change the
subordination of any outstanding Junior Subordinated Notes without the consent
of each holder of Senior Indebtedness that the amendment would adversely affect.
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Events of Default
The following are events of default under the Subordinated Indenture with
respect to any series of Junior Subordinated Notes, unless Duke Energy states
otherwise in the applicable prospectus supplement:
o failure to pay principal of or any premium on any Junior Subordinated
Note of that series when due;
o failure to pay when due any interest on any Junior Subordinated Note of
that series that continues for 60 days; for this purpose, the date on
which interest is due is the date on which Duke Energy is required to
make payment following any deferral of interest payments by it under the
terms of Junior Subordinated Notes that permit such deferrals;
o failure to make any sinking fund payment when required for any Junior
Subordinated Note of that series that continues for 60 days;
o failure to perform any covenant in the Subordinated Indenture (other than
a covenant expressly included solely for the benefit of other series)
that continues for 90 days after the Subordinated Indenture Trustee or
the holders of at least 33% of the outstanding Junior Subordinated Notes
of that series give Duke Energy written notice of the default; and
o certain bankruptcy, insolvency or reorganization events with respect to
Duke Energy.
In the case of the fourth event of default listed above, the Subordinated
Indenture Trustee may extend the grace period. In addition, if holders of a
particular series have given a notice of default, then holders of at least the
same percentage of Junior Subordinated Notes of that series, together with the
Subordinated Indenture Trustee, may also extend the grace period. The grace
period will be automatically extended if Duke Energy has initiated and is
diligently pursuing corrective action.
Duke Energy may establish additional events of default for a particular
series and, if established, any such events of default will be described in the
applicable prospectus supplement.
If an event of default with respect to Junior Subordinated Notes of a
series occurs and is continuing, then the Subordinated Indenture Trustee or the
holders of at least 33% in principal amount of the outstanding Junior
Subordinated Notes of that series may declare the principal amount of all Junior
Subordinated Notes of that series to be immediately due and payable. However,
that event of default will be considered waived at any time after the
declaration but before a judgment for payment of the money due has been obtained
if:
o Duke Energy has paid or deposited with the Subordinated Indenture Trustee
all overdue interest, the principal and any premium due otherwise than by
the declaration and any interest on such amounts, and any interest on
overdue interest, to the extent legally permitted, in each case with
respect to that series, and all amounts due to the Subordinated Indenture
Trustee; and
o all events of default with respect to that series, other than the
nonpayment of the principal that became due solely by virtue of the
declaration, have been cured or waived.
In the case of Junior Subordinated Notes issued to a Trust, a holder of
Preferred Securities may institute a legal proceeding directly against Duke
Energy, without first instituting a legal proceeding against the Property
Trustee of the Trust by which those Preferred Securities were issued or any
other person or entity, for enforcement of payment to that holder of principal
or interest on an equivalent amount of Junior Subordinated Notes of the related
series on or after the due dates specified in those Junior Subordinated Notes.
The Subordinated Indenture Trustee is under no obligation to exercise any
of its rights or powers at the request or direction of any holders of Junior
Subordinated Notes unless those holders have offered the Subordinated Indenture
Trustee security or indemnity against the costs, expenses and liabilities that
it might incur as a result. The holders of a majority in principal amount of the
outstanding Junior Subordinated Notes of any series have, with certain
exceptions, the right to direct the time, method and place of conducting any
proceedings for any remedy available to the Subordinated Indenture Trustee or
the exercise of any power of the Subordinated Indenture Trustee with respect to
those Junior Subordinated Notes. The Subordinated Indenture Trustee may withhold
notice of any default, except a default in the payment of principal or interest,
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from the holders of any series if the Subordinated Indenture Trustee in good
faith considers it in the interest of the holders to do so.
The holder of any Junior Subordinated Note will have an absolute and
unconditional right to receive payment of the principal, any premium and, within
certain limitations, any interest on that Junior Subordinated Note on its
maturity date or redemption date and to enforce those payments.
Duke Energy is required to furnish each year to the Subordinated Indenture
Trustee a statement by certain of its officers to the effect that it is not in
default under the Subordinated Indenture or, if there has been a default,
specifying the default and its status.
Payments; Paying Agent
The paying agent will pay the principal of any Junior Subordinated Notes
only if those Junior Subordinated Notes are surrendered to it. The paying agent
will pay interest on Junior Subordinated Notes issued as global securities by
wire transfer to the holder of those global securities. Unless Duke Energy
states otherwise in the applicable prospectus supplement, the paying agent will
pay interest on Junior Subordinated Notes that are not in global form at its
office or, at Duke Energy's option:
o by wire transfer to an account at a banking institution in the United
States that is designated in writing to the Subordinated Indenture
Trustee at least 16 days prior to the date of payment by the person
entitled to that interest; or
o by check mailed to the address of the person entitled to that interest as
that address appears in the security register for those Junior
Subordinated Notes.
Unless Duke Energy states otherwise in the applicable prospectus
supplement, the Subordinated Indenture Trustee will act as paying agent for that
series of Junior Subordinated Notes, and the principal corporate trust office of
the Subordinated Indenture Trustee will be the office through which the paying
agent acts. Duke Energy may, however, change or add paying agents or approve a
change in the office through which a paying agent acts.
Any money that Duke Energy has paid to a paying agent for principal or
interest on any Junior Subordinated Notes that remains unclaimed at the end of
two years after that principal or interest has become due will be repaid to Duke
Energy at its request. After repayment to Duke Energy, holders should look only
to Duke Energy for those payments.
Defeasance and Covenant Defeasance
The Subordinated Indenture provides that Duke Energy may be:
o discharged from its obligations, with certain limited exceptions, with
respect to any series of Junior Subordinated Notes, as described in the
Subordinated Indenture, such a discharge being called a "defeasance" in
this prospectus; and
o released from its obligations under certain restrictive covenants
especially established with respect to a series of Junior Subordinated
Notes, as described in the Subordinated Indenture, such a release being
called a "covenant defeasance" in this prospectus.
Duke Energy must satisfy certain conditions to effect a defeasance or
covenant defeasance. Those conditions include the irrevocable deposit with the
Subordinated Indenture Trustee, in trust, of money or government obligations
which through their scheduled payments of principal and interest would provide
sufficient money to pay the principal and any premium and interest on those
Junior Subordinated Notes on the maturity dates of those payments or upon
redemption. Following a defeasance, payment of the Junior Subordinated Notes
defeased may not be accelerated because of an event of default under the
Subordinated Indenture.
Under current United States federal income tax laws, a defeasance would be
treated as an exchange of the relevant Junior Subordinated Notes in which
holders of those Junior Subordinated Notes might recognize
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gain or loss. In addition, the amount, timing and character of amounts that
holders would thereafter be required to include in income might be different
from that which would be includible in the absence of that defeasance. Duke
Energy urges investors to consult their own tax advisors as to the specific
consequences of a defeasance, including the applicability and effect of tax laws
other than United States federal income tax laws.
Junior Subordinated Notes issued to a Trust will not be subject to covenant
defeasance.
Subordination
Each series of Junior Subordinated Notes will be subordinate and junior in
right of payment, to the extent set forth in the Subordinated Indenture, to all
Senior Indebtedness as defined below. If:
o Duke Energy makes a payment or distribution of any of its assets to
creditors upon its dissolution, winding-up, liquidation or
reorganization, whether in bankruptcy, insolvency or otherwise;
o a default beyond any grace period has occurred and is continuing with
respect to the payment of principal, interest or any other monetary
amounts due and payable on any Senior Indebtedness; or
o the maturity of any Senior Indebtedness has been accelerated because of a
default on that Senior Indebtedness,
then the holders of Senior Indebtedness generally will have the right to receive
payment, in the case of the first instance, of all amounts due or to become due
upon that Senior Indebtedness, and, in the case of the second and third
instances, of all amounts due on the Senior Indebtedness, or Duke Energy will
make provision for those payments, before the holders of any Junior Subordinated
Notes have the right to receive any payments of principal or interest on their
Junior Subordinated Notes.
"Senior Indebtedness" means, with respect to any series of Junior
Subordinated Notes, the principal, premium, interest and any other payment in
respect of any of the following:
o all of Duke Energy's indebtedness that is evidenced by notes, debentures,
bonds or other securities Duke Energy sells for money or other
obligations for money borrowed;
o all indebtedness of others of the kinds described in the preceding
category which Duke Energy has assumed or guaranteed or which Duke Energy
has in effect guaranteed through an agreement to purchase, contingent or
otherwise; and
o all renewals, extensions or refundings of indebtedness of the kinds
described in either of the preceding two categories.
Any such indebtedness, renewal, extension or refunding, however, will not
be Senior Indebtedness if the instrument creating or evidencing it or the
assumption or guarantee of it provides that it is not superior in right of
payment to or is equal in right of payment with those Junior Subordinated Notes.
Senior Indebtedness will be entitled to the benefits of the subordination
provisions in the Subordinated Indenture irrespective of the amendment,
modification or waiver of any term of the Senior Indebtedness.
Future series of Subordinated Notes that are not Junior Subordinated Notes
may rank senior to outstanding series of Junior Subordinated Notes and would
constitute Senior Indebtedness with respect to those series.
The Subordinated Indenture does not limit the amount of Senior Indebtedness
that Duke Energy may issue. As of June 30, 2002, Duke Energy's Senior
Indebtedness totaled approximately $4,600,000,000.
Concerning the Subordinated Indenture Trustee
JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank) is the
Subordinated Indenture Trustee and is also the Senior Indenture Trustee and the
trustee under Duke Energy's First and Refunding Mortgage. Duke Energy and
certain of its affiliates maintain deposit accounts and banking relationships
with JPMorgan Chase Bank. JPMorgan Chase Bank also serves as trustee or agent
under other indentures and agreements pursuant to which securities of Duke
Energy and of certain of its affiliates are outstanding.
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The Subordinated Indenture Trustee will perform only those duties that are
specifically set forth in the Subordinated Indenture unless an event of default
under the Subordinated Indenture occurs and is continuing. In case an event of
default occurs and is continuing, the Subordinated Indenture Trustee will
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs.
