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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 31, 1999JUNE 4, 2001
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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PIEDMONT NATURAL GAS COMPANY, INC.
(Exact name of registrantRegistrant as specified in its charter)
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NORTH CAROLINA 56-0556998
(State or other jurisdiction of (I.R.S. Employer
incorporation or (I.R.S. Employerorganization) Identification No.)
organization)
1915 REXFORD ROAD
POST OFFICE BOX 33068
CHARLOTTE, NC 2821128233
(704) 364-3120
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
MARTIN C. RUEGSEGGER
VICEWARE F. SCHIEFER
PRESIDENT CORPORATE COUNSEL AND SECRETARYCHIEF EXECUTIVE OFFICER
PIEDMONT NATURAL GAS COMPANY, INC.
1915 REXFORD ROAD, CHARLOTTE, NC 28211
(704) 364-3483, EXT. 202364-3120
(Name, address, including zip code, and telephone number,numbers, including area code,
of agent for service)
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WITH COPIES TO:
JERRY W. AMOS, ESQ. CHRISTOPHER J. MOORE, ESQ.
NELSON, MULLINS, RILEY & SCARBOROUGH, LLP ORRICK, HERRINGTON & SUTCLIFFE LLP
SUITE 3350, BANK OF AMERICA CORPORATE CENTER 666 FIFTH AVENUE
100 NORTH TRYON STREET NEW YORK, NEW YORK 10103-0001
CHARLOTTE, NC 28202-4021 (212) 506-5000
(704) 417-3000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.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 to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, 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, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
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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. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ][X]
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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED-----------------------------------------------------------------------------------------------------------------
TITLE OF EACH CLASS AMOUNTOF PROPOSED MAXIMUM MAXIMUM AMOUNT OF OF
SECURITIES TO BE REGISTERED AGGREGATE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE(3) OFFERING PRICE(3) FEE
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Debt securities................................
Common Stock, nostock (no par value per share(1)(2)..... 2,000,000 $33.0625 $66,125,000 $18,383share)(1).......
Total.......................................... $250,000,000(2) $62,500
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(1) PursuantIncludes, with respect to Rule 429 under the Securities Acteach share of 1933, the Prospectus
included in this registration statement also relatescommon stock, rights pursuant to the
registrant's Registration Statement No. 333-01855, andRights Agreement, dated as of August 31, 1999, 236,499
sharesFebruary 27, 1998, as amended,
between the registrant and Wachovia Bank, N.A., as rights agent, and until a
triggering event thereunder, the rights trade with, and cannot be separated
from, the common stock.
(2) Estimated solely for the purpose of the registrant's Common Stock remain for sale thereunder. This
registration statement andcalculating the registration statement amended herebyfee; plus
such additional principal amount of debt securities as may be necessary such
that, if debt securities are collectively referredissued with an original issue discount, the
aggregate initial offering price of all debt securities and common stock
will equal $250,000,000; excludes accrued interest and accrued amortization
of discount, if any, to herein as the "Registration Statement."
(2) Includes preferred stock purchase rights under the Rights Agreementdate of Piedmont Natural Gas Company, Inc.delivery.
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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, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), dated February 27, 1998.
(3) The shares are to be offered at prices not presently determinable. The fee
is calculated upon the basis of the average of the high and low sales prices
on the New York Stock Exchange on August 30, 1999, pursuant to Rule 457(c).
The average of the high and low sales prices on such date was $33.0625.MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS - ----------IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION DATED JUNE 4, 2001
PROSPECTUS
PIEDMONT NATURAL GAS COMPANY, INC.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
Piedmont Natural Gas Company, Inc., hereby offersBy this prospectus, we offer up to
potential investors
the opportunity to purchase shares$250,000,000
of our Common Stock, no par value per share,
under the Dividend Reinvestmentdebt securities and Stock Purchase Plan. Furthermore, holders of
Common Stock are offered the opportunity to purchase additional shares of Common
Stock under the Plan by having their cash dividends automatically reinvested and
by making cash payments. No brokerage commissions, fees or service charges are
paid by Initial Investors of Common Stock or Participants in the Plan in
connection with purchases of shares of Common Stock for their accounts under the
Plan. Investors may not invest more than $120,000 per calendar year.
Initial Investors may purchase shares of Common Stock by making optional
cash payments of not less than $250 or more than $120,000. Participants may
purchase additional shares of Common Stock by having all or part of the cash
dividends on their shares of Common Stock automatically reinvested and by making
optional cash payments of not less than $25 per payment or more than $120,000
per calendar year.
The price per share acquired under the Plan with reinvested dividends is
95% of the mean of the high and low sales prices of the Common Stock reflected
in the New York Stock Exchange Composite Transactions on the pertinent dividend
payment date. The price per share acquired under the Plan by Initial Investors
and Participants with optional cash payments is 100% of the mean of the high and
low sales prices reflected in the NYSE Composite Transactions on the weekly
investment date. Both the dividend payment date and the weekly investment date
are referred to as the "Investment Date."
Initial Investors or current shareholders who do not presently participate
in the Plan may become Participants by completing an Authorization Card and
returning it to American Stock Transfer & Trust Company (the "Trustee").
Shareholders who do not wish to participate in the Plan need do nothing and will
continue to receive their cash dividends, if and when declared, as usual.
Shareholders who presently participate in the Plan do not need to take any
further action to continue participation in the Plan.
Additional legal requirements may be necessary for persons in certain
states prior to enrollment in the Plan. These requirements may prohibit
participation by residents of such states.common stock
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WE WILL PROVIDE SPECIFIC TERMS OF THESE SECURITIES HAVEIN SUPPLEMENTS TO THIS
PROSPECTUS. THIS PROSPECTUS MAY NOT BEEN APPROVED OR DISAPPROVEDBE USED TO SELL SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT. YOU SHOULD READ THIS PROSPECTUS AND THE
PROSPECTUS SUPPLEMENT CAREFULLY BEFORE YOU INVEST.
We may offer our securities directly or through underwriters, agents or
dealers. The supplements to this prospectus will describe the terms of any
particular plan of distribution, including any underwriting arrangements. The
"Plan of Distribution" section of this prospectus also provides more information
on this topic.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS THE COMMISSION PASSED UPON THE ACCURACYAPPROVED OR ADEQUACYDISAPPROVED OF THE PROSPECTUS.THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this Prospectus is August 31, 1999., 2001.
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TABLE OF CONTENTS
PAGE
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Where You Can Find More Information......................... 2
Piedmont Natural Gas Company, Inc. ......................... 3
Description of the Plan..................................... 4
Purpose................................................... 4
Advantages and Disadvantages.............................. 4
Administration............................................ 5
Participation............................................. 5
Costs..................................................... 7
Initial Purchases......................................... 7
Optional Cash Payments.................................... 7
Purchases................................................. 8
Reports to Participants................................... 9
Issuance of Certificates.................................. 9
Dividends on Fractions of Shares.......................... 10
Withdrawal of Shares in Plan Accounts..................... 10
Termination of Participation.............................. 10
Sale of Plan Shares....................................... 11
Risk to Participants...................................... 11
Stock Dividends or Stock Splits; Rights Offering.......... 11
Voting Rights............................................. 12
Income Tax Consequences................................... 12
Foreign Shareholders...................................... 12
Responsibilities of Piedmont Natural Gas Company and the
Trustee................................................ 13
Custody of Certificates................................... 13
Suspension, Modification or Termination of the Plan....... 13
Use of Proceeds............................................. 14
Description of Common Stock................................. 14
Legal Matters............................................... 15
Experts..................................................... 15
FORWARD-LOOKING STATEMENTS
Our discussion contains forward-looking statements concerning, among
others, plans, objectives, proposed capital expenditures and future events or
performance. Our statements reflect our current expectations and involve a
number of risks and uncertainties. Although we believe that our expectations are
based on reasonable assumptions, we can give no assurances that these
expectations will be achieved. Important factors that could cause actual results
to differ include:
- Regulatory issues, including those that affect allowed rates of return,
rate structure and financings,
- Industrial, commercial and residential growth in our service territories,
- Deregulation, unanticipated impacts of restructuring and increased
competition in the energy industry,
- The potential loss of large-volume industrial customers due to bypass or
the shift by such customers to special competitive contracts at lower
per-unit margins,
- Economic and capital market conditions,
- The ability to meet internal performance goals,
- The capital intensive nature of our business, including development
project delays or changes in project costs,
- Changes in the availability and price of natural gas,
- Changes in demographic patterns and weather conditions, and
- Changes in environmental requirements and cost of compliance.
All of these factors are difficult to predict and many are beyond our
control. Accordingly, while we believe these forward-looking statements to be
reasonable, there can be no assurance that they will approximate actual
experience or that the expectations derived from them will be realized. When
used in our documents or oral presentations, the words "anticipate," "believe,"
"estimate," "expect," "objective," "projection," "forecast," "goal" or similar
words are intended to identify forward-looking statements.
WHERE YOU CAN FIND MORE INFORMATION
AVAILABLE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC.SEC under the Securities Exchange Act of 1934. You may read
and copy any document we filethis information at the SEC's public
reference rooms infollowing locations of the SEC:
Judiciary Plaza, Room 1024 Seven World Trade Center Citicorp Center
450 Fifth Street, N.W. Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois 60661
You can also obtain copies of this information by mail from the Public
Reference Room of the SEC, 450 Fifth Street, N.W., Room 1024, Washington, DC, New York, New York, and Chicago, Illinois.
Please call the SEC's toll-free telephone numberD.C.
20549, at 1-800-SEC-0330 for furtherprescribed rates. You may obtain information abouton the operation of the
public reference rooms. In addition, you
may inspect ourPublic Reference Room by calling the SEC at (800) SEC-0330.
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The SEC also maintains an Internet world wide web site that contains
reports, proxy statements and other information about issuers, like us, who file
electronically with the SEC. The address of that site is http://www.sec.gov.
Our common stock is listed on the New York Stock Exchange and you can
inspect reports, proxy statements and other information about us at the offices
of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005, where our
Common Stock is listed. Our10005.
We have filed with the SEC filingsa registration statement on Form S-3 that
registers the securities we are available onoffering. The registration statement, including
the SEC's web site at
http://www.sec.gov. Informationattached exhibits and schedules, contains additional relevant information
about us is also available on our web site at
http://www.piedmontng.com.and the securities offered. The rules and regulations of the SEC allow
us to omit certain information included in the registration statement from this
prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information into this
prospectus that we filehave filed with it, whichit. This means that we can disclose important
information to you by referring you to those documents.another document filed separately with
the SEC. The information incorporated by 2
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reference is an importantconsidered to be part of
this Prospectus and should be read withprospectus, except for any information that is superseded by information
that is included directly in this document.
This prospectus includes by reference the same care. Informationfollowing documents that we file laterhave
previously filed with the SEC will automatically update
and supersede that information.
The following documents are incorporated in and made a part ofwe have not included or delivered with
this Prospectus by reference:document:
- our annual reportAnnual Report on Form 10-K for the year ended October 31, 1998,2000, and
- our quarterly reportsQuarterly Report on Form 10-Q for the quartersquarter ended January 31, 1999,2001.
These documents contain important information about us, our common stock
and April 30, 1999.
Anyour financial condition.
We incorporate by reference additional documents that we may file with the
SEC inbetween the future under Section 13(a),
13(c), 14 or 15(d)date of this prospectus and the date of the Securities Exchange Actclosing of 1934 will also beeach
offering. These documents include periodic reports, such as Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as
well as proxy statements.
You can obtain any of the documents incorporated by reference in this
Prospectus until we sell all ofdocument from us without charge, excluding any exhibits to those documents
unless the securities
being registered.exhibit is specifically incorporated by reference as an exhibit to
this prospectus. You may request a copy of these filings at no costcan obtain documents incorporated by reference in this
prospectus by requesting them in writing or callingby telephone from us at the
following address or onetelephone number:
Office of the following telephone numbers:Secretary
Piedmont Natural Gas Company, Inc.
Vice President, Corporate Counsel and Secretary
P. O.1915 Rexford Road
Post Office Box 33068
Charlotte, North Carolina 28233-306828233
Telephone Number (704)364-3483, Ext. 202 or (800)752-7508, Ext. 202
PIEDMONT NATURAL GAS6202
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THE COMPANY
INC.
We arePiedmont Natural Gas Company, Inc., is an energy and services company
primarily engaged in the distribution and sale of natural gas and the sale of propane to over 673,000690,000
residential, commercial and industrial customers in North Carolina, South
Carolina and Tennessee. Our principal executive officesWe are maintained at 1915 Rexford Road,
Post Office Box 33068, Charlotte, North Carolina 28233; telephone number
704-364-3120.
Our utility operations serve over 625,000the second-largest natural gas customers.utility in the
southeast. We are
also engaged in acquiring, marketing and arranging for the transportation and
storage of natural gas for large-volume purchasers, in retailingsell residential and commercial gas appliances and in the sale of propane and propane appliances to
over 48,000 customers.Tennessee.
In the Carolinas, our service area comprisesis comprised of numerous cities, towns and
communities including Anderson, Greenville and Spartanburg in South Carolina and
Charlotte, Salisbury, Greensboro, Winston-Salem, High Point, Burlington and
Hickory in North Carolina. In Tennessee, theour service area is the Nashville
metropolitan
area including portions of eight adjoining counties. Our propane
markets are in and adjacent to ourNashville. Effective January 1, 2001, we closed the purchase of the
natural gas marketsdistribution business of Atmos Energy Corporation located in all three states.Gaffney
and Cherokee County, South Carolina.
In 1994, our predecessor, which was incorporated in 1950, was merged into a
newly formed North Carolina corporation for the purpose of changing our state of
incorporation to North Carolina.
We are principally engagedhave two reportable business segments, domestic natural gas distribution
and retail energy marketing services. The domestic natural gas business is
conducted by the parent company and two wholly owned subsidiaries of our
subsidiary Piedmont Energy Partners -- Piedmont Intrastate Pipeline Company and
Piedmont Interstate Pipeline Company. Piedmont Intrastate owns 16.45% of the
membership interests of Cardinal Pipeline Company, L.L.C., which owns and
operates an intrastate natural gas pipeline in North Carolina. Piedmont
Interstate owns 35% of the membership interests of Pine Needle LNG Company,
L.L.C., which owns an interstate liquified natural gas (LNG) peak-demand
facility in North Carolina. The retail energy marketing services business is
conducted by SouthStar Energy Services LLC, a limited liability company in which
a wholly owned subsidiary of Piedmont Energy Partners, Piedmont Energy Company,
has a 30% equity interest. SouthStar offers a combination of unregulated energy
products and services to industrial, commercial and residential customers in the
gas distribution industrysoutheastern United States.