DESCRIPTION OF THE FIRST AND REFUNDING MORTGAGE BONDS
Duke Energy will issue the First and Refunding Mortgage Bonds in one or
more series under its First and Refunding Mortgage, dated as of December 1,
1927, to JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as
Trustee, as supplemented and amended. The First and Refunding Mortgage is
sometimes called the "Mortgage" and the First and Refunding Mortgage Bonds are
sometimes called the "Bonds" in this prospectus. The trustee under the Mortgage
is sometimes called the "Bond Trustee" in this prospectus. The Mortgage is an
exhibit to the registration statement, of which this prospectus is a part.
The following description of the Bonds is only a summary and is not
intended to be comprehensive. For additional information you should refer to the
Mortgage.
General
The amount of Bonds that Duke Energy may issue under the Mortgage is
unlimited. Duke Energy's Board of Directors will determine the terms of each
series of Bonds, including denominations, maturity, interest rate and payment
terms and whether the series will have redemption or sinking fund provisions.
Unless Duke Energy states otherwise in the applicable prospectus
supplement, Duke Energy will issue the Bonds only in fully registered form
without coupons and there will be no service charge for any transfers and
exchanges of the Bonds. Duke Energy may, however, require payment to cover any
stamp tax or other governmental charge payable in connection with any transfer
or exchange. Transfers and exchanges of the Bonds may be made at JPMorgan Chase
Bank, 450 West 33rd Street, New York, New York 10001 or at any other office
maintained by Duke Energy for such purpose.
The Bonds will be issuable in denominations of $1,000 and multiples of
$1,000, unless Duke Energy states otherwise in the applicable prospectus
supplement. The Bonds will be exchangeable for an equivalent principal amount of
Bonds of other authorized denominations of the same series.
The prospectus supplement for a particular series of Bonds will describe
the maturity, interest rate and payment terms of those Bonds and any relevant
redemption or sinking fund provisions.
Security
The Mortgage creates a continuing lien to secure the payment of principal
and interest on the Bonds. All the Bonds are equally and ratably secured without
preference, priority or distinction. The lien of the Mortgage covers
substantially all of Duke Energy's properties, real, personal and mixed, and
Duke Energy's franchises, including properties acquired after the date of the
Mortgage, with certain exceptions. Those exceptions include cash, accounts
receivable, inventories of materials and supplies, merchandise held for sale,
securities that Duke Energy holds, certain after-acquired property not useful in
Duke Energy's electric business, certain after-acquired franchises and certain
after-acquired non-electric properties.
The lien of the Mortgage is subject to certain permitted liens and to liens
that exist upon properties that Duke Energy acquired after it entered into the
Mortgage to the extent of the amounts of prior lien bonds secured by those
properties (not, however, exceeding 75% of the cost or value of those
properties) and additions to those properties. "Prior lien bonds" are bonds or
other indebtedness that are secured at the time of acquisition by a lien upon
property that Duke Energy acquires after the date of the Mortgage that becomes
subject to the lien of the Mortgage.
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Issuance of Additional Bonds
If Duke Energy satisfies the conditions in the Mortgage, the Bond Trustee
may authenticate and deliver additional Bonds in an aggregate principal amount
not exceeding:
o the amount of cash that Duke Energy has deposited with the Bond Trustee
for that purpose;
o the amount of previously authenticated and delivered Bonds or refundable
prior lien bonds that have been or are to be retired which, with certain
exceptions, Duke Energy has deposited with the Bond Trustee for that
purpose; or
o 66 2/3% of the aggregate of the net amounts of additional property
(electric) certified to the Bond Trustee after February 18, 1949.
The Bond Trustee may not authenticate and deliver any additional Bonds
under the Mortgage, other than certain types of refunding Bonds, unless Duke
Energy's available net earnings for twelve consecutive calendar months within
the immediately preceding fifteen calendar months have been at least twice the
amount of the annual interest charges on all Bonds outstanding under the
Mortgage, including the Bonds proposed to be issued, and on all outstanding
prior lien bonds that the Bond Trustee does not hold under the Mortgage.
Duke Energy may not apply to the Bond Trustee to authenticate and deliver
any Bonds (1) in an aggregate principal amount exceeding $26,000,000 on the
basis of additional property (electric) that Duke Energy acquired or constructed
prior to January 1, 1949 or (2) on the basis of Bonds or prior lien bonds paid,
purchased or redeemed prior to February 1, 1949. Duke Energy may not certify any
additional property (electric) which is subject to the lien of any prior lien
bonds for the purpose of establishing those prior lien bonds as refundable if
the aggregate principal amount of those prior lien bonds exceeds 66 2/3% of the
net amount of the additional property that is subject to the lien of such prior
lien bonds.
Release Provisions
The Mortgage permits Duke Energy to dispose of certain property and to take
other actions without the Bond Trustee releasing that property. The Mortgage
also permits the release of mortgaged property if Duke Energy deposits cash or
other consideration equal to the value of the mortgaged property to be released.
In certain events and within certain limitations, the Bond Trustee is required
to pay out cash that the Bond Trustee receives -- other than for the Replacement
Fund or as the basis for issuing Bonds -- upon Duke Energy's application.
Duke Energy may withdraw cash that it deposited with the Bond Trustee as
the basis for issuing Bonds in an amount equal to the principal amount of any
Bonds that it is entitled to have authenticated and delivered on the basis of
additional property (electric), on the basis of Bonds previously authenticated
and delivered or on the basis of refundable prior lien bonds.
Replacement Fund
The Mortgage requires Duke Energy to deposit with the Bond Trustee
annually, for the Replacement Fund established under the Mortgage, the sum of
the "replacement requirements" for all years beginning with 1949 and ending with
the last calendar year preceding the deposit date, less certain deductions.
Those deductions are (1) the aggregate original cost of all fixed property
(electric) retired during that time period, not exceeding the aggregate of the
gross amounts of additional property (electric) that Duke Energy acquired or
constructed during the same period, and (2) the aggregate amount of cash that
Duke Energy deposited with the Bond Trustee up to that time, or that Duke Energy
would have been required to deposit except for permitted reductions, under the
Replacement Fund.
The "replacement requirement" for any year is 2 1/2% of the average "amount
of depreciable fixed property" (electric) owned by Duke Energy at the beginning
and end of that year, not exceeding, however, the amount Duke Energy is
permitted to charge as an operating expense for depreciation or retirement by
any governmental authority, or the amount deductible as depreciation or similar
expense for federal income tax purposes. The "amount of depreciable fixed
property" (electric) is the amount by which the sum of
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$192,913,385 plus the aggregate gross amount of all depreciable additional
property (electric) that Duke Energy acquired or constructed from January 1,
1949 to the date as of which such amount is determined exceeds the original cost
of all of Duke Energy's depreciable fixed property (electric) retired during
that period or released from the lien of the Mortgage.
Duke Energy may reduce the amount of cash at any time required to be
deposited in the Replacement Fund and may withdraw any cash that it previously
deposited that is held in the Replacement Fund:
o in an amount equal to 150% of the principal amount of Bonds previously
authenticated and delivered under the Mortgage, or refundable prior lien
bonds, deposited with the Bond Trustee and on the basis of which Duke
Energy would otherwise have been entitled to have additional Bonds
authenticated and delivered; and
o in an amount equal to 150% of the principal amount of Bonds which Duke
Energy would otherwise be entitled to have authenticated and delivered on
the basis of additional property (electric).
Upon Duke Energy's application, the Bond Trustee will apply cash that Duke
Energy deposited in the Replacement Fund and has not previously withdrawn to the
payment, purchase or redemption of Bonds issued under the Mortgage or to the
purchase of refundable prior lien bonds.
Duke Energy has never deposited any cash with the Bond Trustee for the
Replacement Fund. If Duke Energy deposits any cash in the future, it has agreed
not to apply that cash to the redemption of the Bonds as long as any Bonds then
outstanding remain outstanding.
Amendments of the Mortgage
Duke Energy may amend the Mortgage with the consent of the holders of
66 2/3% in principal amount of the Bonds, except that no such amendment may:
o affect the terms of payment of principal at maturity or of interest or
premium on any Bond;
o affect the rights of Bondholders to sue to enforce any such payment at
maturity; or
o reduce the percentage of Bonds required to consent to an amendment.
No amendment may affect the rights under the Mortgage of the holders of
less than all of the series of Bonds outstanding unless the holders of 66 2/3%
in principal amount of the Bonds of each series affected consent to the
amendment.
The covenants included in the supplemental indenture for any series of
Bonds to be issued will be solely for the benefit of the holders of those Bonds.
Duke Energy may modify any such covenant only with the consent of the holders of
66 2/3% in principal amount of those Bonds outstanding, without the consent of
Bondholders of any other series.
Events of Default
The Bond Trustee may, and at the written request of the holders of a
majority in principal amount of the outstanding Bonds will, declare the
principal of all outstanding Bonds due when any event of default under the
Mortgage occurs. The holders of a majority in principal amount of the
outstanding Bonds may, however, waive the default and rescind the declaration if
Duke Energy cures the default.
Events of default under the Mortgage include:
o default in the payment of principal;
o default for 60 days in the payment of interest;
o default in the performance of any other covenant in the Mortgage
continuing for 60 days after the Bond Trustee or the holders of not less
than 10% in principal amount of the Bonds then outstanding give notice of
the default; and
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o certain bankruptcy or insolvency events with respect to Duke Energy.
Duke Energy provides a statement by certain of its officers each year to
the Bond Trustee stating whether it has complied with the covenants of the
Mortgage.
Concerning the Bond Trustee
JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank) is the
Bond Trustee and is also the Senior Indenture Trustee and the Subordinated
Indenture Trustee. Duke Energy and certain of its affiliates maintain deposit
accounts and banking relationships with JPMorgan Chase Bank. JPMorgan Chase Bank
also serves as trustee or agent under other indentures and agreements pursuant
to which securities of Duke Energy and of certain of its affiliates are
outstanding.
The Bond Trustee is under no obligation to exercise any of its powers at
the request of any of the holders of the Bonds unless those Bondholders have
offered to the Bond Trustee security or indemnity satisfactory to it against the
cost, expenses and liabilities it might incur as a result. The holders of a
majority in principal amount of the Bonds outstanding may direct the time,
method and place of conducting any proceeding for any remedy available to the
Bond Trustee, or the exercise of any trust or power of the Bond Trustee. The
Bond Trustee will not be liable for any action that it takes or omits to take in
good faith in accordance with any such direction.
DESCRIPTION OF THE COMMON STOCK
The following description of Duke Energy's Common Stock is only a summary
and is not intended to be comprehensive. For additional information you should
refer to the applicable provisions of the North Carolina Business Corporation
Act and Duke Energy's Restated Articles of Incorporation (Articles) and By-Laws.
The Articles and By-Laws are exhibits to the registration statement, of which
this prospectus is a part.
General
Duke Energy is authorized to issue up to 2,000,000,000 shares of Common
Stock. At June 30, 2002, approximately 832,000,000 shares of Common Stock were
outstanding. Duke Energy is also authorized to issue up to 12,500,000 shares of
Preferred Stock, 10,000,000 shares of Preferred Stock A, 20,000,000 shares of
Serial Preferred Stock and 1,500,000 shares of Preference Stock. At June 30,
2002, 2,154,984 shares of Preferred Stock, 1,257,185 shares of Preferred Stock A
and no shares of Serial Preferred Stock or Preference Stock were outstanding.
The Preferred Stock, Preferred Stock A, Serial Preferred Stock and Preference
Stock together are sometimes called the "Preferred Stocks."
Dividends
Holders of Common Stock are entitled to such dividends as may be declared
from time to time by the Board of Directors from legally available funds but
only if full dividends on all outstanding series of the Preferred Stocks for the
then current and all prior dividend periods and any required sinking fund
payments with respect to any outstanding series of such securities have been
paid or provided for.
Voting Rights
Subject to the rights, if any, of the holders of the Preferred Stocks that
may be outstanding or as otherwise provided by law, the holders of Common Stock
have exclusive voting rights, each share being entitled to one vote. Holders of
Common Stock have noncumulative voting rights, which means that the holders of
more than 50% of the shares voting for the election of directors can elect 100%
of the directors and the holders of the remaining shares voting for the election
of directors will not be able to elect any directors.
Whenever dividends on any part of any outstanding Preferred Stock or
Preferred Stock A are in arrears in an amount equivalent to the total dividends
required to be paid on that Preferred Stock or Preferred Stock A in any period
of 12 calendar months, the holders of the Preferred Stock as a class have the
exclusive right to elect a majority of the authorized number of directors and
the holders of the Preferred Stock A as a class have the exclusive right to
elect two directors. Those rights cease whenever Duke Energy pays all accrued
and
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unpaid dividends in full. Whenever six quarterly dividends on any outstanding
series of the Preference Stock are in arrears or any required sinking fund
payments are in default, the holders of the Preference Stock as a class have the
exclusive right to elect two directors. This right ceases whenever all dividends
and required sinking fund obligations in default have been paid in full or
provided for. In addition, the consent of the holders of specified percentages
of any outstanding Preferred Stock, Preferred Stock A or Preference Stock, or
some or all of the holders of such classes, is required in connection with
certain increases in authorized amounts of or changes in stock senior to the
Common Stock or in connection with any sale of substantially all of Duke
Energy's assets or certain mergers.
The holders of the Serial Preferred Stock will have such voting rights as a
series or otherwise with respect to the election of directors or otherwise as
may be fixed by the Board of Directors at the time of the creation of the
series, in addition to any voting rights provided by law.
Rights Upon Liquidation
The holders of Common Stock are entitled in liquidation to share ratably in
the assets of Duke Energy after payment of all debts and liabilities and after
required preferential payments to the holders of outstanding Preferred Stocks.
Miscellaneous
The outstanding shares of Common Stock are, and the shares of Common Stock
sold hereunder will be, upon payment for them, fully paid and nonassessable.
Holders of Common Stock have no preemptive rights and no conversion rights. The
Common Stock is not subject to redemption and is not entitled to the benefit of
any sinking fund provisions.
If so provided by the Board of Directors at the time of creation of any
series of Serial Preferred Stock, the shares of such series may be convertible
or exchangeable into shares of Common Stock or other securities of Duke Energy
or of any other corporation or other entity, upon terms fixed at the time of
creation of the series.
Transfer Agent and Registrar
Duke Energy acts as transfer agent and registrar for the Common Stock.
Preference Stock Purchase Rights
Each share of Common Stock has attached to it a Preference Stock Purchase
Right. The Rights initially are represented only by the certificates for the
shares of Common Stock and will not trade separately from those shares unless
and until:
o ten days after it is publicly announced that a person or group (with
certain exceptions) has acquired, or has obtained the right to acquire,
the beneficial ownership of 15% or more of the outstanding Common Stock
(an "acquiring person"); or
o ten business days (or a later date determined by Duke Energy's Board of
Directors) after the date a person or group commences, or public
announcement is made that the person or group intends to commence, a
tender or exchange offer that would result in the person or group
becoming an acquiring person.
If and when the Rights separate, each Right will entitle the holder to purchase
1/10,000 of a share of Duke Energy's Series A Participating Preference Stock for
an exercise price that is presently $190.
In the event that a person or group becomes an acquiring person, each Right
(except for Rights beneficially owned by the acquiring person or its
transferees, which Rights become void) will entitle its holder to purchase, for
the exercise price, a number of shares of Common Stock having a market value of
twice the exercise price. Also, if, after ten days following the date of the
announcement that a person or group has become an acquiring person:
o Duke Energy is involved in a merger or similar form of business
combination in which Duke Energy is not the surviving corporation or in
which Duke Energy is the surviving corporation but the Common Stock is
changed or exchanged; or
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o more than 50% of Duke Energy's assets or earning power is sold or
transferred;
then each Right (except for voided Rights) will entitle its holder to purchase,
for the exercise price, a number of shares of common stock of the acquiring
company having a value of twice the exercise price. If any person or group
acquires from 15% to but excluding 50% of the outstanding Common Stock, Duke
Energy's Board of Directors may, at its option, exchange each outstanding Right
(except for those held by an acquiring person or its transferees) for one share
of Common Stock or 1/10,000 of a share of Series A Participating Preference
Stock.
Duke Energy's Board of Directors may redeem the Rights for $0.01 per Right
prior to ten business days after the date of the public announcement that a
person or group has become an acquiring person.
The Rights will not prevent a takeover of Duke Energy. However, the
existence of the Rights may cause substantial dilution to a person or group that
acquires 15% or more of the Common Stock unless the Board of Directors first
redeems those Rights.
Certain Anti-Takeover Matters
Duke Energy's Articles and By-Laws include a number of provisions that may
have the effect of encouraging persons considering unsolicited tender offers or
other unilateral takeover proposals to negotiate with the Board of Directors
rather than pursue non-negotiated takeover attempts. Those provisions include:
Classified Board of Directors; Removal of Directors; Vacancies
Duke Energy's Articles provide for a Board of Directors divided into three
classes, with one class being elected each year to serve for a three-year term.
As a result, at least two annual meetings of shareholders may be required for
shareholders to change a majority of the Board of Directors. Duke Energy's
shareholders may remove directors only for cause. Vacancies and newly created
directorships on the Board of Directors may be filled only by the affirmative
vote of a majority of the directors remaining in office, and no decrease in the
number of directors may shorten the term of an incumbent director. The
classification of directors and the inability of shareholders to remove
directors without cause and to fill vacancies and newly created directorships on
the Board of Directors will make it more difficult to change the composition of
the Board of Directors, but will promote continuity of existing management.
Advance Notice Requirements
Duke Energy's By-Laws establish advance notice procedures with regard to
shareholder proposals relating to the nomination of persons for election as
directors or new business to be brought before annual meetings of shareholders.
These procedures provide that shareholders must give timely notice of such
proposals in writing to the Secretary of Duke Energy. Generally, to be timely
with respect to an annual meeting of shareholders, notice must be received at
Duke Energy's principal executive offices not less than 90 days nor more than
120 days prior to the first anniversary date of the annual meeting for the
preceding year. The notice must contain certain information specified in the
By-Laws.
Special Meetings of Shareholders
Neither the Articles nor the By-Laws of Duke Energy give shareholders the
right to call a special meeting of shareholders. The By-Laws provide that
special meetings of shareholders may be called only by the Board of Directors or
the Chairman of the Board.
Amendment of Charter and By-Laws
Duke Energy's Articles require the approval of not less than 80% of the
voting power of all outstanding shares of Common Stock to amend provisions
relating to the minimum and maximum size of the Board of Directors, the
classification of the Board of Directors, the removal of directors, the filling
of vacancies and newly created directorships on the Board of Directors and the
requirement that a decrease in the number of directors constituting the Board of
Directors may not shorten the term of any incumbent director. Duke Energy's
Articles also require the affirmative vote of the holders of at least a majority
of the combined voting power of the then outstanding shares of stock of all
classes entitled to vote generally in the election of directors, voting together
as a single class, for the shareholders to adopt, amend or repeal any provisions
in the By-Laws. This voting requirement also applies to any amendment or repeal
of this provision or the adoption of
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any provision inconsistent with it. These amendment provisions will make it more
difficult to dilute the anti-takeover effects of Duke Energy's Articles and
By-Laws.
Serial Preferred Stock
Serial Preferred Stock can be, and has been, used by corporations
specifically for anti-takeover purposes. For example, shares of Serial Preferred
Stock can be privately placed with purchasers who support a board of directors
in opposing a tender offer or other hostile takeover bid, or can be issued to
dilute the stock ownership and voting power of a third party seeking a merger or
other extraordinary corporate transaction. Under these and similar
circumstances, the Serial Preferred Stock can serve to perpetuate incumbent
management and can adversely affect shareholders who may want to participate in
the tender offer or other transaction.