Another wholly owned subsidiary of Piedmont Energy Partners, Piedmont
Propane Company, owns 20.69% of the membership interest in US Propane, L.P.,
which owns all of the general partnership interest and have no other
reportable industry segments.approximately 34% of the
limited partnership interest in Heritage Propane Partners, L.P. (NYSE:HPG).
Heritage is the nation's fourth-largest propane distributor serving more than
500,000 customers in 28 states.
Our utility operations are subject to regulation by the North Carolina
Utilities Commission, and the Tennessee Regulatory Authority as to the issuance
of securities, and by those commissions and by the Public Service Commission of South Carolina and the
Tennessee Regulatory Authority as to rates, service area, adequacy of service,
safety standards, extensions and abandonment of facilities, accounting and
depreciation. We are also subject to regulation by the North Carolina Utilities
Commission as to the issuance of securities. We are also subject to or affected
by various federal regulations.
3Our principal executive offices are maintained at 1915 Rexford Road, Post
Office Box 33068, Charlotte, North Carolina 28233, and our telephone number is
(704) 364-3120. Our web site is http://www.piedmontng.com. Information on our
web site is not part of this prospectus.
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USE OF PROCEEDS
Unless otherwise specified in the applicable prospectus supplement, we will
use the net proceeds from the sale of the securities for general corporate
purposes, including construction of additional facilities, the repayment of
short-term debt and working capital needs. Pending such use, we may temporarily
invest the net proceeds in investment grade securities. We may, from time to
time, engage in additional capital financing of a character and in amounts to be
determined by us in light of our needs at such time or times and in light of
prevailing market conditions. If we elect at the time of an issuance of the
securities to make different or more specific use of proceeds other than that
set forth herein, we will describe such use in the prospectus supplement.
RATIO OF EARNINGS TO FIXED CHARGES
The following are the consolidated ratios of earnings to fixed charges for
the twelve-month period ended April 30, 2001, and each of our fiscal years in
the five-year period ended October 31, 2000:
TWELVE MONTHS
ENDED YEARS ENDED OCTOBER 31,
APRIL 30, --------------------------------
2001 2000 1999 1998 1997 1996
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Ratio of Earnings to Fixed Charges
(unaudited)(1)............................... 3.52 3.38 3.52 3.58 3.26 3.15
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(1) For purposes of computing the consolidated ratios, "earnings" represent our
net income from continuing operations plus applicable income taxes and fixed
charges, and "fixed charges" represent interest expense, amortization of
debt discount, premium and expense, and a portion of lease payments
considered to represent an interest factor.
SECURITIES WE MAY ISSUE
We may use this prospectus to offer up to $250,000,000 of:
- our debt securities and
- our common stock.
PROSPECTUS SUPPLEMENTS
This prospectus provides you with a general description of the debt
securities and common stock we may offer. Each time we offer securities, we will
provide a prospectus supplement that will contain specific information about the
terms of the offering. The prospectus supplement may also add to or change
information contained in this prospectus. If so, the prospectus supplement
should be read as superseding this prospectus. You should read both this
prospectus and any prospectus supplement together with additional information
described under the heading "Where You Can Find More Information."
The prospectus supplement to be attached to the front of this prospectus
will describe the amount and terms of any debt securities that we offer, the
amount of common stock that we offer and any initial public offering price, the
purchase price and net proceeds that we will receive and the other specific
terms related to the offering of the securities.
For more details on the terms of the securities, you should read the
exhibits filed with our registration statement.
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DESCRIPTION OF THE PLANDEBT SECURITIES
We may issue debt securities from time to time in one or more distinct
series. This section summarizes the material terms of the debt securities that
we anticipate will be common to all series. Most of the financial and other
terms of any series of debt securities that we offer and any differences from
the common terms will be described in the prospectus supplement to be attached
to the front of this prospectus.
As used in this section, "we," "us" and "our" refer to Piedmont Natural Gas
Company and not to its subsidiaries, unless the context otherwise requires.
As required by U.S. federal law for all bonds and notes of companies that
are publicly offered, a document called an "indenture" will govern any debt
securities that we issue. An indenture is a contract between us and a financial
institution acting as trustee on your behalf. We have entered into an indenture
with Citibank, N.A., who will act as trustee. The Plan provides Initial Investorsindenture will be subject to
the Trust Indenture Act of 1939. The trustee has the following two main roles:
- the trustee can enforce your rights against us if we default. There are
some limitations on the extent to which the trustee acts on your behalf,
described later in this prospectus.
- the trustee will perform certain administrative duties for us, which
include sending you interest payments and notices.
Because this section is a summary of the material terms of the indenture,
it does not describe every aspect of the debt securities. We urge you to read
the indenture because it, and not this description, will define your rights as a
holder of debt securities. For example, in this section, we use capitalized
words to signify terms that are specifically defined in the indenture. Some of
the definitions are repeated in this prospectus, but for the rest you will need
to read the indenture. We have filed or will file the indenture and any
supplements to it as exhibits to the registration statement that we have filed
with the opportunitySEC. See "Where You Can Find More Information," for information on how
to obtain copies of the indenture and any supplements. References to the
"Indenture" in this prospectus mean the indenture we have filed as an exhibit to
the registration statement relating to this offering that we have filed with the
SEC.
GENERAL
The Debt Securities may be issued from time to time in one or more series.
Although the amount of Debt Securities offered by this prospectus will be
limited to $250,000,000, the Indenture does not contain any limitations on the
amount of Debt Securities that may be issued under it at any time or from time
to time in one or more series.
The Debt Securities will be our unsecured obligations and will rank equally
and ratably with all of our other unsecured indebtedness. As of April 30, 2001,
we had issued and outstanding long-term debt with an aggregate principal amount
of $483,000,000. The Debt Securities will be issued only in fully registered
form.
You should read the prospectus supplement for the following terms of the
series of Debt Securities offered by the prospectus supplement. Our board of
directors will establish the following terms before issuance of the series:
(1) the specific title of the offered Debt Securities;
(2) any limit on the aggregate principal amount of the offered Debt
Securities;
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(3) the person to whom any interest on the offered Debt Securities
will be payable, if other than the person in whose name that offered debt
security is registered at the close of business on the record date for such
interest;
(4) the date or dates on which the principal of the offered Debt
Securities is payable;
(5) the rate or rates at which the offered Debt Securities will bear
interest, if any, or the formula that will be used to determine which such
rate or rates, and the date or dates from which any such interest will
accrue, and the date or dates for any interest payable;
(6) the place or places where the principal, premium (if any) and
interest on the offered Debt Securities will be payable, and the method of
such payment;
(7) the period or periods within which the price or prices at which
and the terms and conditions upon which the offered Debt Securities may be
redeemed, in whole or in part, at our option;
(8) our obligations, if any, to purchase sharesor redeem the offered Debt
Securities under any sinking fund or analogous provision or at the option
of Common Stockholders of such securities and allows existing shareholders a convenient methodthe period or periods within which, the
price or prices at which and the terms and conditions upon which the
offered Debt Securities will be redeemed or purchased, in whole or in part,
pursuant to purchase
additional sharessuch obligation;
(9) the denominations in which the offered Debt Securities will be
issuable, if other than denominations of Common Stock through automatic reinvestment$1,000 and any integral multiple
thereof;
(10) if the amount of cash
dividends, optional cash payments of principal, premium (if any) or
both. There are no brokerage commissions,
feesinterest on the offered Debt Securities may be determined with reference to
an index, the manner in which such amounts shall be determined;
(11) whether the offered Debt Securities will be issuable in whole or
service charges on any purchases of shares under the Plan.
Initial Investors who are not currently shareholders, but who wish to
purchase shares of Common Stock under the Plan, may become Participants by
completing an Authorization Card and returning it to us or to the Trusteein part in the mannerform of one or more global securities (as defined under
"Global Securities") and, if so, the securities depository or depositories
for such global security or securities and the circumstances under which
any such global security or securities may be registered for transfer or
exchange, or authenticated and delivered, in the name of a person other
than such depository or its nominee, other than as set forth in the
answerIndenture;
(12) if other than the principal amount thereof, the portion of the
principal amount of the offered Debt Securities which shall be payable upon
declaration of acceleration of the maturity thereof;
(13) any modification, amendment or addition to Question 6. Shareholders who do not presently
participateour covenants;
(14) whether the offered Debt Securities will be subject to defeasance
or covenant defeasance, or such other means of satisfaction and discharge
as may be specified in the Plan may become Participants by completing an Authorization
Cardprospectus supplement;
(15) any additional events of default; and
returning it to the Trustee in the manner set forth in the answer to
Question 6. Shareholders who presently participate in the Plan and wish to
continue do not need to complete an Authorization Card or take(16) any other action.
Shareholders who doterms or provisions of the offered Debt Securities not
wish to participate in the Plan need do nothing and will
continue to receive their cash dividends, if and when declared, as usual.
The following questions and answers generally describeinconsistent with the provisions of the Plan.
PURPOSE
1. What isIndenture.
The Indenture does not limit the purposeamount of Debt Securities that we are
authorized to issue from time to time. We may issue Debt Securities with terms
different from those of Debt Securities already issued. Without the consent of
the Plan?
The Plan allows existing shareholders and investors an easy and convenient
method of acquiring shares of Common Stock. Investors can purchase Common Stock
without payment of any brokerage commissions, fees or service charges. In
addition, existing shareholders can purchase additional shares of stock by
investing cash dividends and by making optional cash payments without payment of
any brokerage commissions, fees or service charges. Beneficial owners of shares
of Common Stock whose shares are registered in names other than their own can
have their cash dividends reinvested by requesting their nominees or other
holders of record to participateoutstanding Debt Securities, we may reopen a previous issue of a
series of Debt Securities and issue additional Debt Securities of that series
unless the reopening was restricted when we created that series.
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There is no requirement that we issue Debt Securities in the Plan on their behalf. Since the shares
of Common Stock purchasedfuture under
the Plan are acquired from us,Indenture, and we receive
additional funds for our continuing construction program and for general
corporate purposes.
ADVANTAGES AND DISADVANTAGES
2. What are the advantages of the Plan?
Initial Investors can purchase shares of Common Stock by making a cash
payment of not less than $250 but not more than $120,000. Existing shareholders
may purchase additional shares of Common Stock by having alluse other indentures or part of their
cash dividends automatically reinvested and by making optional cash payments of
not less than $25 per payment or more than $120,000 per calendar year. Shares
purchased with reinvested cash dividends are purchased at a discount. (See
Question 17.)
No brokerage commissions, fees or service charges are paid by an Initial
Investor or a Participantdocumentation, containing
different provisions, in connection with future issues of other Debt Securities.
We may issue the purchaseDebt Securities as "Original Issue Discount Securities,"
which are Debt Securities, including any zero-coupon Debt Securities, that are
issued and sold at a discount from their stated principal amount. Original Issue
Discount Securities provide that, upon acceleration of shares of Common
Stocktheir maturity, an amount
less than their principal amount will become due and payable. We will describe
the U.S. federal income tax consequences and other considerations applicable to
original issue discount securities in any prospectus supplement.
GLOBAL SECURITIES
We will issue each debt security under the Plan.Indenture in book-entry form
only, unless we specify otherwise in the applicable prospectus supplement. A
global security represents one or any other number of individual Debt
Securities. Generally, all Debt Securities represented by the same global
securities will have the same terms. We may, however, issue a global security
that represents multiple Debt Securities that have different terms and are
issued at different times. We call this kind of global security a master global
security.
Each debt security issued in book-entry form will be represented by a
global security that we deposit with and register in the name of a financial
institution or its nominee that we select. The Trustee,financial institution that we
select for this purpose is called the administering agentdepositary. Unless we specify otherwise in
the applicable prospectus supplement, The Depository Trust Company, New York,
New York, known as DTC, will be the depositary for all Debt Securities issued in
book-entry form. We will describe the specific terms of the Plan, assures
safekeeping of shares of Common Stock crediteddepository
arrangements with respect to any Debt Securities represented by a Plan account and provides
regular statements of such account. Therefore, shareholders avoid the cumbersome
safekeeping of certificates of shares of Common Stock credited to their Plan
accounts.
Investors who have an Individual Retirement Account or who set up an IRA
with a third party may enrollGlobal
Security in the Plan and purchase shares through the Plan.
The Trustee, however, cannot establishapplicable prospectus supplement.
A global security may not be transferred to or administer an IRA. That must be done
through another entity.
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3. What are the disadvantages of the Plan?
No interest is paid on optional cash payments held by the Trustee pending
investment. Participants have no control over the share price or the timing of
the sale or purchase of Plan shares. Participants cannot designate a specific
price or a specific date at which to purchase or sell Common Stock. In addition,
Participants will not know the exact number of shares purchased and the prices
paid until after the applicable investment date. (See Question 19.)
ADMINISTRATION
4. Who administers the Plan?
We have designated the Trustee as our agent to administer the Plan,
maintain records, send statements of account to Participants and to Initial
Investors and perform other duties relating to the Plan. Shares of Common Stock
purchased under the Plan are held by the Trustee as agent for Participants and registered in the name of
anyone other than the depositary or its nominee, unless special termination
situations arise. We describe those situations below under "Special Situations
When a Global Security Will Be Terminated." As a result of these arrangements,
the depositary, or its nominee, will be the sole registered owner and holder of
all Debt Securities represented by a global security, and investors will be
permitted to own only beneficial interests in a global security. Beneficial
interests must be held by means of an account with a broker, bank or other
financial institution that in turn has an account with the depositary or with
another institution that does. Thus, if your security is represented by a global
security, you will not be a holder of the debt security, but only an indirect
holder of a beneficial interest in the global security.
Special Considerations for Global Securities. As an indirect holder, your
rights relating to a global security will be governed by the account rules of
your financial institution and of the depositary, as well as general laws
relating to securities transfers. We do not recognize an indirect holder as a
holder of Debt Securities and instead deal only with the depositary that holds
the global security.