Duke Energy's Board of Directors has adopted resolutions that state that
the Serial Preferred Stock:
a) not be used for the principal purpose of acting as an anti-takeover
device without shareholder approval; and
b) not be given supermajority voting rights except possibly with respect to
proposed amendments to the Articles of Incorporation altering materially
existing provisions of the Serial Preferred Stock or creating, or
increasing the authorized amount of, any class of stock ranking, as to
dividend or assets, prior to the Serial Preferred Stock.
DESCRIPTION OF THE STOCK PURCHASE CONTRACTS
AND THE STOCK PURCHASE UNITS
Duke Energy may issue stock purchase contracts representing contracts
obligating holders to purchase from Duke Energy, and Duke Energy to sell to the
holders, a specified number of shares of Common Stock (or a range of numbers of
shares pursuant to a predetermined formula) at a future date or dates. The price
per share of Common Stock may be fixed at the time the stock purchase contracts
are issued or may be determined by reference to a specific formula set forth in
the stock purchase contracts.
The stock purchase contracts may be issued separately or as a part of
units, often known as stock purchase units, consisting of a stock purchase
contract and either:
o Senior Notes, Junior Subordinated Notes or other debt securities of Duke
Energy or one of its subsidiaries;
o debt obligations of third parties, including U.S. Treasury securities; or
o Preferred Securities or trust preferred securities issued by trusts, all
of whose common securities are owned by Duke Energy or by subsidiaries of
Duke Energy,
securing the holder's obligations to purchase the Common Stock under the stock
purchase contracts.
The stock purchase contracts may require Duke Energy to make periodic
payments to the holders of the stock purchase units or vice versa, and such
payments may be unsecured or prefunded on some basis. The stock purchase
contracts may require holders to secure their obligations in a specified manner
and in certain circumstances Duke Energy may deliver newly issued prepaid stock
purchase contracts, often known as prepaid securities, upon release to a holder
of any collateral securing such holder's obligations under the original stock
purchase contract.
The applicable prospectus supplement will describe the terms of any stock
purchase contracts or stock purchase units and, if applicable, prepaid
securities. The description in the applicable prospectus supplement will not
contain all of the information that you may find useful. For more information,
you should review the stock purchase contracts, the collateral arrangements and
depositary arrangements, if applicable, relating to such stock purchase
contracts or stock purchase units and, if applicable, the prepaid securities and
the document pursuant to which the prepaid securities will be issued. These
documents will be filed with the SEC promptly after the offering of such stock
purchase contracts or stock purchase units and, if applicable, prepaid
securities.
28
DESCRIPTION OF THE PREFERRED SECURITIES
Each Trust may issue only one series of Preferred Securities. The Trust
Agreement of each Trust will authorize the Administrative Trustees to issue the
Preferred Securities of that Trust on behalf of that Trust. For additional
information you should refer to the applicable Trust Agreement. The form of
Trust Agreement is an exhibit to the registration statement, of which this
prospectus is a part.
The prospectus supplement for a particular series of Preferred Securities
being offered will disclose the specific terms related to the offering,
including the price or prices at which the Preferred Securities to be offered
will be issued. Those terms will include some or all of the following:
o the title of the series;
o the number of Preferred Securities of the series;
o the yearly distribution rate, or the method of determining that rate, and
the date or dates on which distributions will be payable;
o the date or dates, or method of determining the date or dates, from which
distributions will be cumulative;
o the amount that will be paid out of the assets of the Trust to the
holders of the Preferred Securities upon the voluntary or involuntary
dissolution, winding-up or termination of the Trust;
o any obligation that the Trust has to purchase or redeem the Preferred
Securities, and the price at which, the period within which, and the
terms and conditions upon which the Trust will purchase or redeem them;
o any voting rights of the Preferred Securities that are in addition to
those legally required, including any right that the holders of the
Preferred Securities have to approve certain actions under or amendments
to the Trust Agreement;
o any right that the Trust has to defer distributions on the Preferred
Securities in the event that Duke Energy extends the interest payment
period on the related Junior Subordinated Notes; and
o any other rights, preferences, privileges, limitations or restrictions
upon the Preferred Securities of the series.
Duke Energy will guarantee each series of Preferred Securities to the
extent described below under the caption "Description of the Guarantees."
The applicable prospectus supplement will describe any material United
States federal income tax considerations that apply to the Preferred Securities.
DESCRIPTION OF THE GUARANTEES
Duke Energy will execute the Guarantees from time to time for the benefit
of the holders of the Preferred Securities of the respective Trusts. JPMorgan
Chase Bank will act as Guarantee Trustee under each Guarantee. The Guarantee
Trustee will hold each Guarantee for the benefit of the holders of the Preferred
Securities to which it relates.
The following description of the Guarantees is only a summary and is not
intended to be comprehensive. The form of Guarantee is an exhibit to the
registration statement, of which this prospectus is a part.
General
Duke Energy will irrevocably and unconditionally agree under each Guarantee
to pay the Guarantee Payments that are defined below, to the extent specified in
that Guarantee, to the holders of the Preferred Securities to which the
Guarantee relates, to the extent that the Guarantee Payments are not paid by or
on behalf of the related Trust. Duke Energy is required to pay the Guarantee
Payments to the extent specified in the relevant Guarantee regardless of any
defense, right of set-off or counterclaim that Duke Energy may have or may
assert against any person.
The following payments and distributions on the Preferred Securities of a
Trust are Guarantee Payments:
o any accrued and unpaid distributions required to be paid on the Preferred
Securities of the Trust, but only to the extent that the Trust has funds
legally and immediately available for those distributions;
29
o the redemption price for any Preferred Securities that the Trust calls
for redemption, including all accrued and unpaid distributions to the
redemption date, but only to the extent that the Trust has funds legally
and immediately available for the payment; and
o upon a dissolution, winding-up or termination of the Trust, other than in
connection with the distribution of Junior Subordinated Notes to the
holders of Trust Securities of the Trust or the redemption of all the
Preferred Securities of the Trust, the lesser of:
o the sum of the liquidation amount and all accrued and unpaid
distributions on the Preferred Securities of the Trust to the payment
date, to the extent that the Trust has funds legally and immediately
available for the payment; and
o the amount of assets of the Trust remaining available for distribution
to holders of the Preferred Securities of the Trust in liquidation of
the Trust.
Duke Energy may satisfy its obligation to make a Guarantee Payment by
making that payment directly to the holders of the related Preferred Securities
or by causing the Trust to make the payment to those holders.
Each Guarantee will be a full and unconditional guarantee, subject to
certain subordination provisions, of the Guarantee Payments with respect to the
related Preferred Securities from the time of issuance of those Preferred
Securities, except that the Guarantee will apply to the payment of distributions
and other payments on the Preferred Securities only when the Trust has
sufficient funds legally and immediately available to make those distributions
or other payments.
IF DUKE ENERGY DOES NOT MAKE THE REQUIRED PAYMENTS ON THE JUNIOR
SUBORDINATED NOTES THAT THE PROPERTY TRUSTEE HOLDS UNDER A TRUST, THAT TRUST
WILL NOT MAKE THE RELATED PAYMENTS ON ITS PREFERRED SECURITIES.
Subordination
Duke Energy's obligations under each Guarantee will be unsecured
obligations of Duke Energy. Those obligations will rank:
o subordinate and junior in right of payment to all of Duke Energy's other
liabilities, other than obligations or liabilities that rank equal in
priority or subordinate by their terms;
o equal in priority with Duke Energy's Preferred Stock and Preferred Stock
A and similar guarantees; and
o senior to Duke Energy's Common Stock.
Duke Energy has Preferred Stock and Preferred Stock A outstanding that will
rank equal in priority with the Guarantees and has Common Stock outstanding that
will rank junior to the Guarantees.
Each Guarantee will be a guarantee of payment and not of collection. This
means that the guaranteed party may institute a legal proceeding directly
against Duke Energy, as guarantor, to enforce its rights under the Guarantee
without first instituting a legal proceeding against any other person or entity.
The terms of the Preferred Securities will provide that each holder of the
Preferred Securities, by accepting those Preferred Securities, agrees to the
subordination provisions and other terms of the related Guarantee.
Amendments and Assignment
Duke Energy may amend each Guarantee without the consent of any holder of
the Preferred Securities to which that Guarantee relates if the amendment does
not materially and adversely affect the rights of those holders. Duke Energy may
otherwise amend each Guarantee with the approval of the holders of at least
66 2/3% of the outstanding Preferred Securities to which that Guarantee relates.
Termination
Each Guarantee will terminate and be of no further effect when:
o the redemption price of the Preferred Securities to which the Guarantee
relates is fully paid;
o Duke Energy distributes the related Junior Subordinated Notes to the
holders of those Preferred Securities; or
30
o the amounts payable upon liquidation of the related Trust are fully paid.
Each Guarantee will remain in effect or will be reinstated if at any time
any holder of the related Preferred Securities must restore payment of any sums
paid to that holder with respect to those Preferred Securities or under that
Guarantee.
Events of Default
An event of default will occur under any Guarantee if Duke Energy fails to
perform any of its payment obligations under that Guarantee. The holders of a
majority of the Preferred Securities of any series may waive any such event of
default and its consequences on behalf of all of the holders of the Preferred
Securities of that series. The Guarantee Trustee is obligated to enforce the
Guarantee for the benefit of the holders of the Preferred Securities of a series
if an event of default occurs under the related Guarantee.
The holders of a majority of the Preferred Securities to which a Guarantee
relates have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee with respect to
that Guarantee or to direct the exercise of any trust or power that the
Guarantee Trustee holds under that Guarantee. Any holder of the related
Preferred Securities may institute a legal proceeding directly against Duke
Energy to enforce that holder's rights under the Guarantee without first
instituting a legal proceeding against the Guarantee Trustee or any other person
or entity.
Concerning the Guarantee Trustee
JPMorgan Chase Bank will be the Guarantee Trustee. It is also the Property
Trustee, the Subordinated Indenture Trustee, the Senior Indenture Trustee and
the Bond Trustee. Duke Energy and certain of its affiliates maintain deposit
accounts and banking relationships with JPMorgan Chase Bank. JPMorgan Chase Bank
also serves as trustee or agent under other indentures and agreements pursuant
to which securities of Duke Energy and certain of its affiliates are
outstanding.
The Guarantee Trustee will perform only those duties that are specifically
set forth in each Guarantee unless an event of default under the Guarantee
occurs and is continuing. In case an event of default occurs and is continuing,
the Guarantee Trustee will exercise the same degree of care as a prudent
individual would exercise in the conduct of his or her own affairs. Subject to
those provisions, the Guarantee Trustee is under no obligation to exercise any
of its powers under any Guarantee at the request of any holder of the related
Preferred Securities unless that holder offers reasonable indemnity to the
Guarantee Trustee against the costs, expenses and liabilities which it might
incur as a result.
Agreements as to Expenses and Liabilities
Duke Energy will enter into an Agreement as to Expenses and Liabilities
under each Trust Agreement. Each Agreement as to Expenses and Liabilities will
provide that Duke Energy will, with certain exceptions, irrevocably and
unconditionally guarantee the full payment of any indebtedness, expenses or
liabilities of the related Trust to each person or entity to whom that Trust
becomes indebted or liable. The exceptions are the obligations of the Trust to
pay to the holders of the related Preferred Securities or other similar
interests in that Trust the amounts due to the holders under the terms of those
Preferred Securities or those similar interests.
PLAN OF DISTRIBUTION
Duke Energy and the Trusts may sell securities to one or more underwriters
or dealers for public offering and sale by them, or it may sell the securities
to investors directly or through agents. The prospectus supplement relating to
the securities being offered will set forth the terms of the offering and the
method of distribution and will identify any firms acting as underwriters,
dealers or agents in connection with the offering, including:
o the name or names of any underwriters;
o the purchase price of the securities and the proceeds to Duke Energy or
the Trusts from the sale;
o any underwriting discounts and other items constituting underwriters'
compensation;
31
o any public offering price;
o any discounts or concessions allowed or reallowed or paid to dealers; and
o any securities exchange or market on which the securities may be listed.
Only those underwriters identified in the prospectus supplement are deemed
to be underwriters in connection with the securities offered in the prospectus
supplement.
Duke Energy and the Trusts may distribute the securities from time to time
in one or more transactions at a fixed price or prices, which may be changed, or
at prices determined as the prospectus supplement specifies. Duke Energy may
sell securities through forward contracts or similar arrangements. In connection
with the sale of securities, underwriters, dealers or agents may be deemed to
have received compensation from Duke Energy in the form of underwriting
discounts or commissions and also may receive commissions from securities
purchasers for whom they may act as agent. Underwriters may sell the securities
to or through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters or commissions from
the purchasers for whom they may act as agent.
Duke Energy may sell the securities directly or through agents it
designates from time to time. Any agent involved in the offer or sale of the
securities covered by this prospectus, other than at the market offerings of
common stock, will be named in a prospectus supplement relating to such
securities. At the market offerings of common stock may be made by agents.
Commissions payable by Duke Energy to agents will be set forth in a prospectus
supplement relating to the securities being offered. Unless otherwise indicated
in a prospectus supplement, any such agents will be acting on a best-efforts
basis for the period of their appointment.
Some of the underwriters, dealers or agents and some of their affiliates
who participate in the securities distribution may engage in other transactions
with, and perform other services for, Duke Energy and its subsidiaries or
affiliates in the ordinary course of business.
Any underwriting or other compensation which Duke Energy pays to
underwriters or agents in connection with the securities offering, and any
discounts, concessions or commissions which underwriters allow to dealers, will
be set forth in the applicable prospectus supplement. Underwriters, dealers and
agents participating in the securities distribution may be deemed to be
underwriters, and any discounts and commissions they receive and any profit they
realize on the resale of the securities may be deemed to be underwriting
discounts and commissions under the Securities Act of 1933. Underwriters, and
their controlling persons, and agents may be entitled, under agreements entered
into with Duke Energy and the Trusts, to indemnification against certain civil
liabilities, including liabilities under the Securities Act of 1933.
EXPERTS
The consolidated financial statements and the related financial statement
schedule incorporated in this prospectus by reference from Duke Energy's Annual
Report on Form 10-K for the year ended December 31, 2001 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
VALIDITY OF THE SECURITIES
Edward M. Marsh, Jr., Esq., who is Duke Energy's Deputy General Counsel and
Assistant Secretary, and Simpson Thacher & Bartlett, New York, New York, will
issue opinions about the validity of the securities offered by Duke Energy in
the applicable prospectus supplement for Duke Energy. Richards, Layton & Finger,
P.A., special Delaware counsel, will issue opinions about the validity of the
Preferred Securities offered in the applicable prospectus supplement for the
Trusts. Counsel named in the applicable prospectus supplement will issue
opinions about the validity of the securities offered by Duke Energy for any
underwriters.
32
WHERE YOU CAN FIND MORE INFORMATION
Duke Energy files annual, quarterly and current reports and other
information with the SEC. You may read and copy any documents that are filed at
SEC Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549.
You may also obtain copies of these documents at prescribed rates from the
Public Reference Section of the SEC at its Washington address.
Please call the SEC at 1-800-SEC-0330 for further information. Duke
Energy's filings are also available to the public through:
o the SEC web site at http://www.sec.gov; and
o The New York Stock Exchange
20 Broad Street
New York, New York 10005.
Information about Duke Energy is also available on its web site at
http://www.duke-energy.com. Such web site is not a part of this prospectus.
The SEC allows Duke Energy to "incorporate by reference" the information
Duke Energy files with it, which information incorporated by reference is
considered to be part of this prospectus and any accompanying prospectus
supplement, and later information that Duke Energy files with the SEC will
automatically update and supersede that information as well as the information
included in this prospectus and any accompanying prospectus supplement. Duke
Energy incorporates 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 filed prior to the termination of this offering:
o Duke Energy's annual report on Form 10-K for the year ended December 31,
2001;
o Duke Energy's quarterly reports on Form 10-Q for the quarters ended March
31, 2002 and June 30, 2002; and
o Duke Energy's current reports on Form 8-K filed on March 29, 2002 and
April 15, 2002.
Duke Energy will provide without charge a copy of these filings, other than
any exhibits unless the exhibits are specifically incorporated by reference into
this prospectus. You may request your copy by writing Duke Energy at the
following address or telephoning one of the following numbers:
Investor Relations Department
Duke Energy Corporation
P.O. Box 1005
Charlotte, North Carolina 28201
(704) 382-3853 or (800) 488-3853 (toll-free)
33
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution (Estimated):
The estimated expenses of issuance and distribution, other than
underwriting discounts and commissions, to be borne by Duke Energy Corporation
are as follows:
SEC Filing Fee.............................................. $ 184,000*
Trustee Fees and Expenses................................... 50,000
Listing Fees................................................ 200,000
Printing Costs.............................................. 200,000
Legal Fees and Expenses..................................... 400,000
Accounting Fees............................................. 50,000
Blue Sky Fees and Expenses.................................. 20,000
Rating Agency Fees.......................................... 270,000
NASD Fee.................................................... 30,000
Miscellaneous............................................... 10,000
----------
TOTAL....................................................... 1,414,000
==========
---------------
* Actual
Item 15. Indemnification of Directors and Officers.
Sections 55-8-50 through 55-8-58 of the North Carolina Business Corporation
Act and the By-Laws of Duke Energy Corporation permit indemnification of its
directors and officers in a variety of circumstances, which may include
liabilities under the Securities Act of 1933, as amended (the "Securities Act").
In addition, Duke Energy Corporation has purchased insurance permitted by the
law of North Carolina on behalf of directors, officers, employees or agents,
which may cover liabilities under the Securities Act.
The Restated Articles of Incorporation of Duke Energy Corporation provide
that a director shall not be personally liable for monetary damages for breach
of fiduciary duty as a director except to the extent such exemption from
liability or limitation thereof is not permitted under the North Carolina
Business Corporation Act.
Item 16. Exhibits.
See "Index to Exhibits" starting on page II-5.
The total amount of securities of Duke Energy Corporation or its
subsidiaries authorized under any instrument with respect to long-term debt not
filed as an exhibit does not exceed 10% of the total assets of Duke Energy
Corporation and its subsidiaries on a consolidated basis. Duke Energy
Corporation agrees, upon request of the Securities and Exchange Commission, to
furnish copies of any or all of such instruments.
Item 17. Undertakings.
(a) Undertaking related to Rule 415 offering:
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made of the securities registered hereby, a post-effective amendment to
this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
II-1
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20 percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, S-8 or F-3 and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
registrants pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Act, 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) Undertaking related to filings incorporating subsequent Exchange Act
documents by reference:
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of Duke Energy
Corporation's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Undertaking related to acceleration of effectiveness:
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the indemnification provisions described in Item 15 above
or in contractual arrangements pursuant thereto, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant,
Duke Energy Corporation, certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Charlotte, State of North Carolina, on
the 22nd day of August 2002.
DUKE ENERGY CORPORATION
By: R.B. PRIORY
------------------------------------
Chairman of the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following directors and officers
of Duke Energy Corporation in the capacities and on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
Richard B. Priory Chairman of the Board, August 22, 2002
President
and Chief Executive Officer
(Principal Executive Officer)
Robert P. Brace Executive Vice President and August 22, 2002
Chief Financial Officer
(Principal Financial Officer)
Keith G. Butler Senior Vice President and August 22, 2002
Controller
(Principal Accounting Officer)
G. Alex Bernhardt, Sr.
Robert J. Brown
William A. Coley
William T. Esrey
Ann M. Gray
Dennis R. Hendrix
Harold S. Hook A majority of the Directors August 22, 2002
George D. Johnson, Jr.
Max Lennon
Leo E. Linbeck, Jr.
James G. Martin
Richard B. Priory
James T. Rhodes
Myron L. Caldwell, by signing his name hereto, does hereby sign this document on
behalf of Duke Energy Corporation and on behalf of each of the above-named
persons pursuant to a power of attorney duly executed by Duke Energy Corporation
and such persons, filed with the Securities and Exchange Commission as an
exhibit hereto.