If we issue Debt Securities only in the form of a global security, you
should be aware of the following:
- you cannot cause the Debt Securities to be registered in your name, and
cannot obtain non-global certificates for your interest in the Debt
Securities, except in the special situations that we describe below,
- you will be an indirect holder and must look to your own bank or broker
for payments on the Debt Securities and protection of your legal rights
relating to the Debt Securities,
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- you may not be able to sell interests in the Debt Securities to some
insurance companies and to other institutions that are required by law to
own their securities in non-book-entry form,
- you may not be able to pledge your interest in a global security in
circumstances where certificates representing the Debt Securities must be
delivered to the lender or other beneficiary of the pledge in order for
the pledge to be effective,
- the depositary's policies, which may change from time to time, will
govern payments, transfers, exchanges and other matters relating to your
interest in a global security. We and the Trustee have no responsibility
for any aspect of the depositary's actions or for its nominee. If Participants desirerecords of
ownership interests in a global security. We and the Trustee also do not
supervise the depositary in any way,
- DTC requires that those who purchase and sell interests in a global
security within its book-entry system use immediately available funds and
your broker or bank may require you to do so as well, and financial
institutions that participate in the depositary's book-entry system, and
through which you hold your interest in a global security, may also have
their own policies affecting payments, notices and other matters relating
to the debt security. Your chain of ownership may contain more than one
financial intermediary. We do not monitor and are not responsible for the
actions of any of those intermediaries.
Special Situations When a Global Security Will Be Terminated. In a few
special situations described below, a global security will be terminated and
interests in it will be exchanged for certificates in non-global form
representing the Debt Securities it represented. After that exchange, the choice
of whether to hold their shares personally,the Debt Securities directly or in street name will be up to
you. You must consult your own bank or broker to find out how to have your
interests in a global security transferred on termination to your own name, so
that you will be a holder.
The special situations for termination of a global security are as follows:
- if the depositary notifies us that it is unwilling, unable or no longer
qualified to continue as depositary for that global security and we do
not appoint another institution to act as depositary within 60 days,
- if we notify the Trustee that we wish to terminate that global security,
or if an event of default has occurred with regard to Debt Securities
represented by that global security and has not been cured or waived; we
discuss defaults later under "Defaults and Right of Acceleration."
If a global security is terminated, only the depositary, and not we or the
Trustee, is responsible for deciding the names of the institutions in whose
names the Debt Securities represented by the global security will issuebe registered
and, therefore, who will be the holders of those Debt Securities.
EXCHANGE REGISTRATION AND TRANSFER
We will not be required to exchange or register a stock certificatetransfer of (i) any Debt
Securities of any series for a period of 15 days next preceding the mailing of
the notice of any redemption of such Debt Securities of such series to be
redeemed, or (ii) any such series selected, called or being called for
redemption except, in the namecase of any such series to be redeemed in part, the
portion thereof not to be so redeemed.
DEBT SECURITIES ISSUED IN NON-GLOBAL FORM
Debt Securities not issued in global form will be issued:
- only in fully registered form,
- without interest coupons, and
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- unless we indicate otherwise in the prospectus supplement, in
denominations of $1,000 and amounts that are multiples of $1,000.
Holders may exchange their Debt Securities that are not in global form for
Debt Securities of smaller denominations or combined into fewer Debt Securities
of larger denominations, as long as the total principal amount is not changed.
Holders may exchange or transfer their Debt Securities at the office of the
shareholder upon request.Trustee. We will appoint the Trustee to act as our agent for registering Debt
Securities in the names of holders transferring Debt Securities. We may appoint
another entity to perform these functions or perform them ourselves.
Holders will not be required to pay a service charge to transfer or
exchange their Debt Securities, but they may be required to pay for any tax or
other governmental charge associated with the transfer or exchange. The Trusteetransfer
or exchange will be made only if our transfer agent is satisfied with the
holder's proof of legal ownership.
If we have designated additional transfer agents for your Debt Security,
they will be named in your prospectus supplement. We may appoint additional
transfer agents or cancel the appointment of any particular transfer agent. We
may also servesapprove a change in the office through which any transfer agent acts.
If a Debt Security is issued as Transfer Agenta Global Security, only the depositary will
be entitled to transfer and exchange the debt security as described in this
subsection, since it will be the sole holder of the debt security.
REDEMPTION
Any terms for the Common Stock.
All communications regardingoptional or mandatory redemption of the Plan shouldDebt Securities
will be sentset forth in the applicable prospectus supplement. Except as shall
otherwise be provided with respect to the Debt Securities redeemable at the
option of the holder, such Debt Securities will be redeemable only upon notice,
by mail, not less than 30 nor more than 60 days prior to the date fixed for
redemption and, if less than all of the Debt Securities of any series are to be
redeemed, the Trustee shall select the particular Debt Securities to be redeemed
in such manner as it deems fair and appropriate. If less than all of the Debt
Securities represented by a Global Security are to be redeemed, the beneficial
interest to be redeemed will be selected by the Depository as described in the
applicable prospectus supplement.
COVENANTS
The Indenture contains the covenants summarized below, which are applicable
so long as any of the Debt Securities are outstanding.
Property. To the extent necessary for our business to be properly
conducted, we will cause (or, with respect to property owned in common with
others, make reasonable effort to cause) all of our properties used or useful in
the conduct of our business to be maintained and kept in good condition, repair
and working order. We will also cause (or, with respect to property owned in
common with others, make reasonable effort to cause) all necessary repairs,
renewals, replacements, betterments and improvements to be made on such
properties. This covenant does not prevent us from discontinuing, or causing the
discontinuance of, the operation and maintenance of any of our properties if
such discontinuance is, in our judgment, desirable in the conduct of our
business.
Limitation on Liens. We will not create, assume or suffer to exist, and
will not permit any subsidiary to create, assume or suffer to exist, except in
our favor, any mortgage, pledge or other lien or encumbrance of or upon any of
our properties or assets (including stock and other securities of
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subsidiaries) without making effective provisions to secure equally and ratably
the Debt Securities then outstanding and other indebtedness entitled to be so
secured, except that we or a subsidiary, without so securing the Debt
Securities, may create, assume or suffer to exist:
(a) certain purchase money and existing liens in connection with
property acquisitions and the extension, renewal or refunding of the same,
(b) pledges of current assets, in the ordinary course of business to
secure current liabilities,
(c) liens on property to secure obligations to pay all or a part of
the purchase price of such property only out of or measured by oil or gas
production or the proceeds thereof, or liens upon production from oil and
gas property or the proceeds of such production, to secure obligations to
pay all or part of the expenses of exploration, drilling or development of
such property only out of such production or proceeds,
(d) mechanics' or materialman's liens, certain good faith deposits,
deposits to secure public or statutory obligations, deposits to secure, or
in lieu of, surety, stay or appeal bonds, and deposits as security for
payment of taxes, assessments or similar charges and liens or security
interests created in connection with bid or completion bonds,
(e) liens arising by reason of deposits with, or the giving of
security to, a governmental agency as a condition to the transaction of
business or the exercise of a privilege or license, or to enable us or a
subsidiary to maintain self-insurance or participate in any funds
established to cover any insurance risks in connection with workmen's
compensation, unemployment insurance, old age pension or other social
security,
(f) pledges or assignments of accounts receivable, including
customers' installment paper, to banks or others (including to or by any
subsidiary which is principally engaged in the business of financing our
business and the business of our subsidiaries) made in the ordinary course
of business,
(g) liens of taxes or assessments for the current year or not due or
being contested in good faith and against which an adequate reserve has
been established,
(h) judgments or liens the finality of which is being contested and
execution on which is stayed,
(i) assessments or similar encumbrances the existence of which does
not impair the use of the property subject thereto for the purposes for
which it was acquired,
(j) certain landlords' liens so long as the rent secured thereby is
not in default, and
(k) liens on the assets of any limited liability company organized
under a limited liability company act of any state which limited liability
company is treated as a partnership for federal income tax purposes.
Subject to the provisions described under "Consolidation, Merger or Sale,"
we will do or cause to be done all things necessary to preserve and keep in full
force and effect our corporate existence, rights (charter and statutory), our
franchises or franchises of our subsidiaries. We will not be required to
preserve, or cause any subsidiary to preserve, any such right or franchise or to
keep in full force and effect the corporate existence of any subsidiary if, in
our judgment, preservation is no longer desirable in the conduct of our business
and the loss thereof is not disadvantageous in any material respect to the
holders of any series of Debt Securities.
Unless otherwise indicated in the prospectus supplement, the covenants
contained in the Indenture and the Debt Securities would not necessarily afford
holders protection in the event of a highly leveraged or other transaction
involving us that may adversely affect holders.
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CONSOLIDATION, MERGER OR SALE
We will not consolidate with or merge into any other corporation or sell or
convey all or substantially all of our assets to any person, firm or corporation
unless
(i) either we shall be the continuing corporation, or the successor
corporation (if other than us) shall be a corporation organized and
existing under the laws of the United States of America or a state thereof
or the District of Columbia and such corporation shall expressly assume, by
supplemental indenture, the due and punctual payment of the principal,
premium (if any) and interest on all the Debt Securities and the
performance of all of our covenants under the Indenture,
(ii) we or such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale or conveyance,
be in default in the performance of any such covenant or condition, and
(iii) we will have delivered to the Trustee addressedan opinion of counsel as
follows:
American Stock Transfer & Trust Company
40 Wall Streetprovided in the Indenture.
PAYMENT AND PAYING AGENT
The principal, premium (if any) and interest (if any) on Debt Securities
not represented by a Global Security will be payable in New York Clearing House
Funds at the office or agency of the paying agent or paying agents as we may
designate from time to time, provided that, at our option, interest may be paid
by check mailed to the holders entitled thereto at their last addresses as they
appear in the Debt Security Register. The Trustee is initially designated as our
sole paying agent and the principal corporate trust office of Citibank, N.A., in
the Borough of Manhattan, the City of New York, 10005
Initial Investorsis initially designated as the
office where the Debt Securities may be presented for payment, for the
registration of transfer and for exchange and where notices and demands to or
existing shareholders should mention Piedmont Natural
Gas Companyupon us in their correspondence and, ifrespect of the Debt Securities or of the Indenture may be served.
Unless otherwise indicated in the applicable furnish Plan account
numbers. Inquiries mayprospectus supplement, interest
payments shall be made to the person in whose name any debt security is
registered at the close of business on the record date with respect to an
interest payment date. All moneys paid by us to a paying agent for the payment
of principal, premium (if any) or interest on any debt security of any series
which remain unclaimed at the end of two years after such principal, premium or
interest shall have become due and payable will be repaid to us, and the holder
of such debt security will thereafter look only to us for payment thereof.
DEFAULTS AND RIGHTS OF ACCELERATION
The following are Events of Default under the Indenture with respect to a
particular series of Debt Securities:
(a) default in the payment of the principal or premium (if any) on any
of the Debt Securities of such series when due and payable;
(b) default in the payment of any installment of interest upon any of
the Debt Securities of such series when due and payable, and continuance of
such default for a period of 30 days;
(c) default in the payment of any sinking or purchase fund payment or
analogous obligation when due and payable;
(d) failure to observe or perform any other of our covenants or
agreements for a period of 90 days after written notice of such failure has
been given as provided in the Indenture;
(e) a default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by us (including a default with respect to
Debt Securities of any series other than that
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series) or under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any
indebtedness for money borrowed by us (including the Indenture) whether
such indebtedness now exists or shall hereafter be created, which default
shall constitute a failure to pay in excess of $50,000,000 principal amount
of such indebtedness when due and payable after the expiration of any
applicable grace period with respect thereto or shall have resulted in an
excess of $50,000,000 of principal amount of such indebtedness becoming or
being declared due and payable prior to the date on which it would
otherwise have become due and payable, without such indebtedness having
been discharged, or such acceleration having been rescinded or annulled,
within a period of 10 days after there shall have been given, by registered
or certified mail, to us by the Trustee or to us and the Trustee by telephone at 1-800-278-4353.
PARTICIPATION
5. Who is eligible to participate?
All individuals, corporations, partnerships, other business associations
andthe
holders of recordat least 25% in principal amount of sharesthe outstanding Debt
Securities of Common Stock are eligiblethat series a written notice specifying such default and
requiring us to participatecause such indebtedness to be discharged or cause such
acceleration to be rescinded or annulled and stating that such notice is a
"Notice of Default" thereunder; or
(f) certain events in bankruptcy, insolvency or other similar
occurrences.
The Indenture provides that if an event of default described in clause (a),
(b), (c), (d) or (e) shall have occurred and is continuing, and in each and
every such case, unless the principal amount of all the Debt Securities of such
series shall have already become due and payable, either the Trustee or the
holders of not less than 25% in aggregate principal amount of the Debt
Securities of all series affected thereby then outstanding, by notice in writing
to us (and to the Trustee if given by securityholders) may declare the principal
amount of all the Debt Securities (or, with respect to discount Debt Securities,
as defined below, such lesser amount as may be specified in the Plan, provided participation is not prohibited by any laws or regulations.
In orderterms of such
Debt Securities) affected thereby to be eligibledue and payable immediately, or, if an
event of default described in clause (f) shall have occurred and is continuing,
and unless the principal of all the Debt Securities of such series shall have
already become due and payable, either the Trustee or the holders of not less
than 25% in aggregate principal amount of all the Debt Securities then
outstanding, by notice in writing to participate, beneficial ownersus (and to the Trustee if given by
securityholders), may declare the principal of shares of Common
Stock whose shares are registered in names other than their own (for example,
shares registeredall the Debt Securities (or, with
respect to discount Debt Securities, such lesser amount as may be specified in
the nameterms of such Debt Securities) to be due and payable immediately. Upon
certain conditions, such declarations may be annulled and certain past defaults
may be waived by the holders of a broker ormajority of the principal amount of
outstanding Debt Securities of such series. For information as to waiver of
defaults, see "Meetings; Modification of the Indenture; Waiver."
We will be required to furnish to the Trustee annually a bank nominee)statement as to
our performance of certain of our obligations under the Indenture and as to any
default in such performance.
Under the Indenture, the Trustee must becomegive to the holders of record by havingeach series of
Debt Securities notice of all uncured defaults with respect to such series
within 90 days after the occurrence of such a default; provided that, except in
the case of default in the payment of principal, premium (if any) or a portioninterest on
any of those shares transferred into their
names. Or, they can requestthe Debt Securities, the Trustee shall be protected in withholding such
nominees or othernotice if it in good faith determines that the withholding of such notice is in
the interests of the holders of recordthe Debt Securities of such series.
MEETINGS; MODIFICATION OF THE INDENTURE; WAIVER
The Indenture contains provisions permitting us and the Trustee, with the
consent of the holders of not less than 66 2/3% in aggregate principal amount of
all series of the Debt Securities to participatebe affected at the time outstanding under
the Indenture (voting as one class), to enter into indentures supplemental to or
modifying the Indenture or the rights of the holders of such Debt Securities,
except that no such modification shall (a) extend the fixed maturity, reduce the
principal amount or redemption premium (if any) or reduce the rate or extend the
time of payment of interest on any
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Debt Security without the consent of the holder of each Debt Security so
affected, or (b) reduce the percentage in principal amount of the outstanding
Debt Securities, the consent of whose holders is required for any such
modification, without the consent of the holders of all Debt Securities then
outstanding.
Without the consent of any holders of Debt Securities, we and the Trustee
may enter into one or more supplemental indentures (which shall conform to the
effective provisions of the Trust Indenture Act) for any of the following
purposes:
(a) to evidence the succession of another corporation to us, or
successive successions and the assumption by the successor corporation of
our covenants, agreements and obligations pursuant to Article Eleven of the
Indenture;
(b) to add to our covenants for the protection of the holders of the
Debt Securities, and to make the occurrence, or the occurrence or
continuance, of a default in any of such additions, an event of default
permitting the enforcement of all remedies provided in the PlanIndenture, with
such period of grace, if any, and subject to such conditions as such
supplemental indenture may provide;
(c) to provide for the issuance under the Indenture of Debt
Securities, whether or not then outstanding, in coupon form (including Debt
Securities registrable as to principal only) and to provide for
exchangeability of such Debt Securities with Debt Securities issued under
the Indenture in fully registered form and to make all appropriate changes
for such purpose;
(d) to modify, eliminate or add to the provisions of the Indenture to
such extent as shall be necessary to effect the qualification of the
Indenture under the Trust Indenture Act, or under any similar federal
statute hereafter enacted, and to add to the Indenture such other
provisions as may be expressly permitted by the Trust Indenture Act,
excluding, however, the provisions referred to in Section 316(a)(2) of the
Trust Indenture Act or any corresponding provision in any similar federal
statute hereafter enacted;
(e) to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee;
(f) to evidence and provide for the acceptance and appointment
hereunder of a successor trustee with respect to the Debt Securities of one
or more series and to add or change any provisions of the Indenture as
shall be necessary to provide for or facilitate the administration of the
trusts by more than one trustee;
(g) to change or eliminate any provision of the Indenture or to add
any new provision to the Indenture; provided that if such change,
elimination or addition will adversely affect the interests of the holders
of the Debt Securities of any series in any material respect, such change,
elimination or addition will become effective with respect to such series
only when there is no debt security of such series remaining outstanding
under the Indenture;
(h) to provide collateral security for the Debt Securities;
(i) to change any place where (1) the principal, premium (if any) and
interest on their behalf. Individuals having established IRA
accountsDebt Securities of any series shall be payable; (2) any Debt
Securities of any series may be surrendered for registration of transfer;
(3) Debt Securities of any series may be surrendered for exchange; and (4)
notices and demands to or upon us in respect of the Debt Securities of any
series and the Indenture may be served; and
(j) to establish the form or terms of Debt Securities of any series as
permitted by the Indenture.
The Trustee is authorized by the Indenture to join with a third party may participateus in the Plan.
5execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations which may be
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6. How does an Initial Investor16
contained in any such supplemental indenture and to accept the conveyance,
transfer, assignment, mortgage or eligible shareholder becomepledge of any property under such supplemental
indenture. The Trustee shall not be obligated to enter into any such
supplemental indenture which adversely affects the Trustee's own rights, duties
or immunities under the Indenture or otherwise. No supplemental indenture shall
be effective as against the Trustee unless and until it has been duly executed
and delivered by the Trustee.
The Indenture contains provisions for convening meetings of the holders of
Debt Securities of a Participant?
An Initial Investor or an eligible shareholderseries. A meeting may join the Planbe called at any time by completing an Authorization Cardthe Trustee,
and returningalso by us or the holders of at least 25% in aggregate principal amount of
the outstanding Debt Securities of any series if the Trustee fails to call the
meeting upon our request or upon the request of such holders. Notice of every
meeting of securityholders shall set forth the time and place in the Borough of
Manhattan, the City of New York, of such meeting and in general terms the action
proposed and shall be mailed to all holders of Debt Securities of the applicable
series as the names and addresses of such holders appear on the Debt Security
Register.
Each holder of Debt Securities of a series with respect to which a meeting
is being held (or such holder's proxy) shall be entitled to one vote for each
$1,000 outstanding principal amount of Debt Securities held (or represented) by
him. The vote upon any resolution submitted to any meeting of securityholders
shall be by written ballot. The holders of a majority in principal amount of the
outstanding Debt Securities of all series affected thereby (voting as one class)
may waive our compliance of covenants or conditions provided for in the
Indenture. The holders of a majority in principal amount of the outstanding Debt
Securities of each series may, on behalf of the holders of all the Debt
Securities of such series, waive any past default under the Indenture, except a
default (1) in the payment of principal, premium (if any) or interest on any
debt security of such series, or (2) in respect of a covenant or provision of
the Indenture which cannot be modified or amended without the consent of the
holder of each outstanding Debt Security affected.
COLLECTION OF INDEBTEDNESS, ETC.
The Indenture also provides that if we fail to make payment of principal,
premium, interest or any mandatory sinking fund requirements on the Debt
Securities (and in the case of payment of interest or any mandatory sinking fund
payment, such failure to pay shall have continued for 30 days) we will, upon
demand of the Trustee, pay to it, for the benefit of the holders of the Debt
Securities, the whole amount then due and payable on the Debt Securities for
principal or premium (if any) and interest, with interest on the overdue
principal and, to the Trustee. An
Authorization Cardextent payment of interest shall be legally enforceable,
upon overdue installments of interest at the rate borne by the Debt Securities.
The Indenture further provides that if we fail to pay such amount upon such
demand, the Trustee may, among other things, institute a judicial proceeding for
the collection thereof. However, the Indenture provides that notwithstanding any
other provision of the Indenture, the holder of any Debt Security shall have the
right to institute suit for the enforcement of any payment of principal and
interest on such security on the respective stated maturities expressed in such
Debt Security and that such right shall not be obtainedimpaired without the consent of
such holder. The holders of a majority in principal amount of the Debt
Securities of each series then outstanding under the Indenture shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee; provided, that the holders shall have offered
to the Trustee reasonable indemnity against expenses and liabilities.
SATISFACTION AND DISCHARGE
We may satisfy and discharge its obligations under the Indenture if, at any
time, (1) we shall have delivered to the Trustee for cancellation all Debt
Securities of any series theretofore
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authenticated or (2) all such Debt Securities of such series not theretofore
delivered to the Trustee for cancellation shall have become due and payable, or
are by contactingtheir terms to become due and payable within one year or are to be called
for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption, and we shall deposit or cause to be
deposited with the Trustee as trust funds (a) an amount of money which will be
sufficient, or (b) Government Obligations, the principal and interest on which
when due, without any regard to reinvestment thereof, will provide monies which
will be sufficient, or (c) a combination of (a) and (b) which will be
sufficient, to pay at maturity or upon redemption all Debt Securities of such
series not theretofore delivered to the Trustee for cancellation, including
principal, premium (if any) and interest due or to become due to such date of
maturity or date fixed for redemption, as the case may be.
If the conditions of either (1) or (2) above are satisfied, we must also
pay or cause to be paid all other sums payable by us under the Indenture with
respect to such series, and then the Indenture shall cease to be of further
effect with respect to the Debt Securities of such series, and the Trustee, on
demand of and at our cost and expense, shall execute proper instruments
acknowledging satisfaction of and discharging the Indenture with respect to the
Debt Securities of such series. We agree to reimburse the Trustee for any costs
or expenses thereafter reasonably and properly incurred by the Trustee in
connection with the Indenture or the Debt Securities of such series.
In addition, under the Indenture we will be discharged from any and all
obligations in respect of the Debt Securities of any series (except in each case
for certain obligations to register the transfer or exchange of Debt Securities,
replace stolen, lost or mutilated Debt Securities, maintain paying agencies and
hold moneys for payment in trust) if we deposit with the Trustee, in trust,
money, Government Obligations, or a combination thereof, in an amount sufficient
to pay all the principal (including any mandatory sinking fund payments) of, and
interest on, Debt Securities of such series on the dates such payments are due
in accordance with the terms of such Debt Securities. Such defeasance and
discharge will become effective after we have, among other things, delivered to
the Trustee an opinion of counsel to the effect that the deposit and related
defeasance would not cause the holders of the Debt Securities of such series to
recognize income, gain or loss for federal income tax purposes, or a copy of a
ruling or other formal statement or action to such effect received from or
published by the United States Internal Revenue Service (the "IRS").
NOTICES
Any notice or demand required or permitted to be given or served by the
Trustee or by contactingthe holders of Debt Securities to or on us may be given or served
by postage prepaid first class mail addressed (until another address is filed by
us with the Trustee) as follows: Piedmont Natural Gas Company, Inc.
Attention: Vice President, Corporate Counsel and Secretary, 1915
Rexford Road, Post Office Box 33068, Charlotte, North Carolina 28233-3068
Telephone: (704)364-3483, Ext. 20228233, Attention:
Ted C. Coble, Vice President and Treasurer and Assistant Secretary.
Any notice, direction, request or (800)752-7508, Ext. 202
7. When do investments begin underdemand by any holder of the Plan?
Dividend payment dates ordinarily occur onDebt
Securities to or about the 15th day of
January, April, July and October. The record date for determining shareholders
who are eligible to receive dividends normally precedes the dividend payment
date by about three weeks.
Ifupon the Trustee receives an Authorization Card specifying reinvestmentshall be deemed to have been sufficiently
given or made, if given or made in writing at the principal corporate trust
office of dividends at least three business days before the record dateTrustee in the Borough of Manhattan, the City of New York.
Any notice to be given to the holders of the Debt Securities will be given
by mail to the addresses of such holders as they appear in the Debt Security
Register.
TITLE
We, the Trustee and any of our agents may deem the person in whose name
such Debt Security shall be registered upon our books (which, in the case of
Debt Securities represented by a global security, shall be the Depository or its
nominee) to be the absolute owner of such Debt Security (whether or not such
debt security shall be overdue and notwithstanding any notation of ownership or
other writing thereon), for the purpose of receiving payment and for all other
purposes.
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REPLACEMENT OF DEBT SECURITIES
In case any Debt Security shall become mutilated or be destroyed, lost or
stolen, we, in the case of a dividendmutilated Debt Security shall, and in the case of a
lost, stolen or destroyed Debt Security may in our discretion, provide a new
Debt Security of the same series. The applicant for a substituted Debt Security
shall furnish to us and the Trustee such security or indemnity as may be
required by them to save each of us harmless, and, in every case of destruction,
loss or theft, the applicant shall also furnish evidence of the destruction,
loss or theft of such Debt Security and of the ownership thereof. We may require
the payment reinvestment commences withof a sum sufficient to cover any tax, governmental charge or other
charges that dividend payment. Ifmay be imposed in relation to the Authorization
Cardissuance of a substituted Debt
Security and in addition a further sum not exceeding $2.00 for each Debt
Security so issued in substitution.
GOVERNING LAW
The Indenture is received after that date, reinvestment of dividends underand the Plan
beginsDebt Securities will be governed by, and construed
in accordance with, the dividend payment followinglaws of the next record date.
Initial investments and optional cash payments by Participants are invested
as specified in Question 13.
8. What doesState of New York.
CONCERNING THE TRUSTEE
Subject to the Authorization Card provide?
The Authorization Card provides forprovisions of the purchase of shares of Common Stock
through the following options:
- Full Dividend Reinvestment. If the "Full Dividend Reinvestment" box is
checked,Indenture relating to its duties, the
Trustee will apply all of a Participant's cash dividends on
shares of Common Stock registered in the Participant's name, as well as
on all shares of Common Stock credited to the Participant's Plan account,
to the purchase of additional shares of Common Stock.
- Partial Dividend Reinvestment. If the "Partial Dividend Reinvestment" box
is checked, the Trustee will reinvest dividends on the number of shares
indicated by the Participant, as well as dividends on all shares of
Common Stock credited to the Participant's Plan account, and will pay any
remaining dividends in cash.
- Cash Payments Only. If the "Cash Payments Only" box is checked, the
Trustee will apply any optional cash payments and any dividends on shares
credited to the Participant's Plan account to the purchase of additional
shares of Common Stock. Cash dividends on shares of Common Stock
registered in the Participant's name other than in his or her Plan
account will be paid to the Participant in cash.
- Initial Purchases. If the "Initial Purchases" box is checked, the Trustee
will apply any cash payments to the purchase of shares of Common Stock.
If a participant does not check any box on the Authorization Card, then
full dividend reinvestment will be assumed.
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9. May Participants reinvest dividends on less than all shares registered in
their name?
Except for dividends on shares of Common Stock in a Participant's Plan
account, which are reinvested automatically, Participants may elect to reinvest
all or part of the dividends on shares of Common Stock registered in their name
by designating their intentions on the Authorization Card.
10. May Participants change the method of participation?
At any time, Participants may change their investment options by completing
a new Authorization Card and returning it to the Trustee. If the Participant
elects to participate through the full or partial dividend reinvestment feature
but later decides to change the number of shares on which cash dividends are
being reinvested or to participate through the optional cash payments feature
only, the Trustee must receive an Authorization Card indicating the change at
least three business days before the record date of a dividend payment. If the
Authorization Card is received after that date, the change will not be effective
until the dividend payment following the next record date.
COSTS
11. Are there any expenses to Initial Investors or Participants in connection
with the Plan?
There are no brokerage commissions, fees or service charges to Initial
Investors or Participants for purchases under the Plan. We pay all costs of
administration of the Plan. (See Question 27 and Question 28 for a discussion of
payment by Participants of brokerage costs and transfer taxes associated with
termination of participation and sale of shares under the Plan.)
INITIAL PURCHASES
12. How are initial purchases made?
Initial purchases by non-shareholders of shares of Common Stock may be made
by check or money order in an amount not less than $250 or more than $120,000.
Investors may not invest more that $120,000 per calendar year. The Trustee will
return any excess tendered amount to the sender. The Trustee must receive
initial purchase payments at least three business days prior to an Investment
Date in order to be invested on that date. (See Question 16.) Initial purchase
payments received by the Trustee less than three business days before an
Investment Date will be held until the following Investment Date. No interest is
paid on initial purchase payments pending investment. An Initial Investor may
obtain the return of any initial purchase payment by written request received by
the Trustee at least two days before the next Investment Date.