/s/ MYRON L. CALDWELL
--------------------------------------
Myron L. Caldwell
Attorney-in-Fact
II-3
Pursuant to the requirements of the Securities Act of 1933, Duke Energy
Capital Trust III certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
registration statement or amendment thereto to be signed on its behalf by the
undersigned, thereunto duly authorized, in Charlotte, North Carolina, on the
22nd day of August 2002.
DUKE ENERGY CAPITAL TRUST III
By: Duke Energy Corporation, Depositor
By: /s/ ROBERT T. LUCAS III
------------------------------------
Robert T. Lucas III
Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, Duke Energy
Capital Trust IV certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
registration statement or amendment thereto to be signed on its behalf by the
undersigned, thereunto duly authorized, in Charlotte, North Carolina, on the
22nd day of August 2002.
DUKE ENERGY CAPITAL TRUST IV
By: Duke Energy Corporation, Depositor
By: /s/ ROBERT T. LUCAS III
------------------------------------
Robert T. Lucas III
Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, Duke Energy
Capital Trust V certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
registration statement or amendment thereto to be signed on its behalf by the
undersigned, thereunto duly authorized, in Charlotte, North Carolina, on the
22nd day of August 2002.
DUKE ENERGY CAPITAL TRUST V
By: Duke Energy Corporation, Depositor
By: /s/ ROBERT T. LUCAS III
------------------------------------
Robert T. Lucas III
Assistant Secretary
II-4
INDEX TO EXHIBITS
EXHIBIT NO. EXHIBITS
----------- --------
1-A** Form of Underwriting Agreement relating to Senior Notes.
1-B* Form of Underwriting Agreement relating to Junior
Subordinated Notes (filed with Form S-3, File No. 333-58820,
effective April 24, 2001, as Exhibit 1-B).
1-C* Form of Underwriting Agreement relating to First and
Refunding Mortgage Bonds (filed with Form S-3, File No.
333-58820, effective April 24, 2001, as Exhibit 1-C).
1-D* Form of Underwriting Agreement relating to Common Stock
(filed with Form S-3, File No. 333-58820, effective April
24, 2001, as Exhibit 1-D).
1-E* Form of Underwriting Agreement relating to Trust Preferred
Securities (filed with Form S-3, File No. 333-58820,
effective April 24, 2001, as Exhibit 1-E).
1-F* Form of Calculation Agent Agreement relating to Senior Notes
(filed with Form S-3, File No. 333-58820, effective April
24, 2001, as Exhibit 1-F).
4-A-1* Restated Articles of Incorporation of Duke Energy
Corporation, dated June 18, 1997 (filed with Form S-8, File
No. 333-29563, effective June 19, 1997, as Exhibit 4(G)).
4-A-2* Articles of Amendment of Duke Energy Corporation, dated
April 28, 1999 (filed with Form S-3, File No. 333-81573,
effective October 8, 1999, as Exhibit 4(B)).
4-A-3* Articles of Amendment of Duke Energy Corporation, dated May
2, 2001 (filed with Post-Effective Amendment No. 2 to Form
S-3, File No. 333-81573, filed December 21, 2001, as Exhibit
4(B)-1).
4-A-4* Articles of Amendment of Duke Energy Corporation, dated May
1, 2002 (filed with Form 10-Q for the quarter ended March
31, 2002, File No. 1-4928, as Exhibit 3).
4-B* By-Laws of Duke Energy Corporation, as amended (filed with
Form S-3, File No. 333-52204, effective December 26, 2000,
as Exhibit 4-B).
4-C* Rights Agreement between Duke Energy Corporation and The
Bank of New York, as Rights Agent, dated as of December 17,
1998 (filed with Form 8-K, dated February 11, 1999, of Duke
Energy Corporation, as Exhibit 4.1).
4-D-1* Senior Indenture between Duke Energy Corporation and
JPMorgan Chase Bank (formerly known as The Chase Manhattan
Bank), as Trustee, dated as of September 1, 1998 (filed with
Form S-3, File No. 333-14209, effective April 7, 1999, as
Exhibit 4-D-1).
4-D-2* First Supplemental Indenture dated as of December 4, 1998
supplementing said Senior Indenture (filed with Form S-3,
File No. 333-14209, effective April 7, 1999, as Exhibit 4-D-
1(A)).
4-D-3* Second Supplemental Indenture dated as of January 12, 1999
supplementing said Senior Indenture (filed with Form S-3,
File No. 333-14209, effective April 7, 1999, as Exhibit
4-D-1(B)).
4-D-4* Third Supplemental Indenture dated as of March 11, 1999
supplementing said Senior Indenture (filed with Form S-3,
File No. 333-14209, effective April 7, 1999, as Exhibit 4-D-
1(C)).
4-D-5* Fourth Supplemental Indenture dated as of March 10, 2000
supplementing said Senior Indenture (filed with Form S-3,
File No. 333-52204, effective December 26, 2000, as Exhibit
4-D-5).
4-D-6* Fifth Supplemental Indenture dated as of September 12, 2000
supplementing said Senior Indenture (filed with Form S-3,
File No. 333-52204, effective December 26, 2000, as Exhibit
4-D-6).
4-D-7** Sixth Supplemental Indenture dated as of January 14, 2002
supplementing said Senior Indenture.
4-D-8* Form of Supplemental Indenture to Senior Indenture relating
to Senior Notes (filed with Form S-3, File No. 333-58820,
effective April 24, 2001, as Exhibit 4-D-7).
II-5
EXHIBIT NO. EXHIBITS
----------- --------
4-E-1* Subordinated Indenture between Duke Energy Corporation and
JPMorgan Chase Bank (formerly known as The Chase Manhattan
Bank), as Trustee, dated as of December 1, 1997 (filed with
Form S-3, File No. 333-14209, effective September 3, 1998,
as Exhibit 4-D-2).
4-E-2* First Supplemental Indenture dated as of December 8, 1997
supplementing said Subordinated Indenture (filed with Form
S-3, File No. 333-14209, effective April 7, 1999 as Exhibit
4-D-2(A)).
4-E-3* Second Supplemental Indenture dated as of June 14, 1999
supplementing said Subordinated Indenture (filed with Form
S-3, File No. 333-52204, effective December 26, 2000, as
Exhibit 4-E-3).
4-E-4* Form of Supplemental Indenture to Subordinated Indenture
relating to Junior Subordinated Notes (filed with Form S-3,
File No. 333-58820, effective April 24, 2001, as Exhibit
4-E-4).
4-E-5* Form of Supplemental Indenture to Subordinated Indenture
relating to Junior Subordinated Notes issued in connection
with Trust Preferred Securities Notes (filed with Form S-3,
File No. 333-58820, effective April 24, 2001, as Exhibit
4-E-5).
4-F-1* First and Refunding Mortgage from Duke Energy Corporation to
Guaranty Trust Company of New York, as Trustee, dated as of
December 1, 1927 (filed with Form S-1, File No. 2-7224,
effective October 15, 1947, as Exhibit 7(a)).
4-F-2* Supplemental Indenture, dated as of March 12, 1930,
supplementing said Mortgage (filed with Form S-1, File No.
2-7224, effective October 15, 1947, as Exhibit 7(b)).
4-F-3* Supplemental Indenture, dated as of July 1, 1935,
supplementing said Mortgage (filed with Form S-1, File No.
2-7224, effective October 15, 1947, as Exhibit 7(c)).
4-F-4* Supplemental Indenture, dated as of December 1, 1935,
supplementing said Mortgage (filed with Form S-1, File No.
2-7224, effective October 15, 1947, as Exhibit 7(d)).
4-F-5* Supplemental Indenture, dated as of September 1, 1936,
supplementing said Mortgage (filed with Form S-1, File No.
2-7224, effective October 15, 1947, as Exhibit 7(e)).
4-F-6* Supplemental Indenture, dated as of January 1, 1941,
supplementing said Mortgage (filed with Form S-1, File No.
2-7224, effective October 15, 1947, as Exhibit 7(f)).
4-F-7* Supplemental Indenture, dated as of April 1, 1944,
supplementing said Mortgage (filed with Form S-1, File No.
2-7224, effective October 15, 1947, as Exhibit 7(g)).
4-F-8* Supplemental Indenture, dated as of September 1, 1947,
supplementing said Mortgage (filed with Form S-1, File No.
2-7224, effective October 15, 1947, as Exhibit 7(h)).
4-F-9* Supplemental Indenture, dated as of September 8, 1947,
supplementing said Mortgage (filed with Form S-1, File No.
2-10401, effective August 21, 1953, as Exhibit 4-B-9).
4-F-10* Supplemental Indenture, dated as of February 1, 1949,
supplementing said Mortgage (filed with Form S-1, File No.
2-7808, effective February 3, 1949, as Exhibit 7(j)).
4-F-11* Supplemental Indenture, dated as of March 1, 1949,
supplementing said Mortgage (filed with Form S-1, File No.
2-8877, effective April 6, 1951, as Exhibit 7(k)).
4-F-12* Supplemental Indenture, dated as of April 1, 1951,
supplementing said Mortgage (filed with Form S-1, File No.
2-8877, effective April 6, 1951, as Exhibit 7(1)).
4-F-13* Supplemental Indenture, dated as of September 1, 1953,
supplementing said Mortgage (filed with Form S-1, File No.
2-10401, effective August 21, 1953, as Exhibit 4-B-13).
4-F-14* Supplemental Indenture, dated as of October 1, 1954,
supplementing said Mortgage (filed with Form S-9, File No.
2-11297, effective December 30, 1954, as Exhibit 2-B-14).
4-F-15* Supplemental Indenture, dated as of January 1, 1955,
supplementing said Mortgage (filed with Form S-9, File No.
2-11297, effective December 30, 1954, as Exhibit 2-B-15).
II-6
EXHIBIT NO. EXHIBITS
----------- --------
4-F-16* Supplemental Indenture, dated as of May 1, 1956,
supplementing said Mortgage (filed with Form S-9, File No.
2-12402, effective April 26, 1956, as Exhibit 2-B-16).