OPTIONAL CASH PAYMENTS
13. How are optional cash payments made?
Optional cash payments may be made by check or money order, or by automatic
bank draft. A shareholder may make an initial optional cash payment when
enrolling in the Plan by enclosing a check (made payable to American Stock
Transfer & Trust Company) with the Authorization Card. Thereafter, Participants
may make optional cash payments through the use of cash payment forms sent to
Participants as part of their account statements. Participants may also
authorize the Trustee to automatically draft their checking, savings or other
account in any financial institution that participates in the Automated Clearing
House system. The Trustee can furnish draft authorization cards and additional
information to Participants.
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Optional cash payments which are made by check or money order need not be
in the same amount each time and there is no obligation to make optional cash
payments regularly. However, should Participants electexpend or risk its own funds or to make optional cash
payments through automatic bank draft, the draft must beincur
any personal financial liability in the same amount. The
draftperformance of its duties under the
Indenture, or to exercise any of its rights or powers under the Indenture, if
there are reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Subject to such provisions, the holders of a majority in principal amount of
the Debt Securities then outstanding will continue until the Participant notifies the Trustee in writing to
change the amount automatically drafted or terminate the bank draft.
The Trustee must receive optional cash payments at least three business
days prior to an Investment Date in order to be invested on that date. (See
Question 16.) Optional cash payments received by the Trustee less than three
business days before an Investment Date will be held until the following
Investment Date. No interest is paid on optional cash payments pending
investment. Participants may obtain the return of any optional cash payments by
written request received by the Trustee at least two days before the next
Investment Date.
14. What are the limitations on making optional cash payments?
Optional cash payments may be not less than $25 per payment or more than
$120,000 per calendar year. We reservehave the right to direct the Trustee to refusetime,
method and place of conducting any optional cash payments that in the aggregate exceed $120,000 per calendar
year with respect to the aggregate of all of a Participant's Plan accounts. In
such event, the Trustee will return the excess tendered amount of optional cash
payments to the Participant.
PURCHASES
15. What is the source of shares of Common Stock under the Plan?
Shares of Common Stock needed to meet the requirements of the Plan will
either come from our authorized and unissued shares or from shares purchased in
the open market by an independent agent. The Plan limits us from changing our
determination regarding the source of shares to not more than once in any
three-month period.
16. When are shares of Common Stock purchased under the Plan?
The Investment Dates for shares purchased with reinvested dividends are on
or about the 15th day of January, April, July and October. The Investment Dates
for initial investments or optional cash payments are weekly, usually on
Wednesdays. If the normal Investment Date is not a business day, the Investment
Date is the immediately preceding business day. During a week when a dividend
payment is made, the Investment Date for initial investments and optional cash
purchases is the same date.
Shares purchased under the Plan belong to the Participant on the Investment
Date. However, for federal income tax purposes, the holding period for such
shares begins on the following day.
17. What is the price of shares of Common Stock purchased under the Plan?
The price of shares of Common Stock purchased with reinvested dividends is
95% of the mean of the high and low sales prices for such shares reflected in
the NYSE Composite Transactions on the Investment Date, or the most recent
preceding day if the NYSE is closed on that Investment Date. The price of shares
of Common Stock purchased through initial payments or with optional cash
payments is 100% of the mean determined above.
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18. How many shares of Common Stock are purchased for Participants?
The number of shares purchased for a Participant's account is equal to the
amount of the Participant's dividends being reinvested plus the amount of
initial purchase payments plus the amount of any optional cash payments divided
by the purchase price of the shares. Each Plan account is credited with that
number of shares, including fractions computed to four decimal places. The Plan
does not provide for Participants or Initial Investors to purchase a specific
number of shares.
REPORTS TO PARTICIPANTS
19. What reports are sent to Participants?
Shareholders who participate in the Plan only through the reinvestment of
dividends receive quarterly statements of their accounts. Initial Investors and
shareholders that participate through the investment of optional cash payments
receive statements when cash investments are made. These statements of account
show any cash dividends reinvested and any cash payments received, the number of
shares purchased, the purchase price for the shares and the mean of the high and
low sales prices on the Investment Date, the number of Plan shares held for the
Participant by the Trustee, the number of shares registered in the name of the
Participant reinvesting dividends, and an accumulation of the transactions for
the current calendar year to date. Statements are mailed as soon as practicable
after each Investment Date. These statements are a Participant's continuing
record of the cost of purchases of shares of Common Stock under the Plan, and
the last cumulative statement of the year should be retained for tax purposes.
In addition, each Participant receives copies of all communications sent to
shareholders generally, including annual reports, notices of annual meetings and
proxy statements and income tax information for reporting dividends paid.
ISSUANCE OF CERTIFICATES
20. Are certificates issued for shares of Common Stock purchased under the
Plan?
Unless requested in writing by a Participant, certificates for shares of
Common Stock purchased under the Plan are not issued to the Participant.
However, certificatesproceeding for any number of whole shares credited to a Participant's
account will be issued in the Participant's name without charge upon written
request of the Participant; provided, however, that any request received from
reinvestment Participants between a dividend record date and the Investment Date
for that dividend will not be effective until after the dividend is reinvested
under the Plan. Certificates representing fractional share interests will not be
issued under any circumstances.
A request for issuance of Plan shares, including issuance of all of the
shares in a Participant's account, does not constitute a termination of
participation in the Plan by the Participant. Termination may be effected only
through the delivery to the Trustee of a notice of termination. (See Question
26.)
21. In whose name are certificates issued?
Accounts under the Plan are maintained in the names in which certificates
of the Participants were registered at the time they entered the Plan.
Consequently, certificates for whole shares issued upon the request of
Participants are issued in the same names.
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DIVIDENDS ON FRACTIONS OF SHARES
22. Are Participants' Plan accounts credited with dividends on fractions of
shares?
Participants receive credit for the amount of dividends attributable to
fractions of shares in their Plan accounts. These dividends are reinvested
automatically.
WITHDRAWAL OF SHARES IN PLAN ACCOUNTS
23. How may shares be withdrawn from the Plan?
Participants may withdraw Plan shares credited to their accounts by
notifying the Trustee in writing specifying the number of shares to be
withdrawn. Certificates for whole shares of Common Stock so withdrawn will be
issued to and registered in the name of the Participant. Certificates
representing fractional share interests will not be issued under any
circumstances.
24. Will dividends on shares withdrawn from the Plan continue to be
reinvested?
If Participants have authorized reinvestment of dividends on all shares
registered in their name, cash dividends on shares withdrawn continue to be
reinvested. If, however, dividends on only part of the shares registered in
their name are being reinvested, the Trustee continues to reinvest dividends on
only the number of shares specified on the Authorization Card unless the Trustee
receives a new Authorization Card specifying a different number of shares.
25. Will dividends on Participants' Plan shares continue to be reinvested if
Participants sell or transfer the Common Stock registered in their name?
Even if Participants sell or transfer all of the shares of Common Stock
registered in their name, the Trustee continues to reinvest dividends on the
Plan shares until the Trustee receives a written request for withdrawal from the
Plan.
TERMINATION OF PARTICIPATION
26. How do Participants terminate participation in the Plan?
Participants may terminate participation in the Plan at any time by
notifying the Trustee in writing. A Participant's notice of termination takes
effect when the Trustee receives the notice; however, for a Participant
reinvesting dividends, if the Trustee receives the notice of termination on or
after the fifth business day preceding a dividend record date, that cash
dividend will be reinvested for the Participant's account. The account then will
be terminated and all subsequent dividends will be paid to the Participant.
Any optional cash payment received before the Trustee receives the notice
of termination will be invested for the Participant's account unless the
Participant specifically requests return of the payment prior to two days before
the next Investment Date.
27. What happens when Participants terminate participation in the Plan?
When Participants terminate participation in the Plan by providing the
Trustee with a written notice of termination, or upon termination of the Plan,
certificates for whole shares credited to a Participant's account will be issued
to the Participant and a cash payment will be made for any fractional share
interests. However, in the Participant's notice of termination of participation,
the Participant may direct the Trustee to sell all full
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and fractional share interests held in the account. Within ten business days or
as soon as practicable after receipt of notice of termination, such sales will
be made through an independent brokerage organization. Any brokerage
commissions, fees, transfer and other taxes and other transaction expenses in
connection with such sales will be paid by the terminating Participant. The
proceeds of the sale, net of such expenses, will be sent to the Participant as
soon as practicable after settlement of the sale.
Dividends paid after termination of participation in the Plan will be paid
in cash directly to the former Participant. Former Participants may become
Participants in the Plan again at any time by signing a new Authorization Card
and returning it to the Trustee.
SALE OF PLAN SHARES
28. May Participants' Plan shares be sold?
Participants may sell all or part of the shares of Common Stock held in the
Plan in either of two ways. First, the Participant may request certificates for
full shares and arrange for the sale of these shares through a securities broker
of the Participant's choice. Alternatively, within ten days after receipt of
written instructions, the Trustee will sell all or any portion of the shares
held by the Trustee for the Participant. Such shares will be sold through
independent securities brokers selected by the Trustee in its sole discretion.
The Participant will be charged brokerage commissions, fees, transfer and other
taxes and other transaction expenses, which amounts will be deducted from the
cash proceeds paid to the Participant. Shares being sold for the Participant may
be aggregated with those of other Plan Participants who have requested sales. In
that case, the Participant will receive proceeds based on the average sales
price of all shares sold, less a pro rata share of brokerage commissions, fees,
transfer and other taxes and other transaction expenses. The proceeds of the
sale, net of such expenses, will be sent to the Participant as soon as
practicable after settlement of the sale.
RISK TO PARTICIPANTS
29. Does participation in the Plan involve risk?
The Plan itself creates no risk. The risk to Participants is the same as
with any other investment in shares of Common Stock. Since purchase prices are
established on the Investment Date, a Participant loses any advantage otherwise
available from being able to select the timing of investments. Participants
should recognize that neither Piedmont Natural Gas Company nor the Trustee can
assure a profit or protect against a loss on shares of Common Stock purchased
under the Plan.
STOCK DIVIDENDS OR STOCK SPLITS; RIGHTS OFFERING
30. What happens if we issue a stock dividend, declare a stock split or have a
rights offering?
Any stock dividend or split will be credited to Participants' Plan accounts
based on the number of shares, including fractional share interests, held in
such accounts on the record date for such stock dividend or split.
In the event we makeremedy available to shareholders rights to purchase
additional shares of Common Stock or other securities, such rights will be made
available to Participants based on the number of shares, including fractional
share interests to the extent practicable, held in their Plan accounts on the
record date established for determining shareholders who are entitled to such
rights.
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VOTING RIGHTS
31. How are Participants' shares voted at meetings of shareholders?
Participants receives a proxy indicating the total number of shares of
Common Stock held, including shares registered in their name and shares credited
to their Plan account. If the proxy is returned properly signed and marked for
voting, all the shares covered by the proxy will be voted as marked. If the
proxy is returned properly signed but with no instructions on how the shares are
to be voted, all of the Participant's shares will be voted in accordance with
the recommendations of the Board of Directors. If the proxy is not returned or
if it is returned unexecuted or improperly executed, the Participant's shares
will be voted only if the Participant votes in person.
INCOME TAX CONSEQUENCES
32. What are some federal income tax consequences of participation in the
Plan?
Participants are deemed to have received dividend income on the Investment
Date to the extent that shares of Common Stock are purchased with reinvested
dividends. Thus, the full amount of cash dividends reinvested under the Plan
plus the 5% purchase discount represents dividend income to Participants.
The basis of shares of Common Stock purchased under the Plan, either with
reinvested cash dividends, initial payments or optional cash payments, is the
mean of the high and low sales prices on the Investment Date. The holding period
for such shares begins on the day after the Investment Date.
Participants will not realize any taxable income when they receive
certificates for Plan shares credited to their accounts, whether upon withdrawal
from the Plan or otherwise. However, upon withdrawal, Participants will receive
cash payments for the fractional shares credited to their Plan accounts and may
realize a gain or loss. The amount of such gain or loss will be the difference
between the amount the Participant receives for the fractional shares and the
Participant's tax basis for such shares.
If the Participant is subject to withholding, we will withhold the required
taxes from the amount of dividends that would otherwise be reinvested under the
Plan. The Trustee will notify the Participant when withholding begins. The
amount withheld will be deducted from the amount of the dividend and only the
remaining amount will be invested. The amount withheld will be reported to the
Participant.
The selling of shares by a Participant will give rise to capital gain or
loss, provided such shares are held as a capital asset by the Participant. The
amount of any such gain or loss will be the difference between the proceeds
received by the Participant, net of commissions and fees, and the Participant's
tax basis. The tax basis of shares acquired under the Plan is equal to the
purchase price of such shares.
The discussion above is only a general discussion of certain federal income
tax aspects of an investment in the Plan. Because tax consequences may vary,
depending on each Participant's own tax situation, Participants or persons
considering participation in the Plan are advised to consult their own tax
advisors regarding the tax effect of participation in the Plan, including the
application of current and proposed federal, state, local, foreign and other tax
laws.
FOREIGN SHAREHOLDERS
33. What provision is made for foreign shareholders?
For foreign shareholders who are Participants and whose dividends are
subject to United States income tax withholding laws, an amount equal to the
dividends to be reinvested less the amount of tax required to be
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withheld is applied to the purchase of shares of Common Stock. The statements
distributed by the Trustee confirming purchases made for such foreign
Participants indicate the amount of tax withheld. Initial cash payments and
optional cash payments received from foreign shareholders must be in United
States dollars and are invested in the same manner as payments from other
Participants.
RESPONSIBILITIES OF PIEDMONT NATURAL GAS COMPANY AND THE TRUSTEE
34. What are the responsibilities of Piedmont Natural Gas Company and the
Trustee under the Plan?
Neither we norIndenture, or exercising any trust or power conferred on the
Trustee will be liable for claims arising from any act
done in good faith or any good faith omission to act. This includes, but is not
limited to, any claim of liability arising out of failure to terminate a
Participant's Plan account upon such Participant's death prior to receipt of
notice in writing of such death. Neither we nor the Trustee have any duties,
responsibilities or liabilities except those expressly set forth in the Plan.
The payment of dividends is at the discretion of our Board of Directors and
will depend upon future earnings, our financial condition and other factors.