4-F-17* Supplemental Indenture, dated as of January 1, 1960,
supplementing said Mortgage (filed with Form 10, effective
June 29, 1961, as Exhibit 3-B-18).
4-F-18* Supplemental Indenture, dated as of February 1, 1960,
supplementing said Mortgage (filed with Form 10, effective
June 29, 1961, as Exhibit 3-B-19).
4-F-19* Supplemental Indenture, dated as of February 1, 1962,
supplementing said Mortgage (filed with Form S-9, File No.
2-20577, effective August 16, 1962, as Exhibit 2-B-20).
4-F-20* Supplemental Indenture, dated as of August 1, 1962,
supplementing said Mortgage (filed with Form S-1, File No.
2-25367, effective August 23, 1966, as Exhibit 4-B-19).
4-F-21* Supplemental Indenture, dated as of June 15, 1964,
supplementing said Mortgage (filed with Form S-1, File No.
2-25367, effective August 23, 1966, as Exhibit 4-B-20).
4-F-22* Supplemental Indenture, dated as of February 1, 1965,
supplementing said Mortgage (filed with Form S-1, File No.
2-25367, effective August 23, 1966, as Exhibit 4-B-21).
4-F-23* Supplemental Indenture, dated as of April 1, 1967,
supplementing said Mortgage (filed with Form S-9, File No.
2-28023, effective February 15, 1968, as Exhibit 2-B-25).
4-F-24* Supplemental Indenture, dated as of February 1, 1968,
supplementing said Mortgage (filed with Form S-9, File No.
2-31304, effective January 21, 1969, as Exhibit 2-B-26).
4-F-25* Supplemental Indenture, dated as of February 1, 1969,
supplementing said Mortgage (filed with Form S-7, File No.
2-34289, effective August 27, 1969, as Exhibit 2-B-27).
4-F-26* Supplemental Indenture, dated as of September 1, 1969,
supplementing said Mortgage (filed with Form S-7, File No.
2-36095, effective February 16, 1970, as Exhibit 2-B-39).
4-F-27* Supplemental Indenture, dated as of March 1, 1970,
supplementing said Mortgage (filed with Form S-7, File No.
2-37953, effective July 28, 1970, as Exhibit 2-B-42).
4-F-28* Supplemental Indenture, dated as of August 1, 1970,
supplementing said Mortgage (filed with Form S-7, File No.
2-39451, effective March 4, 1971, as Exhibit 2-B-28).
4-F-29* Supplemental Indenture, dated as of March 1, 1971,
supplementing said Mortgage (filed with Form S-7, File No.
2-42404, effective December 7, 1971, as Exhibit 2-B-29).
4-F-30* Supplemental Indenture, dated as of December 1, 1971,
supplementing said Mortgage (filed with Form S-7, File No.
2-43122, effective March 7, 1972, as Exhibit 2-B-30).
4-F-31* Supplemental Indenture, dated as of April 1, 1972,
supplementing said Mortgage (filed with Form S-7, File No.
2-46208, effective November 20, 1972, as Exhibit 2-B-31).
4-F-32* Supplemental Indenture, dated as of December 1, 1972,
supplementing said Mortgage (filed with Form S-7, File No.
2-48058, effective June 5, 1973, as Exhibit 2-B-32).
4-F-33* Supplemental Indenture, dated as of June 1, 1973,
supplementing said Mortgage (filed with Form S-7, File No.
2-49333, effective November 5, 1973, as Exhibit 2-B-33).
4-F-34* Supplemental Indenture, dated as of November 1, 1973,
supplementing said Mortgage (filed with Form S-7, File No.
2-50493, effective April 25, 1974, as Exhibit 2-B-34).
4-F-35* Supplemental Indenture, dated as of May 1, 1974,
supplementing said Mortgage (filed with Form S-7, File No.
2-52669, effective February 11, 1975, as Exhibit 2-B-35).
4-F-36* Supplemental Indenture, dated as of February 1, 1975,
supplementing said Mortgage (filed with Form S-7, File No.
2-57118, effective October 5, 1976, as Exhibit 2-B-36).
4-F-37* Supplemental Indenture, dated as of July 1, 1975,
supplementing said Mortgage (filed with Form S-7, File No.
2-57118, effective October 5, 1976, as Exhibit 2-B-37).
4-F-38* Supplemental Indenture, dated as of October 1, 1976,
supplementing said Mortgage (filed with Form S-7, File No.
2-59494, effective August 10, 1977, as Exhibit 2-B-38).
II-7
EXHIBIT NO. EXHIBITS
----------- --------
4-F-39* Supplemental Indenture, dated as of September 1, 1977,
supplementing said Mortgage (filed with Form S-7, File No.
2-61995, effective July 26, 1978, as Exhibit 2-B-39).
4-F-40* Supplemental Indenture, dated as of August 1, 1978,
supplementing said Mortgage (filed with Form S-7, File No.
2-64541, effective June 7, 1979, as Exhibit 2-B-40).
4-F-41* Supplemental Indenture, dated as of June 1, 1979,
supplementing said Mortgage (filed with Form S-7, File No.
2-65371, effective October 2, 1979, as Exhibit 2-B-41).
4-F-42* Supplemental Indenture, dated as of October 1, 1979,
supplementing said Mortgage (filed with Form S-7, File No.
2-66659, effective March 12, 1980, as Exhibit 2-B-42).
4-F-43* Supplemental Indenture, dated as of March 1, 1980,
supplementing said Mortgage (filed with Form S-16, File No.
2-68571, effective August 19, 1980, as Exhibit 2-B-43).
4-F-44* Supplemental Indenture, dated as of August 1, 1980,
supplementing said Mortgage (filed with Form S-16, File No.
2-75951, effective February 23, 1982, as Exhibit 2-B-44).
4-F-45* Supplemental Indenture, dated as of March 1, 1982,
supplementing said Mortgage (filed with Form S-3, File No.
2-78882, effective August 30, 1982, as Exhibit 4-B-45).
4-F-46* Supplemental Indenture, dated as of September 1, 1982,
supplementing said Mortgage (filed with Form S-3, File No.
2-95931, effective April 1, 1985, as Exhibit 4-B-46).
4-F-47* Supplemental Indenture, dated as of May 1, 1983,
supplementing said Mortgage (filed with Form S-3, File No.
2-95931, effective April 1, 1985, as Exhibit 4-B-47).
4-F-48* Supplemental Indenture, dated as of September 1, 1983,
supplementing said Mortgage (filed with Form S-3, File No.
2-95931, effective April 1, 1985, as Exhibit 4-B-48).
4-F-49* Supplemental Indenture, dated as of September 1, 1984,
supplementing said Mortgage (filed with Form S-3, File No.
2-95931, effective April 1, 1985, as Exhibit 4-B-49).
4-F-50* Supplemental Indenture, dated as of March 1, 1985,
supplementing said Mortgage (filed with Form S-3, File No.
2-95931, effective April 1, 1985, as Exhibit 4-B-50).
4-F-51* Supplemental Indenture, dated as of December 1, 1985,
supplementing said Mortgage (filed with Form S-3, File No.
33-5163, effective May 2, 1986, as Exhibit 4-B-51).
4-F-52* Supplemental Indenture, dated as of April 1, 1986,
supplementing said Mortgage (filed with Form S-3, File No.
33-5163, effective May 2, 1986, as Exhibit 4-B-52).
4-F-53* Supplemental Indenture, dated as of May 1, 1986,
supplementing said Mortgage (filed with Form 10-K for the
year ended December 31, 1986, File No. 1-4928, as Exhibit
4-B-53).
4-F-54* Supplemental Indenture, dated as of June 1, 1986,
supplementing said Mortgage (filed with Form 10-K for the
year ended December 31, 1986, File No. 1-4928, as Exhibit
4-B-54).
4-F-55* Supplemental Indenture, dated as of February 1, 1987,
supplementing said Mortgage (filed with Form 10-K for the
year ended December 31, 1986, File No. 1-4928, as Exhibit
4-B-55).
4-F-56* Supplemental Indenture, dated as of February 15, 1987,
supplementing said Mortgage (filed with Form 10-K for the
year ended December 31, 1986, File No. 1-4928, as Exhibit
4-B-56).
4-F-57* Supplemental Indenture, dated as of March 1, 1987,
supplementing said Mortgage (filed with Form 10-K for the
year ended December 31, 1986, File No. 1-4928, as Exhibit
4-B-57).
4-F-58* Supplemental Indenture, dated as of October 1, 1987,
supplementing said Mortgage (filed with Form 10-K for the
year ended December 31, 1987, File No. 1-4928, as Exhibit
4-B-58).
4-F-59* Supplemental Indenture, dated as of February 1, 1990,
supplementing said Mortgage (filed with Form 10-K for the
year ended December 31, 1989, File No. 1-4928, as Exhibit
4-B-59).
4-F-60* Supplemental Indenture, dated as of March 1, 1990,
supplementing said Mortgage (filed with Form 10-K for the
year ended December 31, 1990, File No. 1-4928, as Exhibit
4-B-60).
4-F-61* Supplemental Indenture, dated as of May 1, 1990,
supplementing said Mortgage (filed with Form 10-K for the
year ended December 31, 1990, File No. 1-4928, as Exhibit
4-B-61).
II-8
EXHIBIT NO. EXHIBITS
----------- --------
4-F-62* Supplemental Indenture, dated as of May 15, 1990,
supplementing said Mortgage (filed with Form 10-K for the
year ended December 31, 1990, File No. 1-4928, as Exhibit
4-B-62).
4-F-63* Supplemental Indenture, dated as of March 1, 1991,
supplementing said Mortgage (filed with Form 10-K for the
year ended December 31, 1990, File No. 1-4928, as Exhibit
4-B-63).
4-F-64* Supplemental Indenture, dated as of July 1, 1991,
supplementing said Mortgage (filed with Form S-3, File No.
33-45501, effective February 13, 1992, as Exhibit 4-B-64).
4-F-65* Supplemental Indenture, dated as of December 1, 1991,
supplementing said Mortgage (filed with Form S-3, File No.
33-44501, effective February 13, 1992, as Exhibit 4-B-65).
4-F-66* Supplemental Indenture, dated as of March 1, 1992,
supplementing said Mortgage (filed with Form 10-K for the
year ended December 31, 1991, File No. 1-4928, as Exhibit
4-B-66).
4-F-67* Supplemental Indenture, dated as of June 1, 1992,
supplementing said Mortgage (filed with Form S-3, File No.
33-50592, effective August 11, 1992, as Exhibit 4-B-67).
4-F-68* Supplemental Indenture, dated as of July 1, 1992,
supplementing said Mortgage (filed with Form S-3, File No.
33-50592, effective August 11, 1992, as Exhibit 4-B-68).
4-F-69* Supplemental Indenture, dated as of September 1, 1992,
supplementing said Mortgage (filed with Form S-3, File No.
33-53308, effective November 24, 1992, as Exhibit 4-B-69).
4-F-70* Supplemental Indenture, dated as of February 1, 1993,
supplementing said Mortgage (filed with Form 10-K for the
year ended December 31, 1992, File No. 1-4928, as Exhibit
4-B-70).
4-F-71* Supplemental Indenture, dated as of March 1, 1993,
supplementing said Mortgage (filed with Form S-3, No.
33-59448, effective March 17, 1993, as Exhibit 4-B-71).
4-F-72* Supplemental Indenture, dated as of April 1, 1993,
supplementing said Mortgage (filed with Form S-3, File No.
33-50543, effective October 20, 1993, as Exhibit 4-B-72).
4-F-73* Supplemental Indenture, dated as of May 1, 1993,
supplementing said Mortgage (filed with Form S-3, File No.
33-50543, effective October 20, 1993, as Exhibit 4-B-73).
4-F-74* Supplemental Indenture, dated as of June 1, 1993,
supplementing said Mortgage (filed with Form S-3, File No.
33-50543, effective October 20, 1993, as Exhibit 4-B-74).
4-F-75* Supplemental Indenture, dated as of July 1, 1993,
supplementing said Mortgage (filed with Form S-3, File No.
33-50543, effective October 20, 1993, as Exhibit 4-B-75).
4-F-76* Supplemental Indenture, dated as of August 1, 1993,
supplementing said Mortgage (filed with Form S-3, File No.
33-50543, effective October 20, 1993, as Exhibit 4-B-76).
4-F-77* Supplemental Indenture, dated as of August 20, 1993,
supplementing said Mortgage (filed with Form S-3, File No.
33-50543, effective October 20, 1993, as Exhibit 4-B-77).
4-F-78* Supplemental Indenture, dated as of May 1, 1994,
supplementing said Mortgage (filed with Form 10-K for the
year ended December 31, 1994, File No. 1-4928, as Exhibit
4-B-78).
4-F-79* Supplemental Indenture, dated as of November 1, 1994,
supplementing said Mortgage (filed with Form 10-K for the
year ended December 31, 1994, File No. 1-4928, as Exhibit
4-B-79).
4-F-80* Supplemental Indenture, dated as of August 1, 1995,
supplementing said Mortgage (filed with Form 10-K for the
year ended December 31, 1995, File No. 1-4928, as Exhibit
4-B-80).
4-F-81* Form of Supplemental Indenture relating to First and
Refunding Mortgage Bonds (filed with Form S-3, File No.
333-58820, effective April 24, 2001, as Exhibit 4-F-81).
4-F-82* Instrument of Resignation, Appointment and Acceptance among
Duke Energy Corporation, Morgan Guaranty Trust Company of
New York, as Trustee, and Chemical Bank (now JPMorgan Chase
Bank), as Successor Trustee, dated as of August 30, 1994
(filed with Form 10-K for the year ended December 31, 1994,
File No. 1-4928, as Exhibit 4-C).
4-G-1* Certificate of Trust of Duke Energy Capital Trust III (filed
with Form S-3, File No. 333-79065, effective June 4, 1999,
as Exhibit 4.3-B).
II-9
EXHIBIT NO. EXHIBITS
----------- --------
4-G-2* Certificate of Trust of Duke Energy Capital Trust IV (filed
with Form S-3, File No. 333-79065, effective June 4, 1999,
as Exhibit 4.3-C).
4-G-3* Certificate of Trust of Duke Energy Capital Trust V (filed
with Form S-3, File No. 333-52204, effective December 26,
2000, as Exhibit 4-G-3).
4-H-1* Trust Agreement of Duke Energy Capital Trust III (filed with
Form S-3, File No. 333-79065, effective June 4, 1999, as
Exhibit 4.4-B).
4-H-2* Trust Agreement of Duke Energy Capital Trust IV (filed with
Form S-3, File No. 333-79065, effective June 4, 1999, as
Exhibit 4.4-C).
4-H-3* Trust Agreement of Duke Energy Capital Trust V (filed with
Form S-3, File No. 333-52204, effective December 26, 2000,
as Exhibit 4-H-3).
4-I* Form of Amended and Restated Trust Agreement (Agreements for
Duke Energy Capital Trust III, Duke Energy Capital Trust IV
and Duke Energy Capital Trust V will be substantially
identical except for names and dates) (filed with Form S-3,
File No. 333-58820, effective April 24, 2001 as Exhibit
4-I).
4-J* Form of Senior Note (included in Exhibit 4-D-7 above).
4-K* Form of Junior Subordinated Note (included in Exhibits 4-E-4
and 4-E-5 above).
4-L* Form of First and Refunding Mortgage Bond (included in
Exhibit 4-F-81 above).
4-M* Form of Trust Preferred Security for Duke Energy Capital
Trust III, Duke Energy Capital Trust IV and Duke Energy
Capital Trust V (included in Exhibit 4-I above).
4-N* Form of Guarantee Agreement (Agreements for Duke Energy
Capital Trust III, Duke Energy Capital Trust IV and Duke
Energy Capital Trust V will be substantially identical
except for names and dates) (filed with Form S-3, File No.
333-58820, effective April 24, 2001, as Exhibit 4-N).
4-O* Form of Agreement as to Expenses and Liabilities (included
in Exhibit 4-I above).
4-P-1* Form of Purchase Contract Agreement (filed with Form 8-K
filed November 20, 2001, File No. 1-4928, as Exhibit 4.3)
4-P-2* Form of Pledge Agreement (filed with Form 8-K filed November
20, 2001, File No. 1-4928, as Exhibit 4.5)
4-P-3* Form of Remarketing Agreement (filed with Form 8-K filed
November 20, 2001, File No. 1-4928, as Exhibit 4.6)
5-A** Opinion of Edward M. Marsh, Jr., Esq.
5-B** Opinion of Simpson Thacher & Bartlett.
5-C-1** Opinion of Richards, Layton & Finger, P.A. relating to Duke
Energy Capital Trust III.
5-C-2** Opinion of Richards, Layton & Finger, P.A. relating to Duke
Energy Capital Trust IV.
5-C-3** Opinion of Richards, Layton & Finger, P.A. relating to Duke
Energy Capital Trust V.
12 Computation of Ratio of Earnings to Fixed Charges.
23-A Independent Auditors' Consent.
23-B** Consent of Edward M. Marsh, Jr., Esq. (included in Exhibit
5-A above).
23-C** Consent of Simpson Thacher & Bartlett (included in Exhibit
5-B above).
23-D** Consent of Richards, Layton & Finger, P.A. (included in
Exhibits 5-C-1, 5-C-2 and 5-C-3 above).
24-A** Power of Attorney of certain officers and directors of Duke
Energy Corporation.
24-B** Resolution of Duke Energy Corporation regarding Power of
Attorney.
II-10
EXHIBIT NO. EXHIBITS
----------- --------
25-A* Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of JPMorgan Chase Bank (formerly known as
The Chase Manhattan Bank), as Senior Indenture Trustee
(filed with Form S-3, File No. 333-58820, effective April
24, 2001, as Exhibit 25-A).
25-B* Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of JPMorgan Chase Bank (formerly known as
The Chase Manhattan Bank), as Subordinated Indenture Trustee
(filed with Form S-3, File No. 333-58820, effective April
24, 2001, as Exhibit 25-B).
25-C* Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of JPMorgan Chase Bank (formerly known as
The Chase Manhattan Bank), as Bond Trustee (filed with Form
S-3, File No. 333-58820, effective April 24, 2001, as
Exhibit 25-C).
25-D-1* Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of JPMorgan Chase Bank (formerly known as
The Chase Manhattan Bank), as Property Trustee under Duke
Energy Capital Trust III (filed with Form S-3, File No.
333-58820, effective April 24, 2001, as Exhibit 25-D-1).
25-D-2* Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of JPMorgan Chase Bank (formerly known as
The Chase Manhattan Bank), as Property Trustee under Duke
Energy Capital Trust IV (filed with Form S-3, File No.
333-58820, effective April 24, 2001, as Exhibit 25-D-2).
25-D-3* Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of JPMorgan Chase Bank (formerly known as
The Chase Manhattan Bank), as Property Trustee under Duke
Energy Capital Trust V (filed with Form S-3, File No.
333-58820, effective April 24, 2001, as Exhibit 25-D-3).
25-E-1* Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of JPMorgan Chase Bank (formerly known as
The Chase Manhattan Bank), as Guarantee Trustee with respect
to Duke Energy Capital Trust III (filed with Form S-3, File
No. 333-58820, effective April 24, 2001, as Exhibit 25-E-1).
25-E-2* Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of JPMorgan Chase Bank (formerly known as
The Chase Manhattan Bank), as Guarantee Trustee with respect
to Duke Energy Capital Trust IV (filed with Form S-3, File
No. 333-58820, effective April 24, 2001, as Exhibit 25-E-2).
25-E-3* Statement of Eligibility under the Trust Indenture Act of
1939, as amended of JPMorgan Chase Bank (formerly known as
The Chase Manhattan Bank), as Guarantee Trustee with respect
to Duke Energy Capital Trust V (filed with Form S-3, File
No. 333-58820, effective April 24, 2001, as Exhibit 25-E-3).
---------------
* Previously filed and incorporated herein by reference thereto.
** Previously filed.
II-11