There can be no assurance as to the declaration or payment of any dividend.
Nothing in the Plan obligates us to declare or pay any dividend on our Common
Stock.
CUSTODY OF CERTIFICATES
35. May other Common Stock certificates be deposited with theTrustee. Citibank, N.A., Trustee under the Plan?
Participants may deposit any Common Stock certificatesIndenture, has commercial banking
relationships with us. Citibank, N.A., is an affiliate of Citicorp Securities,
Inc., which is one of the Company now
or hereafter registered in their nameagents for credit under the Plan. There is no
charge for this service. Because Participants bear the risk of loss in sending
stock certificates to the Trustee, it is recommended that certificates be sent
by registered mail, return receipt requested, and properly insured. The
Participant must provide written instructions to the Trustee directing that the
shares be deposited to the Participant's Plan account. Whenever certificates are
issued to a Participant, either upon request or upon termination of
participation, new, differently numbered certificates will be issued.
SUSPENSION, MODIFICATION OR TERMINATION OF THE PLAN
36. May the Plan be suspended, modified or terminated?
While the Plan is intended to continue indefinitely, we reserve the right
to suspend or terminate the Plan at any time. We also reserve the right to make
modifications to the Plan. We will notify Participants of any such suspension,
termination or modification. If the Plan is terminated, any uninvested optional
cash payments will be returned to Participants, certificates for whole shares
credited to Plan accounts will be issued and cash payments will be made for any
fractional shares credited to such Plan accounts. (See Question 27.)
We intend to use our best efforts to maintain the effectiveness of the
Registration Statement filed with the Commission covering the offer and sale of
Common Stock under the Plan. However, we have no obligation to offer, issue or
sell Common Stock to Initial Investors or Participants under the Plan if, at the
time of the offer, issuance or sale, such Registration Statement is for any
reason not effective. Also, we may elect not to offer or sell Common Stock under
the Plan to Initial Investors or Participants residing in any jurisdiction or
foreign country where the burden of expense of compliance with applicable blue
sky or securities laws makes such offer or sale there impracticable or
inadvisable. In any of these circumstances, dividends, if and when declared,
will be paid in cash and any optional cash payments received from such
shareholder will be returned.
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We reserve the right to interpret and regulate the Plan as we deem
necessary or desirable in connection with the Plan's operations.
USE OF PROCEEDS
We expect to use the proceeds from the sales of shares of Common Stock
under the Plan for the purpose of financing the construction of additions to our
facilities and for general corporate purposes. We have no basis for estimating
the number of shares of Common Stock that ultimately will be sold under the Plan
or the prices at which such shares will be sold. We expect to continue to obtain
a portion of our capital requirements through external sources with the type,
amount and timing of any sales of securities to depend upon market conditions
and other factors. We expect to obtain the balance of such requirements from
internally generated cash.medium-term note program.
DESCRIPTION OF COMMON STOCK
Our Articles of Incorporation authorize 100,000,000 shares of Common Stockcommon stock
without par value and 175,000 shares of Preferred Stockpreferred stock without par value. TheOur
Board of Directors has the authority to establish one or more series of
Preferred Stockpreferred stock with such terms and rights as the Boardit may determine. No shares of
Preferred Stockpreferred stock are presently outstanding.
Holders of Common Stockour common stock are entitled to one vote for each share held of
record on all matters submitted to a vote of shareholders. Under North Carolina
law, the election of directors requires a plurality of the votes cast in the
election. The Articles require the affirmative vote of a super majority of the
outstanding shares of voting stock to approve certain transactions such as
actions in connection with business combinations or other changes in control.
Shareholders do not have cumulative voting rights.
Our Articles of Incorporation and By-Laws contain certain provisions that
could have the effect of delaying, deferring or preventing a change in control.
These provisions include:
- AClassified Board of Directors. Our Board of Directors is divided into
three classes with staggered terms, which means that, as a general
matter, only one-third of the Board must stand for re-election at any
annual meeting of shareholders;shareholders. The classification of directors could
have the effect of making it more difficult for shareholders, including
those holding a majority of the outstanding shares, to force an immediate
change in the composition of our Board. Two shareholder meetings, instead
of one, generally will be required to effect a change in the control of
our Board. The provision for the classification of directors may be
amended,
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altered, changed or repealed only upon the affirmative vote of 80% of the
outstanding shares entitled to vote in the election of directors.
- Fixing and Changing Number of Directors. Our By-Laws authorize the Board
of Directors to fix the number of directors and provide that the number
may be changed only by (a) the affirmative vote of 80% of the outstanding
shares entitled to vote in the election of directors or (b) a majority of
the entire Board of Directors.
- Nominations forto the Board, withBoard. With certain exceptions, nominations to the
Board must be made at least 60 days prior to the date of a meeting of
shareholders; andshareholders.
- Removal of Directors. Directors may be removed for cause only by the
affirmative vote of 80% of the outstanding shares entitled to vote in the
election of Directors.directors.
- Fair Price Provisions. Our Articles of Incorporation require the
affirmative vote of a super majority of the outstanding shares of voting
stock to approve certain transactions such as actions in connection with
any "Business Combination." A Business Combination is defined to include
any merger, consolidation, lease, sale or disposition of assets or
certain other business transactions by us or our subsidiaries involving
an "interested shareholder." An interested shareholder is defined as any
person who is or has announced an intention to become the beneficial
owner of 10% or more of our voting stock (and certain defined affiliates)
or an affiliate or associate of an interested shareholder and that,
together with all such other arrangements, has an aggregate fair market
value and/or involves aggregate commitments of $10,000,000 or more or
more than 5% of our total assets or shareholders' equity as reflected on
our most recent fiscal year-end consolidated balance sheet. Our Articles
of Incorporation require the affirmative vote of not less than 66 2/3% of
our voting stock, voting together as a single class, excluding any voting
stock held by an interested shareholder, with respect to all Business
Combinations involving the interested shareholder unless (1) the
transaction is approved by our Board of Directors prior to the date on
which directors not affiliated with the interested shareholder and who
were directors prior to the time the interested shareholder acquired such
status ("Continuing Directors") comprise less than a majority of our
Board of Directors, and (2) if the Business Combination involves payment
of consideration to shareholders, certain minimum price and disclosure
requirements are satisfied as to all shareholders, and there has been no
major change in our business or equity capital structure or any change or
reduction in the payment of dividends since the date the interested
shareholder acquired such status. To meet the minimum price criteria, the
shareholders must receive consideration or retain value per share after
the transaction that is not less than the highest price per share paid by
the interested shareholder in the transaction or within two years
preceding the announcement date of the transaction, or the fair market
value per share of our common stock on the date the transaction is
announced or the date on which the interested shareholder acquired such
status, whichever is higher. The minimum price provisions must be met
with respect to every class or series of our outstanding capital stock,
whether or not the interested shareholder has previously acquired shares
of any particular class or series. Our Articles of Incorporation require
the same 66 2/3% shareholder approval to amend or repeal the foregoing
provisions or to adopt any provision inconsistent with such provisions
unless the change is proposed by the Board of Directors prior to the date
on which Continuing Directors comprise less than a majority of the Board.
- Shareholder Rights Plan. Our shareholder rights plan generally provides
the Board of Directors and shareholders the right to act to substantially
dilute the share ownership position of any person who acquires 15% or
more of our Common Stock.common stock. These provisions could discourage bids for the
Common Stockcommon stock at a premium and might adversely affect the market price of
our common stock.
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20
- Amendment to our By-Laws. Unless otherwise provided by law, our By-Laws
may be amended only by (a) the Common Stock.affirmative vote of 80% of the outstanding
shares entitled to vote in the election of directors or (b) a majority of
the entire Board of Directors at a meeting at which a quorum is present.
- Opt out of North Carolina Anti-Takeover Statutes. Our Articles of
Incorporation contain language to "opt out" of the provisions of two
North Carolina anti-takeover statutes which, under the North Carolina
Business Corporation Act, would otherwise apply to us. The first of these
statutes, called the "North Carolina Shareholder Protection Act,"
requires that any business combination (as defined therein) between a
corporation and any 20% shareholder be approved by 95% of the
corporation's voting shares. Under the second statute, called the "North
Carolina Control Share Acquisition Act," control shares of a corporation
that are acquired in a "control share acquisition" (as defined in the
statute) have no voting rights unless such rights are granted by
resolution adopted by a majority of the corporation's shareholders, and
in the event such voting rights were to be granted, all other
shareholders would have the right to have their shares in the corporation
redeemed at their fair value, subject to certain restrictions. Because
application of these statutes to us would create material conflicts with
existing provisions of our Articles of Incorporation regarding Business
Combinations, our Articles of Incorporation include provisions stating
that neither of these statutes will apply to us.
Holders of Common Stockour common stock are entitled to receive dividends that may be
declared from time to time by the Board of Directors subject to any preferences
that may be applicable to any shares of Preferred Stockour preferred stock then outstanding.
Some of the agreements under which our long-term debt was issued contain
provisions that restrict the amount of cash dividends that may be paid on Common Stock.our
common stock. Under the most restrictive of these provisions, all of our
retained earnings were free of such restrictions as of July 31, 1999.
14
16April 30, 2001.
In the event of liquidation, holders of Common Stockcommon stock are entitled to all
assets that remain after satisfaction of creditors and the liquidation
preferences of any outstanding Preferred Stock,preferred stock, if any. Holders of Common Stockcommon stock
do not have preemptive rights to purchase additional shares of Common Stockcommon stock or
securities convertible into such shares. There are no redemption provisions on
any shares of Common Stock.common stock. The outstanding shares of Common Stockcommon stock are, and the
additional shares offered hereby will be, fully paid and non-assessable.
The outstanding shares of Common Stockcommon stock are, and the additional shares
offered hereby will, subject to notice of listing, be listed on the New York
Stock Exchange under the trading symbol "PNY."
The Transfer Agenttransfer agent and Registrarregistrar for the Common Stockcommon stock is American Stock
Transfer & Trust Company, 40 Wall Street,59 Maiden Lane, New York, New York 10005.
LEGAL MATTERS
Martin C. Ruegsegger, who is our Vice President, Corporate Counsel10008.
PLAN OF DISTRIBUTION
We may sell the securities offered by this prospectus and Secretarythe applicable
prospectus supplement as follows:
- to or through underwriting syndicates represented by managing
underwriters, or by underwriters without a syndicate, such underwriters
to be designated at the time of sale;
- through agents designated from time to time; or
- directly by us to other purchasers.
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21
The applicable prospectus supplement will set forth the terms of the
offering of the securities, including the name or names of any underwriters or
agents, the purchase price of such securities and who is eligiblethe proceeds to participateus from such
sales, any underwriting discounts, agency commissions and other items
constituting underwriters' or agents' compensation, any initial public offering
price, any discounts or concessions to be allowed or reallowed or paid to
dealers and the securities exchanges, if any, on which such securities may be
listed.
If underwriters are used in the Plan,sale, the securities will pass uponbe acquired by
the underwriters for their own accounts and may be resold from time to time in
one or more transactions, including negotiated transactions. These transactions
may be at a fixed public offering price or at varying prices determined at the
time of sale. Such securities may be offered to the public either through
underwriting syndicates represented by managing underwriters or by underwriters
without a syndicate, all of which underwriters in either case will be designated
in the prospectus supplement corresponding to such offering. Unless otherwise
set forth in the applicable prospectus supplement, under the terms of the
underwriting agreement, the obligations of the underwriters to purchase such
securities will be subject to certain conditions precedent, and the underwriters
will be obligated to purchase all of such securities if any are purchased. Any
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
The securities may be sold directly by us or through agents designated by
us from time to time. Any agent involved in the offer or sale of the securities
with respect to which this prospectus is delivered will be named, and any
commission payable by us to such agent will be set forth, in the corresponding
prospectus supplement. Unless otherwise indicated in the corresponding
prospectus supplement, any such agent will be acting on a reasonable
best-efforts basis for the period of its appointment.
If so indicated in the applicable prospectus supplement, we may authorize
underwriters or agents to solicit offers by certain institutions to purchase
securities from us at the public offering price set forth in such prospectus
supplement pursuant to delayed delivery contracts ("Delayed Delivery Contracts")
providing for payment and delivery on the future date or dates stated in the
prospectus supplement. The amount of securities to be sold under each Delayed
Delivery Contract and the aggregate amount of securities to be sold under all
Delayed Delivery Contracts will be set forth in the prospectus supplement.
Institutions with which Delayed Delivery Contracts, when authorized, may be made
include commercial and savings banks, insurance companies, pension funds,
investment companies and educational and charitable institutions, but shall in
all cases be subject to our approval in our sole discretion. The obligations of
the purchaser under any Delayed Delivery Contract to pay for and take delivery
of securities will not be subject to any conditions except that (i) the purchase
of securities by such institution shall not at the time of delivery be
prohibited under the laws of any jurisdiction to which such institution is
subject; and (ii) any related sale of securities to underwriters shall have
occurred. A commission set forth in the applicable prospectus supplement will be
paid to underwriters or agents soliciting purchases of securities pursuant to
Delayed Delivery Contracts accepted by us. The underwriters or agents will not
have any responsibility in respect of the validity or performance of Delayed
Delivery Contracts.
All Debt Securities will be new issues of securities with no established
trading market. Any underwriters to whom Debt Securities are sold by us for
public offering and sale may make a market in such securities, but such
underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. No assurance can be given as to the liquidity
of the trading market for any Debt Securities. Any common stock sold pursuant to
a prospectus supplement will be listed on the New York Stock Exchange, subject
to notice of listing.
Underwriters and agents may be entitled under agreements entered into with
us to indemnification by us against certain civil liabilities, including
liabilities under the Securities Act of
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1933, or to contribution with respect to payments which the underwriters or
agents may be required to make in respect thereof and to reimbursement by us for
certain expenses. Underwriters and agents also may be customers of, engage in
transactions with, or perform other services for us in the ordinary course of
business.
LEGAL OPINIONS
The validity of the securities will be passed upon for us by Nelson,
Mullins, Riley & Scarborough, LLP, Charlotte, North Carolina. Jerry W. Amos, a
partner in that law firm, who is also our General Counsel and a Director,
beneficially owned 71,206 shares of Common Stock offeredour common stock as of May 31, 2001. Certain
legal matters in connection with the issuance of the securities will be passed
upon for any underwriters or agents by this Prospectus and certain
other legal matters. As of August 31, 1999, Mr. Ruegsegger owned 1,740 shares of
Common Stock.Orrick, Herrington & Sutcliffe LLP, New
York, New York.
EXPERTS
OurThe consolidated financial statements includedand the related financial statement
schedule incorporated in ourthis Prospectus by reference from Piedmont Natural Gas
Company's Annual Report on Form 10-K for the year ended October 31, 1998, which are incorporated by reference in
this Prospectus,2000, have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, in this
Prospectusand have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in auditingaccounting and accounting.
You should rely only on the information contained or incorporated by
reference in this Prospectus.auditing.
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23
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We have not authorized anyone to give any other personinformation or make any
representation about us that is different from, or in addition to, providethat
contained in this prospectus or in any of the materials that we have
incorporated by reference into this document. Therefore, if anyone does give you
with different information. If anyone provides you with different or
inconsistent information of this sort, you should not rely on it. WeIf you are not making an offerin a
jurisdiction where offers to sell, our Common Stock in any state whereor solicitations of offers to purchase, the
securities offered by this document are unlawful, or if you are a person to whom
it is unlawful to direct these types of activities, then the offer or sale ispresented in
this document does not permitted.
You should assume that theextend to you. The information contained in this Prospectus is accuratedocument
speaks only as of its date. Our business, financial condition, resultsthe date of operations
and prospects may have changed sincethis document, unless the information specifically
indicates that date.
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17
DIVIDEND REINVESTMENT
AND
STOCK PURCHASE PLAN
COMMON STOCK
NO PAR VALUE PER SHARE
--------------------
PROSPECTUS
--------------------another date applies.
-------------------------
TABLE OF CONTENTS
PAGE
----
Forward-Looking Statements.......... 2
Where You Can Find More
Information....................... 2
The Company......................... 4
Use of Proceeds..................... 5
Ratio of Earnings to Fixed
Charges........................... 5
Securities We May Issue............. 5
Prospectus Supplements.............. 5
Description of Debt Securities...... 6
Description of Common Stock......... 17
Plan of Distribution................ 19
Legal Opinions...................... 21
Experts............................. 21
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PIEDMONT NATURAL GAS
COMPANY, INC.
LOGO
August 31, 1999------------------------------------------------------
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1824
PART IIII. INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.DISTRIBUTION
The following table sets forth the estimatedvarious expenses ofto be paid by the
CompanyRegistrant in connection with the issuancesale and distribution of the securities being
registered.registered hereby, other than underwriting or broker dealer fees, discounts and
commissions. All amounts are estimated except for the Securities Act
registration fee.
Registration Fee............................................ $18,383Securities Act registration fee............................. $ 62,500
Printing Costs..............................................and engraving...................................... 20,000
Legal fees and expenses..................................... 75,000
Accounting fees and expenses................................ 60,000
Rating agency fees.......................................... 60,000
Blue Sky fees and expenses.................................. 5,000
Legal Fees..................................................Trustee's fees and expenses................................. 6,000
Accounting Fees.............................................Miscellaneous expenses...................................... 5,000
-------
Total....................................................... $34,383
=======--------
Total............................................. $293,500
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under the Articles of Incorporation and North Carolina corporation laws,
each of the present and former directors and officers of the Company may be
entitled to indemnification under certain circumstances from certain
liabilities, claims and expenses arising from any threatened, pending or
completed action, suit or proceeding (including any such action, suit or
proceeding arising under the Securities Act of 1933), to which they are made a
party by reason of the fact that he or she is or was a director or officer of
the Company.
The Company insures its directors and officers against certain liabilities
and has insurance against certain payments which it may be obliged to make to
such persons under the indemnification provisions of its Articles of
Incorporation.OFFICERS
The following provisions of the North Carolina Business Corporation Act as
contained in the North Carolina General Statutes ("N.C.G.S." or "G.S.") govern
indemnification of our officers and directors of the Company:directors:
SECTION 55-8-50. POLICY STATEMENT AND DEFINITIONS. (a) It is the
public policy of this State to enable corporations organized under this
Chapter to attract and maintain responsible, qualified directors, officers,
employees and agents, and, to that end, to permit corporations organized
under this Chapter to allocate the risk of personal liability of directors,
officers, employees and agents through indemnification and insurance as
authorized in this Part.
(b) Definitions in this Part:
(1) "Corporation" includes any domestic or foreign corporation
absorbed in a merger which, if its separate existence had continued,
would have had the obligation or power to indemnify its directors,
officers, employees, or agents, so that a person who would have been
entitled to receive or request indemnification from such corporation if
its separate existence had continued shall stand in the same position
under this Part with respect to the surviving corporation.
(2) "Director" means an individual who is or was a director of a
corporation or an individual who, while a director of a corporation, is
or was serving at the corporation's request as a director, officer,
partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan,
or other enterprise. A director is considered to be serving an employee
benefit plan at the corporation's request if his duties to the
corporation also impose duties on, or otherwise involve services by, him
to the plan or to participants in or beneficiaries of the plan.
"Director" includes, unless the context requires otherwise, the estate
or personal representative of a director.
(3) "Expenses" means expenses of every kind incurred in defending a
proceeding, including counsel fees.
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1925
(4) "Liability" means the obligation to pay a judgment, settlement,
penalty, fine (including an excise tax assessed with respect to an
employee benefit plan), or reasonable expenses incurred with respect to
a proceeding.
(4a) "Officer," "employee," or "agent" includes, unless the context
requires otherwise, the estate or personal representative of a person
who acted in that capacity.
(5) "Official capacity" meansmeans: (i) when used with respect to a
director, the office of director in a corporation; and (ii) when used
with respect to an individual other than a director, as contemplated in
G.S. 55-8-56, the office in a corporation held by the officer or the
employment or agency relationship undertaken by the employee or agent on
behalf of the corporation. "Official capacity" does not include service
for any other foreign or domestic corporation or any partnership, joint
venture, trust, employee benefit plan, or other enterprise.
(6) "Party" includes an individual who was, is, or is threatened to
be made a named defendant or respondent in a proceeding.
(7) "Proceeding" means any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal.
SECTION 55-8-51. AUTHORITY TO INDEMNIFY. (a) Except as provided in
subsection (d), a corporation may indemnify an individual made a party to a
proceeding because he is or was a director against liability incurred in
the proceeding if:
(1) He conducted himself in good faith; and
(2) He reasonably believed (i) in the case of conduct in his
official capacity with the corporation, that his conduct was in its best
interests; and (ii) in all other cases, that his conduct was at least
not opposed to its best interests; and
(3) In the case of any criminal proceeding, he had no reasonable
cause to believe his conduct was unlawful.
(b) A director's conduct with respect to an employee benefit plan for
a purpose he reasonably believed to be in the interests of the participants
in and beneficiaries of the plan is conduct that satisfies the requirement
of subsection (a)(2)(ii).
(c) The termination of a proceeding by judgment, order, settlement,
conviction, or upon a plea of no contest or its equivalent is not, of
itself, determinative that the director did not meet the standard of
conduct described in this section.
(d) A corporation may not indemnify a director under this section:
(1) In connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the
corporation; or
(2) In connection with any other proceeding charging improper
personal benefit to him, whether or not involving action in his official
capacity, in which he was adjudged liable on the basis that personal
benefit was improperly received by him.
(e) Indemnification permitted under this section in connection with a
proceeding by or in the right of the corporation that is concluded without
a final adjudication on the issue of liability is limited to reasonable
expenses incurred in connection with the proceeding.
(f) The authorization, approval or favorable recommendation by the
board of directors of a corporation of indemnification, as permitted by
this section, shall not be deemed an act or
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26
corporate transaction in which a director has a conflict of interest, and
no such indemnification shall be void or voidable on such ground.
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20
SECTION 55-8-52. MANDATORY INDEMNIFICATION. Unless limited by its
articles of incorporation, a corporation shall indemnify a director who was
wholly successful, on the merits or otherwise, in the defense of any
proceeding to which he was a party because he is or was a director of the
corporation against reasonable expenses incurred by him in connection with
the proceeding.
SECTION 55-8-53. ADVANCE FOR EXPENSES. Expenses incurred by a
director in defending a proceeding may be paid by the corporation in
advance of the final disposition of such proceeding as authorized by the
board of directors in the specific case or as authorized or required under
any provision in the articles of incorporation or bylaws or by any
applicable resolution or contract upon receipt of an undertaking by or on
behalf of the director to repay such amount unless it shall ultimately be
determined that he is entitled to be indemnified by the corporation against
such expenses.
SECTION 55-8-54. COURT-ORDERED INDEMNIFICATION. Unless a
corporation's articles of incorporation provide otherwise, a director of
the corporation who is a party to a proceeding may apply for
indemnification to the court conducting the proceeding or to another court
of competent jurisdiction. On receipt of an application, the court after
giving any notice the court considers necessary may order indemnification
if it determines:
(1) The director is entitled to mandatory indemnification under
G.S. 55-8-52, in which case the court shall also order the corporation
to pay the director's reasonable expenses incurred to obtain
court-ordered indemnification; or
(2) The director is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances, whether or
not he met the standard of conduct set forth in G.S. 55-8-51 or was
adjudged liable as described in G.S. 55-8-51(d), but if he was adjudged
so liable his indemnification is limited to reasonable expenses
incurred.
SECTION 55-8-55. DETERMINATION AND AUTHORIZATION OF
INDEMNIFICATION. (a) A corporation may not indemnify a director under G.S.
55-8-51 unless authorized in the specific case after a determination has
been made that indemnification of the director is permissible in the
circumstances because he has met the standard of conduct set forth in G.S.
55-8-51.
(b) The determination shall be made:
(1) By the board of directors by majority vote of a quorum
consisting of directors not at the time parties to the proceeding;
(2) If a quorum cannot be obtained under subdivision (1), by
majority vote of a committee duly designated by the board of directors
(in which designation directors who are parties may participate),
consisting solely of two or more directors not at the time parties to
the proceeding;
(3) By special legal counsel (i) selected by the board of directors
or its committee in the manner prescribed in subdivision (1) or (2); or
(ii) if a quorum of the board of directors cannot be obtained under
subdivision (1) and a committee cannot be designated under subdivision
(2), selected by majority vote of the full board of directors (in which
selection directors who are parties may participate); or
(4) By the shareholders, but shares owned by or voted under the
control of directors who are at the time parties to the proceeding may
not be voted on the determination.
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27
(c) Authorization of indemnification and evaluation as to
reasonableness of expenses shall be made in the same manner as the
determination that indemnification is permissible, except that if the
determination is made by special legal counsel, authorization of
indemnification and evaluation as to reasonableness of expenses shall be
made by those entitled under subsection (b)(3) to select counsel.
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21
SECTION 55-8-56. INDEMNIFICATION OF OFFICERS, EMPLOYEES, AND
AGENTS. Unless a corporation's articles of incorporation provide
otherwise:
(1) An officer of the corporation is entitled to mandatory
indemnification under G.S. 55-8-52, and is entitled to apply for the
court-ordered indemnification under G.S. 55-8-54, in each case to the
same extent as a director;
(2) The corporation may indemnify and advance expenses under this
Part to an officer, employee, or agent of the corporation to the same
extent as to a director; and
(3) A corporation may also indemnify and advance expenses to an
officer, employee, or agent who is not a director to the extent,
consistent with public policy, that may be provided by its articles of
incorporation, bylaws, general or specific action of its board of
directors, or contract.
SECTION 55-8-57. ADDITIONAL INDEMNIFICATION AND INSURANCE. (a) In
addition to and separate and apart from the indemnification provided for in
G.S. 55-8-51, 55-8-52, 55-8-54, 55-8-55 and 55-8-56, a corporation may in
its articles of incorporation or bylaws or by contract or resolution
indemnify or agree to indemnify any one or more of its directors, officers,
employees, or agents against liability and expenses in any proceeding
(including without limitation a proceeding brought by or on behalf of the
corporation itself) arising out of their status as such or their activities
in any of the foregoing capacities; provided, however, that a corporation
may not indemnify or agree to indemnify a person against liability or
expenses he may incur on account of his activities which were at the time
taken known or believed by him to be clearly in conflict with the best
interests of the corporation. A corporation may likewise and to the same
extent indemnify or agree to indemnify any person who, at the request of
the corporation, is or was serving as a director, officer, partner,
trustee, employee, or agent of another foreign or domestic corporation,
partnership, joint venture, trust or other enterprise or as a trustee or
administrator under an employee benefit plan. Any provision in any articles
of incorporation, bylaw, contract, or resolution permitted under this
section may include provisions for recovery from the corporation of
reasonable costs, expenses, and attorneys' fees in connection with the
enforcement of rights to indemnification granted therein and may further
include provisions establishing reasonable procedures for determining and
enforcing the rights granted therein.
(b) The authorization, adoption, approval, or favorable recommendation
by the board of directors of a public corporation of any provision in any
articles of incorporation, bylaw, contract or resolution, as permitted in
this section, shall not be deemed an act of corporate transaction in which
a director has a conflict of interest, and no such articles of
incorporation or bylaw provision or contract or resolution shall be void or
voidable on such grounds. The authorization, adoption, approval, or
favorable recommendation by the board of directors of a nonpublic
corporation of any provision in any articles of incorporation, bylaw,
contract or resolution, as permitted in this section, which occurred prior
to July 1, 1990, shall not be deemed an act or corporate transaction in
which a director has a conflict of interest, and no such articles of
incorporation, bylawsbylaw provision, contract or resolution shall be void or
voidable on such grounds. Except as permitted in G.S. 55-8-31, no such
bylaw, contract, or resolution not adopted, authorized, approved or
ratified by shareholders shall be effective as to claims made or
liabilities
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28
asserted against any director prior to its adoption, authorization, or
approval by the board of directors.
(c) A corporation may purchase and maintain insurance on behalf of an
individual who is or was a director, officer, employee, or agent of the
corporation, or who, while a director, officer, employee, or agent of the
corporation, is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee, or agent of another foreign
or domestic corporation, partnership, joint venture, trust, employee
benefit plan, or other enterprise, against liability asserted against or
incurred by him in that capacity or arising from his status as a director,
officer, employee, or agent, whether or not the corporation would have
power to indemnify him against the same liability under any provision of
this Chapter.
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SECTION 55-8-58. APPLICATION OF PART. (a) If articles of
incorporation limit indemnification or advance for expenses,
indemnification and advance for expenses are valid only to the extent
consistent with the articles.
(b) This Part does not limit a corporation's power to pay or reimburse
expenses incurred by a director in connection with his appearance as a
witness in a proceeding at a time when he has not been made a named
defendant or respondent to the proceeding.
(c) This Part shall not affect rights or liabilities arising out of
acts or omissions occurring before July 1, 1990.
TheOur By-Laws provide that the Companywe shall indemnify and hold harmless itsour
directors, and our officers of the Company who are also directors or who are designated by the
Board of Directors from time to time as indemnified officers ("indemnified
officers") against any obligation to pay any judgment, settlement, penalty, fine
(including any excise tax assessed with respect to an employee benefit plan) and
reasonable expenses, including but not limited to attorneys' fees of opposing
parties ("Liabilities") and for any expenses incurred with respect to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, whether formal or informal, and any
appeal therein (and any inquiry or investigation that could lead to such a
proceeding) (a "Proceeding"), including any Proceeding brought by us or on our
behalf, of the Company itself, arising out of their status as our directors or officers. The Company shallWe also
indemnify itsour directors and indemnified officers for their service at the Company'sour
request as a director, officer, partner, trustee, employee or agent or another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise. The Company shallWe do not, however, indemnify a director or indemnified officer
against Liabilities or expenses incurred on account of activities of such person
that at the time taken were known or believed by him or her, or a reasonable
person would have or should have known, to be clearly in conflict with theour best
interests of the
Company.interests. The By-Laws further provide that the Companywe shall indemnify each director and
indemnified officer for his or her reasonable costs, expenses and attorneys'
fees incurred in connection with the enforcement of the rights to
indemnification granted therein, if it is determined that such director or
indemnified officer is entitled to indemnification thereunder.
TheOur Articles of Incorporation, as amended, contain the following
provisions:
ARTICLE 8: A director of the Corporation shall not be personally
liable to the Corporation or any of its shareholders for monetary damages
for any breach of duty as a director, except for liability with respect to
(i) acts or omissions not made in good faith that the director at the time
of such breach knew or believed were in conflict with the best interests of
the Corporation, (ii) any liability under N.C.G.S. sec. 55-8-33 (liability
for unlawful distributions), (iii) any transaction from which such director
derived an improper personal benefit, or (iv) acts or omissions occurring
prior to the date on which this Article 8 became effective. As used herein,
the term "improper personal benefit" does not include a director's
compensation or other incidental benefit for or on account of service as a
director, officer, employee, independent
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contractor, attorney or consultant of the Corporation. If the North
Carolina General Statutes are amended after approval by the Corporation's
shareholders of this Article 8 to authorize corporate action further
eliminating or limiting the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or limited
to the fullest extent permitted by the North Carolina General Statutes, as
so amended. No amendment or repeal of the provisions of this Article 8
shall apply to or have anany effect on the liability or alleged liability of
any director of the Corporation for or with respect to any act or failure
to act on the part of such director occurring prior to such amendment or
repeal. The provisions of this Article 8 shall not be deemed to limit or
preclude indemnification of a director by the Corporation for any liability
which has not been eliminated by the provisions of this Article 8.
The Company hasWe have obtained and maintainsmaintain a policy for directors' and officers'
liability insurance. The policy is designed to protect the Companyus in the event it iswe are
required to pay any amounts to its directors and officers as indemnification
against loss arising from certain civil claims, including certain claims under
the Securities Act of 1933, Act, which might be made against its directors and
officers by reason of any alleged "breach of duty,"
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23 neglect, error,
misstatement, misleading statement, omission or other act done or wrongfully
attempted, while acting in their respective capacities as our directors or
officers.
Reference is made to the forms of Underwriting Agreements and Agency
Agreement filed as Exhibits 1.1, 1.2 and 1.3 hereto, respectively, which contain
provisions for indemnification of us, our directors, officers, and any
controlling persons by underwriters against certain liabilities for information
furnished by such underwriters expressly for use in this Registration Statement.
ITEM 16. EXHIBITS.LIST OF EXHIBITS
EXHIBIT
NUMBER
- -------
3.1
1.1 -- Form of Underwriting Agreement (Debt).
1.2 -- Form of Underwriting Agreement (Equity).
1.3 -- Form of Agency Agreement.
4.1 -- Indenture dated as of April 1, 1993, between Piedmont
Natural Gas Company, Inc., and Citibank, N.A., as Trustee
(incorporated by reference to Exhibit 4.1 of Form S-3
Registration Statement No. 33-59369 filed by the Registrant
on August 9, 1995).
4.2 -- First Supplemental Indenture dated as of February 25, 1994,
between PNG Acquisition Company, Piedmont Natural Gas
Company, Inc., and Citibank, N.A., as Trustee (incorporated
by reference to Exhibit 4.2 of Form S-3 Registration
Statement No. 33-59369 filed by the Registrant on August 9,
1995).
4.3 -- Form of Debt Security.*
4.4 -- Form of Master Global Note.
4.5 -- Copy of Articles of Incorporation of the Company, filed with
the North Carolina Secretary of State on December 14, 1993
(filed as Exhibit 2 to the Company's Form 8-B, filed on
March 2, 1994, and incorporated herein by reference).
3.2 By-Laws of the Company, as amended (filed as Exhibit C to
the Proxy Statement included as Exhibit 2 of the Company's
Registration Statement on Form 8-B, dated March 2, 1994, No.
1-6196, and incorporated herein by reference).
4.14.6 -- Copy of Certificate of Merger (New York) and Articles of
Merger (North Carolina), each dated March 1, 1994,
evidencing merger of Piedmont Natural Gas Company, Inc.,
with and into PNG Acquisition Company, with PNG Acquisition
Company being renamed "Piedmont Natural Gas Company, Inc."
(filed as Exhibits 3.2 and 3.1 to the Company's Form 8-B,
filed March 2, 1994, and incorporated herein by reference).
4.2 Copy4.7 -- By-Laws of Indenture, dated as of April 1, 1993, between the Company, and Citibank, N.A., as Trusteeamended (filed as Exhibit 4.1C to
the Proxy Statement included as Exhibit 2 of the Company's
Registration Statement on Form 8-B, dated March 2, 1994, No.
33-60108, filed March 25,
1993, and incorporated herein by reference).
4.31-6196, and incorporated herein by reference).
II-6
30
4.8 -- Copy of Rights Agreement dated as of February 27, 1998,
between the Company and Wachovia Bank, N.A., as Rights
Agent, including the Rights Certificate (filed as Exhibit
10.1 to Current Report on Form 8-K of the Company dated
February 27, 1998, and incorporated herein by reference).
54.9 -- Specimen Common Stock Certificate (filed as Exhibit 3.3 of
the Company's Registration Statement on Form 8-B, dated
March 2, 1994, No. 1-6196, and incorporated herein by
reference).
5.1 -- Opinion of Martin C. Ruegsegger, Esquire, Vice President,
Corporate Counsel and Secretary of the Company, with respect
to theNelson, Mullins, Riley & Scarborough, LLP,
regarding legality of the securities being registered.
12.1 -- Computation of Ratio of Earnings to Fixed Charges.
23.1 -- Consent of Martin C. Ruegsegger, EsquireNelson, Mullins, Riley & Scarborough, LLP
(included in Exhibit 5)5.1).
23.2 -- Independent Auditors' Consent.
24 Powers25.1 -- Statement of Attorney.Eligibility of Trustee on Form T-1.
- -------------------------
* The Company will file any forms of debt securities not previously so filed in
a current report on Form 8-K.
ITEM 17. UNDERTAKINGS.UNDERTAKINGS
The undersigned registrantRegistrant hereby undertakes:
A. Post-Effective Amendments
(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:Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statementRegistration 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;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;
II-6
24Registration Statement;
provided, however, that the undertakings set forth in paragraphs (a)(1)(i) and
(a)(1)(ii) above do not apply if the registration statement is on Form S-3 Form S-8 or
Form F-3,S-8, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with
or furnished to the Commission by the registrantRegistrant pursuant to Section 13 or
(15(d)Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the
registration statement.this Registration Statement.
(2) That for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment of
any of the securities being registered which remain unsold at the termination of
the offering.
II-7
31
B. Filings Incorporating Subsequent Documents by Reference
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration 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. Indemnification
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrantRegistrant pursuant to the foregoing provisions described under Item 15 above or
otherwise, the registrantRegistrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrantRegistrant of expenses incurred or paid by a director, officer or
controlling person of the registrantRegistrant 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 registrantRegistrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-7II-8
2532
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statementregistration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Charlotte, State of North Carolina, on the 31st4th day of
August, 1999.June, 2001.
PIEDMONT NATURAL GAS COMPANY, INC.
By: /s/ JOHN H. MAXHEIM
------------------------------------
John H. Maxheim
Chairman of the BoardWARE F. SCHIEFER
-------------------------------------
Ware F. Schiefer,
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statementregistration has been signed below by the following persons in the capacities and on
the dates indicated.
SIGNATURESIGNATURES TITLE DATE
------------------- ----- ----
/s/ JOHN H. MAXHEIMWARE F. SCHIEFER Director, Chairman of the August 31, 1999
- ----------------------------------------------------- BoardPresident and Chief June 4, 2001
- ------------------------------------------------ Executive John H. Maxheim Officer
Ware F. Schiefer
/s/ DAVID J. DZURICKY Senior Vice August 31, 1999President and Chief June 4, 2001
- ----------------------------------------------------- President--Finance------------------------------------------------ Financial Officer (Principal
David J. Dzuricky Financial Officer)
/s/ BARRY L. GUY Vice President and Controller August 31, 1999June 4, 2001
- ----------------------------------------------------------------------------------------------------- (Principal Accounting Officer)
Barry L. Guy
Officer)
*/s/ JERRY W. AMOS Director June 4, 2001
- -----------------------------------------------------------------------------------------------------
Jerry W. Amos
*/s/ C.M. BUTLER III Director June 4, 2001
- -----------------------------------------------------
C. M.------------------------------------------------
C.M. Butler III
*/s/ D. HAYES CLEMENT Director June 4, 2001
- -----------------------------------------------------
Sam J. DiGiovanni
*------------------------------------------------
D. Hayes Clement
/s/ JOHN W. HARRIS Director June 4, 2001
- -----------------------------------------------------------------------------------------------------
John W. Harris
*/s/ MURIEL W. HELMS Director June 4, 2001
- -----------------------------------------------------------------------------------------------------
Muriel W. Helms
*/s/ JOHN H. MAXHEIM Director June 4, 2001
- -----------------------------------------------------------------------------------------------------
John F. McNair III
*H. Maxheim
/s/ NED R. MCWHERTER Director June 4, 2001
- -----------------------------------------------------------------------------------------------------
Ned R. McWherter
*/s/ WALTER S. MONTGOMERY, JR. Director June 4, 2001
- -----------------------------------------------------------------------------------------------------
Walter S. Montgomery, Jr.
*/s/ DONALD S. RUSSELL, JR. Director June 4, 2001
- -----------------------------------------------------------------------------------------------------
Donald S. Russell, Jr.
*/s/ JOHN E. SIMKINS Director President and ChiefJune 4, 2001
- ----------------------------------------------------- Operating Officer
Ware F. Schiefer
* Director
- -----------------------------------------------------
John E. Simkins, Jr.
*By: /s/ DAVID J. DZURICKY August 31, 1999
------------------------------------------------
David J. Dzuricky
(Attorney-in-Fact)John E. Simkins
II-8II-9
26
EXHIBIT33
INDEX TO EXHIBITS
EXHIBIT NO.
- -----------
5 Opinion
1.1 -- Form of Martin C. Ruegsegger, Esquire, Vice President,
Corporate CounselUnderwriting Agreement (Debt).
1.2 -- Form of Underwriting Agreement (Equity).
1.3 -- Form of Agency Agreement.
4.1 -- Indenture dated as of April 1, 1993, between Piedmont
Natural Gas Company, Inc., and SecretaryCitibank, N.A., as Trustee
(incorporated by reference to Exhibit 4.1 of Form S-3
Registration Statement No. 33-59369 filed by the Registrant
on August 9, 1995).
4.2 -- First Supplemental Indenture dated as of February 25, 1994,
between PNG Acquisition Company, Piedmont Natural Gas
Company, Inc., and Citibank, N.A., as Trustee (incorporated
by reference to Exhibit 4.2 of Form S-3 Registration
Statement No. 33-59369 filed by the Registrant on August 9,
1995).
4.3 -- Form of Debt Security.*
4.4 -- Form of Master Global Note.
4.5 -- Copy of Articles of Incorporation of the Company, filed with
respectthe North Carolina Secretary of State on December 14, 1993
(filed as Exhibit 2 to the Company's Form 8-B, filed on
March 2, 1994, and incorporated herein by reference).
4.6 -- Copy of Certificate of Merger (New York) and Articles of
Merger (North Carolina), each dated March 1, 1994,
evidencing merger of Piedmont Natural Gas Company, Inc.,
with and into PNG Acquisition Company, with PNG Acquisition
Company being renamed "Piedmont Natural Gas Company, Inc."
(filed as Exhibits 3.2 and 3.1 to the Company's Form 8-B,
filed March 2, 1994, and incorporated herein by reference).
4.7 -- By-Laws of the Company, as amended (filed as Exhibit C to
the Proxy Statement included as Exhibit 2 of the Company's
Registration Statement on Form 8-B, dated March 2, 1994, No.
1-6196, and incorporated herein by reference).
4.8 -- Copy of Rights Agreement dated as of February 27, 1998,
between the Company and Wachovia Bank, N.A., as Rights
Agent, including the Rights Certificate (filed as Exhibit
10.1 to Current Report on Form 8-K of the Company dated
February 27, 1998, and incorporated herein by reference).
4.9 -- Specimen Common Stock Certificate (filed as Exhibit 3.3 of
the Company's Registration Statement on Form 8-B, dated
March 2, 1994, No. 1-6196, and incorporated herein by
reference).
5.1 -- Opinion of Nelson, Mullins, Riley & Scarborough, LLP,
regarding legality of the securities being registered.
12.1 -- Computation of Ratio of Earnings to Fixed Charges.
23.1 -- Consent of Martin C. Ruegsegger, EsquireNelson, Mullins, Riley & Scarborough, LLP
(included in Exhibit 5)5.1).
23.2 -- Independent Auditors' Consent.
24 Powers25.1 -- Statement of Attorney.Eligibility of Trustee on Form T-1.
- -------------------------
* The Company will file any forms of debt securities not previously so filed in
a current report on Form 8-K.